EIN: 616014175
UEI: CW2FFU14R2V3
Data as of August 26, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on September 11, 2024. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by March 11, 2025 (533 days ago).
What is a management decision? →Federal Program: Assistance Listing #97.036 - Disaster Grants - Public Assistance (Presidentially Declared Disaster) Award Number and Year: FEMA 4630 - 2023 Name of Federal Agency and Pass-Thru Agency (if applicable): U.S. Department of Homeland Security, Passed Through Kentucky Department of Emergency Management Compliance Requirements: Activities Allowed & Allowable Costs, Matching, Level of Effort, Earmarking, Period of Performance, Special Tests and Provisions Type of Finding: Material Weakness Amount of Questioned Costs: None Noted Opinion Modification (if applicable): N/A COVID Related: No Repeat Finding: Repeat finding of 2022-006 This is a repeat finding and was included in the prior year audit report as finding 2022-006. The Marshall County Fiscal Court failed to implement adequate internal controls over the Disaster Grants – Public Assistance (Presidentially Declared Disaster) (FEMA) program to ensure all compliance requirements are being met and that record keeping was being done correctly. The fiscal court relied on a third-party administrator for the recording of all FEMA project activity. The fiscal court also relied on the third-party to satisfy compliance requirements and failed to establish any review process or independent internal controls that verified that activities performed, and amounts charged to the program were allowable under all applicable compliance requirements. By relying on a third-party administrator’s controls, without enacting any internal controls, the county increased the risk of misappropriation of funds, and noncompliance with federal grant guidelines. This could have potentially led to questioned costs that would have to be repaid, and less federal funding in the future. This also resulted in the county’s Schedule of Federal Awards and Expenditures (SEFA) being materially misstated, and several schedules and reports being incomplete or inaccurate. Strong internal controls dictate that the fiscal court should review all federal expenditure documentation and reports to ensure compliance requirements are being met and activities are being completed accurately. 2 CFR 200.303 states “The non-Federal entity must (a): 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 recommend the fiscal court strengthen internal controls over the federal expenditure process by ensuring all activity related to federal expenditures is reviewed for accuracy and compliance.
Show full finding ▾Hide full finding ▴Federal Program: Assistance Listing #97.036 - Disaster Grants - Public Assistance (Presidentially Declared Disaster) Award Number and Year: FEMA 4630 - 2023 Name of Federal Agency and Pass-Thru Agency (if applicable): U.S. Department of Homeland Security, Passed Through Kentucky Department of Emergency Management Compliance Requirements: Activities Allowed & Allowable Costs, Matching, Level of Effort, Earmarking, Period of Performance, Special Tests and Provisions Type of Finding: Material Weakness Amount of Questioned Costs: None Noted Opinion Modification (if applicable): N/A COVID Related: No Repeat Finding: Repeat finding of 2022-006 This is a repeat finding and was included in the prior year audit report as finding 2022-006. The Marshall County Fiscal Court failed to implement adequate internal controls over the Disaster Grants – Public Assistance (Presidentially Declared Disaster) (FEMA) program to ensure all compliance requirements are being met and that record keeping was being done correctly. The fiscal court relied on a third-party administrator for the recording of all FEMA project activity. The fiscal court also relied on the third-party to satisfy compliance requirements and failed to establish any review process or independent internal controls that verified that activities performed, and amounts charged to the program were allowable under all applicable compliance requirements. By relying on a third-party administrator’s controls, without enacting any internal controls, the county increased the risk of misappropriation of funds, and noncompliance with federal grant guidelines. This could have potentially led to questioned costs that would have to be repaid, and less federal funding in the future. This also resulted in the county’s Schedule of Federal Awards and Expenditures (SEFA) being materially misstated, and several schedules and reports being incomplete or inaccurate. Strong internal controls dictate that the fiscal court should review all federal expenditure documentation and reports to ensure compliance requirements are being met and activities are being completed accurately. 2 CFR 200.303 states “The non-Federal entity must (a): 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 recommend the fiscal court strengthen internal controls over the federal expenditure process by ensuring all activity related to federal expenditures is reviewed for accuracy and compliance.
