Red Lake CountyLocal Government

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: Red Lake County did not submit the data collection form to the Federal Audit Clearinghouse within the required time frame. Context: Red Lake County was in violation of the reporting requirements when their audit was not completed until 11 months after the end of the fiscal year. Effect: This instance of later reporting is not expected to reoccur. Cause: Delays in completeness of information resulted in late reporting. 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. County’s Response: The late audit report was beyond the control of the County. The County Auditor 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.

Criteria: Federal requirements for the 20.205 Highway Planning and Construction awards include subrecipient monitoring for the award. Condition: The County was not in compliance with the requirements: - Obtain an understanding of internal control, assess risk, and test internal controls. - Identify the requirements of the pass thru money and convey the terms and conditions to the subrecipient. - Monitor the subrecipient to verify that the award was spent in accordance with the terms and conditions set forth by the award. Context: The Highway Department passed $728,000 from the federal government through to the City of Red Lake Falls for the trail project. Various documentation was required to comply with the subrecipient monitoring portion of the award. Effect: Noncompliance with federal award requirements. Cause: The monitoring of pass-thru awards was missing in the documentation of the subrecipient project. Recommendation: We recommend the County abide by their policy for subrecipient monitoring. County’s Response: The County acknowledges the finding and will take corrective action to ensure compliance with federal subrecipient monitoring requirements. The County will review its procedures to ensure that all future subrecipient agreements include proper documentation of monitoring activities, including communication of award terms, risk assessments, and verification that funds are expended in accordance with federal requirements. The County Highway Department and Auditor’s Office will work together to document all subrecipient monitoring steps for future federally funded projects.

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: Red Lake County did not submit the data collection form to the Federal Audit Clearinghouse within the required time frame. Context: Red Lake County was in violation of the reporting requirements when their audit was not completed until after 11 months after the end of the fiscal year. Effect: This instance of later reporting is not expected to reoccur. Cause: Delays in the completeness of information resulted in late reporting. 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. Red Lake County Response: The late audit report was beyond the control of the County. The County Auditor 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: 2020-008 Finding Title: Uniform Guidance Written Procurement Policies and Procedures Program: US Department of the Treasury Coronavirus Relief Fund (CFDA #21.019) 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 2020, 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 policy had not been since 2018. 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; 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. County?s Response: The County Auditor will add the additional information related to the Uniform Guidance to its procurement policy.

Finding Number: 2020-009 Finding Title: Subrecipient Monitoring Program: US Department of the Treasury Coronavirus Relief Fund (CFDA #21.019) Award No.: SLT0016, 2020 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. 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. County?s Response: The County is in the process of completing their subrecipient monitoring policy.