Lincoln County, Nebraska

Department of the U.S. Treasury AL #21.027 – Coronavirus State and Local Fiscal Recovery Funds Grant Period Year Ended June 30, 2024 Criteria: The Compliance and Reporting Guidance for State and Local Fiscal Recovery Funds issued by the U.S. Treasury requires the County to complete an annual Project and Expenditure Report to be filed by April 30. Internal controls should be in place to ensure that this reporting requirement is completed accurately and should include a review of each report completed by an individual knowledgeable in the requirements of the award who did not prepare the report. Such review should occur prior to report submission and should be documented. Condition and Context: The County has contracted with a third-party grant administrator to prepare the annual Project and Expenditure Report, however it currently has no controls in place for a knowledgeable individual within County management to review the report prior to its submission. The County’s Project and Expenditure Report for the reporting period ended March 31, 2024 included cumulative expenditures of $6,414,956 and current period expenditures of $970,822 under one project in the Revenue Replacement category and Provision of Government Services subcategory. The project description references supplementing County infrastructure and other entities due to reduced revenue and increased volume during the pandemic along with additional information related to providing food assistance to low or moderate income households. None of the current period expenditures were related to the provision of food assistance, therefore, it appears that more clear and appropriate categorization and description of projects should be reported. Cause: Presently, the County lacks written procedures to ensure that reporting services provided by its third-party grant administrator are completed accurately in accordance with the U.S. Treasury’s reporting requirements. Effect or Potential Effect: The lack of procedures may result in inaccurate or unclear reporting in relation to the reporting requirements. Questioned Costs: None Repeat Finding: The finding is a repeat finding of 2023-002. Recommendation: We recommend Lincoln County, Nebraska develop written procedures requiring the review of the Project and Expenditure Report prior to its submission. This review should be performed by an individual within County management who is knowledgeable regarding the U.S. Treasury reporting requirements. View of Responsible Officials: Management and governance agree with the finding. See attached Corrective Action Plan.

Department of the U.S. Treasury AL #21.027 – Coronavirus State and Local Fiscal Recovery Funds Grant Period Year Ended June 30, 2024 Criteria: Federal regulations require that non-Federal entities verify that an entity is not excluded or disqualified prior to entering into a covered transaction. The County indicated it had developed procedures to verify through SAM.gov that all vendors are not suspended, debarred or excluded from receiving Federal dollars prior to payment of a claim. Condition and Context: During our procedures, we noted that six claims tested out of a population of 19 claims did not include verification through SAM.gov that the vendor was not suspended, debarred or excluded. For these six claims, we performed a verification through SAM.gov and noted none of the vendors were suspended, debarred or excluded. Cause: While the County indicated it had developed procedures to verify vendors were not suspended, debarred or excluded, its procedures lacked appropriate controls to ensure that these procedures had been implemented prior to the payment of a claim. Effect or Potential Effect: The lack of controls may result in noncompliance with Federal regulations by entering into a covered transaction with an entity who is suspended, debarred or excluded from receiving Federal funds. Questioned Costs: None Repeat Finding: The finding is a repeat finding of 2023-003. Recommendation: We recommend the Board of Commissioners of Lincoln County, Nebraska require documentation that a vendor has been verified through SAM.gov prior to the obligation of any federal funds. We further recommend that the County Clerk’s office review all claims submitted against federal funds to ensure the SAM.gov verification is attached to the request for payment. View of Responsible Officials: Management and governance agree with the finding. See attached Corrective Action Plan.