This finding covers a fiscal year for which the first half concluded prior to Kevin Spraggs’ term as County Judge/Executive. Additionally, FY23, as well as the prior year FY22, audits were completed toward the end of FY24 – therefore any auditor recommendations and corrective actions would not be in place for a full year until FY25. This response is in relation to the repeat finding from prior year, FY22, that the Court failed to implement adequate controls over federal expenditures due to not having purchase orders for the December 2021 Tornado Disaster related expenses and that the third party hired by the court to be administrator for FEMA project activity resulting in a misstated SEFA and inaccurate record keeping. This finding repeats the finding of SEFA misstatement (2022-003). The SEFA was overstated for the Disaster Grant Public Assistance Program FEMA. The Court hired a third party company to administer the grant submissions for the December 2021 Tornado Disaster, and this created a disconnect between the submission process and later reporting process for the SEFA form. At the time that the SEFA was prepared submissions and approvals for FEMA related expenses had just started to occur. All expenses were included in the submission, even those that later were deemed ineligible for FEMA or were determined to be only partially covered by FEMA. There are still expenses as of May 2024 that are in the appeal stage of application for FEMA reimbursement with uncertainty of whether they will be approved with federal funding or will be denied. For the future planning, in the event that another disaster requires the County to contract with another outside agency for FEMA submission, the Court will strengthen the controls in the reporting process as well as seek out guidance from DLG and/or auditors and/or others on accurately reporting partially covered FEMA expenses as well as expenses that are in an ‘unknown coverage’ state at the time of the SEFA creation. Additionally, the court will comply with auditor recommendations listed with these findings regarding future third party administrators.
2022-006
FAC accepted this audit on June 3, 2024 — management decision was due December 3, 2024.
The Marshall County Fiscal Court failed to implement adequate controls over the Disaster Grants – Public Assistance (Presidentially Declared Disaster) (FEMA) program to ensure all compliance requirements are being met. Disbursements for the FEMA program were not handled in the manner prescribed by the county’s administrative code, or the manner prescribed by the Department For Local Government as required by KRS 68.210. The auditor selected a sample size of forty federal expenditures related to the FEMA program. Of the forty expenditures tested, thirty-four expenditures, totaling $5,049,474, did not have purchase orders as required. Furthermore, the fiscal court did not have any internal control procedures in place to verify that FEMA expenditure requests, and record keeping were being done correctly. This resulted in the county’s Schedule of Federal Awards and Expenditures (SEFA) being materially misstated, and several schedules and reports being incomplete or inaccurate. The fiscal court relied heavily on a third-party administrator for all FEMA project activity and relied on the third-party’s controls to satisfy compliance requirement. Also, according to county personnel, at that time the fiscal court decided not to require purchase orders for contracted services and disaster related expenditures. By relying on a third-party administrator’s controls, without enacting any internal controls, the county increased the risk of misappropriation of funds, and noncompliance with federal grant guidelines. This could have potentially led to questioned costs that would have to be repaid, and less federal funding in the future. By not requiring purchase orders, there is an increased risk of misappropriation of funds and overspending budget line items. Furthermore, the fiscal court is not in compliance with the Department of Local Government’s policies or their own Administrative Code. Strong internal controls dictate that the fiscal court should review all federal expenditure documentation and reports to ensure compliance requirements are being met, and activities are being completed accurately. Strong internal controls also require purchase orders be approved and issued prior to items being ordered and expenses being incurred, to ensure available line-item appropriation exists. The Marshall County Administrative Code Section 4.6 states, “All claims for payment from the County shall be filed in writing with the County Judge. Each claim shall be recorded by date, receipt and purchase order number and presented to the Fiscal Court at its next meeting.” 