Houston CountyLocal Government

Suspension and Debarment 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 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: 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 suspension and debarment requirements apply to covered transaction amounts over $25,000. Condition: For three covered transactions selected for testing, the verification for suspended or debarred vendors was not performed before entering into the covered transactions. Questioned Costs: None. Context: The County entered into a total of 29 covered transactions over the $25,000 threshold for this grant. In addition, after this was brought to the County’s attention, the County verified that these vendors were not suspended or debarred. 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 or debarred may result in the County entering into a transaction with a vendor that is not authorized to provide goods and services. Cause: The County has procedures in place to perform verification and retain documentation; however, due to staffing shortages and timing, the procedures were not performed. Recommendation: We recommend the County maintain documentation to demonstrate that vendors are not debarred, suspended, or otherwise excluded; this documentation should be completed prior to entering into a covered transaction. View of Responsible Official: Concur

2021-002 Eligibility Intake Function 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: 2105MN5ADM, 2021 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. Condition: The Minnesota Department of Human Services (DHS) maintains the computer system, MAXIS, which is used by Houston County to support the eligibility determination process. While periodic supervisory case reviews are performed to monitor compliance with grant requirements for eligibility, not all documentation was available or input correctly into MAXIS. Three case files in the sample of 40 MAXIS case files tested did not have support for asset information or asset information was not properly entered into MAXIS. Questioned Costs: Not applicable. The County administers the program, but benefits to participants in this program are paid by the State of Minnesota. Context: The State of Minnesota contracts with the County to perform the ?intake function? which includes meeting with the social service participant to determine income and categorical eligibility. The Minnesota DHS maintains the MAXIS system, which supports the eligibility determination process and actually pays the benefits to the participants. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Missing information, or the improper input of information into the MAXIS system, increases the risk that a program participant will receive benefits when they are not eligible. Cause: Program personnel entering case information into MAXIS did not ensure all required information was input into MAXIS correctly. Recommendation: We recommend Houston County implement additional procedures to provide reasonable assurance that all necessary documentation to support eligibility determinations is obtained and input into MAXIS. Consideration should be given to providing additional training to program personnel. View of Responsible Official: Concur

Finding Number: 2020-003 Prior Year Finding Number: N/A Repeat Finding Since: N/A Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: U.S. Department of the Treasury?s COVID 19 ? Coronavirus Relief Fund (CRF), 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. Section 5001(d) of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provides the eligible purposes for which Coronavirus Relief Fund payments may be used and generally requires that payments are necessary expenditures incurred due to the public health emergency during the covered period. Condition: Houston County did not document CRF-related duties performed for diverted staff salaries, track specific time spent, or document the reasoning for the percentage of time allocated to the grant. Questioned Costs: $57,139 of undocumented costs. Context: The County did not document the duties performed, track specific time spent, or document the reasoning for the percentage of time allocated to the grant for four employees tested. The amount of likely questioned costs projected to the population is $192,913. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The County identified expenditures as relating to the CRF program which are not in compliance with activities allowed or unallowed and allowable costs/cost principles compliance requirements. Cause: The County Administrator performed reporting of salaries and is no longer employed with County as of December 31, 2020. Other employees were unable to find support or determine how reporting percentages were determined. Recommendation: We recommend the County implement procedures to follow the guidance related to the CRF program and claim documented actual costs incurred under the grant. View of Responsible Official: Concur

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