Program - AL #21.027 – COVID-19 Coronavirus State and Local Fiscal Recovery Funds - Reporting Grant Number & Year - SLFRP2949, March 3, 2021, through December 31, 2024 Federal Grantor Agency - U.S. Department of the Treasury Criteria - Title 2 of the U.S. Code of Federal Regulations (CFR) § 200.303 (January 1, 2023) states the following, in relevant part: The non-Federal entity must: (a) 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. These internal controls should be in compliance with guidance in ‘‘Standards for Internal Control in the Federal Government’’ issued by the Comptroller General of the United States or the ‘‘Internal Control Integrated Framework’’, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The U.S. Department of the Treasury adopted the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards in 2 CFR § 1000.10 (January 1, 2023), which states the following: Except for the deviations set forth elsewhere in this Part, the Department of the Treasury adopts the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, set forth at 2 CFR part 200. The U.S. Department of the Treasury issued “Compliance and Reporting Guidance” and frequently asked questions, which specify the reporting requirements related to Coronavirus State and Local Fiscal Recovery Funds. Such guidance required the completion of a Project and Expenditure Report by April 30, 2023. A good internal control plan includes establishing effective internal controls through written policies and procedures to ensure Federal reporting requirements are completed accurately. Such plan should include, among other things, appropriate training on Federal reporting requirements and require a documented, detailed review of each report to be completed by a knowledgeable individual, who did not prepare the report, prior to submission. Condition - Lincoln County did not implement effective internal controls to ensure that the reporting requirements of the Coronavirus State and Local Fiscal Recovery Funds were completed accurately. Consequently, the Project and Expenditure Report submitted on April 7, 2023, did not contain accurate information. Repeat Finding - Yes Questioned Costs - None Statistical Sample - No Context - Lincoln County reported Current Period Expenditures of $5,355,379; however, this amount did not include an expenditure of $253,681 made on November 28, 2022. Additionally, all expenditures were reported under one project using Project Expenditure Category of Revenue Replacement and Project Expenditure Subcategory as Provision of Government Services. Based on the expenditures made by Lincoln County using Coronavirus State and Local Fiscal Recovery Funds, it appears more appropriate for the County to have reported two projects. The first project provided $189,305 to local non-profits to support their food pantry operations. As such, it appears a Project Category of Negative Economic Impacts, and a project subcategory of Aid to Nonprofit Organizations would be more appropriate. The second project included expenses totaling $5,419,755 and was correctly reported using a Project Category of Revenue Replacement and project subcategory of Provision of Government Services. The Project Description on the Project and Expenditure Report described the County's efforts to provide food assistance. As only $189,305, or 3.5% of the reported expenditures, was paid to non-profit entities, it appears that a Project Description outlining how that majority of the funds were spent would be more appropriate. Cause - Lack of procedures and knowledge relating to Federal reporting requirements. Effect - Inaccurate information was reported to the U.S. Department of the Treasury on the April 2023 Project and Expenditure report. Additionally, the County is not in compliance with the reporting requirements set by the U.S. Department of the Treasury. Recommendation - We recommend Lincoln County establish written policies and procedures to ensure Federal reporting requirements are completed accurately. Such procedures should include, among other things, appropriate training on Federal reporting requirements and a documented review by a knowledgeable individual who was not involved in the preparation of the report. View of Officials - West Central NE Development District will need to collect reports from various offices (County Clerk & County Treasurer) to verify all expenditures and disbursements match and perform their own calculations.

Program - AL #21.027 – COVID-19 Coronavirus State and Local Fiscal Recovery Funds – Suspension and Debarment Grant Number & Year - SLFRP2949, March 3, 2021, through December 31, 2024 Federal Grantor Agency - U.S. Department of the Treasury Criteria - Title 2 of the U.S. Code of Federal Regulations (CFR) § 200.303 (January 1, 2023) states the following, in relevant part: The non-Federal entity must: (a) 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR § 200.214 (January 1, 2023) states the following: Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The U.S. Department of the Treasury adopted the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards in 2 CFR § 1000.10 (January 1, 2023), which states the following: Except for the deviations set forth elsewhere in this Part, the Department of the Treasury adopts the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, set forth at 2 CFR part 200. 2 CFR § 180.300 (January 1, 2023) requires non-Federal entities to verify that an entity is not excluded or disqualified prior to entering into a covered transaction by “(a) Checking SAM Exclusions; or (b) Collecting a certification from that . . . [entity]; or (c) Adding a clause or condition to the covered transaction with that . . . [entity].” A good internal control plan requires the County to have proper procedures in place to verify that all contractors paid with Federal funds are not suspended, debarred, or otherwise excluded from or ineligible for participation in Federal programs or activities. Condition - Lincoln County had controls in place to ensure that suspension and debarment requirements were followed and adequately documented; however, the County did not follow these controls for every vendor. We noted the County used Coronavirus State and Local Fiscal Recovery Funds to pay seven vendors over $25,000 each, totaling $5,540,320, during the fiscal year ended June 30, 2023. The County failed to ensure that these vendors, with whom the County regularly does business, were not excluded or disqualified prior to entering into these covered transactions. We reviewed SAM.gov, and noted that none of these vendors were suspended, debarred, or otherwise excluded from participation in Federal programs or activities as of the date testing was performed. Repeat Finding - No Questioned Costs - None Statistical Sample - No Context - The following table provides details of the covered transactions noted: Cause - Lack of procedures and knowledge regarding suspension and debarment requirements. Effect - Without adequate procedures to ensure all contractors are not suspended, debarred, or otherwise excluded from or ineligible for participation in Federal programs or activities, there is an increased risk for the misuse of Federal funds and noncompliance with Federal regulations, leading to possible Federal sanctions. Recommendation - We recommend the County implement procedures to ensure, prior to entering into a covered transaction, that all contractors are not suspended, debarred, or otherwise excluded from or ineligible for participation in Federal programs or activities, and those procedures are adequately documented. View of Officials - Lincoln County (submitting Department and County Clerk’s Office) will verify through Sam.Gov that all claims submitted for payment using federal funds are not suspended, debarred, or excluded from receiving federal dollars prior to payment of the claim.

