EIN: 416005792
UEI: KCS4GKENJ2N9
Audited by: Minnesota Office of the State Auditor
Oversight agency: 21 [Department of the Treasury]
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Data as of August 31, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on February 13, 2026. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by August 13, 2026 (19 days ago).
What is a management decision? →Faribault County acted as the sponsor for a project for a local city and the Minnesota Department of Transportation. The County did not develop controls over the sponsored project to ensure compliance for procurement. This included: • The County did not maintain records to support the history of procurement. • The County did not maintain documentation that the requirements for suspension or debarment were met by (a) checking SAM.gov exclusions, (b) collecting a certification from the vendor, or (c) verifying a clause or condition was included in the contract. Questioned Costs: None. Context: In June 2024, the County approved a resolution to act as a sponsoring agent for a city project. The project expenditures were $61,458 with payments made to the city for reimbursement. Effect: Without controls in place over the sponsored project, there is an increased risk of noncompliance with applicable laws, rules, and regulations. Cause: The County was unaware of the responsibilities of a project sponsor. Recommendation: We recommend the County implement controls to ensure projects the County sponsors are completed in accordance with all the federal and state rules and regulations that apply. View of Responsible Official: Acknowledge
Show full finding ▾Hide full finding ▴2024-004 Procurement and Suspension and Debarment Prior Year Finding Number: N/A Year of Finding Origination: 2024 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Transportation Program: 20.205 Highway Planning and Construction Award Number and Year: 1057187; 2024 Pass-Through Agency: Minnesota Department of Transportation 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. The Minnesota Department of Transportation State Aid Manual provides guidance and responsibilities for project sponsors. In addition to acting as the fiscal agent, the sponsor is taking on responsibility that the project will be completed in accordance with all of the federal and state rules and regulations that apply. Title 2 U.S. Code of Federal Regulations § 200.318(i) states that the County 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. Federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction with the contracting party. Condition: Faribault County acted as the sponsor for a project for a local city and the Minnesota Department of Transportation. The County did not develop controls over the sponsored project to ensure compliance for procurement. This included: • The County did not maintain records to support the history of procurement. • The County did not maintain documentation that the requirements for suspension or debarment were met by (a) checking SAM.gov exclusions, (b) collecting a certification from the vendor, or (c) verifying a clause or condition was included in the contract. Questioned Costs: None. Context: In June 2024, the County approved a resolution to act as a sponsoring agent for a city project. The project expenditures were $61,458 with payments made to the city for reimbursement. Effect: Without controls in place over the sponsored project, there is an increased risk of noncompliance with applicable laws, rules, and regulations. Cause: The County was unaware of the responsibilities of a project sponsor. Recommendation: We recommend the County implement controls to ensure projects the County sponsors are completed in accordance with all the federal and state rules and regulations that apply. View of Responsible Official: Acknowledge
Finding Number: 2024-004 Finding Title: Procurement and Suspension and Debarment Program: 20.205 Highway Planning and Construction Name of Contact Person Responsible for Corrective Action: Jennifer Luhmann & April Wellman Corrective Action Planned: Faribault County Public Works will ensure all fiscally sponsored project files contain required documentation as stated in U.S. Code of Federal Regulations 200.318(i) and 180.300. Anticipated Completion Date: December 31, 2025
The County did not have documentation to support that verification for suspension or debarred vendors was performed by County staff prior to entering into the covered transactions. Questioned Costs: None. Context: None of the vendors tested were listed as suspended or debarred on SAM.gov at the time of the audit. There were two covered transactions during 2024. Effect: Failure to verify vendors are not suspended, debarred, or otherwise excluded prior to entering into a covered transaction may result in the County entering into a transaction with a vendor that is not authorized to provide goods and services under the grant. Cause: The County informed us that documentation of SAM.gov searches for covered transactions could not be located due to staffing changes. In addition, staff were unaware of the requirements. Recommendation: We recommend the County maintain documentation to demonstrate that vendors were not suspended, debarred, or otherwise excluded from conducting business with the County; the County should complete this documentation prior to entering into a covered transaction. View of Responsible Official: Acknowledge
