Clearwater County

Criteria: The Uniform Guidance states that an auditee must submit a data collection form and audit reporting package to the Federal Audit Clearinghouse within the earlier of 30 days after receipt of the auditor’s report or nine months after the end of the audit period. Condition: Clearwater County did not submit the data collection form to the Federal Audit Clearinghouse within the required time frame. Context: Clearwater County was in violation of the reporting requirements when their audit was not completed until ten months after the end of the fiscal year. Effect: This instance of late reporting is not expected to happen again. Cause: Required information was not provided to the auditor in a timely manner which delayed the completion of the audit report. Recommendation: The annual county audit should be completed within nine months of the fiscal year end to allow for timely submission of the data collection form and reporting package. Clearwater County's Response: The County Auditor/Treasurer will monitor the progress of the annual audit in the future so that the annual audit will be completed on a timely basis as described in the corrective action plan.

Finding Number: 2021-002 Finding Title: Reporting Requirements Criteria: The Uniform Guidance states that an auditee must submit a data collection form and audit reporting package to the Federal Audit Clearinghouse within the earlier of 30 days after receipt of the auditor?s report or nine months after the end of the audit period. Condition: Clearwater County did not submit the data collection form to the Federal Audit Clearinghouse within the required time frame. Context: Clearwater County was in violation of the reporting requirements when their audit was not completed until ten months after the end of the fiscal year. Effect: This instance of late reporting is not expected to reoccur. 0 Cause: Complications during the course of the audit imposed by an eternal oversight agency delayed the auditors in the completion of the auditor report. Recommendation: The annual County audit should be completed within nine months of the fiscal year end to allow for timely submission of the data collection form and reporting package. Clearwater County?s Response: The late audit report was beyond the control of the County. The County Auditor/Treasurer will monitor the progress of the annual audit in the future so that the annual audit will be completed on a timely basis as described in our Corrective Action Plan.

III. FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARD PROGRAMS ITEM REPORTED THIS YEAR Finding Number: 2020-003 Finding Title: Subrecipient Monitoring Program: U.S. Department of the Treasury?s COVID-19 ? Coronavirus Relief Fund (CFDA No. 21.019), Award No. SLT0016, 2020 Pass-Through Agency: Minnesota Management and Budget 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. Also, the County must comply with the requirements for pass-through entities as identified in Title 2 U.S. Code of Federal Regulations ? 200.332, such as clearly identifying the award to the subrecipient and evaluating the subrecipient?s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the award. Condition: The County did not document risk assessment procedures performed over its subrecipients. Award information, including the CFDA number, was not provided to subrecipients, and there were no signed subrecipient agreements in place. Questioned Costs: Not applicable. Context: The County passed funds to local governments who have been operating for many years and with whom the County is familiar with. The County also passed funds to non-profit organizations in order to provide assistance for their continuing operations. For all subrecipients, the County reviewed detailed listings of expenditures, along with supporting documentation, prior to the funds being reported to Minnesota Management and Budget. Effect: The County is not meeting all federal regulations pertaining to subrecipient monitoring. Cause: The County was not aware of the full extent of requirements for subrecipient monitoring. Recommendation: We recommend the County document its rationale of who is a subrecipient, including guidance followed at the time of determination, and to document risk assessments completed for those identified as subrecipients in order to determine further monitoring procedures that should be performed. We further recommend that signed subrecipient agreements be put in place that provides subrecipients with all information required under the Uniform Guidance. Clearwater County?s Response: The County will document its determination of who is a subrecipient, the guidance followed at the time of determination, and will perform risk assessments completed for identified subrecipients so that further monitoring procedures can be performed. Additionally, signed subrecipient agreements will be in place to provide all subrecipients with the required information.

Finding Number: 2019-004 Prior Audit Finding Number: 2015-013 Finding Title: Uniform Guidance Written Procurement Policies and Procedures Program: U.S. Department of Transportation?s Highway Planning and Construction Cluster (CFDA No. 20.205), Award No. 00015, 2015 Pass-Through Agency: Minnesota Department of Transportation Criteria: Title 2 U.S. Code of Federal Regulations ? 200.318 states that the non-federal entity must use its own documented procurement procedures which reflect applicable state, local, and tribal laws and regulations, provided that the procurements conform with applicable federal law and the standards identified in this regulation. The Uniform Guidance provides for a grace period for implementation of the new procurement standards provided that election is documented with the choice to use previous procurement standards. Condition: For 2015, the County?s written purchasing policy did not have the required components of a procurement policy in accordance with Title 2 U.S. Code of Federal Regulations ? 200.318, including provisions for written standards of conduct and suspension and debarment. The County also had not enacted the waiver offered by the Uniform Guidance for implementation of the new procurement standards. The policy had not been amended for 2019. Questioned Costs: Not applicable. Context: This issue was discovered during the audit of the major federal program; however, it impacts federal programs County-wide. Written policies that reflect the specific components of federal regulations improve controls to help ensure compliance with federal award requirements. The County did adopt procurement policies in October 2017; however, additional information related to the Uniform Guidance will need to be added. Effect: Noncompliance with federal program requirements. Additionally, the lack of written policies and procedures that reflect the Uniform Guidance procurement requirements could increase the risk of noncompliance with other federal program requirements. Cause: The County was not aware of the Uniform Guidance requirements. Recommendation: We recommend the County further develop and implement policies that include the specific components of the Uniform Guidance requirements in written procurement policies and procedures. Clearwater County?s Response: The County Auditor/Treasurer is working on improvements to their policy.

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