County of MiddlesexLocal Government

Finding 2024-001 – Reporting Federal Program Information: • COVID-19 Coronavirus State and Local Fiscal Recovery Funds (SLFRF) – A.L.N.# 21.027 • Workforce Innovation and Opportunity Act (WIOA) – A.L.N.# 17.258/259/278 • Temporary Assistance for Needy Families (TANF) – A.L.N.# 93.558 Criteria: 2 CFR 200.327 and 200.328 require that performance and financial reports be accurate, current, and complete. Reports must be supported by the accounting records from which they are prepared. Condition: We noted that quarterly financial reports for SLFRF and the monthly financial reports for WIOA and TANF submitted during FY 2024 did not reconcile to the County’s underlying accounting records. Context: We selected four quarterly reports for the SLFRF program, twelve monthly reports for the WIOA program, and twelve monthly reports for the TANF program, and we noted for the reports selected, amounts reported did not agree to the supporting documentation. Cause: The County identified additional grant expenses or disqualified certain grant expenses and revised existing expenses charged to the grants after the reports were submitted, but the reports had already been filed and could not be amended. Effect: Submitting reports that do not agree to the accounting records may result in inaccurate reporting to the federal awarding agency. This increases the risk of misstating program expenditures, potential questioned costs, and reduced confidence in the accuracy of reported data used for program oversight. Questioned Costs: None. Recommendation: We recommend the County identify all eligible expenses and revisions prior to reporting submissions.

Finding 2024-002 – Earmarking Federal Program Information: • Workforce Innovation and Opportunity Act (WIOA) – A.L.N.# 17.258/259/278 Criteria: • 2 CFR 200.302(b)(3): Recipients must maintain records that adequately identify the source and application of Federal funds. • 2 CFR 200.327–328: Financial and performance reports must be accurate, current, and complete. • OMB Compliance Supplement (Part 4, earmarking section): Requires that a specified portion of expenditures be used for certain categories, which must be verifiable through the accounting system. Condition: During our testing of earmarking requirements for the WIOA, we were unable to perform the required calculations because the financial data reported to the awarding agency did not reconcile to the County’s underlying accounting records. Due to these identified discrepancies, we were unable to verify earmarking requirements. Context: We selected twelve monthly reports for the WIOA program, and we noted for the reports selected, amounts reported did not agree to the underlying accounting records and thus we could not verify compliance with earmarking requirements. Cause: The County has not implemented effective reconciliation procedures to ensure that reports submitted to the awarding agency agree to the underlying accounting records. Additionally, there is no validation of the accuracy of expenditures reported for earmarking purposes. Effect: Because the submitted reports did not reconcile to the accounting records, we were unable to determine whether the County complied with the earmarking requirements of the program. Questioned Costs: None. Recommendation: We recommend the County identify all eligible expenses and revisions prior to reporting submissions so that accurate information is available to ensure compliance with earmarking requirements.

The audit of compliance over reporting requirements noted report submissions were not timely or accurate.

Finding 2022-001 Noncompliance: The audit of compliance over reporting requirements noted report submissions were not timely or accurate. Prior Year Finding: Not applicable. Federal Program Information: 21.023 COVID-19 Emergency Rental Assistance Program 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Criteria or specific requirement: Compliance: Emergency Rental Assistance (ERA) 1 and (ERA) 2 state, local, and territorial recipients were required to submit quarterly and annual reports to the United States Department of the Treasury (U.S. Treasury). The quarterly reports are in-depth reports with data on an array of programmatic and financial information to provide transparency in the use and progress of ERA funds. ERA 1 and ERA 2 quarterly reports were required for each quarter of Fiscal Year 2022 and were due April 15, 2022, July 15, 2022, October 17, 2022 and January 17, 2023. The ERA 1 final report covering the award date through September 30, 2022 was due January 30, 2023. Coronavirus State and Local Fiscal Recover Funds (SLFRF) recipients were required to submit quarterly reports to the U.S. Treasury. Quarterly reports were required for each quarter of Fiscal Year 2022 and were due April 30, 2022, July 31, 2022, October 31, 2022, and January 31, 2023. Questioned Costs: None. Condition: As the direct recipient of ERA and SLFRF funds, the County is responsible for ensuring the timeliness and accuracy of report submissions. We noted that quarterly financial reports for ERA 1, ERA 2 and SLFRF submitted during FY 2022 did not agree with supporting documentation and were not submitted by the deadlines. Context: We selected two quarterly reports for the ERA 1 program and four quarterly reports for the ERA 2 program and we noted for the reports selected, amounts reported did not agree to supporting documentation. Additionally, two out of the six reports were not filed by the deadline. We selected the annual report for the ERA 1 program and we noted the report did not agree to the supporting documentation. Additionally, the report was not filed by the deadline. We selected four quarterly reports for the SLFRF program and we noted for the reports selected, amounts reported did not agree to the supporting documentation. Additionally, one of the quarterly reports was not submitted by the deadline. Cause: The County identified additional grant expenses and revised existing expenses charged to the grants after the reports were submitted, but the reports had already been filed and could not be amended. Additionally, there were technical issues with the reporting portal that caused the delayed report filings. Effect: Information reported to the U.S. Treasury may have been inaccurate since it did not agree to supporting documentation. Information was not submitted by the U.S. Treasury?s deadlines. Recommendation: We recommend the County identify all eligible expenses and revisions prior to report submissions. Additionally, we recommend all grant reporting be filed timely. Views of Responsible Officials: Management will correct these findings during the year ended December 31, 2023. Additionally, after year end, management updated the cumulative expenditures on a subsequent SLFRF quarterly report to agree to the expenditures noted in the supporting documentation over the life of the program.