FLORENCE COUNTY

2024-003 Review of Allowable Costs Federal Agency: Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: N/A Pass-Through Agency: N/A Award Period: March 1, 2021 – December 31, 2024 Type of Finding: Significant deficiency in internal control over compliance. Criteria or Specific Requirement Review of journal entries are an important control over compliance to ensure expenditure reimbursements are properly prepared and agree with the County's actual activity. Condition The County did not perform review procedures over journal entries. Questioned Costs None Context Having an appropriate reviewer over journal entries is intended to prevent, detect, and correct a potential misstatement. Effect Unallowed costs could be claimed, or costs could be double claimed. Cause While journal entries were being prepared, there was no review over those journal entries. Repeat Finding The finding is not a repeat finding in the immediately prior year. Recommendation Recommend that there is an appropriate reviewer of each journal entry. Views of Responsible Officials and Planned Corrective Actions Management agrees with the finding and has developed a plan to correct the finding.

2024-004 Federal Grants Management - Procurement Policy Federal Agency: Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: N/A Pass-Through Agency: N/A Award Period: March 1, 2021 – December 31, 2024 Type of Finding: Significant deficiency in internal control over compliance. Criteria or Specific Requirement 2 CFR 200 requires that all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and §200.320. The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Further, the method of procurement, whether informal or formal, must follow the County’s written procurement policy on approval thresholds and controls. Condition The County did not follow controls related to ensuring procurement procedures were followed. Questioned Costs None Context While performing compliance procedures, it was noted that the County did not follow adopted policies for procurement. Cause The County did not follow controls related to ensuring procurement procedures were followed. Effect The County is not in compliance with procurement or suspension and debarment requirements. Contracts for construction, nonconstruction-related procurements, and those over the simplified acquisition threshold may not be in compliance with the Uniform Guidance. Vendors may be paid with federal funds that are suspended and debarred entities which would not be in compliance with the Uniform Guidance. Repeat Finding The finding is not a repeat finding in the immediately prior year. Section III – Findings and Questioned Costs – Major Federal and State Programs (Continued) 2024-004 (Continued) Recommendation We recommend the County follow their procurement policy and maintaining this documentation. Views of Responsible Officials and Planned Corrective Actions There is no disagreement with the audit finding.

2023-003 Review of Claim Forms and Expenditure Reconciliations Federal Agency: Department of Health and Human Services Federal Program Name: Medical Assistance Program / State Health Insurance Assistance Program / Medicare Enrollment Assistance Program Assistance Listing Number: 93.778 / 93.324 / 93.071 Federal Award Identification Number and Year: N/A Pass-Through Agency: WI DHS Pass-Through Number(s): 560100 / 560152 / 560155 / 560320 / 560328 / 560432 / 560620 Award Period: January 1, 2023 through December 31, 2023 Type of Finding: Significant deficiency in internal control over compliance Criteria or Specific Requirement Uniform Guidance requires the reporting of costs or activities as the basis for making payments to providers. The State single audit guidelines require the County to perform control activities for ensuring accurate reporting, such as timely and accurate reconciliations. Monthly review of financial information, including claim forms and reconciliations, are an important control over compliance to ensure expenditure reimbursements are properly prepared and agree with the County's actual activity. Condition The County did not perform review procedures over claims prior to submission. Questioned Costs None Context During our testing, it was noted on all three reports tested that Florence County was not reviewing claims prior to submission. Effect Unallowed costs could be claimed, or costs could be double claimed. Cause While monthly claims were being prepared and reconciled to the ledger, there was no review over those claims prior to submission. Repeat Finding The finding is not a repeat finding in the immediately prior year. Section III – Findings and Questioned Costs – Major Federal and State Programs (Continued) 2023-003 (Continued) Recommendation We recommend the County designate an individual to obtain additional training in order to review each grant claim. In addition, we recommend the county consider developing a financial policies and procedures manual to document and assist in completing the claims process. Views of Responsible Officials and Planned Corrective Actions Management agrees with the finding and has developed a plan to correct the finding.

2023-004 Federal Grants Management - Procurement Policy Federal Agency: Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: N/A Pass-Through Agency: N/A Award Period: March 1, 2021 – December 31, 2024 Type of Finding: Significant deficiency in internal control over compliance, other matters. Criteria or Specific Requirement 2 CFR Section 200.214 requires non-federal entities to follow suspension and debarment regulations outlined in 2 CFR part 180. When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. 2 CFR 200.303 states “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal 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 perform a search for suspension and debarment for vendors the County initiated procurement transactions in excess of $25,000. Questioned Costs None Section III – Findings and Questioned Costs – Major Federal and State Programs (Continued) 2023-004 (Continued) Context There was one transaction that exceeded the $25,000 covered transaction threshold during the granting period. During our testing, it was noted on the item tested that Florence County was not reviewing vendors prior to entering into a contract with a vendor to ensure the vendor was not on the suspended or debarred vendor list maintained by the General Services Administration. Cause The County was not aware of the requirements under suspension and debarment. Effect The County could contract with a vendor that has been suspended or debarred from receiving federal funds. Recommendation We recommend the County use sam.gov or the ELPS listing to review clients at the beginning of the year or before a transaction is incurred in accordance with Uniform Guidance requirements. Views of Responsible Officials and Planned Corrective Actions There is no disagreement with the audit finding.

