ANNE ARUNDEL COUNTY, MARYLANDLocal Government

Finding 2025-001 U.S. Department of Labor Assistance Listing Numbers 17.258, 17.259, 17.278 – WIOA Cluster Material Weakness and Noncompliance over Subrecipient Monitoring Repeat Finding: No Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.331(a)(1); all requirements imposed by the PTE on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); and any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the federal award (e.g., financial, performance, and special reports) (2 CFR section 200.331(a)(3)). A PTE must also evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)), and monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). Condition and Context: The County did not conduct adequate monitoring of its subrecipient during the year ended June 30, 2025. The County passes 100% of WIOA Cluster funds to one subrecipient, and risk assessment or monitoring activities (site visits, financial reviews, or programmatic assessments) were not conducted to provide assurance of compliance with federal regulations. Cause: The County did not perform subrecipient monitoring. Without established processes and dedicated resources for subrecipient oversight, the County was unable to fulfill its monitoring obligations effectively. Effect or Potential Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County to not be in compliance with Uniform Guidance. Questioned Costs: Unknown. Recommendation: We recommend that the County prepare and maintain a written plan to ensure subrecipients are aware of the Uniform Guidance requirements. Additionally, we recommend the County performs the monitoring of the subrecipients and ensure the documentation is saved within the County. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan Section of this report.

Finding 2025-002 U.S. Department of the Treasury Assistance Listing Number 21.027 – COVID-19 - American Rescue Plan Act Funds (US Treasury ARPA) Significant Deficiency and Noncompliance over Subrecipient Monitoring Repeat Finding: Yes, 2024-002, 2023-003 Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.332(a)(1); all requirements imposed by the PTE on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.332(a)(2)); and any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the federal award (e.g., financial, performance, and special reports) (2 CFR section 200.332(a)(3)). Condition and Context: For 2 out of 2 selections, the agreement with the subrecipient did not clearly identify the federal assistance listing. Effect or Potential Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County not to be in compliance with Uniform Guidance. Questioned Costs: Unknown. Recommendation: We recommend that the County prepare and maintain a written plan to ensure subrecipients are aware of the Uniform Guidance requirements. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan Section of this report.

Finding 2024-001 U.S. Department of Housing and Urban Development Assistance Listing Number 14.239 – Home Investment Partnership Program Significant Deficiency over Subrecipient Monitoring Repeat Finding: No Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.332(a)(1); all requirements imposed by the PTE on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.332(a)(2)); and any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the Federal award (e.g., financial, performance, and special reports) (2 CFR section 200.332(a)(3)). Condition and Context: For 1 out of 1 selection, the agreement with the subrecipient did not clearly identify the Federal assistance listing. Cause: The County did not inform its subrecipients of Federal requirements included in Uniform Guidance related to procedures required for subrecipient monitoring. Effect or Potential Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County not to be in compliance with Uniform Guidance. Questioned Costs: Unknown. Recommendation: We recommend that the County prepare and maintain a written plan to ensure subrecipients are aware of the Uniform Guidance requirements. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan Section of this report.

Finding 2024-002 U.S. Department of the Treasury Assistance Listing Number 21.027 – COVID-19 - American Rescue Plan Act Funds (US Treasury ARPA) Significant Deficiency over Subrecipient Monitoring Repeat Finding: Yes, 2023-003 Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.332(a)(1); all requirements imposed by the PTE on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.332(a)(2)); and any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the Federal award (e.g., financial, performance, and special reports) (2 CFR section 200.332(a)(3)). Condition and Context: For 2 out of 3 selections, the agreement with the subrecipient did not clearly identify the Federal assistance listing. Effect or Potential Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County not to be in compliance with Uniform Guidance. Questioned Costs: Unknown. Recommendation: We recommend that the County prepare and maintain a written plan to ensure subrecipients are aware of the Uniform Guidance requirements. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan Section of this report.

Finding 2024-003 Small Business Administration Assistance Listing Number 59.059– Inclusive Venture Program Significant Deficiency over Subrecipient Monitoring Repeat Finding: No Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.332(a)(1); all requirements imposed by the PTE on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.332(a)(2)); and any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the Federal award (e.g., financial, performance, and special reports) (2 CFR section 200.332(a)(3)). Condition and Context: For 1 out of 1 selection, the agreement with the subrecipient did not clearly identify the Federal assistance listing. Effect or Potential Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County not to be in compliance with Uniform Guidance. Questioned Costs: Unknown. Recommendation: We recommend that the County prepare and maintain a written plan to ensure subrecipients are aware of the Uniform Guidance requirements. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan Section of this report.