Show full finding ▾Hide full finding ▴2024-005 Suspension and Debarment Prior Year Finding Number: 2023-007 Year of Finding Origination: 2023 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: Federal Direct; 2022 Pass-Through Agency: N/A – Direct Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must maintain internal control over federal programs that provides reasonable assurance that the auditee is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction. The County’s procurement policy requires SAM.gov search results to be documented prior to entering into a covered transaction. Condition: The County did not have documentation to support that verification for suspension or debarred vendors was performed by County staff prior to entering into the covered transactions. Questioned Costs: None. Context: None of the vendors tested were listed as suspended or debarred on SAM.gov at the time of the audit. There were two covered transactions during 2024. Effect: Failure to verify vendors are not suspended, debarred, or otherwise excluded prior to entering into a covered transaction may result in the County entering into a transaction with a vendor that is not authorized to provide goods and services under the grant. Cause: The County informed us that documentation of SAM.gov searches for covered transactions could not be located due to staffing changes. In addition, staff were unaware of the requirements. Recommendation: We recommend the County maintain documentation to demonstrate that vendors were not suspended, debarred, or otherwise excluded from conducting business with the County; the County should complete this documentation prior to entering into a covered transaction. View of Responsible Official: Acknowledge
Finding Number: 2024-005 Finding Title: Suspension and Debarment Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Name of Contact Person Responsible for Corrective Action: Charles Schrader, Auditor / Treasurer Corrective Action Planned: Faribault County will implement procedures to ensure documentation is maintained verifying that vendors are not debarred, suspended, or otherwise excluded from conducting business with the County. This verification will be completed and documented prior to entering into any covered transaction. Anticipated Completion Date: January 31, 2026
2023-007
The County overstated current period obligations and expenditures reported on the annual Project and Expenditure Report submitted to the U.S. Department of the Treasury by $997,578 and $1,149,654, respectively, due to not updating projects reported in prior annual reports. Additionally, cumulative expenditures were understated by $49,837, due to not including all applicable expenditures. Also, the County did not submit the annual Project and Expenditure Report by the federal deadline of April 30, 2025. Questioned Costs: None. Context: The County opted to spend the SLFRF award under the Revenue Replacement category, which allows spending on broader types of government services. The annual Project and Expenditure Report required to be submitted to the U.S. Department of the Treasury by April 30 of each year for the reporting period ending March 31 was submitted June 6, 2025. Effect: The County is not in compliance with federal reporting requirements. Cause: The County indicated difficulty tracking project expenditures due to staff turnover. Recommendation: We recommend the County review the U.S. Department of the Treasury’s guidance and form instructions to ensure accurate reporting of SLFRF activity. We also recommend the County submit future Project and Expenditure Reports by the federal deadline. View of Responsible Official: Acknowledge
Show full finding ▾Hide full finding ▴2024-006 Reporting Prior Year Finding Number: 2023-006 Year of Finding Origination: 2023 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: Federal Direct; 2022 Pass-Through Agency: N/A – Direct Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must maintain internal control over federal programs that provides reasonable assurance that the auditee is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. The U.S. Department of the Treasury requires submission of an annual Project and Expenditure Report for Coronavirus State and Local Fiscal Recovery Funds (SLFRF) that includes current period expenditures. Condition: The County overstated current period obligations and expenditures reported on the annual Project and Expenditure Report submitted to the U.S. Department of the Treasury by $997,578 and $1,149,654, respectively, due to not updating projects reported in prior annual reports. Additionally, cumulative expenditures were understated by $49,837, due to not including all applicable expenditures. Also, the County did not submit the annual Project and Expenditure Report by the federal deadline of April 30, 2025. Questioned Costs: None. Context: The County opted to spend the SLFRF award under the Revenue Replacement category, which allows spending on broader types of government services. The annual Project and Expenditure Report required to be submitted to the U.S. Department of the Treasury by April 30 of each year for the reporting period ending March 31 was submitted June 6, 2025. Effect: The County is not in compliance with federal reporting requirements. Cause: The County indicated difficulty tracking project expenditures due to staff turnover. Recommendation: We recommend the County review the U.S. Department of the Treasury’s guidance and form instructions to ensure accurate reporting of SLFRF activity. We also recommend the County submit future Project and Expenditure Reports by the federal deadline. View of Responsible Official: Acknowledge
Finding Number: 2024-006 Finding Title: Reporting Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Name of Contact Person Responsible for Corrective Action: Charles Schrader, Auditor / Treasurer Corrective Action Planned: Faribault County will implement procedures to ensure federal program reports are completed accurately. This includes consulting reporting instructions provided by grantor agencies and seeking clarification from grantors when needed. Anticipated Completion Date: January 31, 2026
2023-006
FAC accepted this audit on June 3, 2025 — management decision was due December 3, 2025.
