Ingham County, MichiganLocal Government

2025-002 – Procurement, Suspension and Debarment Finding Type. Immaterial Noncompliance / Significant Deficiency in Internal Control over Compliance (Procurement, Suspension and Debarment). Program. Coronavirus State and Fiscal Recover Funds; U.S. Department of Treasury; Assistance Listing Number 21.027; direct and passed through Michigan Supreme Court / Court Administrative Office; Michigan Department of Health and Human Services; award numbers SCAO-2023-078, 20250036.Criteria. A recipient of federal awards is required to determine that vendors being paid with federal funds are not suspended or debarred from doing business with the County. Such procedures are required whenever the amount disbursed to a single vendor in a given year is expected to be at least $25,000. Condition. While the County indicated that they have been completing suspension and debarment checks on County vendors in the past, evidence of these suspension and debarment checks were not retained and made available for audit. Cause. This condition was caused by management oversight in knowing the federal compliance requirements of the grant, and maintaining appropriate supporting documentation to evidence compliance. Effect. As a result of this condition, the County was exposed to the risk that disbursements of federal awards would be made to vendors suspended or debarred by the federal government and subject to disallowance by the grantor. Questioned Costs. No costs have been questioned as a result of this finding. Recommendation. We recommend that the County verify that any of their vendors with $25,000 spent with federal funds were not suspended or debarred, and that documentation of these procedures be retained. View of Responsible Officials. The County agrees with the finding and has prepared a corrective action plan.

2024-003 - Subrecipient Monitoring Finding Type. Immaterial Noncompliance / Significant Deficiency in Internal Control over Compliance (Subrecipient Monitoring). Program. Homeland Security Grant Program; U.S. Department of Homeland Security; ALN 97.067; Passed through the Michigan State Police; Award numbers EMW-2022-SS-00031-S01 and EMW-2023-SS-00022-S01. Coronavirus State and Fiscal Recover Funds; U.S. Department of Treasury; ALN 21.027. Criteria. A pass-through entity must monitor the activities of the subrecipients as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR 200.331(d)-(f)), plus any additional items identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award. Condition. We noted that the County did not compile any risk assessments or perform adequate subrecipient monitoring during the fiscal year. Cause. The cause of this condition appears to be a lack of understanding of the subrecipient monitoring requirements of the grants. Effect. The lack of monitoring failed to provide reasonable assurance that the subrecipients complied with the provisions of the grant. Questioned Costs. No costs were questioned due to the fact that the County approved subrecipient expenditures. Recommendation. We recommend that the County create a subrecipient policy to ensure that all subrecipient grant awards are monitored in compliance with the Uniform Guidance requirements. View of Responsible Officials. We concur with the audit assessment regarding this matter.

2021-004 - COVID-19 - Subrecipient Monitoring (Repeat Finding) Finding Type. Material Noncompliance / Material Weakness in Internal Control over Compliance (Subrecipient Monitoring). Programs. COVID-19 - Coronavirus State and Local Fiscal Recovery Funds; U.S. Department of Treasury; ALN 21.027, Homeland Security Grant Program; U.S. Department of Homeland Security; ALN 97.067; Award numbers EMW-2017-SS-00013, EMW-2018-SS-00042, and EMW-2019-SS-00021. Criteria. A pass-through entity must monitor the activities of the subrecipients as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR 200.331(d)-(f)), plus any additional items identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award. Condition. We noted that the County did not compile any risk assessments or perform adequate subrecipient monitoring during the fiscal year. Cause. The cause of this condition appears to be a lack of understanding of the subrecipient monitoring requirements of the grants. Effect. The lack of monitoring failed to provide reasonable assurance that the subrecipients complied with the provisions of the grant. Questioned Costs. No costs were questioned due to the fact that the County approved subrecipient expenditures. Recommendation. We recommend that the County create a subrecipient policy to ensure that all subrecipient grant awards are monitored in compliance with the Uniform Guidance requirements. View of Responsible Officials. We concur with the audit assessment regarding this matter.

