RANDOLPH COUNTYLocal Government

Criteria: The schedule of expenditures of federal awards must accurately represent financial results as it pertains to federal programs. The schedule of expenditures of federal awards must be reconciled to the accrual basis trial balance. Condition: During audit testing of compliance and internal controls over compliance, it was discovered the schedule of expenditures of federal awards was not accurate and not reconciled to the accrual basis trial balance. Cause: Lack of adherence to established accounting policies and corresponding review procedures coupled with failure to meticulously track and document federal expenditures. Effect: Failure to produce an accurate schedule of expenditures of federal awards, and failure to reconcile the schedule of expenditures of federal awards to the accrual basis trial balance could result in grant termination and loss of future awards. Recommendation: Management should implement procedures to ensure an accurate schedule of expenditures of federal awards with a corresponding reconciliation to the accrual basis trial balance. It is recommended that management establish and enforce review and approval procedures related to the schedule of expenditures of federal awards and the accrual basis trial balance.Views of Responsible Officials and Planned Corrective Actions: The County acknowledges the importance regarding the accuracy of the schedule of expenditures of federal awards and corresponding reconciliation to the accrual basis trial balance. The County is considering providing additional training for current personnel along with the employment of additional personnel with suitable knowledge, skills, and experience to fulfill the fund-based accounting duties and other fiscal duties of the Treasurer’s office. Planned completion date for corrective action plan: Fiscal year 2026

Financial Statement Findings Required to be Reported in Accordance with Generally Accepted Government Auditing Standards: Summary Schedule of Current Audit Findings: U.S. Department of the Treasury 2021-001 American Rescue Plan Act (ARPA) ? CFDA 21.019 Grant Number: OMB 1505-0271 Grant Period: March 3, 2021 ? December 31, 2024 Material Weakness Financial Reporting ? Schedule of Expenditures of Federal Awards Condition: The County did not initially include funds for the stated program in the Schedule of Expenditures of Federal Awards from the United States Department of the Treasury. The County is responsible for designing and implementing internal controls that provide reasonable assurance regarding the reliability of financial reporting including the Schedule of Expenditures of Federal Awards. These controls should ensure that financial events are identified properly and presented completely. Our audit identified a deficiency in internal control that limited the County?s ability to produce a reliable Schedule of Expenditures of Federal Awards. Because of the effect on the County?s financial reporting, we consider this a material weakness. Recommendation: We recommend that the County strengthen internal control over the preparation of the Schedule of Expenditures of Federal Awards. The County should review the Uniform Guidance, guidelines from the United States Department of the Treasury, and all contracts for state and federal awards. This should allow the County to ensure proper revenue recognition as it relates to federal awards. Furthermore, we recommend that the County?s board of commissioners employ individuals with adequate skills and training to perform the fund-based accounting duties and other duties of the Treasurer?s office related to federal and state grant reporting.

Summary Schedule of Current Audit Findings (Continued): U.S. Department of the Treasury 2021-002 American Rescue Plan Act (ARPA) ? CFDA 21.019 Grant Number: OMB 1505-0271 Grant Period: March 3, 2021 ? December 31, 2024 Material Weakness Accounting Discipline and Oversight Condition: In the process of performing the audit, we noted the County?s general ledger is currently maintained on the cash basis of accounting, as it relates to receivables and payables. We further noted account reconciliations were not completed on a timely basis. Failure to maintain the County?s general ledger on the accrual basis of accounting distorts the interim financial statements and may lead to critical financial decisions being made on erroneous data. We suggest the County implement the use of accrual basis of accounting. Significant adjustments were needed to properly report accounts receivable, accounts payable, accrued payroll, revenue, expenses, fixed assets, and long-term debt. Effective monthly reconciliations play a key role in proving the accuracy of accounting data and financial information that comprise interim and year-end financial statements. It was noted during the year ended November 30, 2021, significant turnover was experienced by the Treasurer?s office. The County provided training to an employee to fulfill the accounting duties of the Treasurer?s office. Ultimately the employee?s aptitude, coupled with inadequate supervision and follow-up training, was not commensurate with the accounting duties required by the Treasurer?s office. This led to significant audit adjustments for the year ended November 30, 2021. Recommendation: The County could have been more effective and efficient at year-end in closing the books for the audit if the County utilized a more formal year-end closing schedule. Such an approach would detail all the critical steps in the yearend close as well the account analysis and schedule preparation that is required for the audit. Due dates would also be monitored so the process stays on target for the established deadline. We suggest the County develop such a formal year-end closing schedule that indicates specific personnel responsibilities and corresponding time requirement. Strict adherences to this schedule should be required because this will allow year-end work and audit preparation to be much less time consuming and arduous process. Furthermore, we recommend that the County?s Board of Commissioners employ individuals with adequate skills and training to perform the fund-based accounting duties and other fiscal duties of the Treasurer?s office.