KALKASKA COUNTY

2020-001 ? Grant Reporting - Wages and Fringe Benefit Costs Finding Type. Material Noncompliance/Material Weakness in Internal Control over Compliance (Reporting). Program. Coronavirus Relief Fund (CRF); U.S. Department of Treasury; Assistance Listing Number 21.019; Award number 40-0000-PSPHPR, Passed-through the Michigan Department of Treasury. Criteria. A recipient of federal awards is required to report costs incurred periodically to the grantor agency in order to certify that federal funds are expended on allowable activities and eligible costs. In the case of the Public Safety Public Health Payroll Reimbursement (PSPHPR) program, award allocations by the Michigan Department of Treasury were determined based on the costs reported with the initial application form. Condition. As part of its grant application, the County was required to report wages and fringe benefits paid to public safety employees during the months of April and May 2020. However, the amounts reported did not agree to the County's internal records. Management attempted to use budgeted (rather than actual) amounts, and through a combination of human and arithmetic errors, over-reported its costs. Cause. This condition appears to have been caused by not comparing actual costs, per the County's general ledger, to the amounts reported to the Michigan Department of Treasury. Effect. As a result of this condition, the County misstated the amounts included in grant reports by amounts that were material to the grant program. This over-reporting caused the County to receive a greater allocation than it was otherwise entitled to. However, because the grant only covered a portion of reported costs, the amount ultimately received was less than the County's actual costs. However, the County was exposed to the risk that it could have been over-reimbursed in excess of its actual costs. Questioned Costs. No costs are required to be questioned as a result of this finding, inasmuch as total costs incurred during the period of performance exceeded the amount awarded. Recommendation. We recommend that when individuals outside of the finance department prepare amounts to be included in grant reporting that these schedules be reviewed and compared to actual payroll reports from the same pay periods. The County's general ledger should always be considered the "official" books of record for all future grant reporting. View of Responsible Officials. The Clerk's office will review all grant reports to ensure consistency and accuracy with payroll and accounts payable systems.

2020-001 ? Grant Reporting - Wages and Fringe Benefit Costs Auditor Description of Condition and Effect: As part of its grant application, the County was required to report wages and fringe benefits paid to public safety employees during the months of April and May 2020. However, the amounts reported did not agree to the County's internal records. Management attempted to use budgeted (rather than actual) amounts, and through a combination of human and arithmetic errors, over-reported its costs. As a result of this condition, the County misstated the amounts included in grant reports by amounts that were material to the grant program. This over-reporting caused the County to receive a greater allocation than it was otherwise entitled to. However, because the grant only covered a portion of reported costs, the amount ultimately received was less than the County's actual costs. However, the County was exposed to the risk that it could have been over-reimbursed in excess of its actual costs. Auditor Recommendation: We recommend that when individuals outside of the finance department prepare amounts to be included in grant reporting that these schedules be reviewed and compared to actual payroll reports from the same pay periods. The County's general ledger should always be considered the "official" books of record for all future grant reporting. Management Assessment. During 2020 there were several new grant opportunities relative to the pandemic. Multiple departments were involved in tracking and reporting for these funds which may have led to inconsistencies or errors. Planned Corrective Action. Going forward the Clerk?s office will review all grant reports to ensure consistency and accuracy. Responsible Party. Deborah Hill, County Clerk/Administrator Date of Planned Corrective Action. March 1, 2022