Finding Text
Criteria: American Rescue Plan Act of 2021, Pub. L. No. 117-2, requires that the Coronavirus State and Local Fiscal Recovery Fund monies must be used to cover costs that are:
1. Support public health expenditures, by funding COVID-19 mitigation efforts, medical expenses, behavioral healthcare, and certain public health and safety staff;
2. Address negative economic impacts caused by the public health emergency, including economic harms to works, households, small business, impacted industries, and the public sector;
3. Replace lost public sector revenue to provide government services; recipients may use this funding to provide government services to the extent of the reduction in revenue experienced due to the pandemic;
4. Provide premium pay for essential works, offering additional support to those who have borne and will bear the greatest health risks because of their service in critical infrastructure sectors; and
5. Invest in water, sewer, and broadband infrastructure, making necessary investments to improve access to clean drinking water, support vital wastewater and stormwater infrastructure, and to expand access to broadband internet.
Additionally, 2 CFR 200.303 requires the recipient of federal funds 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.
Condition/Context: We selected a statistically valid random sample of transactions charged to the program of 40 emergency assistance transactions to test controls of disbursement costs charged to the major program and found the following:
- One emergency assistance disbursement transaction was not supported with appropriate documentation.
- There were expenses in the amount of $3,717,000 recognized for the program as of December 31, 2021 related to checks for emergency assistance payments to individuals that did not complete an application indicating eligibility. An entry was recorded by the Tribes to appropriately adjust these expenses from as of December 31, 2021.
Cause: The primary factor that contributed to the deficiencies was the lack of sufficient controls implemented to appropriately review and monitor disbursement activity and ensure amounts were properly recorded in the general ledger.
Effect: Emergency assistance transactions were being processed incorrectly. We were unable to obtain sufficient assurance over compliance, and the major program received a qualified opinion.
Questioned costs: We tested $120,000 emergency assistance transactions out of federal expenditures of $12,768,000. Known and likely questioned costs totaled $322,200.
Repeat finding: This is not a repeat finding from the prior year.
Recommendation: In order to ensure disbursement transactions are properly reviewed, approved, and supporting documentation, maintained, we recommend the Tribes ensure controls over disbursement procedures are designed and operating effectively.
Views of responsible officials and planned corrective action: The Tribes will ensure compliance with future program allowable costs and allowable activities requirements, such as documentation review and enhanced controls to ensure accurate recognition of expenditures.