COUNTY OF MISSISSIPPI

Criteria: Title 2 U.S. Code of Federal Regulations Part 200.510(b) requires auditees to prepare a schedule of expenditures of federal awards which must report total federal awards expended during the audit period. At a minimum, the schedule must include: expenditures by individual program, program title and assistance listing number, programs required to be identified as part of a cluster, name of the pass-through entity and identifying number assigned by the pass-through entity for awards not received directly from the federal government, and the total amount provided to subrecipients from each federal program. Condition: The schedule of expenditures of federal awards (SEFA) reported by the County in the annual budget documents contained errors in amounts of federal expenditures reported. Additionally, the schedule did not include the identification of programs required to be part of a cluster, names of pass-through entities, identifying numbers assigned by the pass-through entities, or total amounts provided to subrecipients for the applicable programs. The County excluded federal funds expenditures from the following programs: 15.226 - Payments in Lieu of Taxes, 16.738 - Edward Byrne Memorial Justice Assistance Grant Program, 20.205 - Highway Planning and Construction, and 21.027 - COVID-19 Coronavirus State and Local Fiscal Recovery Funds. Additionally, the County reported the total amount of receipts for 93.563 - Child Support Services rather than expenditures. Cause: The County has not implemented a proper system of internal control over SEFA preparation, such as a reconciliation to underlying accounting records or having a separate individual review the SEFA for clerical accuracy after it has been prepared. Reasons for discrepancies varied. Effect: The SEFA presented for the audit did not accurately reflect the County's actual expenditures of federal awards for the year ended December 31, 2023. Recommendation: We recommend that the County implement internal controls to ensure that the SEFA completely and accurately states the expenditures of federal awards of the County each year, such as performing a reconciliation between the SEFA and underlying accounting records. Federal reimbursement grants should be reported on the SEFA based on reimbursable expenditures made during the year. Management's Response: The Treasurer has reviewed the corrected SEFA and understands the errors. Funds will be reported accurately in the future.

Federal Grantor: U.S. Department of Treasury; Pass-through Grantor: n/a; Assistance Listing Number: 21.027; Program Title: COVID-19 Coronavirus State and Local Fiscal Recovery Funds; Award Year: 2023; Compliance Requirement(s): (I) - Procurement, Suspension, & Debarment; Known Questioned Costs: $333,416. Criteria: Under Uniform Guidance (2 CFR 200.213) and the OMB Compliance Supplement for Assistance Listing 21.027, recipients must verify that contractors and subrecipients are not suspended, debarred, or excluded before entering into covered transactions. SLFRF recipients are required to follow Treasury guidance and 31 CFR Part 19.300 for exclusions screening. Condition: During a review of procurement files for SLFRF-funded contracts, we noted that four contractors/subrecipients, totaling $333,416, were engaged without any documentation that the auditee performed exclusion checks on SAM.gov or obtained suspension/debarment certifications. Cause: The auditee did not include suspension and debarment verification in its procurement policies or standard review process for SLFRF-covered transactions under Assistance Listing 21.027. Effect: Failure to screen contractors for suspension, debarment, or exclusion risks violation of federal procurement integrity laws. This noncompliance may result in SLFRF funds being paid to ineligible parties, which could constitute an improper expenditure and put the auditee and federal funding at risk. Recommendation: We recommend that the County immediately verify the suspension/debarment status of the four contractors/subrecipients using SAM.gov; if any are excluded, initiate corrective action and recover funds if necessary. The County should revise procurement policies to incorporate mandatory use of exclusion screening (e.g., SAM.gov) and signed certifications before a contract award under SLFRF, and train procurement staff on 2 CFR 200.213, 31 CFR Part 19, and Assistance Listing 21.027 suspension/debarment rules. The County should also implement internal controls, such as periodic audits or checklists, to ensure ongoing compliance with suspension and debarment requirements in future covered transactions. Management's Response: The County will act on the recommendation given and take necessary actions where applicable.

