Finding Text
PASS-THROUGH GRANTOR: Oklahoma Department of Emergency Management; Oklahoma Office and Management and Enterprise Services
FEDERAL AGENCY: U.S. Department of Treasury
ASSISTANCE LISTING: 21.019
FEDERAL PROGRAM NAME: Coronavirus Relief Fund
FEDERAL AWARD NUMBER: Oklahoma CARES PPE; SA-2242
FEDERAL AWARD YEAR: 2020
CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Costs Principles; and Period of Performance
QUESTIONED COSTS: $868,053
Condition: The County submitted and received reimbursement for $1,269,227 in expenditures related to the COVID-19 Pandemic. After performing testwork on 100% of the County’s expenditures, $868,053 was not expended in accordance with the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Period of Performance due to ineligible costs.
• The County was reimbursed $783,766 for payroll expenditures for the OCCJA for the period of March 2020, through August 2020. The reimbursement of these funds was determined to be unallowable, as these costs were not expenditures of the County.
• The County was reimbursed $71,376 for General Government payroll expenditures for multiple county employees. The reimbursement of these funds was determined to be unallowable as these were not expenditures to mitigate or prevent the spread of COVID-19 as required by the grant agreement.
• The County was reimbursed $12,500 in payroll expenditures for the County’s Emergency Management Department. The reimbursement of these funds was determined to be unallowable, as these costs were previously reimbursed or will be reimbursed by another federal program.
• The County was reimbursed for $411 in costs that the County could not provide documentation to support the expenditures.
• The County relied on the Oklahoma Office of Management and Enterprise Services to ensure that the County reimbursement request was for eligible expenditures.
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: These conditions resulted in noncompliance with federal grant requirements. The County runs the risk of misappropriation of funds which could hinder the County from receiving future federal funding. Further, these conditions could result in the repayment of funds.
Recommendation: OSAI recommends the County gain an understanding of requirements for this program and design and implement policies and procedures to ensure compliance with all applicable grant requirements.
Management Response:
District 1 County Commissioner: My tenure as an Okmulgee County Commissioner began, October 3, 2022. My understanding is Okmulgee County relied on the State of Oklahoma Office of Management and Enterprise Services (OMES) as the overseer of eligible expenditures. OMES approved the expenditures for reimbursement.
District 2 County Commissioner: I did not take office until January of 2021, months after the County had submitted expenditures for reimbursement from the Coronavirus Relief Fund and my understanding of the submission process is that the County sent all reimbursement documentation to OMES, who were responsible for vetting the submissions. All submission made by Okmulgee County to OMES were approved and reimbursed by OMES.
District 3 County Commissioner: I took office January 3, 2023, I will work with other officials to design and implement policies and procedures to ensure compliance with all applicable grant requirements.
Criteria: Title 42 United States Code § 801 – Coronavirus relief fund Section 801(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, 2 CFR § 200.303(a) Internal Controls reads as follows:
The non-Federal entity must:
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. 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 relevant part,
Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards:
(f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period.
(g) Be adequately documented.