Finding Text
Finding 2021-010 – Lack of Internal Controls over the Schedule of Expenditures of Federal Awards
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; Period of Performance
QUESTIONED COSTS: $0
Condition: During the review of 100% of federal expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA), federal programs were identified that were not accurately reported. Actual federal expenditures for the major federal program Assistance Listing 21.019 - Coronavirus Relief Fund were $2,024,981 and the County reported $193,762. Therefore, expenditures were understated $1,831,219 for the major federal program Coronavirus Relief Fund.
Further, actual federal expenditures for Assistance Listing 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) FEMA DR-4438 were $0 and the County reported $109,550. Therefore, the expenditures were overstated by $109,550. Actual federal expenditures for Assistance Listing 97.042 - Emergency Management Performance Grants were $7,177 and the County reported $15,000. Therefore, expenditures were overstated by $7,823.
Additionally, the county reported expenditures of the Social Security Administration, overstating expenditures $1,200, although considered federally sourced, expenditures should not be reported on the SEFA.
Reported Total Expenditures of Federal Awards $ 343,373
Add: Coronavirus Relief Fund (21.019) 1,831,219
Less: Disaster Grants – Public Assistance
(Presidentially Declared Disasters) FEMA DR-4438 (97.036) (109,550)
Less: Emergency Management Performance Grants (97.042) ( 7,823)
Less: Social Security Administration ( 1,200)
Actual Federal Expenditures of Federal Awards $2,056,019
SEFA Understated $1,712,646
Cause of Condition: Policies and procedures have not been designed and implemented to ensure accurate reporting of expenditures for federal awards.
Effect of Condition: This resulted in a material misstatement of the County’s Schedule of Expenditures of Federal Awards and could increase the potential for material noncompliance.
Recommendation: OSAI recommends the County design and implement internal controls to ensure accurate reporting of federal expenditures on the SEFA.
Management Response:
Chairman of the Board of County Commissioners: The BOCC will work to design and implement internal controls to ensure accurate reporting of federal expenditures on the SEFA and ensure compliance with federal requirements.
Criteria: The GAO Standards – Section 1 – Fundamental Concepts of Internal Control – OV1.01 states in part:
Definition of Internal Control
Internal control is a process effected by an entity’s oversight body, management, and other personnel that provides reasonable assurance that the objectives of an entity will be achieved.
Further, Title 2 CFR 200 § 200.510(a)(b) Financial Statements reads as follows:
(a) Financial statements. The auditee must prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. The financial statements must be for the same organizational unit and fiscal year that is chosen to meet the requirements of this part. However, non-Federal entity-wide financial statements may also include departments, agencies, and other organizational units that have separate audits in accordance with §200.514 Scope of audit, paragraph (a) and prepare separate financial statements.
(b) Schedule of expenditures of Federal awards. The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with §200.502 Basis for determining Federal awards expended.