2 CFR Part 200, Appendix XI, the Compliance Supplement for program 4-97.036, states, “Cost must be: Consistent with applicant’s internal policies, regulations, and procedures that apply uniformly to both federal awards and other activities of applicant.” KRS 68.210 gives the State Local Finance Officer the authority to prescribe a system of uniform accounts. The Department of Local Government (DLG) requires counties to implement a purchase order system which includes issuing purchase orders for all claims expended from the county’s budget. Good internal controls require the use of established procurement policies to ensure that federal disbursements are handled in the manner consistent with the treatment of non-federal disbursements. In addition, according to a memorandum from the Department for Local Government (DLG) dated August 4, 2016, “[t]he main purpose of this system is to ensure that purchases can be made if there are sufficient appropriations available within the amount of line items in the county’s budget. Because of this, it is a requirement by the State Local Finance Officer that all counties have a purchase order system and follow the guidelines prescribed on Page 54 of the County Budget Preparation and State Local Finance Officer Policy Manual.” Furthermore, DLG highly recommends that counties accept the practice of issuing purchase orders for payroll and utility claims. Auditor recommends that the Marshall County Fiscal Court strengthen internal controls over the federal expenditure process by ensuring all activity related to federal expenditures is reviewed for accuracy and compliance. Auditor further recommends that purchase orders are issued for all expenditures prior to the purchase being made.
Show full finding ▾Hide full finding ▴The Marshall County Fiscal Court failed to implement adequate controls over the Disaster Grants – Public Assistance (Presidentially Declared Disaster) (FEMA) program to ensure all compliance requirements are being met. Disbursements for the FEMA program were not handled in the manner prescribed by the county’s administrative code, or the manner prescribed by the Department For Local Government as required by KRS 68.210. The auditor selected a sample size of forty federal expenditures related to the FEMA program. Of the forty expenditures tested, thirty-four expenditures, totaling $5,049,474, did not have purchase orders as required. Furthermore, the fiscal court did not have any internal control procedures in place to verify that FEMA expenditure requests, and record keeping were being done correctly. This resulted in the county’s Schedule of Federal Awards and Expenditures (SEFA) being materially misstated, and several schedules and reports being incomplete or inaccurate. The fiscal court relied heavily on a third-party administrator for all FEMA project activity and relied on the third-party’s controls to satisfy compliance requirement. Also, according to county personnel, at that time the fiscal court decided not to require purchase orders for contracted services and disaster related expenditures. By relying on a third-party administrator’s controls, without enacting any internal controls, the county increased the risk of misappropriation of funds, and noncompliance with federal grant guidelines. This could have potentially led to questioned costs that would have to be repaid, and less federal funding in the future. By not requiring purchase orders, there is an increased risk of misappropriation of funds and overspending budget line items. Furthermore, the fiscal court is not in compliance with the Department of Local Government’s policies or their own Administrative Code. Strong internal controls dictate that the fiscal court should review all federal expenditure documentation and reports to ensure compliance requirements are being met, and activities are being completed accurately. Strong internal controls also require purchase orders be approved and issued prior to items being ordered and expenses being incurred, to ensure available line-item appropriation exists. The Marshall County Administrative Code Section 4.6 states, “All claims for payment from the County shall be filed in writing with the County Judge. Each claim shall be recorded by date, receipt and purchase order number and presented to the Fiscal Court at its next meeting.” 2 CFR Part 200, Appendix XI, the Compliance Supplement for program 4-97.036, states, “Cost must be: Consistent with applicant’s internal policies, regulations, and procedures that apply uniformly to both federal awards and other activities of applicant.” KRS 68.210 gives the State Local Finance Officer the authority to prescribe a system of uniform accounts. The Department of Local Government (DLG) requires counties to implement a purchase order system which includes issuing purchase orders for all claims expended from the county’s budget. Good internal controls require the use of established procurement policies to ensure that federal disbursements are handled in the manner consistent with the treatment of non-federal disbursements. In addition, according to a memorandum from the Department for Local Government (DLG) dated August 4, 2016, “[t]he main purpose of this system is to ensure that purchases can be made if there are sufficient appropriations available within the amount of line items in the county’s budget. Because of this, it is a requirement by the State Local Finance Officer that all counties have a purchase order system and follow the guidelines prescribed on Page 54 of the County Budget Preparation and State Local Finance Officer Policy Manual.” Furthermore, DLG highly recommends that counties accept the practice of issuing purchase orders for payroll and utility claims. Auditor recommends that the Marshall County Fiscal Court strengthen internal controls over the federal expenditure process by ensuring all activity related to federal expenditures is reviewed for accuracy and compliance. Auditor further recommends that purchase orders are issued for all expenditures prior to the purchase being made.
