COUNTY OF MONROELocal Government

Finding #2021-001 ? Internal Controls over preparation of the County?s Schedule of Expenditures of Federal Awards Criteria: Prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA), in accordance with federal OMB Uniform Guidance ?200.510 Financial Statements. Condition: During the fiscal year 2021 audit, the Treasurer?s office provided the auditor with the Schedule of Expenditures of Federal Awards, which contained some incorrect expenditure totals. Cause: The County?s controls over the review of the SEFA were not operating effectively. Complete and accurate federal expenditure information was unavailable to the Treasurer?s office in a timely manner, and as a result, the office could not prepare an accurate Schedule of Expenditures of Federal Awards. Effect: Lack of adequate controls over financial reporting of federal expenditures led to the initial reporting of the County?s federal expenditures being overstated by $138,006. Management subsequently corrected the errors. Accuracy of the Schedule of Expenditures of Federal Awards is fundamental to selecting and testing compliance for the County?s major programs in accordance with OMB Uniform Guidance. Errors in preparing the SEFA may result in the improper selection and testing of compliance for major programs required under OMB Uniform Guidance. Questioned Costs: None Recommendation: We recommend that management utilize its accounting software to properly track federal grant revenues and expenditures and prepare an accurate, comprehensive list of federal revenues and expenditures for each fiscal year within 90 days of the fiscal year end. Response: Management agrees with the recommendation. Management will strengthen its policies and procedures to prepare an accurate, comprehensive list of federal revenues and expenditures for each fiscal year within 90 days of year-end. We anticipate completion of this corrective action by November 30, 2022.

Criteria: Prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA), in accordance with federal OMB Uniform Guidance ?200.510 Financial Statements. Condition: During the fiscal year 2020 audit, various County department heads provided the auditor with components of the Schedule of Expenditures of Federal Awards, which did not properly include all federal grant expenditures. Cause: The County?s controls over the review of the SEFA were not operating effectively. Complete and accurate federal expenditure information was not provided to the Treasurer by all department heads, and he could not prepare an accurate Schedule of Expenditures of Federal Awards. Effect: Lack of adequate controls over financial reporting of federal expenditures led to the initial reporting of the County?s federal expenditures being understated by $1,535,671. Management subsequently corrected the errors. Accuracy of the Schedule of Expenditures of Federal Awards is fundamental to selecting and testing compliance for the County?s major programs in accordance with OMB Uniform Guidance. Errors in preparing the SEFA may result in the improper selection and testing of compliance for major programs required under OMB Uniform Guidance. Questioned Costs: None Recommendation: We recommend that management strengthen its policies and procedures to ensure that all federal expenditures are reported to one party within County government and that the one responsible party prepare an accurate, comprehensive list of federal revenues and expenditures for each fiscal year within 90 days of the fiscal year end. Response: Management agrees with the recommendation. Management will strengthen its policies and procedures to ensure that all federal expenditures are reported to one party within County government, and one responsible party will prepare an accurate, comprehensive list of federal revenues and expenditures for each fiscal year within 90 days of year-end. We anticipate completion of this corrective action by November 30, 2021.