Lincoln County

Reporting ? Social Services State/federal agency: Department of Children & Families, Department of Health Services State/federal program title: Youth Aids, Medicaid Cluster State ID/ Assistance Listing Number: 437.3413, 93.778 Award Period: January 1, 2021 ? December 31, 2021 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The 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 for grants within the social services department. Accordingly, this does not allow for 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 have internal controls in place to provide and document proper segregation of duties over grant reporting for the social services SPARC and DHS income maintenance grants. Cause: The department and the positions responsible for preparing, reviewing, and approving the report are combined for one person resulting in the missed reporting control requirements. Effect: Information could be mis-keyed or potentially altered if there is no segregation of duties or review of reporting before being sent to the granting agency. Repeat finding: Yes Recommendation: We recommend the County review its written procedures to ensure there are adequate controls over reporting to prevent or detect error. Views of responsible officials: There is no disagreement with the audit finding. Refer to the management response per the corrective action plan.

Allowable Costs ? Social Services Journal Entries State agency: Department of Children & Families, Department of Health Services State program title: Youth Aids, Medicaid Cluster State ID Number: 437.3413, 93.778 Award Period: January 1, 2021 ? December 31, 2021 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: In order to ensure all costs coded to a grant are accurate and allowable, internal controls should be designed and implemented to prevent and detect errors in the underlying costs and activities. Segregation of duties is an internal control intended to prevent or decrease the occurrence of error 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 journal entries by someone other than the preparer for grants within the social services department. Accordingly, this does not allow for a proper segregation of duties for internal control purposes over allowable costs and activities compliance requirements. Questioned costs: None Context: While performing audit procedures, it was noted that management does not have internal controls in place to provide and document proper segregation of duties over journal entries coded to certain grant programs for the social services SPARC and income maintenance grants. Cause: The finance staff within the social services department consists of only one person who has responsibility over adjusting the general ledger for the department. Effect: If the County incurred under budgeted costs for the year, the County could receive grant funds it was not entitled to under the grant agreement. Repeat finding: No Recommendation: We recommend the County review its written procedures to ensure there are adequate controls over journal entry reviews. Views of responsible officials: There is no disagreement with the audit finding. Refer to the management response per the corrective action plan.

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