Prepared by: Erica West, Treasurer Date Prepared: 4/29/24 Person Respon sible for Corrective Action Plan: Treasurer, Assistant Tre asurer, Fiscal Court Anticipated Completion Date: Immediate Official's Response: This finding is during a fiscal year prior to Kevin Spraggs' term as County Judge/Executive. This response is in relation to the finding that the Court failed to implement adequate controls over federal expenditures due to not having purchase orders for the December 2021 Tornado Disaster related expenses and that the third party hired by the court to be administrator for FEMA project activity resulting in a misstated SEFA and inaccurate record keeping. This finding repeats the purchase order finding (2022-02) and the SEF A misstatement (2022-005). Please review the corrective action related to those findings for corrective actions for these two items. Additionally, the court will comply with auditor recommendations listed with these findings regarding future third party administrators.
FAC accepted this audit on March 6, 2022 — management decision was due September 6, 2022.
2020-001 The Marshall County Fiscal Court's Schedule Of Expenditures Of Federal Awards Was Materially Misstated Federal Program: CFDA 21.019 Coronavirus Relief Fund Award Number and Year: C267 2020 Name of Federal Agency and Pass-Through Agency: US Department of Treasury, Kentucky Department for Local Government Compliance Requirements: Reporting Type of Finding: Material Weakness and Material Non-Compliance Amount of Questioned Costs: $0 The fiscal court?s internal controls were not adequate to ensure the Schedule of Expenditures Of Federal Awards (SEFA) accurately reported all federal awards expended. The county treasurer has overall responsibility for final preparation of the SEFA. The SEFA for fiscal year 2020 was materially misstated. The treasurer?s final submitted SEFA total was $1,045,560. The Emergency Management Performance Grant was overstated by $3,814, the Delta Regional Grant was overstated by $20,655, the Marshall County Homeowner?s Assistance Program was overstated by $128,240, the Help America Vote Act was understated by $15,360, and the Coronavirus Relief Fund was overstated by $72,286; resulting in the SEFA to be overstated by $209,634. This is a material weakness in internal controls over the SEFA?s preparation and reporting. This misstatement is largely the result of turnover in the county treasurer?s office near the end of the fiscal year, and the lack of familiarity with the reporting requirements. The county treasurer prepared the SEFA based on grant awards received rather than grant funds expended. The fiscal court failed to implement internal controls procedures to ensure the SEFA was accurate and complete. Based on the amount of federal funds omitted from the SEFA, the fiscal court was not aware that they met the requirements of CFR Part 200 of the Uniform Guidance which increases the risk of material noncompliance. Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance) states: ?200.502 Basis for determining Federal awards expended. (a) Determining Federal awards expended. The determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs. (b) Loan and loan guarantees (loans). Since the Federal Government is at risk for loans until the debt is repaid, the following guidelines must be used to calculate the value of Federal awards expended under loan programs, except as noted in paragraphs (c) and (d) of this section: (1) Value of new loans made or received during the audit period; plus (2) Beginning of the audit period balance of loans from previous years for which the Federal Government imposes continuing compliance requirements; plus (3) Any interest subsidy, cash, or administrative cost allowance received. ?200.510 Financial Statements (b) Schedule of expenditures of Federal awards. The auditee must also 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 Basis for determining Federal awards expended. We recommend the fiscal court provide knowledgeable and independent oversight of SEFA preparation and ensure staff responsible for it do an effective job, perform a detailed reconciliation of the federal assistance reported by the treasurer, and establish reporting guidance and assistance to the treasurer to ensure timely, accurate and consistent information and periodically assess the effectiveness of the treasurer?s records to ensure accurate reporting.