U.S. Department of the Health and Human Services Assistance Listing Number 93.959 – Block Grants for Substance Use Prevention, Treatment, And Recovery Services Significant Deficiency over Subrecipient Monitoring Repeat Finding: No Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.332(a)(1); all requirements imposed by the PTE on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.332(a)(2)); and any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the Federal award (e.g., financial, performance, and special reports) (2 CFR section 200.332(a)(3)). Condition and Context: For 2 out of 2 selections, the agreement with the subrecipient did not clearly identify the Federal assistance listing. Cause: The County did not inform its subrecipients of Federal requirements included in Uniform Guidance related to procedures required for subrecipient monitoring. Effect or Potential Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County not to be in compliance with Uniform Guidance. Questioned Costs: Unknown. Recommendation: We recommend that the County prepare and maintain a written plan to ensure subrecipients are aware of the Uniform Guidance requirements. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan Section of this report

Finding 2024-005 U.S. Department of the Health and Human Services Assistance Listing Number 93.959 – Block Grants for Substance Use Prevention, Treatment, And Recovery Services Noncompliance over Activities Allowed or Unallowed and Allowable Costs/Cost Principles Repeat Finding: No Criteria: In accordance with 2 CFR §200.303: 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. Condition and Context: For 3 out of 40 selections, the County was unable to provide copies of the invoices selected to support the expense paid with grant funds. Cause: The County did not implement the controls in place to ensure all the invoices are retained properly. Effect or Potential Effect: The County may not be in compliance with Uniform Guidance. Questioned Costs: $2,315.84 Recommendation: We recommend that the County implement improvements to its policies and procedures to ensure documents are retained in accordance with its retention policy. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan Section of this report

Finding 2023-001 U.S. Department of Labor Assistance Listing Numbers 17.258, 17.259, 17.278 – WIOA Cluster Material Weakness over Subrecipient Monitoring Repeat Finding: No Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.331(a)(1); all requirements imposed by the PTE on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); and any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the Federal award (e.g., financial, performance, and special reports) (2 CFR section 200.331(a)(3)). A PTE must also evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)), and monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). Condition and Context: The County did not conduct adequate monitoring of its subrecipient during the year ended June 30, 2023. The County passes 100% of WIOA Cluster funds to one subrecipient, and risk assessment or monitoring activities (site visits, financial reviews, or programmatic assessments) were not conducted to provide assurance of compliance with Federal regulations. Cause: The County did not perform subrecipient monitoring. Without established processes and dedicated resources for subrecipient oversight, the County was unable to fulfill its monitoring obligations effectively. Effect or Potential Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County to not be in compliance with Uniform Guidance. Questioned Costs: Unknown. Recommendation: We recommend that the County prepare and maintain a written plan to ensure subrecipients are aware of the Uniform Guidance requirements. Additionally, we recommend the County performs the monitoring of the subrecipients and ensure the documentation is saved within the County. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan Section of this report.

Finding 2023-002 U.S. Department of Housing and Urban Development Assistance Listing Number 14.218 – CDBG – Entitlement Grants Cluster Compliance Deficiency over Reporting Repeat Finding: No Criteria: Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Condition and Context: The County is a direct recipient of CDBG Entitlement Grants Cluster funds from the Department of Housing and Urban Development. Additionally, the County provided first-tier subawards greater than $30,000. Cause: The County did not report its first-tier subawards in accordance with the Transparency Act requirements. Transactions Tested Subaward Not Reported Report Not Timely Subaward Amount Incorrect Subaward Missing Key Elements 1 1 N/A N/A N/A Dollar Amount of Tested Transactions Subaward Not Reported Report Not Timely Subaward Amount Incorrect Subaward Missing Key Elements $4,605,932 $4,604,932 N/A N/A N/A Effect or Potential Effect: The County was not in compliance with the reporting requirements of the grant. Questioned Costs: None. Recommendation: We recommend the County establish and implement controls to maintain compliance with reporting requirements. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan Section of this report.

