Mountrail CountyLocal Government

2024-002 – CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS – IMPROPER REPORTING OF EXPENDITURES & OBLIGATIONS – ALN 21.027 – MATERIAL WEAKNESS & MATERIAL NONCOMPLIANCE FINDING TYPE: MATERIAL WEAKNESS & MATERIAL NONCOMPLIANCE Finding 2024-003 Federal Program: FAIN: CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS SLFRP3716, 2024 ALN: 21.027 Year(s): 2024 Federal Agency: U.S. Department of Treasury Questioned Cost: $0 Condition Mountrail County did not properly report total expenditures and obligations on the March 31, 2024, Project and Expenditure Report for the Coronavirus State and Local Fiscal Recovery Funds program. The total reported cumulative and current period expenses were overstated by $516,186 and $500,897, respectively, and the total cumulative and current period obligations were overstated by $49,056 and $144,401, respectively. Effect The amounts reported as cumulative and current expenditures and obligations on the March 31, 2024, Project and Expenditure Report were inaccurate. Cause Mountrail County did not ensure that all expenditures and obligations were in agreement with their ledger when completing reporting for the March 31, 2024 Project and Expenditure Report. Criteria Page 19 of the Coronavirus State and Local Fiscal Recovery Funds: Project and Expenditure Report User Guide Version 12 (September 30, 2024) states: • An expenditure is the amount that has been incurred as a liability of the entity (the service has been rendered or the good has been delivered to the entity). • An obligation is an order placed for property and services, contracts and subawards made, and similar transactions that require payment. An obligation also means a requirement under federal law or regulation or provision of the award terms and conditions to which a recipient becomes subject as a result of receiving or expending funds. • 2 CFR 200.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.   Context As stated in the SLFRF Compliance and Reporting Guidance, for counties allocated less than $10 million with a population below 250,000 residents such as Mountrail, "the initial Project and Expenditure Report covered the period from March 3, 2021 to March 31, 2022 and was required to be submitted to Treasury by April 30, 2022. The subsequent annual reports will cover one calendar year and must be submitted to Treasury by April 30 each year." Therefore, each year after March 31, 2022, the Mountrail County must then submit an annual P&E report for the period covering April 1 202X - March 31, 202Y. Mountrail County did submit the 2024 (period covering April 1, 2023-March 31, 2024) report by April 30, 2024, but did not properly include the current and cumulative expenses and obligations on the 2024 P&E report. Repeat Finding No. Recommendation We recommend Mountrail County review and comply with all reporting requirements of the Coronavirus State and Local Fiscal Recovery Funds program by properly reporting all expenditures and obligations in the Project and Expenditure Reports. Mountrail County’s Response See Corrective Action Plan.