Carlton County, Minnesota

2022-007 Reporting Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Commerce Program: 11.307 Economic Adjustment Assistance Award Number and Year: 06-79-06176; URI 223578, 2020 Pass-Through Agency: Direct Criteria: Per the Standard Terms and Conditions for Construction Projects, Title II of the Public Works and Economic Development Act of 1965, the recipient shall submit a “Federal Financial Report” (Form SF-425) on a semi-annual basis for the periods ending March 31 and September 30 no later than 30 calendar days following the end of each period. Additionally, the recipient shall submit Quarterly Project Progress Reports no later than 30 calendar days following the end of each quarterly period. Condition: The County did not submit the Form SF-425 for the period ending March 31, 2022, by April 30, 2022. Additionally, the County did not submit the June 30, 2022, Project Progress Report by July 31, 2022. Questioned Costs: None. Context: The County submitted the Form SF-425 on May 26, 2022, for the period ending March 31, 2022, and submitted the Project Progress Report for the period ending June 30, 2022, on August 10, 2022. Subsequent reports tested during the year were submitted in a timely manner. The sample size was based on the guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The County did not meet the reporting requirements for the program which could affect future funding. Cause: This was a new program to the County, and staff were not fully aware of the reporting deadlines. Recommendation: We recommend County staff establish procedures to ensure the reports for this program are submitted in a timely manner to meet reporting requirements. View of Responsible Official: Concur

Finding Number: 2022-007 Finding Title: Reporting Program: 11.307 Economic Adjustment Assistance Name of Contact Person Responsible for Corrective Action: JinYeene Neumann – County Engineer and Carla McCullough – Highway Department Office Administrator. Corrective Action Planned: Review program and grant requirements to meet any reporting deadlines. Subsequent required reports were submitted in a timely manner for the remainder of 2022. Anticipated Completion Date: September 30, 2022.

2022-008 LCTS Reporting Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Health and Human Services Program: 93.778 Medical Assistance Program Award Number and Year: 2205MN5ADM, 2022 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. For County federal awards received from the Minnesota Department of Human Services (DHS), internal control should be established and maintained to provide assurance that program reports submitted to DHS are accurate and completed in accordance with DHS reporting instructions. DHS Bulletin No. 16-32-04 requires the Local Collaborative Time Study (LCTS) Fiscal Reporting and Payment Agent to review DHS-3220 quarterly reports prior to their submission. Condition: In our sample of eight DHS-3220 reports tested, none had any indication of a review being completed by someone other than the preparer of the report. Questioned Costs: None. Context: The expenditures reported on the DHS-3220 reports are used to determine federal reimbursements for the Medical Assistance Program and Foster Care – Title IV-E federal programs related to the local collaborative time study. The sample size was based on the guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: If reviews are not performed, there is an increased possibility that an error will occur and not be detected, resulting in the County receiving the incorrect amount of federal reimbursements. Cause: The employee acting as the County's Fiscal Reporting and Payment Agent was not aware of the need for a review to be performed of the reports that the employee prepares. Also, the County informed us that reviews over the DHS-3220 reports completed by the collaborative partners were being performed, but these reviews were not being documented. Recommendation: We recommend a review by someone other than the preparer be conducted for all DHS-3220 quarterly reports prepared by the County and its collaborative partners prior to submission to the Minnesota Department of Human Services. Documentation of these reviews should be retained by the County. View of Responsible Official: Concur

Finding Number: 2022-008 Finding Title: LCTS Reporting Program: 93.778 Medical Assistance Program Name of Contact Person Responsible for Corrective Action: Ann Ozan – Fiscal Supervisor II. Corrective Action Planned: Document the review of the public health, corrections, and school district quarterly reports. Review is being done when the state report is prepared, but not currently documented. Anticipated Completion Date: December 31, 2023.