Seward County

Criteria: Good internal control over financial reporting requires entities have proper segregation of duties in the accounting function so that no one person can authorize a transaction, record the transaction in account, and be responsible for the custody of the asset resulting from the transaction. Condition: Though management demonstrates the capability of running a governmental organization, we noted a lack of segregation of duties as one person could handle all phases of a transaction from beginning to end. Effect: Without proper segregation of duties, there is an increased risk the financial statements may be materially misstated. Repeat Finding: Yes Recommendation: We recommend the County weigh the cost benefit of hiring personnel with accounting function capabilities in order to properly segregate duties. Response: The County’s Board will consider the costs benefit of hiring additional personnel. Additionally, the Board takes an active interest in the finances of the County and provides additional oversight. Questioned Costs: No questioned costs were identified.

Finding 2025-3 Failure to Maintain Required Time and Activity Records for School Resource Officers Criteria: The Guide to Equitable Sharing for State, Local, and Tribal Law Enforcement Agencies requires participating agencies to maintain complete and accurate records sufficient to demonstrate that equitable sharing funds and supported resources are used solely for allowable law enforcement purposes. The Guide further requires documentation adequate to support personnel costs and the use of federally supported resources, including records of time and activity when personnel perform multiple functions.   Condition: The Sheriff’s Office did not maintain required time and activity records documenting the duties performed by School Resource Officers (SROs). Specifically, the Office lacked documentation demonstrating the amount of time SROs spent performing school-based duties versus other law enforcement activities during the audit period. This condition indicates a deficiency in internal control over compliance, as management did not implement procedures to ensure required documentation was maintained. Effect: Because the Sheriff’s Office did not maintain adequate time and activity records, it is in noncompliance with the DOJ Equitable Sharing Guide recordkeeping requirements. Although informal documentation suggests that a significant portion of SRO activities may be allowable, the lack of precise and supportable records prevents the County from accurately determining the dollar amount and extent of payroll and related expenditures that are properly allocable to equitable sharing funds. Repeat Finding: No Recommendation: We recommend the Sheriff’s Office immediately implement policies and procedures to ensure compliance with the DOJ Equitable Sharing Guide. These procedures should require School Resource Officers to maintain detailed and consistent time and activity records, and management should perform periodic supervisory reviews to verify records are complete, accurate, and retained in accordance with federal requirements. Response: “See PAGE 54 for Sheriff’s Office Responses” Questioned Costs: The total questioned costs identified related to this condition were approximately $195,838, representing payroll, benefits, and related expenditures charged to equitable sharing funds during the audit period.

Criteria: Good internal control over financial reporting requires entities have proper segregation of duties in the accounting function so that no one person can authorize a transaction, record the transaction in account, and be responsible for the custody of the asset resulting from the transaction. Condition: Though management demonstrates the capability of running a governmental organization, we noted a lack of segregation of duties as one person could handle all phases of a transaction from beginning to end. Effect: Without proper segregation of duties, there is an increased risk the financial statements may be materially misstated. Repeat Finding: Yes Recommendation: We recommend the County weigh the cost benefit of hiring personnel with accounting function capabilities in order to properly segregate duties. Response: The County’s Board will consider the costs benefit of hiring additional personnel. Additionally, the Board takes an active interest in the finances of the County and provides additional oversight. Questioned Costs: No questioned costs were identified.

Finding 2023-2 Segregation of Duties Criteria: Good internal control over financial reporting requires entities have proper segregation of duties in the accounting function so that no one person can authorize a transaction, record the transaction in account, and be responsible for the custody of the asset resulting from the transaction. Condition: Though management demonstrates the capability of running a governmental organization, we noted a lack of segregation of duties as one person could handle all phases of a transaction from beginning to end. Effect: Without proper segregation of duties, there is an increased risk the financial statements may be materially misstated. Repeat Finding: Yes Recommendation: We recommend the County weigh the cost benefit of hiring personnel with accounting function capabilities in order to properly segregate duties. Response: The County’s Board will consider the costs benefit of hiring additional personnel. Additionally, the Board takes an active interest in the finances of the County and provides additional oversight.

Finding # 2022-002 Program - AL #21.016 ? Equitable Sharing Program - Suspension & Debarment Grant Number & Year - NB0800000, FFY 2022 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. 2 CFR ? 180.300 (January 1, 2022) 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].? The U.S. Department of Justice released a memo titled ?Equitable Sharing Wire,? dated September 30, 2021, which states, in relevant part, the following regarding the Equitable Sharing Program: When procuring goods or services from a vendor using equitable sharing funds, state and local law enforcement agencies participating in the Department of Justice and the Department of the Treasury Equitable Sharing Programs must verify that vendors are registered in the System for Award Management (SAM) and are in good standing. A vendor in good standing means the vendor is not suspended or debarred from receiving federal funds. This requirement applies to all qualifying purchases. A qualifying purchase is one single payment or multiple payments to a vendor that exceeds $25,000 annually. A good internal control plan requires the County to have proper procedures in place to verify that contractors paid with grant funds are not suspended, debarred, or otherwise excluded from or ineligible for participation in Federal programs or activities. Condition - Seward County could not provide documentation to support the County implemented effective internal controls to ensure that the suspension and debarment requirements of the Equitable Sharing Program were followed and adequately documented. We noted that three of the seven vendors that were paid $25,000 or more during the fiscal year 2022 were not registered on SAM.gov. We did note that none of the seven 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 County paid seven vendors each $25,000 or more during the fiscal year 2022. Of these seven vendors, three were not registered on SAM.gov prior to being paid with Equitable Sharing Program funds. These three vendors were paid $123,134 during the fiscal year 2022. However, one of the vendors was paid $25,000 prior to the date of the ?Equitable Sharing Wire? memo. The County Sheriff was unable to provide documentation to support the following: 1) the vendors were not excluded or disqualified prior to entering into the covered transactions; and 2) the vendor was verified as having registered in SAM.gov prior to the County paying the vendor with Equitable Sharing Program funds. For two vendors, the County Sheriff?s office contacted the vendor to inform them to register with SAM.gov; however, these two vendors still received Equitable Sharing Program funds prior to being registered in SAM.gov. Cause - Lack of procedures and knowledge of the Equitable Sharing Program suspension and debarment requirements. Effect - Without adequate procedures to ensure 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. Recommendation - We recommend the County implement procedures to ensure, prior to entering into a covered transaction, that a contractor is 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 - The County Sheriff has implemented a procedure to verify any entity is not excluded or disqualified prior to paying said entity, and such verification will be adequately documented in the entity?s file. The change in procedures is effective immediately.