The County understated current period obligations and expenditures reported on the annual Project and Expenditure Report submitted to the U.S. Department of the Treasury by $139,040 in accrued expenditures for a project designated as SLFRF funded. Additionally, the County does not have a process in place to review the Project and Expenditure Report prior to submission. Questioned Costs: None Context: The County opted to spend the SLFRF award under the Revenue Replacement category, which allows spending on broader types of government services. The annual Project and Expenditure Report is required to be submitted to the U.S. Treasury by April 30 of each year for the reporting period ending March 31. Effect: The County is not in compliance with federal reporting requirements. Cause: The County indicated difficulty tracking project expenditures due to staff turnover. Recommendation: We recommend the County review the U.S. Department of the Treasury’s guidance and form instructions to ensure accurate reporting of SLFRF activity. Additionally, the annual Project and Expenditure Report should be reviewed prior to submission. View of Responsible Official: Acknowledge
Show full finding ▾Hide full finding ▴2023-006 Reporting Prior Year Finding Number: N/A Year of Finding Origination: 2023 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: Federal Direct; 2022 Pass-Through Agency: N/A – Direct Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must maintain internal control over federal programs that provides reasonable assurance that the auditee is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. The U.S. Department of the Treasury requires submission of an annual Project and Expenditure Report for Coronavirus State and Local Fiscal Recovery Funds (SLFRF) that includes current period expenditures. Condition: The County understated current period obligations and expenditures reported on the annual Project and Expenditure Report submitted to the U.S. Department of the Treasury by $139,040 in accrued expenditures for a project designated as SLFRF funded. Additionally, the County does not have a process in place to review the Project and Expenditure Report prior to submission. Questioned Costs: None Context: The County opted to spend the SLFRF award under the Revenue Replacement category, which allows spending on broader types of government services. The annual Project and Expenditure Report is required to be submitted to the U.S. Treasury by April 30 of each year for the reporting period ending March 31. Effect: The County is not in compliance with federal reporting requirements. Cause: The County indicated difficulty tracking project expenditures due to staff turnover. Recommendation: We recommend the County review the U.S. Department of the Treasury’s guidance and form instructions to ensure accurate reporting of SLFRF activity. Additionally, the annual Project and Expenditure Report should be reviewed prior to submission. View of Responsible Official: Acknowledge
Finding Number: 2023-006 Finding Title: Reporting Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Name of Contact Person Responsible for Corrective Action: Charles Schrader, Auditor / Treasurer Corrective Action Planned: Faribault County will implement procedures to ensure federal program reports are completed accurately. This includes consulting reporting instructions provided by grantor agencies and seeking clarification from grantors when needed. Anticipated Completion Date: December 31, 2025
In the sample of three covered transactions tested, the County did not have documentation to support that a verification for suspension or debarred vendors was performed by County staff prior to entering into the covered transactions. Questioned Costs: None Context: None of the vendors tested were listed as suspended or debarred on SAM.gov at the time of the audit. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Failure to verify vendors are not suspended, debarred, or otherwise excluded prior to entering into a covered transaction may result in the County entering into a transaction with a vendor that is not authorized to provide goods and services under the grant. Cause: The County informed us that documentation of SAM.gov searches for covered transactions could not be located due to staffing changes. Recommendation: We recommend the County maintain documentation to demonstrate that vendors were not suspended, debarred, or otherwise excluded from conducting business with the County; the County should complete this documentation prior to entering into a covered transaction. View of Responsible Official: Acknowledge
Show full finding ▾Hide full finding ▴2023-007 Suspension and Debarment Prior Year Finding Number: N/A Year of Finding Origination: 2023 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: Federal Direct; 2022 Pass-Through Agency: N/A – Direct Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must maintain internal control over federal programs that provides reasonable assurance that the auditee is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction. The County’s procurement policy requires SAM.gov search results to be documented prior to entering into a covered transaction. Condition: In the sample of three covered transactions tested, the County did not have documentation to support that a verification for suspension or debarred vendors was performed by County staff prior to entering into the covered transactions. Questioned Costs: None Context: None of the vendors tested were listed as suspended or debarred on SAM.gov at the time of the audit. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Failure to verify vendors are not suspended, debarred, or otherwise excluded prior to entering into a covered transaction may result in the County entering into a transaction with a vendor that is not authorized to provide goods and services under the grant. Cause: The County informed us that documentation of SAM.gov searches for covered transactions could not be located due to staffing changes. Recommendation: We recommend the County maintain documentation to demonstrate that vendors were not suspended, debarred, or otherwise excluded from conducting business with the County; the County should complete this documentation prior to entering into a covered transaction. View of Responsible Official: Acknowledge
Finding Number: 2023-007 Finding Title: Suspension and Debarment Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Name of Contact Person Responsible for Corrective Action: Charles Schrader, Auditor / Treasurer Corrective Action Planned: Faribault County will implement procedures to ensure documentation is maintained verifying that vendors are not debarred, suspended, or otherwise excluded from conducting business with the County. This verification will be completed and documented prior to entering into any covered transaction. Anticipated Completion Date: December 31, 2025
FAC accepted this audit on February 14, 2024 — management decision was due August 14, 2024.