Finding # 2022-002 Program - AL #21.027 ? COVID-19 Coronavirus State and Local Fiscal Recovery Funds - Reporting Grant Number & Year - SLFRP2949, FFY 2021 Federal Grantor Agency - U.S. Department of the Treasury Criteria - Title 2 of the U.S. Code of Federal Regulations (CFR) ? 200.303 (January 1, 2022) states the following, in relevant part: The non-Federal entity must: (a) 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. These internal controls should be in compliance with guidance in ``Standards for Internal Control in the Federal Government?? issued by the Comptroller General of the United States or the ``Internal Control Integrated Framework??, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The U.S. Department of the Treasury adopted the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards in 2 CFR ? 1000.10 (January 1, 2022), which states the following: Except for the deviations set forth elsewhere in this Part, the Department of the Treasury adopts the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, set forth at 2 CFR part 200. The U.S. Department of the Treasury issued ?Compliance and Reporting Guidance? and frequently asked questions, which specify the reporting requirements related to Coronavirus State and Local Fiscal Recovery Funds. Such guidance required the completion of a Project and Expenditure Report by April 30, 2022. A good internal control plan includes establishing effective internal controls through written policies and procedures to ensure Federal reporting requirements are completed accurately. Such plan should include, among other things, appropriate training on Federal reporting requirements and require a documented, detailed review of each report to be completed by a knowledgeable individual, who did not prepare the report, prior to submission. Condition - Lincoln County did not implement effective internal controls to ensure that the reporting requirements of the Coronavirus State and Local Fiscal Recovery Funds were completed accurately. Consequently, the Project and Expenditure report submitted on April 29, 2022, did not contain accurate information. Repeat Finding - No Questioned Costs - None Statistical Sample - No Context - Lincoln County improperly reported Total Cumulative Expenditures and Total Cumulative Obligations as $6,781,635; however, the correct Total Cumulative Expenditures and Total Cumulative Obligations were $88,754. Additionally, all expenditures were reported under one project, using the project expenditure category of revenue replacement and project expenditure subcategory as provision of government services. Based on the expenditures made by Lincoln County, it appears more appropriate for the County to have reported two projects. The first project provided $83,351 to local non-profit organizations to support their food pantry operations. As such, it appears a project category of negative economic impacts and a project subcategory of aid to nonprofit organizations would be more appropriate. The second project included administrative expenses totaling $5,403. As such, it appears a project category of Administrative and project subcategory of Administrative Expenses would be more appropriate. Cause - Lack of procedures and knowledge relating to Federal reporting requirements Effect - Inaccurate information was reported to the U.S. Department of the Treasury on the April 2022 Project and Expenditure report. Additionally, the County is not in compliance with the reporting requirements set by the U.S Department of the Treasury. Recommendation - We recommend Lincoln County establish written policies and procedures to ensure Federal reporting requirements are completed accurately. Such procedures should include, among other things, appropriate training on Federal reporting requirements and a documented review by a knowledgeable individual who was not involved in the preparation of the report. View of Officials - The Lincoln County Board of Commissioners will discuss establishing a policy for reporting requirements. They will also discuss who will file reports for the county going forward and perhaps someone to review the document before submission who is not involved in the preparation of the report.