Douglas County, KansasLocal Government

Finding 2024-001 Type of Finding – Significant Deficiency in Internal Control Over Compliance, Other Matter Federal Agency – U.S. Department of the Treasury Grant Program/Award – COVID-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), ALN No. 21.027 Compliance Requirement – Suspension and Debarment Repeat Finding – Yes, Finding 2023-001 Condition – During our testing of two covered transactions, we noted that management provided supporting documentation that suspension and debarment procedures were performed after the start of the procurement contracts. Questioned Costs – None, our testing revealed the vendor and subrecipient were not suspended or debarred. Criteria – 2 CFR 180.300 prohibits entities from contracting under covered transactions to parties that are suspended or debarred from doing business with the federal government. A contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. In order to comply with federal suspension and debarment requirements, the County can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. Context – For one vendor (out of two) and one subrecipient (out of three) tested for suspension and debarment, the contract agreement was signed before the suspension and debarment check was completed. Cause – There was a lack of personnel within the finance department of the County and grants administration was missing supervision by key personnel. The finding indicates that there should be process improvements in how contracts are reviewed, documented and maintained to provide evidence the compliance requirements are being met. Effect – The County could enter into a federally-funded contract with a suspended or debarred party. Recommendation – We recommend that the County either obtain certifications from vendors and subrecipients stating their organization is not suspended, debarred, or otherwise excluded from participation in federal assistance programs or document the procedures performed to verify the vendor or beneficiary is not identified as suspended or debarred on the SAM website prior to signing a contract. We recommend that the County has proper procedures in place to ensure that all contractual documentation is maintained and able to be located. We understand that the County has followed up with all vendors/subrecipients that were missing without an active registration and completed the certification form.

Finding 2023-002 – Significant Deficiency Type of Finding - Significant Deficiency in Internal Control Over Compliance; Other Matters. Grant Program/Award – U.S Department of the Treasury, ALN 21.027, COVID-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Repeat Finding – No Compliance Requirement – Suspension and Debarment Criteria – The County’s internal controls should be designed to ensure that a verification check is performed on vendors and subrecipients. Condition – In fiscal year 2023, our testing revealed that 4 of 5 vendors and/or subrecipients tested, showed that the County failed to conduct the required SAM.gov inquiry or obtain certification for debarment, suspension, and other responsibility matters for primary covered transactions. Questioned Costs – None Context – For four vendors and one subrecipient tested, all four vendors showed that the County failed to conduct the required Sam.gov inquiry or obtain certification for debarment, suspension, and other responsibility matters for primary covered transactions. Cause – The County staff did not follow the required procedures for suspension and debarment. Effect – Federal funds could be provided to entities that are suspended or debarred. Recommendation – We recommend that the County implement controls and processes that ensure that vendors and subrecipients have a verification check completed, by checking SAM.gov, collecting a certification, or adding a clause / condition to the covered transaction.

Grant Program/Award – U.S. Department of Health and Human Services, ALN: 93.323, COVID-19 -Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Prior Reference Number – 2021-002 Compliance Requirements – Activities Allowed or Unallowed and Allowable Costs/Cost Principles Condition – In fiscal year 2021, our expense testing revealed that 45 of 60 expenditures tested, all related to salaries and benefits expenditures, showed no evidence of time and effort to support how the salaries and benefits allocation was determined, with 6 of the same 45 expenditures lacking evidence of payroll documentation for the amounts charged to the grant. Further, 47 of 60 expenses tested showed no evidence of review by a person knowledgeable of the grant. As the finding was not identified until fiscal year 2022, the condition was present in fiscal year 2022. Criteria – The County’s internal controls should be designed to ensure proper recordkeeping of expenses charged to the federal program and review of the documentation that supports expenses. Cause – The County experienced turnover during and after the fiscal year. Questioned Costs – None for fiscal year 2022. Known questioned costs in fiscal year 2021 - $ 4,513. Likely questioned costs in fiscal year 2021 - $ 23,792. Effect – Unallowed costs could be charged to the federal program. Recommendation – We recommend that the County implement controls and processes that ensure that expenditures charged to the program are reviewed and documented to ensure costs are allowable and properly supported.

Finding 2021-002 ? Material Weakness Grant Program/Award ? U.S. Department of Health and Human Services, ALS Number 93.323, COVID-19 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), Grant Award Periods 2020 and 2021 Prior Reference Number ? N/A Compliance Requirements ? Activities Allowed or Unallowed and Allowable Costs/Cost Principles Condition ? Our expense testing revealed that 45 of 60 expenditures tested, all related to salaries and benefits expenditures, showed no evidence of time and effort to support how the salaries and benefits allocation was determined, with 6 of the same 45 expenditures lacking evidence of payroll documentation for the amounts charged to the grant. Further, 47 of 60 expenses tested showed no evidence of review by a person knowledgeable of the grant. Criteria ? The County?s internal controls should be designed to ensure proper recordkeeping of expenses charged to the federal program and review of the documentation that supports expenses. Cause ? The County experienced turnover during and after the fiscal year. Questioned Costs ? Known questioned costs - $ 4,513. Likely questioned costs - $ 23,792. Effect ? Unallowed costs could be charged to the federal program. Recommendation ? We recommend that the County implement controls and processes that ensure that expenditures charged to the program are reviewed and documented to ensure costs are allowable and properly supported.

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