Allegany County, MarylandLocal Government

Federal Program: Department of Housing and Urban Development; Community Development Block Grants (CDBG); Federal Assistance Listing 14.228 Criteria: The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards at 2 CFR 200 (Uniform Guidance) and grant agreements require all nonfederal entities to submit semi-annual reports within 10 days after the six-month period end. Condition: The County did not submit the semi-annual status reports for the December 31, 2023 period end and June 30, 2024 period end by the due date required in the Uniform Guidance and grant agreements. Cause: The semi-annual status reports were filed late due to several financial reports needing to be prepared at once for the program and due to a delay in obtaining the appropriate signature for the reports. Effect: The County is not in compliance with the reporting requirements as stipulated in the Uniform Guidance and grant agreements. Context: During the course of our single audit testing procedures, we noted that one semi-annual status report for the December 31, 2023 period end was filed late by the County by one day. In addition, two semi-annual status reports for the June 30, 2024 period end were filed late by the County by eight days and one was filed late by one day. Auditors’ Recommendation: We recommend management communicate effectively with all staff to emphasize the importance of promptly submitting financial reports to applicable federal agencies in a timely manner. This will ensure that the required financial reports are filed timely as stipulated by the Uniform Guidance and grant agreements. Views of Responsible Officials and Planned Corrective Actions: Management has discussed the finding with the appropriate staff and has emphasized the importance of promptly submitting reports on time. Staff will develop a system to ensure the necessary documents and signatures will be completed in sufficient time to submit the required reports. Identification of a Repeat Finding: This finding was not a finding in FY 23.

Federal Program: United States Department of Treasury; Coronavirus State and Local Fiscal Recovery Funds; Federal Assistance Listing 21.027 Criteria: The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards at 2 CFR 200 (Uniform Guidance) requires all nonfederal entities to submit quarterly financial reports within 30 days after quarter-end. Condition: The County did not submit the financial report for the third quarter 2022 by the due date required in the Uniform Guidance. Cause: The third quarter 2022 financial report was filed late due to the finance department being unable to obtain the required information from various departments in a timely manner. Effect: The County is not in compliance with the reporting requirements as stipulated in the Uniform Guidance. Context: During the course of our single audit testing procedures, we noted the County’s quarterly financial reporting that was due on October 31, 2022 for the period of July 1 through September 30, 2022 was submitted on November 1, 2022. Auditors’ Recommendation: We recommend management communicate effectively with all staff to emphasize the importance of promptly submitting financial information to the finance department in a timely manner. This will ensure that the required quarterly financial reports are filed timely as stipulated by the Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions: We have developed an improved procedure to ensure financial reports are submitted within the due date. The plan includes discussions with department heads in order to better improve and understand the complex reporting process that is required by the funding agency. Also, finance staff will contact the departments well in advance of the due date of the report to receive the necessary information. This procedure was implemented after discovery of the late filing of the quarterly financial reporting that was due on October 31, 2022. Identification of a Repeat Finding: This is a repeat finding from the immediate previous audit, 2022-001.

2022-001 Reporting Compliance Federal Program: United States Department of Treasury; Coronavirus State and Local Fiscal Recovery Funds; CFDA No. 21.027 Criteria: The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards at 2 CFR 200 (Uniform Guidance) requires all nonfederal entities to submit quarterly financial reports within 30 days after quarter-end. Condition: The County did not submit the financial report for the second quarter 2022 by the due date required in the Uniform Guidance. Context: During the course of our single audit testing procedures, we noted the County?s quarterly financial reporting that was due on July 31, 2022 for the period of April 1 through June 30, 2022 was submitted on August 2, 2022. Cause: The second quarter 2022 financial report was filed late due to the finance department being unable to obtain the required information from various departments in a timely manner. Effect: The County is not in compliance with the reporting requirements as stipulated in the Uniform Guidance. Identification of a Repeat Finding: This finding was not a finding in FY 21. Auditors? Recommendation: We recommend that the County communicate effectively with all staff to emphasize the importance of promptly submitting financial information to the finance department in a timely manner. This will ensure that the required quarterly financial reports are filed timely as stipulated by the Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions: We have developed an improved procedure to ensure financial reports are submitted within the due date. Plan includes discussions with department heads in order to better improve and understand the complex reporting process that is required by the funding agency.

