Finding Text
Finding 2021-009 – Lack of Internal Controls and Noncompliance Over Major Federal Program - Activities Allowed or Unallowed; Allowed Costs/Cost Principles – Coronavirus Relief Fund
PASS-THROUGH GRANTOR: Oklahoma Office of Management and Enterprise Services
FEDERAL AGENCY: U.S. Department of Treasury
ASSISTANCE LISTING: 21.019
FEDERAL PROGRAM NAME: Coronavirus Relief Fund
FEDERAL AWARD YEAR: 2021
CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Cost Principles
QUESTIONED COSTS: $804,695
Condition: A test of 100% of payroll expenditures reflected program disbursements totaling $804,695 that were not expended in accordance with the Activities Allowed or Unallowed; Allowable Costs/Cost Principles due to ineligible costs.
• The County was reimbursed $726,310 for General Government payroll expenditures for the offices of the County Commissioners, County Clerk, County Treasurer, County Assessor, and the County Court Clerk, for the period March 15, 2020, through October 30, 2020, which was determined to be an unallowed cost to mitigate or prevent the spread of COVID-19 in accordance with grant requirements.
• The County was reimbursed $78,385 for 911 Trust Authority payroll expenditures, for the period August 15, 2020, through October 30, 2020, which was determined to be an unallowed cost of non-county employees to mitigate or prevent the spread of COVID-19 in accordance with grant requirements.
Cause of Condition: Policies and procedures have not been designed and implemented to ensure that the County has proper internal controls over federal grant expenditures and that the expenditures were for an allowable cost.
Effect of Condition: This condition resulted in noncompliance with grant requirements. This could hinder the County from receiving future federal funding and could result in the repayment of grants funds to the grantor agency.
Recommendation: OSAI recommends the County design and implement policies and procedures to ensure compliance with applicable grant requirements.
Management Response:
Chairman of the Board of County Commissioners: The Board of County Commissioners will work to ensure federal disbursements comply with federal grant requirements. The County relied on the Oklahoma Office of Management and Enterprise Services to ensure that the County reimbursement request was for eligible expenditures.
Criteria: Title 42 United States Code § 801 – Coronavirus relief fund Section 601(d) requires the States, Tribal governments, or units of local government use the funds received to cover only those costs that (1) are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID-19); (2) were not accounted for in the budget most recently approved as of March 27, 2020, for the State or government; and (3) were incurred during the period that begins on March 1, 2020, and ends on December 30, 2020.
Additionally, CFR § 200.300(a) Internal Controls reads as follows:
The Non-Federal entity must:
(a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonfederal 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).
2 CFR § 200.403 - Factors affecting allowability costs states in part,
Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (g) Be adequately documented.