Finding 588957 (2022-002)

Finding 2022-002 ? Allowable Costs/Cost Principles Program: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing No.: 21.027 Federal Agency: U.S. Department of the Treasury Passed Through: N/A ? Direct Program Award Year: Fiscal Year 2021-2022 Compliance Requirement: Allowable Costs/Cost Principles Questioned Costs: $376,777 Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) ?200.303 states that the non- Federal entity (County) 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). Condition During our testing of expenditures charged to the program, we noted one payment in the amount of $494,988 for emergency rental assistance; the amount was a supplemental payment for the month of September 2021 and, based on the invoices provided, the amount should have been $118,211. Cause of Condition The County?s existing internal control system is not operating effectively to provide reasonable assurance that charges to the program are accurate and allowable. The supplemental amount was incorrectly calculated based on a prior processed payment for August 2021 instead of September 2021. Repeat Finding No. Effect of Condition The County is not in compliance with the allowable cost/cost principles requirements related to the program. Recommendation We recommend that the County adhere to its payment procedures and review invoices and other related source documents for completeness, reasonableness, and accuracy. We also recommend the County ensure that source documents match the payment document and that supervisors review payment 19 documents for accuracy and match pertinent information with invoice, contract, and other related payment source documents with the PeopleSoft voucher that was created. Management Response and Corrective Action Plan The County issued reimbursement based on actuals. The voucher created by the department was for $494,988 and the County reimbursed this amount back to the department. ARPA over claiming started with the payment of the supplemental September 21 invoice that was miscalculated by reducing the Revised September 21 invoice with the Original August 21 invoice, instead of the Original September 21 invoice. This miscalculation was not immediately recognized when the supplemental payment was paid in November 2021. The need to return funds to ARPA was recognized after the DSS Admin completed a reconciliation at end of 2022. This was communicated to DSS Finance in January 2023, thus the discussion between DSS Finance and DSS Admin to finalize the amount. DSS is already in the process of finalizing the amount that needs to be returned to the County ARPA funds. For the corrective action, DSS will be submitting a memo signed by the DSS Director addressed to the CAO for the return of $376,777 to the County ARPA funds.