2022-003 - Federal Grants Management - Procurement Policy Federal Agency: Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: N/A Pass-Through Agency: N/A Award Period: March 1, 2021 ? December 31, 2024 Type of Finding: Significant deficiency in internal control over compliance, other matters. Criteria or Specific Requirement: 2 CFR Section 200.214 requires non-federal entities to follow suspension and debarment regulations outlined in 2 CFR part 180. When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. 2 CFR 200.303 states ?The Non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal 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 perform a search for suspension and debarment for vendors the County initiated procurement transactions in excess of $25,000. Questioned Costs: None Context: There were five transactions that exceeded the $25,000 covered transaction threshold during the granting period. During our testing, it was noted on four of the five items tested that Florence County was not reviewing vendors prior to entering into a contract with a vendor to ensure the vendor was not on the suspended or debarred vendor list maintained by the General Services Administration. Cause: The County was not aware of the requirements under suspension and debarment. Effect: The County could contract with a vendor that has been suspended or debarred from receiving federal funds. Recommendation: We recommend the County use sam.gov or the ELPS listing to review clients at the beginning of the year or before a transaction is incurred in accordance with Uniform Guidance requirements. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding.

Financial Reporting for Federal and State Awards Federal Assistance Listing Number ? All Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Having staff with expertise in federal and state financial reporting prepare the County?s schedules of expenditures of federal and state awards is an internal control intended to prevent, detect and correct a potential misstatement in the schedules of expenditures of federal and state awards, or accompanying notes to the schedule. Condition: Uniform Guidance and the State Single Audit Guidelines require the County to prepare appropriate financial statements, including the schedules of expenditures of federal and state awards. While the current staff of the County maintains financial records supporting amounts reported in the schedules of expenditures of federal and state awards, the County contracts with CliftonLarsonAllen to compile the data from these records and assist in the preparation of the schedules of expenditures of federal and state awards for the County. Questioned Costs: None Context: While performing audit procedures, it was noted that management does not have internal controls in place to provide reasonable assurance that schedules of expenditures of federal and statement awards are prepared in accordance with the Uniform Guidance and the State Single Audit Guidelines. Cause: The additional costs associated with hiring staff sufficiently experienced to prepare the County?s schedules of expenditures of federal and state awards, including the additional training time, outweigh the derived benefits. Effect: The County could receive federal or state grant awards which are not included in the accompanying schedules of expenditures of federal and state awards. Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2020-003. Recommendation: We recommend County personnel continue reviewing the County?s schedules of expenditures of federal and state awards. While it may not be cost beneficial to hire additional staff to prepare these items, a thorough review of this information by appropriate staff of the County is necessary to ensure all federal and state financial assistance programs are properly reported in the County?s single audit report. Views of Responsible Officials: There is no disagreement with the audit finding.

Segregation of Duties ? Grant Reporting Federal Agency: U.S Department of Health and Human Services Federal Program Title: Child Care and Development Block Grant Federal CFDA ? 93.575 Pass-Through Agency: Vilas County, Wisconsin Pass-Through Numbers: 0852, 0831 Award Period: January 1, 2021 - December 31, 2021 Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Grant claims filed by the County to the various granting agencies must be accurate, reconcile to the County general ledger system, and for cost-reimbursement grants, represent costs incurred. Internal controls should be designed and implemented to prevent and detect errors in the data reported on the grant claims. Segregation of duties is an internal control intended to prevent or decrease the occurrence of errors or intentional fraud. Segregation of duties ensures that no single employee has control over all phases of a transaction. Condition: There was no review of the reports and claims for reimbursement by someone other than the preparer. Accordingly, this does not allow for a proper segregation of duties for internal control purposes over reporting compliance requirements. Questioned Costs: None Context: While performing audit procedures, it was noted that management does not internal controls in place to provide proper segregation of duties over grant reporting for the grants reported above. Cause: Limited personnel trained on grant reporting and internal controls over grant reporting. Effect: There could be the possibility that the client would over- or under-report certain items for reimbursement. Recommendation: We recommend that the County utilize other means of reviewing the reports such as utilizing personnel in the County finance office or accounting personnel in other County departments review the claims prior to submitting them to the granting agency for reimbursement. We also recommend the County review its grant management policy with all department heads on an annual basis. Views of Responsible Officials: There is no disagreement with the audit finding.