Federal Program: Economic Adjustment Assistance (11.307). U.S. Department of Commerce. Criteria: Uniform Guidance requires written policies related to cash management, cost allowability, procurement, and conflict of interest provisions, along with appropriate financial management systems and internal controls over federal awards to safeguard federal funds. Condition: The County did not have written policies and procedures over the components of grant administration. Cause: The County had no written policies and relied on each contract to comply with all applicable compliance requirements. Effect: The federal government believes that not having written policies and procedures for grant administration increases the risk that the County will not comply with applicable compliance requirements. Questioned Costs: None. Context: Federal grant expenditures totaled $1,691,396 during the year ended December 31, 2021. Repeat Finding: Yes. The finding was originally reported as 2020-001. Recommendation: We recommend the County develop written policies and procedures related to cash management, cost allowability, procurement, and conflict of interest provisions for federal funds it receives. Views of Responsible Officials and Planned Corrective Actions: The County is in the process of drafting the appropriate written policies in order to implement this recommendation.

Federal Program: Economic Adjustment Assistance (11.307). U.S. Department of Commerce. Criteria: The specific awards condition require semi-annual financial reports to be submitted. Condition: The semi-annual reports filed were not accurate. Cause: Neither the County nor the contracted third party grant administrator reconciled the reports to receipts and disbursements of the County?s accounting records. Effect: Inaccurate reporting of federal expenditures. Questioned Costs: None. Context: Cash receipts were reported as $1,151,500, but as of the report date the County received $-0-. Cash disbursements were reported as $-0-, but the County disbursed $1,256,000. Repeat Finding: No. Recommendation: We recommend the County develop internal controls to monitor reporting requirements of all grants and to reconcile financial reports to the accounting records of the County. Views of Responsible Officials and Planned Corrective Actions: The County contracted with a third party grant administrator to prepare the required grants reports. The County believed this third party administrator would prepare the reports accurately.

Federal Program: Economic Adjustment Assistance (11.307). U.S. Department of Commerce. Criteria: The specific awards condition require a project progress report to be submitted on a quarterly basis and are due 15 days after quarter end. Secondly, semi-annual financial reports are due 30 days after the end of the period. Condition: Several of the reports mentioned above were not filed on time. Cause: Neither the County nor the third party grant administrator had internal controls in place to complete the reports on time. Effect: Non-compliance with the grant?s specific award condition. Questioned Costs: None. Context: Quarter one of the project progress report was not filed on time. Both financial reports due during 2021 were not filed on time. Repeat Finding: No. Recommendation: We recommend the County develop internal controls to monitor reporting requirements of all grants. Views of Responsible Officials and Planned Corrective Actions: The County contracted with a third party grant administrator to prepare the required grant reports. The County believed this third party administrator would prepare and file the reports timely.

Federal Program: COVID 19 ? Coronavirus Relief Fund (21.019). U.S. Department of the Treasury passed through the State of Missouri. Criteria: Uniform Guidance requires written policies related to cash management, cost allowability, procurement, and conflict of interest provisions, along with appropriate financial management systems and internal controls over federal awards to safeguard federal funds. Condition: Although no noncompliance with federal grant requirements was noted, the County did not have written policies and procedures over the components of grant administration. Cause: The County had no written policies and relied on each contract to comply with all applicable compliance requirements. Effect: The federal government believes that not having written policies and procedures for grant administration increases the risk that the County will not comply with applicable compliance requirements. Questioned Costs: None. Context: Federal grant expenditures totaled $2,059,335 during the year ended December 31, 2020. Repeat Finding: No. Recommendation: We recommend the County develop written policies and procedures related to cash management, cost allowability, procurement, and conflict of interest provisions for federal funds it receives. Views of Responsible Officials and Planned Corrective Actions: The County is in the process of drafting the appropriate written policies in order to implement this recommendation.