FLOYD COUNTY FISCAL COURT

The Floyd County Fiscal Court Submitted Ineligible Expenses for Reimbursement From The Coronavirus Relief Fund Federal Program: CFDA 21.109 COVID-19 - Coronavirus Relief Fund Award Number and Year: C130 2020 Name of Federal Agency and Pass-Through Agency: U.S. Department of Treasury and passed-through Kentucky Department for Local Government Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Period of Performance Type of Finding: Material Weakness Amount of Questioned Costs: $47,564 Opinion: Adverse The Floyd County Fiscal Court submitted payroll expenses and matching retirement incurred prior to March 1, 2020, for reimbursement from the Coronavirus Relief Fund (the Fund) administered by the Commonwealth of Kentucky?s Department for Local Government (DLG). The ineligible expense was for the jail?s payroll and matching retirement. The entire payroll for dates February 13-22, 2020, paid March 5, 2020 and the corresponding matching retirement paid March 6, 2020 for those dates along with payroll for February 27-29, 2020, paid March 19, 2020, and corresponding matching retirement paid April 7, 2020, was included in the reimbursement request. The payroll submission causing questioned costs ran from February 13, 2020 through February 29, 2020, which is a pay period outside the CRF?s prescribed period of performance. Questioned costs were computed based on the cost of the jail?s payroll and matching retirement paid for the period of February 15, 2020 through February 29, 2020. The amount of the jail?s payroll and matching retirement for the pay period in February being questioned is $47,564. The county thought reimbursement dates were based upon the day that the cost was expended instead of incurred. This caused the county to submit reimbursement requests for costs that were incurred before the period of performance of March 1. The Coronavirus Aid, Relief, and Economic Security Act (?CARES Act?) established the Fund and appropriated $150 billion for payments by Treasury to States, tribal governments, and certain local governments. The CARES Act provides that payments from the Fund may only be used to cover costs that: ? Are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID-19); ? Were not accounted for in the budget most recently approved as of March 27, 2020 (the date of enactment of the CARES Act) for the State or government; and ? Were incurred during the period that begins on March 1, 2020, and ends on December 30, 2020, per section 601(d) of the Social Security Act, as added by section 5001 of the CARES Act. Additionally, 2 CFR 200.303 states: ?The non-Federal entity must: (a) [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.? We recommend the Floyd County Fiscal Court 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. We also recommend the Floyd County Fiscal Court contact the Department for Local Government for guidance on how to resolve this issue.

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