Finding Text
2023-006 Federal Awarding Agency: Department of the Treasury Program title and ALN: Coronavirus State and Local Fiscal Recovery Funds #21.027 126 GRANT COUNTY, OREGON SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2023 Compliance requirements applicable to finding: Activities Allowed or Unallowed Findings: Other findings disclosed in accordance with 2 CFR 200.516(a) Questioned Costs: $90,122 in known questioned costs related to the non-major federal program Criteria: The county spent $90,122 in Coronavirus State and Local Fiscal Recovery Funds on the remodel of a county building planned to materially be used for the new offices of the county’s emergency management department. Coronavirus State and Local Fiscal Recovery Funds under ALN #21.027 are required to be spent on projects that directly respond to the public health and negative economic impacts of the COVID-19 pandemic. Under 602(c)(1)(A) or 603(c)(1)(A), a general infrastructure project typically would not be considered a response to the public health emergency and its negative economic impacts unless the project responds to a specific pandemic-related public health need (e.g., investments in facilities for the delivery of vaccines) or a specific negative economic impact of the pandemic (e.g., affordable housing in a Qualified Census Tract). The emergency management department does not fit these criteria, which means this remodel project is an unallowed cost. Condition and Context: As a result of following up on prior year findings reported on the Schedule of Findings and Questioned Costs for the year ended June 30, 2022, significant transactions were identified that directly relate to noncompliance over the federal program that occurred during the June 30, 2023, fiscal year. These transactions were not tested as a major program during the 2023 fiscal year and were not subject to current year auditing procedures; however, noncompliance and known questioned costs were identified that met requirements for disclosure. Furthermore, recommendations made by auditors and plans of corrective action identified by management in prior years were insufficiently addressed. Cause: Unfamiliarity with program requirements from those accumulating and tracking costs charged to the program and lack of knowledgeable oversight over the program was a significant cause for these findings. The county lacked internal controls to ensure expenditures reimbursed through the program met compliance requirements. Effect: Known questioned costs related to the compliance of federal programs in the amount of $90,122 related to expenditures in the 2023 fiscal year were identified. Recommendation: We recommend the county adopt formal policies to address transactional compliance over grant awards. Given the volume of grant activity, identifying a grant compliance officer with the requisite experience in program compliance monitoring should be an included control. The current general ledger system has historically been sufficient to address the appropriate segregation and tracking of individual awards but has been used inappropriately to be implemented as a control. Monitoring of controls over expenditures and grant award compliance should be implemented, and deviations from controls in place should be addressed timely. Views of responsible officials and planned corrective actions: The County does not have available funding to hire a grant compliance officer, however, the County plans to seek training resources for current staff responsible for grant administration.