BELL COUNTY FISCAL COURTLocal Government

The Bell County Fiscal Court Failed To Implement Internal Controls To Ensure Costs Submitted For Reimbursement Were For Eligible Expenses Not Already Reimbursed By Other Entities Federal Program: Assistance Listing Number 21.019 ? Coronavirus Relief Funds Award Number and Year: 2021 Name of Federal Agency and Pass-Through Agency: U.S. Department of Treasury and Kentucky Department for Local Government ? Office of Grants Compliance Requirements: Activities Allowed or Unallowed Type of Finding: Significant Deficiency Amount of Questioned Costs: $12,333 Opinion Modification: No The Coronavirus Relief Fund (CRF) was established to cover costs that are necessary expenditures incurred due to the public health emergency with respect to Coronavirus Disease 2019 (COVID-19). The $150 billion fund is to be used to make payments for specified uses to states, tribal governments, and certain local governments for the program period March 1, 2020 through December 31, 2021. The Compliance Supplement 2020 addendum for Department of the Treasury for CRF for States, Tribal Governments, and Certain Eligible Local Governments states ?recipients may not use payments from the Fund to cover expenditures for which they will receive reimbursement from other sources.?. During fiscal year 2021, the Bell County Fiscal Court received reimbursements from the CRF for the payroll expenditures that had already been reimbursed by other state and federal grants or other governmental entities. The Bell County Fiscal Court failed to establish effective internal controls over compliance requirements to ensure expenditures submitted for reimbursement from the CRF were not already reimbursed from other sources. Our total sample included 60 disbursements from a universe of 505 transactions included in the reimbursement request. The audit sample was selected using a non-statistical method. We then reviewed reimbursements received from other state and federal grants or other governmental entities for payroll expenditures that had also been reimbursed by CRF. The issue noted appears to be isolated to the CRF grant reimbursements. Total known questioned costs are $12,333. Questioned costs were computed by comparing reimbursements received from other state and federal grants or other governmental entities for payroll expenditures to payroll expenditures submitted for reimbursement to Coronavirus Relief Fund (CRF). During testing, we found the following expenditures had already been reimbursed: ? $12,333 gross wages were reimbursed for law enforcement officers from the Kentucky Law Enforcement Foundation Program Fund (KLEFPF). The Bell County Fiscal Court failed to establish effective internal controls over compliance requirements to ensure expenditures submitted for reimbursement from the CRF were not already reimbursed from other sources. As a result, the Bell County Fiscal Court submitted payroll expenses that did not qualify for reimbursement from the CRF administered by the Commonwealth of Kentucky?s Department for Local Government (DLG), which, resulted in $12,333 of questioned costs. In addition, the fiscal court could be required to repay the questioned costs back to the granting agency. 2 CFR ? 200.303 requires a non-federal entity to ?[e]stablish 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.? In addition, 2 CFR ? 200.1 states in part: ?Improper payment means: (1) Any payment that should not have been made or that was made in an incorrect amount under statutory, contractual, administrative, or other legally applicable requirements. (i) Incorrect amounts are overpayments or underpayments that are made to eligible recipients (including inappropriate denials of payment or service, any payment that does not account for credit for applicable discounts, payments that are for an incorrect amount, and duplicate payments). An improper payment also includes any payment that was made to an ineligible recipient or for an ineligible good or service, or payments for goods or services not received (except for such payments authorized by law). We recommend the fiscal court strengthen internal controls over federal awards to ensure expenditures have not been reimbursed by other entities and are eligible expenditures. We also recommend that the fiscal court contact the Kentucky Department for Local Government to determine if questioned costs should be repaid or if they can resubmit request with eligible expenditures.