CFDA Number, Federal Agency, and Program Name - CFDA 21.019; Coronavirus Relief Fund Federal Award Identification Number and Year - FAIN N/A 2020 Pass through Entity - Michigan Department of Treasury Finding Type - Material weakness Repeat Finding - No Criteria - Per 2 CFR 200.303, a nonfederal entity must establish and maintain effective internal control over the federal award 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 award. These internal controls should be in compliance with guidance in 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 Organizations of the Treadway Commission (COSO). Condition - The County did not accurately describe the uses of the Coronavirus Relief Local Government Grant funds on the grant closing certificate. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable Context - During review of the reports submitted for the Coronavirus Relief Fund, it was noted that the expenditure description was wrong for Coronavirus Relief Local Government Grant. The application indicated that the funds were going to be expended on personal protective equipment. The client then decided to use the funds on payroll, which was another allowable expenditure. However, the client did not update the expenditure type on the grant close-out report. Cause and Effect - There was no secondary review of the grant closing certificate for the Coronavirus Relief Local Government Grant before it was submitted, which resulted in inconsistencies within the report. Recommendation - We recommend that the County implements controls to ensure that reports are complete and accurate. Views of Responsible Officials and Corrective Action Plan - Grant was one-time and is completed.

CFDA Number, Federal Agency, and Program Name - CFDA 97.067; U.S. Department of Homeland Security; Homeland Security Grant Program Federal Award Identification Number and Year - EMW 2017 SS 00013, EMW 2018 SS 00042, EMW 2019 SS 00021 Pass through Entity - Michigan Department of State Police Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes 2019 007 Criteria - Per 2 CFR 200.332(b) a non-federal entity must evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs 2 CFR 200.332 (d) and 2 CFR 200.332 (e), which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency. Condition - .The County did not perform risk assessments and create a subrecipient monitoring policy Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable Context - During the fiscal year, the County expended $784,318 under this grant and passed through $726,555 to nine participating jurisdictions that are subrecipients of the County for these funds. The County did not perform risk assessments and create a risk assessment policy to monitor the subrecipients. The County, however, performed desk monitoring of all subrecipients through review of invoices submitted for compliance with allowability and approved budget; however, due to the lack of risk assessments, the County's level of monitoring may not be adequate. Cause and Effect - The County did not implement subrecipient requirements outlined by the Uniform Guidance, which, therefore, resulted in the lack of certain required procedures and documentation, which could increase the risk of noncompliance on the part of the subrecipients. Recommendation - We recommend that the County evaluate the requirements related to subrecipient risk assessments and monitoring as outlined by Uniform Guidance and determine policies and procedures to adopt to comply with the requirements. Views of Responsible Officials and Planned Corrective Actions - Risk assessments will be performed and a policy written

CFDA Number, Federal Agency, and Program Name - CFDA 97.067; U.S. Department of Homeland Security; Homeland Security Grant Program Federal Award Identification Number and Year - EMW 2017 SS 00013, EMW 2018 SS 00042, EMW 2019 SS 00021 Pass through Entity - Michigan Department of State Police Finding Type - Material weakness Repeat Finding - Yes 2019 008 Criteria - Per 2 CFR 200.510(b), the auditee must prepare a schedule of expenditures of federal awards for the period covered by the auditee's financial statements, which must include the total federal awards expended, as determined in accordance with ?200.502, basis for determining federal awards expended. Per 2 CFR 200.305(b)(3), when the reimbursement method is used, the federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the federal awarding agency or pass-through entity reasonably believes the request to be improper. Condition - Certain expenditures (reimbursement requests paid to subrecipients) relating to a prior fiscal period were improperly recorded in the current fiscal year. Additionally, the payments related to these expenditures were not made to the subrecipients in a timely manner. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable Context - The County initially reported expenditures of $835,326, which included $51,008 that related to either the prior fiscal year or the subsequent fiscal year. The County subsequently excluded these expenditures from the SEFA. The County did not have appropriate controls in place to ensure that invoices were being recorded in the proper period and that payments to subrecipients were made in a timely manner. Cause and Effect -As a result of the errors, the amount of expenditures initially reported on the schedule of expenditures of federal awards was overstated. Additionally, since there was a significant delay in identifying the expenditures and processing the payments, the County did not pay the subrecipients within a timely manner, as required under 2 CFR Section 200.305(b)(3). Recommendation - We recommend that the County establish procedures to ensure that invoices are recorded in the proper period and that payments to subrecipients are made within the allowable time period. Views of Responsible Officials and Planned Corrective Actions - Strict turn-around deadlines have been imposed internally and with the member local governments in the Region.

