Finding 573387 (2024-003)

Reference Number 2024-003 – Delays in Financial Reporting Evaluation of Finding Material Weakness and Noncompliance Criteria Management is responsible for providing timely and accurate financial information. Because the County has expended over $750,000 in federal awards, Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance), requires non-federal entities to submit their financial statements and single audit reports to the Federal Audit Clearinghouse (FAC) within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Condition The County did not submit its financial statements and single audit reports to the FAC within the required timeframe for the fiscal year ended June 30, 2024. The financial statements and single audit reports were submitted after the deadline of March 31, 2025. Cause of Condition The County implemented new financial accounting software during the 2024 fiscal year. Additionally, the County has experienced significant turnover in key personnel in the County’s Auditor-Controller Office in recent years. The implementation of new software and turnover have resulted in delayed audit completion. Effect or Potential Effect of Condition The late submission of the financial statements and single audit reports impairs the ability of the federal awarding agencies and pass-through entities to monitor the County’s compliance with federal requirements and to make informed decisions regarding the continuation or modification of federal awards. The late submission also results in noncompliance with the Uniform Guidance, and increases the risk of fraud, waste, and abuse of federal funds. Context The County’s financial statements and single audit reports are used by the federal awarding agencies and pass-through entities to assess the non-federal entity's financial condition, internal controls, and compliance with federal requirements. Before the 2024 fiscal year, the County regularly presented the Single Audit Reporting Package on time as mandated. Repeat Finding No. Recommendation To address the challenges caused by staffing shortages and ensure the County’s ability to fulfill its financial reporting obligations, it is crucial to prioritize recruitment, retention, and professional development within key departments. Additionally, exploring partnerships with external consultants or temporary staffing agencies could offer short-term relief while permanent solutions are implemented. By strengthening the County’s workforce, the risk of delayed reporting and noncompliance with federal requirements can be significantly reduced, supporting operational stability and responsible stewardship of public funds. Reference Number 2024-003 – Delays in Financial Reporting Evaluation of Finding Material Weakness and Noncompliance Federal Award Information Assistance Listing Number: All Federal Programs reported on the SEFA Program Title: All Federal Programs reported on the SEFA Federal Award Year(s): FY 2023-24 Criteria Refer to finding 2024-003 in section II above. Condition Refer to finding 2024-003 in section II above. Cause of Condition Refer to finding 2024-003 in section II above. Effect or Potential Effect of Condition Refer to finding 2024-003 in section II above. Questioned costs None. Context Refer to finding 2024-003 in section II above. Repeat Finding Refer to finding 2024-003 in section II above. Recommendation Refer to finding 2024-003 in section II above.