COUNTY OF BENTON MISSOURILocal Government

Federal Agency: U.S. Department of Treasury; Federal Program Title: COVID-19 State and Local Fiscal Recovery Funds; Federal Assistance Listing No.: 21.027; Award Period: 2024; Pass-through Entity: n/a; Questioned Costs: $371,455; Compliance Requirement: (I) Suspension and Debarment. Criteria: Under Uniform Guidance (2 CFR 200.213) and Section I of 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 all contractors were engaged without any documentation that the County performed exclusion checks in SAM.gov or obtained suspension/debarment certifications. Cause: The County has not designed and implemented internal controls to ensure compliance with suspension and debarment requirements outlined. Additionally, the County did not include suspension and debarment verification in its procurement policies or standard review process for SLFRF-covered transactions under Listing 21.027. Effect: Failure to obtain the required certifications or perform verification procedures with SAM.gov could result in the payment of federal funds to vendors that are suspended or debarred from participation in federal assistance programs. This noncompliance may result in SLFRF funds being paid to ineligible parties, which could constitute improper expenditure and put the County and federal funding at risk. Recommendation: We recommend that the County immediately verify the suspension/debarment status of the three contractors using SAM.gov (or alternative methods); revise procurement policies to incorporate mandatory use of exclusion screening (e.g. SAM.gov) and signed certifications before contract award under SLFRF; train procurement and program staff on 2 CFR 200.213, 31 CFR Part 19, and Listing 21.027 suspension/debarment rules; and 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: Management concurs with the finding and commits to the following actions: all covered contractors will be checked in SAM.gov and any required recoveries will be addressed; procurement policy will be updated to require formal exclusion screening and certification for SLFRF-related contracts; procurement and program staff will receive training on suspension/debarment rules; and an annual compliance checklist will be implemented to confirm all future covered transactions include exclusion checks.

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 reported $13,375 in expenditures under assistance listing number 20.205 - Highway Planning and Construction, however, underlying accounting records support expenditures of $66,877. 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: 16.575 - U.S. Department of Justice - Crime Victim Assistance Grant. This grant provides the salary and expenses for the Prosecuting Attorney's Victim Advocate. The County Clerk utilized the year-end expenses for the Victim Advocate grant effort which included salary, office expenses, mileage and training expenses. Our records show that a grant reimbursement of $34,583 was received for 2023. In the future, the County Clerk will ensure the total grant reimbursement amounts are utilized. 16.738 - U.S. Department of Justice - Edward Byrne Memorial Justice Assistance Grant. Our research revealed that this grant was received by our Sheriff's Office. However, the grant application and approval was not provided to the County Clerk's office. Therefore, she was unable to reflect this grant in the budget document. We have asked the Sheriff's Office to send us their grant applications so we are able to set-up a tracking system in the future. 20.205 - U.S. Department of Transportation - Highway Planning and Construction. These funds are pass-through grants from the federal government to the Missouri Department of Transportation to fund bridge replacement projects under the BRO Program. The financial audit for the fiscal year ended December 31, 2022, (finding 2022-003) cited Benton County for improperly accounting for these SEFA grants. The original SEFA amount in 2022 was $428,993 and was corrected to show $343,194. The difference was the 20% local match for these grants. The 2023 audit indicates that the County should report 100% of the grant, not just the 80% that will represent the federal/state funds. The County utilized the guidance from the 2022 to report for the 2023 projects, however, this was incorrect due the source of the funds used for matching. Benton County will ensure that 100% of the federal grants will be reflected in the financial documents moving forward for projects that are funded with soft match credit from the Missouri Department of Transportation.