Segregation of Duties - Allowable Costs & Activities - Payroll Federal Assistance Listing Number ? 21.027 Type of Finding: Material Weakness in Internal Control over Compliance Criteria or specific requirement: Costs claimed under federal awards are required to conform to the specific requirements of the grant. Uniform Guidance contains provisions that a system of internal control is required to be implemented to prevent and detect errors. Segregation of duties is an internal control intended to prevent or decrease the occurrence of errors or intentional fraud and ensures that no single employee has control over all phases of a transaction. Condition: There was no review or approval of the calculation of the employee performance pay approved by the County Board by someone other than the preparer. According, this does not allow for a proper segregation of duties for internal control purposes over allowable costs compliance requirements. Questioned Costs: None Context: While performing audit procedures, it was noted that management did not maintain any documentation regarding a review or approval of the calculation of the performance pay benefit paid using the Coronavirus State and Local Fiscal Recoverey Funds. Cause: Limited personnel trained on grant controls and compliance and the payroll process. Effect: There could be the possibility that the county incorrectly calculated, paid, and reported the performance pay associated with the grant. Repeat Finding: No. Recommendation: We recommend the County review its current internal controls over allowable costs and activities to ensure there are adequate controls in place. We also recommend the County implement a procedure for new grants to assess the specific requirements of the grant before incurring costs to ensure a system of internal controls is in place to ensure compliance under the requirements of the grant. Views of Responsible Officials: There is no disagreement with the audit finding.

FINDING NO. UNIFORM GUIDANCE AND STATE SINGLE AUDIT GUIDELINES FINDINGS 2020-003 Financial Reporting for Federal and State Awards Federal CFDA ? All State IDs ? All Not a repeat finding Compliance Requirement: Other Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria: Having staff with expertise in federal and state financial reporting prepare the County?s schedules of expenditures of federal and state awards is an internal control intended to prevent, detect and correct a potential misstatement in the schedules of expenditures of federal and state awards, or accompanying notes to the schedule. Condition: Uniform Guidance and the State Single Audit Guidelines require the County to prepare appropriate financial statements, including the schedules of expenditures of federal and state awards. While the current staff of the County maintains financial records supporting amounts reported in the schedules of expenditures of federal and state awards, the County contracts with CliftonLarsonAllen to compile the data from these records and assist in the preparation of the schedules of expenditures of federal and state awards for the County. Questioned Costs: None Context: While performing audit procedures, it was noted that management does not have internal controls in place to provide reasonable assurance that schedules of expenditures of federal and statement awards are prepared in accordance with the Uniform Guidance and the State Single Audit Guidelines. Cause: The additional costs associated with hiring staff sufficiently experienced to prepare the County?s schedules of expenditures of federal and state awards, including the additional training time, outweigh the derived benefits. Effect: The County could receive federal or state grant awards which are not included in the accompanying schedules of expenditures of federal and state awards. Recommendation: We recommend County personnel continue reviewing the County?s schedules of expenditures of federal and state awards. While it may not be cost beneficial to hire additional staff to prepare these items, a thorough review of this information by appropriate staff of the County is necessary to ensure all federal and state financial assistance programs are properly reported in the County?s single audit report. Views of Responsible Officials: There is no disagreement with the audit finding.

FINDING NO. UNIFORM GUIDANCE AND STATE SINGLE AUDIT GUIDELINES FINDINGS 2020-004 Segregation of Duties ? Grant Reporting Federal Agency: U.S Department of Health and Human Services Federal Program Title: Child Care and Development Block Grant, Foster Care (Title IV-E), Medical Assistance Program Federal CFDA ? 93.575, 93.658, 93.778 State IDs ? N/A Pass-Through Agency: Wisconsin Department of Health Services, Wisconsin Department of Children and Families, Wood County, Wisconsin, Vilas County, Wisconsin Pass-Through Numbers: 852, 0831,3413, 3561, 3619, 560152, 560155, 878, 881, N/A, 159322, 284 Award Period: January 1, 2020 - December 31, 2020 Not a repeat finding Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria: Grant claims filed by the County to the various granting agencies must be accurate, reconcile to the County general ledger system, and for cost-reimbursement grants, represent costs incurred. Internal controls should be designed and implemented to prevent and detect errors in the data reported on the grant claims. Segregation of duties is an internal control intended to prevent or decrease the occurrence of errors or intentional fraud. Segregation of duties ensures that no single employee has control over all phases of a transaction. Condition: There was no review of the reports and claims for reimbursement by someone other than the preparer. Accordingly, this does not allow for a proper segregation of duties for internal control purposes over reporting compliance requirements. Questioned Costs: None Context: While performing audit procedures, it was noted that management does not internal controls in place to provide proper segregation of duties over grant reporting for the grants reported above. Cause: Limited personnel trained on grant reporting and internal controls over grant reporting. Effect: There could be the possibility that the client would over- or under-report certain items for reimbursement. Recommendation: We recommend that the County utilize other means of reviewing the reports such as utilizing personnel in the County finance office or accounting personnel in other County departments review the claims prior to submitting them to the granting agency for reimbursement. We also recommend the County review its grant management policy with all department heads on an annual basis. Views of responsible officials: There is no disagreement with the audit finding.

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