Ohio County Fiscal Court

The Ohio County Fiscal Court failed to publicly advertise for bids for all but two of the work site projects for the Emergency Watershed Protection Program project. While the county advertised a pre-bid meeting in the local newspaper for prospective companies to get an opportunity to learn about the project, the actual request for bids should have also been advertised in the local newspaper to ensure fair and cost effective procurement procedures. The total of the amount paid for services not properly advertised was $555,000. A total of $766,100 was spent for this program in the audit year. Per the emergency management staff, this was likely due to a misunderstanding and oversight of what was advertised. They had maintained documentation of the pre-bid meeting being advertised and thought that the actual bid request was advertised as well, but it appears it was not. By not following proper bidding procedures, the public was not made aware of the request for bids for this project and did not have an opportunity to apply to provide services for the project. Only those who attended the pre-bid meeting knew of the bidding procedures and the specifications for the projects. KRS 46.010(2) requires, “each county treasurer, and each county officer who receives or disburses state funds, to keep an accurate account of receipts and disbursements, showing a daily balance of receipts and disbursements.” KRS 46.010(3) requires, “all county officers handling state funds, other than taxes, to make an annual report to the Department for Local Government showing receipts and disbursements, and to make other financial statements as the Department for Local Government requires.” Strong internal controls require management to monitor disbursements to ensure compliance with procurement laws, and to keep good records of all bids and other procurement transactions. KRS 424.260 requires that all contractual services other than professional involving expenditures of greater than $40,000 to be advertised in the local newspaper for bids. In addition, 2 CFR section 200.318 (a) states “The recipient or subrecipient must maintain and use documented procedures for procurement transactions under a Federal award or subaward, including for acquisition of property or services. These documented procurement procedures must be consistent with State, local, and tribal laws and regulations and the standards identified in §§ 200.317 through 200.327." Repeat Finding: This is not a repeat finding from the previous year.

The Ohio County Fiscal Court Did Not Properly Bid Out Disbursements Federal Program: Assistance Listing #21.027 Coronavirus State and Local Fiscal Recovery Fund Name of Federal Agency: U.S. Department of Treasury Pass-Through Agency: Not Applicable Award Number and Year: 2022 Amount Expended: $1,821,974 Compliance Requirements: Activities Allowed or Unallowed; Allowable Costs/Cost Principles Type of Finding: Noncompliance Amount of Questioned Costs: $0.00 Opinion Modification (if applicable): N/A During fiscal year 2022, the Ohio County Fiscal Court received funds from the Coronavirus State and Local Fiscal Recovery Fund (CSLFRF). The Ohio County Fiscal Court fail to bid out disbursements appropriated to these funds. According to auditor observation and inquiry with the treasurer, there was a typo in the approved administration code that stated that any purchase over $10,000 had to be bid out. The treasurer stated that the fiscal court used the $30,000 threshold to determine if a disbursement needed to be bid. Since bidding procedures were not followed, it is possible that the county did not get the lowest rate for purchases. This also puts the county at higher risk for potential fraudulent purchases. Additionally, the county was not in compliance with KRS 424.260. Strong internal controls require management to monitor disbursements and purchase orders to ensure compliance with bid laws, and to keep good records of all bid transactions. The version of KRS 424.260(1) in effect during fiscal year 2022 stated, ?[e]xcept where a statute specifically fixes a larger sum as the minimum for a requirement of advertisement for bids, no city, county, or district, or board or commission of a city or county, or sheriff or county clerk, may make a contract, lease, or other agreement for: (a) Materials; (b) Supplies, except perishable foods such as meat, poultry, fish, egg products, fresh vegetables, and fresh fruits; (c) Equipment; or (d) Contractual services other than professional; involving an expenditure of more than thirty thousand dollars ($30,000) without first making newspaper advertisement for bids.? Also, according to the Ohio County Administration Code Chapter 11 1(a), ?[b]idding will be employed when detailed specifications for the goods or services to be procured can be prepared and the primary basis for award in cost. When the cost of a contract, lease or equipment or contractual services other than those personal or professional exceeds $10,000.00[.]? We recommend the Ohio County Fiscal Court bid out any disbursement over the $10,000 threshold or amend the administrative code to reflect current bidding policy.