FAC accepted this audit on September 25, 2022 — management decision was due March 25, 2023.
FAC accepted this audit on September 28, 2021 — management decision was due March 28, 2022.
The County provided some documentation of its risk assessment performed for some subrecipients, but the County did not perform monitoring activities (i.e., on-site visits or phone conversations with its subrecipients). Additionally, the information required to be provided to the subrecipients, including a CFDA number, was not provided to the subrecipients. Questioned Costs: None. Context: Faribault County passed grant funds to local governments, which the County is familiar with, who have been operating for many years. Proper reporting of grant expenditures were supplied to the County Auditor/Treasurer by the subreceipients at least monthly. Effect: The County is not meeting federal regulations pertaining to subrecipient monitoring. Also, the County cannot be assured that their subrecipients are administering federal awards in compliance with all applicable federal requirements. Cause: Faribault County does not generally provide federal awards to subrecipients and, therefore, did not have policies and procedures in place for subrecipient monitoring activities. Additionally, the County was not aware of the full extent of requirements for subrecipient monitoring. Recommendation: We recommend the County develop a policy to identify responsibilities for completing risk assessments and monitoring procedures over federal programs, as well as creating and maintaining proper documentation to meet the requirements of subrecipient monitoring for federal programs. This would include documenting the monitoring procedures performed (such as on-site visits, review of the subrecipient?s audit findings) and any related follow-up on findings, and performing and documenting a risk assessment of subrecipients. In addition, we recommend the County include applicable award information, including CFDA numbers, in its communications to subrecipients regarding the program. Lastly, we recommend the County document procedures performed for monitoring the Coronavirus Relief Funds going forward. View of Responsible Official: Acknowledged
Show full finding ▾Hide full finding ▴Finding Number: 2020-005 Prior Year Finding Number: N/A Repeat Finding Since: N/A Subrecipient Monitoring Program: U.S. Department of the Treasury?s 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; evaluating the subrecipient?s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the award; monitoring the activities of the subrecipient; and verifying the subrecipient is audited, if required. Condition: The County provided some documentation of its risk assessment performed for some subrecipients, but the County did not perform monitoring activities (i.e., on-site visits or phone conversations with its subrecipients). Additionally, the information required to be provided to the subrecipients, including a CFDA number, was not provided to the subrecipients. Questioned Costs: None. Context: Faribault County passed grant funds to local governments, which the County is familiar with, who have been operating for many years. Proper reporting of grant expenditures were supplied to the County Auditor/Treasurer by the subreceipients at least monthly. Effect: The County is not meeting federal regulations pertaining to subrecipient monitoring. Also, the County cannot be assured that their subrecipients are administering federal awards in compliance with all applicable federal requirements. Cause: Faribault County does not generally provide federal awards to subrecipients and, therefore, did not have policies and procedures in place for subrecipient monitoring activities. Additionally, the County was not aware of the full extent of requirements for subrecipient monitoring. Recommendation: We recommend the County develop a policy to identify responsibilities for completing risk assessments and monitoring procedures over federal programs, as well as creating and maintaining proper documentation to meet the requirements of subrecipient monitoring for federal programs. This would include documenting the monitoring procedures performed (such as on-site visits, review of the subrecipient?s audit findings) and any related follow-up on findings, and performing and documenting a risk assessment of subrecipients. In addition, we recommend the County include applicable award information, including CFDA numbers, in its communications to subrecipients regarding the program. Lastly, we recommend the County document procedures performed for monitoring the Coronavirus Relief Funds going forward. View of Responsible Official: Acknowledged
Finding Number: 2020-005 Finding Title: Subrecipient Monitoring Program: U.S. Department of the Treasury?s Coronavirus Relief Fund (CFDA No. 21.019), Award No. SLT0016, 2020 Name of Contact Person Responsible for Corrective Action: Darren Esser, County Auditor/Treasurer/Coordinator Corrective Action Planned: The County will create and implement policies and procedures needed to property administer federal awards. Anticipated Completion Date: October 31, 2021
FAC accepted this audit on September 13, 2017 — management decision was due March 13, 2018.
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