CFDA Number, Federal Agency, and Program Name CFDA 97.067; U.S. Department of Homeland Security; Homeland Security Grant Program Federal Award Identification Number and Year EMW 2016 SS 00010 S01, EMW 2017 SS 00013, EMW 2018 SS 00042 Pass through Entity Michigan Department of State Police Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria Per 2 CFR 200.331, pass through entities are required to include certain elements in subrecipient agreements and perform risk assessments and create a subrecipient monitoring policy. Condition The County did not include all required elements in the subrecipient agreements with the participating jurisdictions. In order to complete subrecipient monitoring, the County did not perform risk assessments and create a subrecipient monitoring policy. Questioned Costs None Identification of How Questioned Costs Were Computed Not applicable Context During the fiscal year, the County expended $1,044,196 under this grant and passed through $879,731 to nine participating jurisdictions that are subrecipients of the County for these funds. The County did not include all the required elements within the subrecipient agreements and did not perform risk assessments and create a risk assessment policy to monitor the subrecipients. The County, however, performed desk monitoring of all subrecipients through review of invoices submitted for compliance with allowability and approved budget; however, due to the lack of risk assessments, the County's level of monitoring may not be adequate. Cause and Effect The County did not implement subrecipient requirements outlined by the Uniform Guidance, which, therefore, resulted in the lack of certain required procedures and documentation, which could increase the risk of noncompliance on the part of the subrecipients. Recommendation We recommend that the County review the subrecipient agreements and ensure that the required elements are included within the agreements. Views of Responsible Officials and Corrective Action Plan Subrecipient agreements will be updated and replaced with a current version that includes proper language. Data for new agreements shall be provided to County's legal firm.

CFDA Number, Federal Agency, and Program Name CFDA 97.067; U.S. Department of Homeland Security; Homeland Security Grant Program Federal Award Identification Number and Year EMW 2016 SS 00010 S01, EMW 2017 SS 00013, EMW 2018 SS 00042 Pass through Entity Michigan Department of State Police Finding Type Material weakness Repeat Finding No Criteria Per 2 CFR 200.510(b), the auditee must prepare a schedule of expenditures of federal awards for the period covered by the auditee's financial statements, which must include the total federal awards expended, as determined in accordance with ?200.502, basis for determining federal awards expended. Per 2 CFR 200.305(b)(3), when the reimbursement method is used, the Federal awarding agency or pass through entity must make payment within 30 calendar days after receipt of the billing, unless the federal awarding agency or pass through entity reasonably believes the request to be improper. Condition Certain expenditures (reimbursement requests paid to subrecipients) relating to a prior fiscal period were improperly recorded in the current fiscal year. Additionally, the payments related to these expenditures were not made to the subrecipients in a timely manner. Questioned Costs None Identification of How Questioned Costs Were Computed Not applicable Context The County initially reported expenditures of $1,044,196, which included $53,085 that related to the prior fiscal year. The County subsequently excluded these expenditures from the SEFA. The County did not have appropriate controls in place to ensure that invoices were being recorded in the proper period and that payments to subrecipients were made in a timely manner. Cause and Effect As a result of the errors, the amount of expenditures initially reported on the schedule of expenditures of federal awards was overstated. Additionally, since there was a significant delay in identifying the expenditures and processing the payments, the County did not pay the subrecipients within a timely manner, as required under 2 CFR Section 200.305(b)(3). Recommendation We recommend that the County establish procedures to ensure that invoices are recorded in the proper period and that payments to subrecipients are made within the allowable time period. Views of Responsible Officials and Planned Corrective Actions Ingham County is realigning and reassigning duties within the financial services department to ensure that staff resources are sufficient to complete job tasks in a timely manner. Lack of staff and staff turnover was very problematic in 2019. As of September 2020, there has not been any turnover in the department for nine months, and all positions are filled.

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