Federal Agency: U.S. Department of the Treasury Federal Program Title: COVID-19 State and Local Fiscal Recovery Funds Federal Assistance Listing No.: 21.027 Award Period: 2023 Pass-through Entity: n/a Questioned Costs: n/a Compliance Requirement: (I) - Suspension and Debarment Criteria: Title 2 U.S. Code of Federal Regulations Part 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures in place to ensure the required certifications for covered contracts and subawards are received, documented, and contracts are not made with a debarred or suspended party. Condition: During our testing, it was noted that the County did not have adequate controls designed to ensure that suspension and debarment requirements were being met. Context: Of the 10 vendors tested, we noted that all 10 were not verified by the County or certifications from the vendors were not collected to ensure the vendors were neither suspended or debarred. Cause: The County has not designed and implemented internal controls to ensure compliance with suspension and debarment requirements outlined. Effect: Failure to obtain the required certifications or perform verification procedures with SAM.gov could result in the payment of federal funds to vendors that are suspended or debarred from participation in federal assistance programs. Recommendation: We recommend that the County implement internal controls to ensure that suspension and debarment assessments are performed during the procurement and contracting phase. In addition, sufficient documentation should be retained to evidence suspension and debarment verification is performed. Management's Response: Benton County has not established adequate controls to ensure grant recipients were not debarred or suspended from receiving federal grants. The County will establish a procedure to verify each grant recipient is authorized to receive federal grant funds.

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. Discrepancies in amounts reported on the SEFA and amounts supported by underlying accounting records are summarized as follows: The County reported $34,436 in expenditures under assistance listing number 16.575 - Crime Victim Assistance. Expenditures of the County, as supported by the underlying accounting records for the reporting period, totaled $35,581. The pass-through grantor identified (Missouri Department of Public Safety) was incorrect, and the County omitted the identifying numbers assigned by the pass-through entity for the various grant agreements. The County was funded for this award through the Missouri Association of Prosecuting Attorneys under three separate grant agreements. The County reported $428,993 in expenditures under assistance listing number 20.205 - Highway Planning and Construction, however, underlying accounting records support expenditures of $343,194. Per the MODOT project agreement, “All costs incurred by County will be reimbursed at the pro-rata share established for each project phase.” Upon reviewing the disbursements and reimbursement requests, the federal pro rata share established for the costs incurred for this project was eighty percent. The County reported the amount that was federally expended as one hundred percent of the amounts reimbursed instead of the pro rata share of eighty percent. Twenty percent of the project reimbursements received were not remitted by MODOT but instead by another local entity. In addition, the County failed to identify the Highway Planning and Construction Cluster on the SEFA. 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, 2022. 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 County recognizes that the accounting system for federal grants is not an accurate recording of expenditures for the MoDOT BRO program. A tracking system will be implemented to ensure that the expended funds are properly recorded.

Federal Grantor: All Programs Pass-Through Grantor: All Programs Federal CFDA Number: All Programs Program Title: All Programs Criteria: Title 2 U.S. Code of Federal Regulations Part 200 requires auditees to prepare an accurate Schedule of Expenditures of Federal Awards (SEFA) containing awards expended, CFDA title and number, award number, name of the Federal awarding agency, name of pass-through entity, and awards paid to subrecipients. Condition: The Schedule of Expenditures of Federal Awards (SEFA) contained errors. The County's current internal controls over SEFA reporting are not sufficient enough to ensure correct SEFA reporting. Cause: Management did not follow reporting requirements related to the Schedule of Expenditures of Federal Awards. Effect: Federal expenditures reported in the SEFA were incorrect. Recommendation: We recommend management develop internal controls over reporting and consult with outside accountants, if possible, to ensure an accurate SEFA is prepared. Management's Response: County officers and employees have diligently tried to maintain sufficient records so that the SEFA can be accurately completed. Title 2 U.S. Code of Federal Regulations Part 200 is being reviewed and training sessions will be initiated by the County Clerk's office. The County Clerk is working towards capturing grant transactions in a manner sufficient to readily report the necessary information required on the SEFA by the next audit period. The County is also going to consider retaining an expert/consultant to assist in completing the next SEFA. The expected completion date is December 31, 2021. The phone number for the County Clerk is (660) 438-7326. CFDA #20.019 ? The County reported funds that were received, the earned interest was not included in the CARES Act grant total as this interest was not a part of the original grant amount. Although the original grant and the earned interest was distributed to other recipients, we felt that the SEFA form did not indicate the requirement to add this earned interest. CFDA #90.404 ? The grant amount at the time it was received was listed as $20,000. In late January 2021, the Secretary of State sent us more information about the grant, indicating that they had used CARES money for postage. Since we did not know this at the time of initial budget submission, a budget amendment to that effect was sent to the Auditor in March.

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