Show full finding ▾Hide full finding ▴2020-001 The Marshall County Fiscal Court's Schedule Of Expenditures Of Federal Awards Was Materially Misstated Federal Program: CFDA 21.019 Coronavirus Relief Fund Award Number and Year: C267 2020 Name of Federal Agency and Pass-Through Agency: US Department of Treasury, Kentucky Department for Local Government Compliance Requirements: Reporting Type of Finding: Material Weakness and Material Non-Compliance Amount of Questioned Costs: $0 The fiscal court?s internal controls were not adequate to ensure the Schedule of Expenditures Of Federal Awards (SEFA) accurately reported all federal awards expended. The county treasurer has overall responsibility for final preparation of the SEFA. The SEFA for fiscal year 2020 was materially misstated. The treasurer?s final submitted SEFA total was $1,045,560. The Emergency Management Performance Grant was overstated by $3,814, the Delta Regional Grant was overstated by $20,655, the Marshall County Homeowner?s Assistance Program was overstated by $128,240, the Help America Vote Act was understated by $15,360, and the Coronavirus Relief Fund was overstated by $72,286; resulting in the SEFA to be overstated by $209,634. This is a material weakness in internal controls over the SEFA?s preparation and reporting. This misstatement is largely the result of turnover in the county treasurer?s office near the end of the fiscal year, and the lack of familiarity with the reporting requirements. The county treasurer prepared the SEFA based on grant awards received rather than grant funds expended. The fiscal court failed to implement internal controls procedures to ensure the SEFA was accurate and complete. Based on the amount of federal funds omitted from the SEFA, the fiscal court was not aware that they met the requirements of CFR Part 200 of the Uniform Guidance which increases the risk of material noncompliance. Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance) states: ?200.502 Basis for determining Federal awards expended. (a) Determining Federal awards expended. The determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs. (b) Loan and loan guarantees (loans). Since the Federal Government is at risk for loans until the debt is repaid, the following guidelines must be used to calculate the value of Federal awards expended under loan programs, except as noted in paragraphs (c) and (d) of this section: (1) Value of new loans made or received during the audit period; plus (2) Beginning of the audit period balance of loans from previous years for which the Federal Government imposes continuing compliance requirements; plus (3) Any interest subsidy, cash, or administrative cost allowance received. ?200.510 Financial Statements (b) Schedule of expenditures of Federal awards. The auditee must also 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 Basis for determining Federal awards expended. We recommend the fiscal court provide knowledgeable and independent oversight of SEFA preparation and ensure staff responsible for it do an effective job, perform a detailed reconciliation of the federal assistance reported by the treasurer, and establish reporting guidance and assistance to the treasurer to ensure timely, accurate and consistent information and periodically assess the effectiveness of the treasurer?s records to ensure accurate reporting.
Views of Responsible Official and Planned Corrective Action: County Judge/Executive?s Response: This finding relates to the comment that the Schedule of Federal Awards (SEFA) was materially misstated. The SEFA form requests a reporting of all federal awards expended in order to establish if a Federal single audit is required. There are two items on the SEFA that were overstated. The overstatement did not affect whether the threshold for a single audit was met. Additionally, a large portion of the total misstatement amount is attributed to Coronavirus Relief Fund expenditures. The specific expenditures represented payroll that was submitted to the Department for Local Government for CARES reimbursement for hours worked prior to the period of allowable reimbursement. The Department for Local Government?s guidance allowed for funds expended during the time period under question to be reimbursed, which payroll in question was paid out during the time period allowed. Further, this payroll was approved through the thorough review process and reimbursed by the Department for Local Government, and supplied that there were other eligible payroll expenses during the time period that were not yet reimbursed by CARES funds. The representative from DLG accepted the additional expenses as a substitution for the payroll that was not within the time frame. Per DLG written response this resolved any issue with the CARES related expense prior to the completion of this audit. Planned corrective actions include verifying outstanding loan balances and sources at fiscal year-end prior to completing SEFA. Further, collaborative researching efforts between the Treasurer?s Office, the County Judge/Executive. Deputy Judge and any department director responsible for grants will occur prior to external reporting of federal funding.
