Florence County, South CarolinaLocal Government

Item 2020-003: Schedule of Expenditures of Federal Awards (Significant Deficiency and Non-material Non-compliance) U.S. Department of Homeland Security Emergency Management Performance Grant (Grant No. 19EMPG01) CFDA No. 97.042 Condition: The County?s Schedule of Expenditures of Federal Awards for the fiscal year ended June 30, 2020 included the County?s 50% matching share of the Emergency Management Performance Grant?s expenditures. Criteria: Per ?200.510 (b) of the Uniform Guidance, Schedule of Expenditures of Federal Awards, the auditee must prepare a Schedule of Expenditures of Federal Awards for the period covered by the auditee?s financial statements which must include the total federal awards expended as determined in accordance with ?200.502 of the Uniform Guidance, Basis for Determining Federal Awards Expended. Cause: The County did not review all of its grant agreements and reconcile them to the Schedule of Expenditures of Federal Awards to ensure that the Schedule of Expenditures of Federal Awards was complete and accurate, and that only federal expenditures were being reported. Recommendation: We recommend that management implement monthly financial reporting procedures that include gathering and tracking all grant agreements, ensuring that the federal share of grant expenditures are reported separately on the general ledger from the state and local share, and preparing a Schedule of Expenditures of Federal Awards that only reflects expenditures that are eligible for reimbursement from the federal granting agency. We also recommend that the Schedule of Expenditures of Federal Awards gets reviewed by an employee independent of the one who prepared it. Effect: The County?s expenditures for this grant and total expenditures reflected on the Schedule of Expenditures of Federal Awards for the fiscal year ended June 30, 2020 were overstated by $73,621.

Item 2020-004: Allowable Costs (Significant Deficiency over Allowable Costs and Non-material Noncompliance) U.S. Department of Transportation National Priority Safety Program CFDA No. 20.616 Condition: The County Sheriff?s Office submitted Requests for Reimbursement associated with its 12th Circuit Law Enforcement Network Grant (Grant No. 2JC20012) and DUI Enforcement Grant (Grant No. M4HVE-2020-HS-48-20) to the South Carolina Department of Public Safety that reflected unallowable expenditures. Criteria: The allowability of costs incurred under any grant shall be determined in accordance with the cost principles outlined in 2 Code of Federal Regulations (?CFR?) Part 200 and National Highway Traffic Safety Administration (?NHTSA?) policy and guidance to determine necessary, reasonable, allocable, and allowable costs consistent with policies, rules, and regulations conforming to limitations or exclusion of costs as set forth in the Uniform Guidance. Cause: Requests for Reimbursement are not reviewed for mathematical accuracy and allowable costs, nor are they compared to the grant budget before they are submitted to the South Carolina Department of Public Safety. Effect: The South Carolina Department of Public Safety disallowed certain expenditures requested for reimbursement by the County Sheriff?s Office. Context: We inspected a sample of eight (8) quarterly Requests for Reimbursement and noted that five (5) of them reflected costs that were disallowed by the South Carolina Department of Public Safety. Recommendation: We recommend that the County Sheriff?s Office implement quality control procedures over the preparation and authorization of its Requests for Reimbursement, including developing segregation of duties, checking the Requests for Reimbursement for accuracy, and comparing them to supporting documentation and the grant budget.

Item 2019-004: Schedule of Expenditures of Federal Awards (Significant Deficiency and Non-compliance Material to the Financial Statements) U.S. Department of Health and Human Services Hospital Preparedness Program and Public Health Emergency Preparedness Cooperative Agreements CFDA No. 93.074 Condition: The County?s Schedule of Expenditures of Federal Awards for the fiscal year ended June 30, 2019 omitted the U.S. Department of Health and Human Services? Hospital Preparedness Program and Public Health Emergency Preparedness Cooperative Agreements. Criteria: Per ?200.510 (b) of the Uniform Guidance, Schedule of Expenditures of Federal Awards, the auditee must prepare a Schedule of Expenditures of Federal Awards for the period covered by the auditee?s financial statements which must include the total federal awards expended as determined in accordance with ?200.502 of the Uniform Guidance, Basis for Determining Federal Awards Expended. Cause: The County did not review its Schedule of Expenditures of Federal Awards for completeness and accuracy throughout the fiscal year to ensure that all federal grant awards were accounted for. Effect: The County?s Schedule of Expenditures of Federal Awards for the fiscal year ended June 30, 2019 omitted $116,316 of federal expenditures incurred to carry out the objectives of the Hospital Preparedness Program and Public Health Emergency Preparedness Cooperative Agreements. Recommendation: We recommend that management implement monthly financial reporting procedures that include gathering and tracking all grant agreements, ensuring that the federal share of grant expenditures are reported separately on the general ledger from the state and local share, and preparing a Schedule of Expenditures of Federal Awards. We also recommend that the Schedule of Expenditures of Federal Awards gets reviewed by an employee independent of the one who prepared it. Views of Responsible Officials and Planned Corrective Actions: Management concurs that the Schedule of Expenditures of Federal Awards for the fiscal year ended June 30, 2019 omitted the U.S. Department of Health and Human Services? Hospital Preparedness Program. Management will implement monthly financial reporting procedures focused on verifying the accuracy and completeness of the County?s Schedule of Expenditures of Federal Awards.

Item 2019-005: Misappropriation of Funds Allocated to the County Sheriff?s Office (Other Matter Required to be Reported under the Uniform Guidance) U.S. Department of Justice Equitable Sharing Program CFDA No. 16.922 Condition: During the fiscal year ended June 30, 2019, the County?s former Sheriff was indicted for embezzlement and misconduct in office for allegedly spending both County and federal narcotics funds allocated to the Sheriff?s Office for personal use. The federal narcotics funds were awarded by the U.S. Department of Justice as part of its Equitable Criteria: Per the Guide to Equitable Sharing, permissible uses of equitably shared funds shall be used by law enforcement agencies for law enforcement purposes only. Eligible expenditures are then reported on the Schedule of Expenditures of Federal Awards. Cause: The condition described above was the result of the former Sheriff having access to all of the bank accounts and the ability to circumvent internal controls. Also, the Sheriff?s Office has not been following the County?s Procurement Policy when making purchases. Effect: The former Sheriff was suspended from Office by the South Carolina State Governor. The total amount of misappropriated funds is unknown, including the allocation between County and federal funds, and the estimated amount of restitution that he has agreed to pay is approximately $17,000. Recommendation: We recommend that the Sheriff?s Office follow the County?s Procurement Policy in order to mitigate the risk of future unauthorized or unallowable purchases. Views of Responsible Officials and Planned Corrective Actions: Management concurs that during the fiscal year ended June 30, 2019, the County?s Sheriff was indicted for embezzlement and misconduct in office for allegedly spending both County and federal narcotic funds allocated to the Sheriff?s Office for personal use. Management concurs that the Sheriff had access to all of the bank accounts and the ability to circumvent internal controls. The Sheriff was removed from office and has agreed to pay restitution. Management will recommend that internal controls are put in place and that the Sheriff?s Office follow the County?s Procurement Policy in order to prevent future occurrences.Sharing Program.