Finding 623049 (2022-002)

2 CFR ? 1000 gives regulatory effect to the United States Department of Treasury for 2 CFR ? 200.328 and 329 which states, in part, that unless otherwise approved by OMB, the Federal awarding agency must solicit only the OMB-approved governmentwide data elements for collection of financial information at time of publication the Federal Financial Report or such future, OMB-approved, governmentwide data elements available from the OMB-designated standards lead. This information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more frequently than quarterly. Additionally, program-specific reporting requirements under the Emergency Rental Assistance Program 1 & 2 (ERA) and State and Local Fiscal Recovery Funds (SLFRF), requires all ERA and SLFRF grantees must submit quarterly reports with reporting periods of one calendar quarter and several cumulative fields covering all activity from the date of award through the quarter close. The key line items in the form are: 1. The cumulative amount obligated by the grantee; and 2. The cumulative amount expended by the grantee Additionally, 2 CFR Subpart F ? 200.510(b) requires the auditee to prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the County?s financial statements which must include the total federal awards expended as determined in accordance with ? 200.502. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the AL number or other identifying number when the AL information is not available. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in ? 200.502 Basis for determining Federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in ? 200.414 Indirect (F&A) costs. Testing over the County's quarterly reporting requirements for the ERA program identified the following: "See Schedule of Findings for table" Furthermore, testing over the County's quarterly reporting requirements for the SLFRF program identified the following: "See Schedule of Findings for table" Furthermore, the lack of effective controls over this compliance requirement resulted in the Schedule being misstated. As a result of the cumulative expenditure amounts being incorrectly reported for the SLFRF program, the County's Schedule of Expenditures of Federal Awards (Schedule) was overstated by $3,091,886. Adjustments, to which management have agreed, are reflected in the accompanying Schedule. Noncompliance with grant requirements as well as errors and omissions on the Schedule of Expenditures of Federal Awards could have an adverse effect on future grant awards by the awarding agency in addition to an inaccurate assessment of major federal programs that would be subjected to audit. County management should review all grant and loan award documents in order to execute policies and procedures which help ensure compliance with grant and loan requirements, including Schedule reporting requirements. The County should implement a system to track all federal expenditures and related information separately from other expenditures and report federal expenditures with proper support including, but not limited to, grant agreements, calculation of the expenditures, and any federal reporting requirements. This will help ensure the County is in compliance with grant and loan requirements, the Schedule is complete and accurate, and major federal programs are accurately identified for audit.