Finding 2023-003 U.S. Department of the Treasury Assistance Listing Number 21.027 – COVID-19 - American Rescue Plan Act Funds (US Treasury ARPA) Compliance Deficiency over Subrecipient Monitoring Repeat Finding: Yes, 2022-001 Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.332(a)(1); all requirements imposed by the PTE on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.332(a)(2)); and any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the Federal award (e.g., financial, performance, and special reports) (2 CFR section 200.332(a)(3)). A PTE must also monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). Condition and Context: For 1 out of 3 selections, the agreement with the subrecipient did not clearly identify the Federal assistance listing. Additionally, the agreement did not contain the information described in 2 CFR section 200.332(a). Cause: The County did not inform its subrecipients of Federal requirements included in Uniform Guidance related to procedures required for subrecipient monitoring. Effect or Potential Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County to not be in compliance with Uniform Guidance. Questioned Costs: Unknown. Recommendation: We recommend that the County prepare and maintain a written plan to ensure subrecipients are aware of the Uniform Guidance requirements. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan Section of this report.

Finding 2023-004 U.S. Department of the Transportation Assistance Listing Number 20.205 WB&A Trail (highway Planning and Construction) Compliance Deficiency over Special Tests – Quality Assurance Program, Value Engineering, and Utilities Repeat Finding: No Criteria: A State DOT or Local Public Agency (LPA) must have a quality assurance (QA) program, approved by Federal Highway Administration (FHWA), for construction projects on the National Highway System (NHS) to ensure that materials and workmanship conform to approved plans and specifications (23 CFR sections 637.201, 637.205, 637.207, and 637.209). Recipients are required to establish a value engineering (VE) program and ensure that a VE analysis is performed on all applicable projects. The program should include procedures to approve or reject recommendations and for monitoring to ensure that resulting, approved recommendations are incorporated into the plans, specifications, and estimate (23 USC 106(e); 23 CFR Part 627). Recipients are required to develop policies and procedures pertaining to the use, accommodation and/or relocation of public and private utility facilities on highway rights-of way using federal highway funds. Recipients are required to develop, maintain, and obtain FHWA approval of their Utility Accommodation Policy (UAP) (23 CFR section 645.215). Condition and Context: Management was unable to provide support documenting the County’s compliance with quality assurance program, value engineering, and utilities special tests for the year ended June 30, 2023. Cause: The County is a pass through entity, and believed the direct recipient of the award was responsible for these special tests requirements. However, there is no formal documentation of this understanding with the direct recipients of these responsibilities. Effect or Potential Effect: The County may not be in compliance with the special tests requirements under Uniform Guidance. Questioned Costs: Unknown. Recommendation: We recommend that the County formalize its agreement with the pass-through entity to clarify the responsibilities for the special tests requirements. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan Section of this report.

Finding 2022-001U.S. Department of the TreasuryAssistance Listing Number 21.027 ? COVID-19 - American Rescue Plan Act Funds (US Treasury ARPA)Compliance and Material Weakness over Subrecipient MonitoringRepeat Findings: NoCriteria:A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.332(a)(1); all requirements imposed by the PTE on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.332(a)(2)); and any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the Federal award (e.g., financial, performance, and special reports) (2 CFR section 200.332(a)(3)).A PTE must also monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)).Condition and Context:For 2 out of 3 selections, the agreement with the subrecipient did not clearly identify the Federal assistance listing. Additionally, the agreement did not contain the information described in 2 CFR section 200.332(a).For 3 out of 3 selections, the County was not able to provide documentation showing that the monitoring of the subrecipients was performed.Cause:The County did not inform its subrecipients of Federal requirements included in Uniform Guidance related to procedures required for subrecipient monitoring. The County also did not provide documentation showing the monitoring of subrecipients was performed.Effect or Potential Effect:The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County to not be in compliance with Uniform Guidance.Questioned Costs:Unknown.Recommendation:We recommend that the County prepare and maintain a written plan to ensure subrecipients are aware of the Uniform Guidance requirements. Additionally, we recommend the County performs the monitoring of the subrecipients and ensure the documentation is saved within the County.Views of Responsible Officials:Management agrees with the finding. Refer to the Corrective Action Plan Section of this report.

Finding 2022-002U.S. Department of the TreasuryAssistance Listing Number 21.027 ? COVID-19 - American Rescue Plan Act Funds (US Treasury ARPA)Compliance and Internal Controls Deficiency over ProcurementRepeat Findings: NoCriteria:In accordance with 2 CFR ?200.303: The non-Federal entity must: (a) Establish and maintain effective internal controls 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.Non-Federal entities other than states, including those operating Federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable Federal statutes and the procurement requirements identified in 2 CFR Part 200. A non-Federal entity must conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319Condition and Context:For 1 out of 4 selections, the County was not able to provide evidence they completed a formal bid process with full and open competition.Cause:The County was not able to provide evidence they followed the procurement policies, and that this procurement transaction was conducted in a manner providing full and open competition.Effect or Potential Effect:The County is not in compliance with the procurement requirement.Questioned Costs:Unknown.Recommendation:We recommend the County follows the County?s procurement policy and keeps records of the procurement methods and rationales used to enter into contracts.Views of Responsible Officials:Management agrees with the finding. Refer to the Corrective Action Plan Section of this report.

Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.331(a)(1); all requirements imposed by the PTE on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); and any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the Federal award (e.g., financial, performance, and special reports) (2 CFR section 200.331(a)(3)). Condition and Context: For 4 out of 8 selections, the agreement with the subrecipient did not clearly identify the Federal assistance listing. Additionally, the agreement did not contain the information described in 2 CFR section 200.331(a). Cause: The County did not inform its subrecipients of Federal requirements included in Uniform Guidance related to procedures required for subrecipient monitoring. Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County to not be in compliance with Uniform Guidance. Questioned Costs: None. Recommendation: We recommend that the County prepare and maintain a written plan to ensure subrecipients are aware of the Uniform Guidance requirements. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan Section in this report.

Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.331(a)(1); all requirements imposed by the PTE on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); and any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the Federal award (e.g., financial, performance, and special reports) (2 CFR section 200.331(a)(3)). Condition and Context: For 1 out of 1 selection, the agreement with the subrecipient did not clearly identify the Federal assistance listing. Additionally, the agreement did not contain the information described in 2 CFR section 200.331(a). Cause: The County did not inform its subrecipients of Federal requirements included in Uniform Guidance related to procedures required for subrecipient monitoring. Effect: The subrecipient may not be in compliance with Uniform Guidance, therefore causing the County to not be in compliance with Uniform Guidance. Questioned Costs: None. Recommendation: We recommend that the County prepare and maintain a written plan to ensure subrecipients are aware of the Uniform Guidance requirements. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan Section in this report.

Finding Reference: 2020-002 Federal Agency: U.S. Department of Treasury Federal Program: Coronavirus Relief Funds CFDA Number: 21.019 Compliance Requirement: Allowable Activities/Costs Type of Finding: Significant Deficiency ? Internal Control, Noncompliance Prior Year Finding: No Criteria 2 CFR part 200.403 states that except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity. c) Be accorded consistent treatment. d) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. e) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also ?200.306(b). f) Be adequately documented. Condition/Context We identified charges in the amount of $1,015,000 that were encumbered but not incurred as of yearend. Cause The County did not have effective controls in place for identifying and reporting program expenditures for proper reporting. Effect The County improperly included unallowable expenditures for the total expenditures reported for the program. Questioned Costs $1,015,000 Recommendation We recommend that the County enhance its review to ensure the accuracy of the expenses being reported on the SEFA. Views of the Responsible Officials There were no disagreements with the audit finding.

Federal Agency: Department of Transportation Federal Program: Highway Planning and Construction CFDA Number: 20.205 Compliance Requirement: Reporting - SEFA Type of Finding: Significant Deficiency ? Internal Control Prior Year Finding: No Criteria 2 CFR part 200.502 states that the determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs. Generally, the activity pertains to events that require the non-Federal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal awards, such as: expenditure/expense transactions associated with awards including grants, cost-reimbursement contracts under the FAR, compacts with Indian Tribes, cooperative agreements, and direct appropriations; the disbursement of funds to subrecipients; the use of loan proceeds under loan and loan guarantee programs; the receipt of property; the receipt of surplus property; the receipt or use of program income; the distribution or use of food commodities; the disbursement of amounts entitling the non-Federal entity to an interest subsidy; and the period when insurance is in force. Condition/Context The SEFA preparation by the County did not accurately identify the proper fiscal year 2019 federal expenditures related to this capital project grant as required by Uniform Guidance. Expenditures reported on the SEFA were overstated by $421,357. Cause The County did not have effective controls in place for identifying and reporting program expenditures related to the capital project grant for proper reporting on the respective year's SEFA. Effect The SEFA was not prepared in accordance with OMB requirements. The County required additional time to assure accounts in the general ledger are properly stated and are reconciled to the program balances. Questioned Costs Not determined. Recommendation We recommend that the County enhance its reporting, management review procedures to ensure the accuracy of the expenses being reported on the SEFA. As part of these procedures, we recommend that the County reconcile capital project grant expenditures reported to those tracked by each program manager to assure each grant within a program is accurately reported. Views of the Responsible Officials There were no disagreements with the audit finding.

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