2019-001
2020-002 The Fiscal Court Failed To Implement Adequate Internal Controls Over Period Of Performance Federal Program: CFDA 21.019 Coronavirus Relief Fund Award Number and Year: C267 2020 Name of Federal Agency and Pass-Through Agency: US Department of Treasury, Kentucky Department for Local Government Compliance Requirements: Period of Performance Type of Finding: Material Weakness and Material Non-Compliance Amount of Questioned Costs: $71,399 The Fiscal Court failed to properly monitor or establish internal controls over period of performance for the Coronavirus Relief Fund. The fiscal court expended funds for payroll, protective supplies, and disinfection without regards to requirements of the Coronavirus Relief Fund period of performance. As a result of the internal control deficiency, the following questionable costs were noted during testing: ? $71,399 for eligible payroll expenses were expended before the period of performance of March 1, 2019 as mandated by Program 21.019. These items are considered questionable costs in relation to the grant agreement thus a total of $71,399 is considered questionable costs. Per CFDA 21.019, the Coronavirus Relief Fund is to provide direct payments to state, territorial, tribal, and eligible local governments to cover: ? Necessary expenditures incurred due to the public health emergency with respect to Coronavirus Disease 2019 (COVID?19); ? Costs that were not accounted for in the government?s most recently approved budget as of March 27, 2020; and ? Costs that 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 Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The Fiscal Court should implement internal controls over period of performance to determine if expenses are in compliance with applicable laws, regulations, and provisions of contracts or grant agreements.
Show full finding ▾Hide full finding ▴2020-002 The Fiscal Court Failed To Implement Adequate Internal Controls Over Period Of Performance Federal Program: CFDA 21.019 Coronavirus Relief Fund Award Number and Year: C267 2020 Name of Federal Agency and Pass-Through Agency: US Department of Treasury, Kentucky Department for Local Government Compliance Requirements: Period of Performance Type of Finding: Material Weakness and Material Non-Compliance Amount of Questioned Costs: $71,399 The Fiscal Court failed to properly monitor or establish internal controls over period of performance for the Coronavirus Relief Fund. The fiscal court expended funds for payroll, protective supplies, and disinfection without regards to requirements of the Coronavirus Relief Fund period of performance. As a result of the internal control deficiency, the following questionable costs were noted during testing: ? $71,399 for eligible payroll expenses were expended before the period of performance of March 1, 2019 as mandated by Program 21.019. These items are considered questionable costs in relation to the grant agreement thus a total of $71,399 is considered questionable costs. Per CFDA 21.019, the Coronavirus Relief Fund is to provide direct payments to state, territorial, tribal, and eligible local governments to cover: ? Necessary expenditures incurred due to the public health emergency with respect to Coronavirus Disease 2019 (COVID?19); ? Costs that were not accounted for in the government?s most recently approved budget as of March 27, 2020; and ? Costs that 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 Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The Fiscal Court should implement internal controls over period of performance to determine if expenses are in compliance with applicable laws, regulations, and provisions of contracts or grant agreements.
