Road Commission of Kalamazoo CountyLocal Government

Assistance Listing, Federal Agency, and Program Name Assistance Listing Number 11.463, National Oceanic and Atmospheric Administration, Habitat Conservation Federal Award Identification Number and Year NA18NMF4630004 Pass through Entity National Fish and Wildlife Foundation Finding Type Material weakness Repeat Finding No Criteria Per 2 CFR 200.303(a), the nonfederal entity must establish and maintain effective internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. These internal controls should be in compliance with the guidance in the "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 Organization of the Treadway Commission (COSO). Condition The Road Commission did not have the appropriate processes and controls in place to ensure that reporting dates and period of performance deadlines were identified, to ensure that reporting and reimbursement requests were appropriately reviewed, or to ensure that vendors were reviewed for suspension and debarment prior to contracts being entered into. Questioned Costs None If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported N/A Identification of How Questioned Costs Were Computed N/A Context During testing of required reporting, as well as reimbursement requests submitted, it was noted that there was no evidence of supervisory reviews prior to submission of these documents. During testing of selected contracts, it was also noted that there was no evidence of review for suspension and debarment prior to entering into contracts. Additionally, while the Road Commission ultimately received extensions for reporting and the period of performance on this grant agreement, these did not occur until after the original dates for both had passed. Cause and Effect If extensions had not been received for reporting and period of performance deadlines, this lack of control could have resulted in instances of noncompliance. Additionally, the lack of appropriate reviews of reporting, requests for reimbursement, and reviews of vendors for suspension and debarment could have resulted in instances of noncompliance. Recommendation The Road Commission should review its processes and controls in these areas to ensure that they are aware of all reporting and period of performance deadlines, that all reporting and reimbursement requests are appropriately reviewed, and that all vendors for spending utilizing federal funding are reviewed for suspension and debarment. Views of Responsible Officials and Corrective Action Plan The federal grant was awarded to the Road Commission of Kalamazoo County (RCKC) in 2021 with most of the project being completed in 2024. The project will be finalized in 2025. Although deadline extensions were received for the Interim Programmatic Report and Final Report, they were not requested in advance of the deadlines. Effective immediately, the Project Engineer and Assistant County Engineer will track and manage all federal grant deadlines in their Outlook calendars to avoid risk of non-compliance. The federal agency for this grant would only provide one user with system access to submit reimbursement requests, and RCKC granted this access to the Project Engineer. The Accountant tracked cost accumulation on the grant project, provided the general ledger detail to the Project Engineer and confirmed reimbursement requests would be submitted. However, there was no review and approval of the individual reimbursement requests. Effective immediately, additional reimbursement requests for this grant will be reviewed and approved by the Assistant County Engineer and Finance prior to submitting through the system for reimbursement. For future federal grants, cost reimbursement system access will only be granted to Finance. The Accountant will review the general ledger for active federal projects monthly and submit the general ledger detail to Engineering for review and approval per contract terms. Once Engineering approves, the Finance Director will review and approve prior to the Accountant submitting the request to avoid risk of non-compliance. Vendors were not reviewed for suspension and debarment prior to entering into the contracts. Effective immediately, the SAM.gov website will be utilized to confirm vendors are active and not suspended or debarred from federal work prior to entering into contracts to avoid risk of non-compliance.