2021-001 Reporting Compliance Federal Program: United States Department of Treasury; Coronavirus Relief Fund Program; CFDA No. 21.019 Criteria: The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards at 2 CFR 200 (Uniform Guidance) requires all nonfederal entities to submit quarterly financial reporting that is supported by and reconciles to the entity?s accounting system. Condition: The County does not have internal controls in place for this requirement under this program to ensure continuing compliance with this requirement. Context: During the course of our single audit testing procedures, we noted the County?s quarterly financial reporting that was submitted for the period of July 1 through October 31, 2020 did not reconcile to the entity?s accounting system. Cause: Procedures to ensure compliance with Reporting requirements related to appropriate review and reconciliation under the Coronavirus Relief Fund program are not in place. Effect: Federal funds could be expended that do not meet Uniform Guidance requirements. Auditor?s Recommendation: We recommend that the County 1) develop more stringent procedures to ensure internal controls are developed to make sure all compliance requirements are met as outlined in the Uniform Guidance, and 2) incorporate ongoing grant training for personnel to stay current with all federal grant requirements including Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions: We have hired a grants manager who will be tasked with developing procedures to ensure that we are complying with the terms of all grant programs. The grants manager will also be developing internal control procedures over grant funding.

Criteria: The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards at 2 CFR 200 (Uniform Guidance) requires all nonfederal entities to adopt written policies relative to all federal awards. Condition: The County did not have written policies as required by the Uniform Guidance until June 11, 2020. Context: During the course of our single audit testing procedures, we noted the County had not developed and adopted the required written policies until June 11, 2020. No questioned costs were noted. Cause: The County did not develop and adopt written policies as required by the Uniform Guidance until June 11, 2020. Effect: Federal funds could be expended that do not meet Uniform Guidance requirements. Auditor?s Recommendation: We recommend that the County 1) follow and update as needed written policies in compliance with the Uniform Guidance, and 2) incorporate ongoing grant training for personnel to stay current with all federal grant requirements including Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions: Allegany County recently hired a grants manager to assist with the grant process. One of the objectives for this new position was to generate a set of written policies governing our federal awards. This was fully implemented on June 11, 2020.

2020-002 Allowable Costs Compliance Federal Program: United States Department of Transportation; Unified Planning Work Program; CFDA No. 20.505 Criteria: The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards at 2 CFR 200 (Uniform Guidance) requires all nonfederal entities to follow cost principles relative to all federal awards. Condition: The County does not have internal controls in place for this requirement under this program to ensure continuing compliance with this requirement. Context: During the course of our single audit testing procedures, we noted the County received reimbursement of federal funds for an estimated expenditure in the amount of $4,600 for fiscal year 2020. Cause: Procedures to ensure compliance with Allowable Costs requirements related to expenditures under the Unified Planning Work program are not in place. Effect: The estimated expenditures of $4,600 reimbursed with federal funds are questioned costs. Auditor?s Recommendation: We recommend that the County 1) develop more stringent procedures to ensure internal controls are developed to make sure all compliance requirements are met as outlined in the Uniform Guidance, and 2) incorporate ongoing grant training for personnel to stay current with all federal grant requirements including Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions: We have hired a grants manager who will be tasked with developing procedures to ensure that we are complying with the terms of all grant programs. The grants manager will also be developing internal control procedures over grant funding.

2020-003 Reporting Compliance Federal Program: United States Department of Treasury; Coronavirus Relief Fund Program; CFDA No. 21.019 Criteria: The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards at 2 CFR 200 (Uniform Guidance) requires all nonfederal entities to submit quarterly financial reporting that is supported by and reconciles to the entity?s accounting system. Condition: The County does not have internal controls in place for this requirement under this program to ensure continuing compliance with this requirement. Context: During the course of our single audit testing procedures, we noted the County?s quarterly financial reporting that was submitted for the period of March 1 through June 30, 2020 did not reconcile to the entity?s accounting system. Cause: Procedures to ensure compliance with Reporting requirements related to appropriate review and reconciliation under the Coronavirus Relief Fund program are not in place. Effect: Federal funds could be expended that do not meet Uniform Guidance requirements. Auditor?s Recommendation: We recommend that the County 1) develop more stringent procedures to ensure internal controls are developed to make sure all compliance requirements are met as outlined in the Uniform Guidance, and 2) incorporate ongoing grant training for personnel to stay current with all federal grant requirements including Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions: We have hired a grants manager who will be tasked with developing procedures to ensure that we are complying with the terms of all grant programs. The grants manager will also be developing internal control procedures over grant funding.

2019-001 Uniform Guidance Compliance Criteria: The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards at 2 CFR 200 (Uniform Guidance) requires all nonfederal entities to adopt written policies relative to all federal awards. Condition: The County does not have written policies as required by the Uniform Guidance. Context: During the course of our single audit testing procedures, we noted the County had not developed and adopted the required written policies. No questioned costs were noted. Cause: The County did not develop and adopt written policies as required by the Uniform Guidance. Effect: Federal funds could be expended that do not meet Uniform Guidance requirements. Auditor?s Recommendation: We recommend that the County 1) develop and adopt written policies in compliance with the Uniform Guidance, and 2) incorporate ongoing grant training for personnel to stay current with all federal grant requirements including Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions: Allegany County recently hired a grants manager to assist with the grant process. One of the objectives for this new position is to generate a set of written policies governing our federal awards. We anticipate this being fully implemented by June 30, 2020.

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