Putnam County CommissionLocal Government

GENERAL INFORMATION: Grant Title: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Year: 2024 Federal Agency: Department of Treasury CONDITION: We noted the Putnam County Commission did not have controls in place to detect and prevent paying amounts in excess of specific contracts. Specially, a contract was executed with a vendor delineating specific prices for goods in agreement with a federal contract established between the vendor and the General Services Administration (GSA). County officials do not have a process in place to identify charges in excess of the specified prices and to ensure payments of federal funds match the agreed upon terms within the signed contract. Proper documentation was not on hand to support charges being in agreement with the contracted amounts. CRITERIA Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.404 states, in part, that: "A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non-Federal entity is predominantly federally-funded. In determining reasonableness of a given cost, consideration must be given to: ...(d) Whether the individuals concerned acted with prudence in the circumstances considering their responsibilities to the non-Federal entity, its employees, where applicable its students or membership, the public at large, and the Federal Government. (e) Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award's cost." Proper internal control dictates the adequate review and oversight of charges related to contracted amounts. Additionally, controls should be in place to review these procedures and reduce opportunities for the override of controls. QUESTIONED COSTS: Unknown CAUSE: Procedures were not in place to verify that disbursements aligned with contractually stipulated amounts. EFFECT: We were unable to determine if the payments remitted to the vendor for charges during the year matched the specific prices on the signed contract. REPEAT FINDING: Yes PRIOR YEAR FINDING NUMBER: 2023-004 RECOMMENDATION: Officials should establish and follow procedures mandating a review and recalculation of all invoice payments. This review process should ensure that prices align with amounts agreed to in the executed contract. In instances where discrepancies are identified, officials should engage with the vendor and relevant state and federal agencies associated with the contract to determine that payments are made only for costs charged in accordance with the associated contract. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: The County Commission will work directly with the vendor to ensure future payment requests properly align with payment information listed on the federal contract.

GENERAL INFORMATION: Grant Title: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Year: 2024 Federal Agency: Department of Treasury CONDITION: We noted that two quarterly Project and Expenditure Reports submitted by Putnam County Commission to the U.S. Treasury excluded $607,026 of expenditures that occurred during the reporting period. CRITERIA: U.S. Department of the Treasury Compliance and Reporting Guidance, State and Local Fiscal Recovery Funds, Part 2: Reporting Guidance, B. Project and Expenditure Report, 2. Annual Reporting states, in part: "The following recipients are required to submit annual Project and Expenditure Reports: ...Metropolitan cities and counties with a population below 250,000 residents that are allocated less than $10 million in SLFRF funding and NEUs that are allocated less than $10 million in SLFRF funding." U.S. Department of the Treasury Compliance and Reporting Guidance, State and Local Fiscal Recovery Funds, Part 1: General Guidance, D. Uniform Administrative Requirements, 10. Reporting states, in part: "…Expenditures may be reported on a cash or accrual basis, as long as methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Your organization should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles..." QUESTIONED COSTS: $0 CAUSE: Procedures were not in place to ensure all qualifying State and Local Fiscal Recovery Funds expenditures were reported on the quarterly Project and Expenditure Reports submitted to the U.S. Treasury. EFFECT: Management excluded expenditures incurred during the periods covered by the Project and Expenditure Reports. This necessitated an adverse opinion. REPEAT FINDING: No RECOMMENDATION: The Putnam County Commission is directed to review these regulations and comply with the provisions set forth therein. Expenditures reported on the quarterly Project and Expenditure Report should be cross-referenced to accounting ledgers prior to submission. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: The County Commission will ensure all expenditures are properly reported to the governing entity during the proper reporting period.

Grant Title: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Award Number and Year: 2023 Assistance Listing #: 21.027 Federal Agency: US Department of Treasury CONDITION: We identified that payments were made in excess of contracted amounts. CONTEXT: Specifically, a contract was executed with a vendor delineating specific prices for goods in alignment with a federal contract established between the vendor and the General Services Administration (GSA). The vendor is a voluntary participant in the GSA Cooperative Purchasing Program. During fiscal year 2023, amounts paid in excess of contractually stipulated prices totaled $30,851. CRITERIA: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.404 states, in part, that: "A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non-Federal entity is predominantly federally-funded. In determining reasonableness of a given cost, consideration must be given to: (a) Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the non-Federal entity or the proper and efficient performance of the Federal award. (b) The restraints or requirements imposed by such factors as: sound business practices; arm's-length bargaining; Federal, state, local, tribal, and other laws and regulations; and terms and conditions of the Federal award. (c) The restraints or requirements imposed by such factors as: sound business practices; arm's-length bargaining; Federal, state, local, tribal, and other laws and regulations; and terms and conditions of the Federal award. (d) Whether the individuals concerned acted with prudence in the circumstances considering their responsibilities to the non-Federal entity, its employees, where applicable its students or membership, the public at large, and the Federal Government. (e) Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award's cost." QUESTIONED COSTS: $30,851 CAUSE: Procedures were not in place to verify that disbursements aligned with contractually stipulated amounts. EFFECT: The County's use of funds deviated from required cost principles. REPEAT FINDING: No RECOMMENDATION: Officials should seek reimbursement or a credit for amounts charged in excess of the GSA price. Additionally, officials should establish and follow procedures mandating a review and recalculation of all invoice payments. This review process should ensure that prices align with amounts agreed to in the executed contract. In instances where discrepancies are identified, officials should engage with the vendor and relevant state and federal agencies associated with the contract to determine that payments are made only to costs charged in accordance with the associated contract. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: The County Commission will seek reimbursement for the amounts paid in excess of contractually stipulated prices directly from the vendor.