Finding 577021 (2021-007)

Finding 2021-007 – Lack of Internal Controls Over Major Federal Program - Disaster Grants - Public Assistance (Presidentially Declared Disasters) PASS THROUGH GRANTOR: Oklahoma Department of Emergency Management FEDERAL AGENCY: U.S. Department of Homeland Security ASSISTANCE LISTING: 97.036 FEDERAL PROGRAM NAME: Disaster Grants - Public Assistance (Presidentially Declared Disasters) FEDERAL AWARD NUMBER: DR 4438 and DR 4453 FEDERAL AWARD YEAR: 2021 CONTROL CATEGORY: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance, Reporting, and Special Tests and Provisions QUESTIONED COSTS: $-0- Condition: During the process of documenting the County’s internal controls regarding federal disbursements, we noted that Okfuskee County has not established procedures to ensure compliance with the following requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance, and Reporting. Cause of Condition: Policies and procedures have not been designed and implemented to ensure compliance with the Uniform Grant Guidance. Effect of Condition: This condition could result in noncompliance to grant requirements and loss of federal funds to the County. Recommendation: OSAI recommends the County gain an understanding of requirements for this program and design and implement internal control procedures to ensure compliance with grant requirements. Management Response: Chairman of the Board of County Commissioners: Officials and employees tasked with the responsibility of expending federal FEMA funds will attend training and seminars offered by OSAI, OEM, and Muskogee Creek Nation to better understand the guidelines. Information received will be communicated to the other officials at the quarterly meetings. Criteria: 2 CFR § 200.303 Internal Controls (a) reads as follows: The non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Further, GAO Standards – Section 2 – Establishing an Effective Internal Control System – OV2.23 states in part: Objectives of an Entity – Compliance Objectives Management conducts activities in accordance with applicable laws and regulations. As part of specifying compliance objectives, the entity determines which laws and regulations apply to the entity. Management is expected to set objectives that incorporate these requirements.