Views of Responsible Official and Planned Corrective Action: County Judge/Executive?s Response: This finding relates to the comment that there were inadequate internal controls over period of performance, specifically Coronavirus Relief Fund. The finding states that $71,399 for eligible payroll expenses that were reimbursed through the Coronavirus Relief Fund were expended before the period of performance. The Department for Local Government?s guidance allowed for funds expended during the time period allowed. Further, this payroll was approved through the thorough review process and reimbursed by the Department for Local Government who was administering these funds. When this was discovered, the Treasurer contacted the Department for Local Government, and supplied that there were other eligible payroll expenses during the time period that were not yet reimbursed by CARES funds. The representative from DLG accepted the additional expenses as a substitution for the payroll that was not within the time frame. Per DLG written responses this resolved any issue with the CARES related expenses prior to the completion of this audit.
FAC accepted this audit on July 5, 2020 — management decision was due January 5, 2021.
Federal Program: CFDA 66.458 Capitalization Grants For Clean Water State Revolving Funds Award Number and Year: A18-014 Name of Federal Agency and Pass-Through Agency: U.S. Department of Environmental Protection Agency and Kentucky Infrastructure Authority Compliance Requirements: Reporting Type of Finding: Material Weakness and Material Non-Compliance Amount of Questioned Costs: $0 The fiscal court?s internal controls were not adequate to ensure the Schedule of Expenditures Of Federal Awards (SEFA) accurately reported all federal awards expended. The county treasurer has overall responsibility for final preparation of the SEFA. The SEFA for fiscal year 2019 was materially misstated. The treasurer?s original SEFA total was $349,699. The Kentucky Infrastructure Authority (KIA) federal loan in the amount of $964,226 was omitted from the Marshall County Fiscal Court?s SEFA, and the Homeland Security Grant, which was expended on ambulance equipment in April 2019, was understated by $22,217. Additionally, the fiscal court failed to submit the SEFA to the Department for Local Government and the Auditor of Public Accounts. This is a material weakness in internal controls over the SEFA?s preparation and reporting. This misstatement is largely the result of turnover in the county treasurer?s office near the end of the fiscal year, and the lack of familiarity with the reporting requirements. The county treasurer prepared the SEFA based on grant awards received rather than grant funds expended. The fiscal court failed to implement internal controls procedures to ensure the SEFA was accurate and complete. Based on the amount of federal funds omitted from the SEFA, the fiscal court was not aware that they met the requirements of CFR Part 200 of the Uniform Guidance which increases the risk of material noncompliance. Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance) states: ?200.502 Basis for determining Federal awards expended. (a) Determining Federal awards expended. The determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs. (b) Loan and loan guarantees (loans). Since the Federal Government is at risk for loans until the debt is repaid, the following guidelines must be used to calculate the value of Federal awards expended under loan programs, except as noted in paragraphs (c) and (d) of this section: (1) Value of new loans made or received during the audit period; plus (2) Beginning of the audit period balance of loans from previous years for which the Federal Government imposes continuing compliance requirements; plus (3) Any interest subsidy, cash, or administrative cost allowance received. ?200.510 Financial Statements (b) Schedule of expenditures of Federal awards. The auditee must also 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 Basis for determining Federal awards expended. We recommend the fiscal court provide knowledgeable and independent oversight of SEFA preparation and ensure staff responsible for it do an effective job, perform a detailed reconciliation of the federal assistance reported by the treasurer, and establish reporting guidance and assistance to the treasurer to ensure timely, accurate and consistent information and periodically assess the effectiveness of the treasurer?s records to ensure accurate reporting.
Show full finding ▾Hide full finding ▴Federal Program: CFDA 66.458 Capitalization Grants For Clean Water State Revolving Funds Award Number and Year: A18-014 Name of Federal Agency and Pass-Through Agency: U.S. Department of Environmental Protection Agency and Kentucky Infrastructure Authority Compliance Requirements: Reporting Type of Finding: Material Weakness and Material Non-Compliance Amount of Questioned Costs: $0 The fiscal court?s internal controls were not adequate to ensure the Schedule of Expenditures Of Federal Awards (SEFA) accurately reported all federal awards expended. The county treasurer has overall responsibility for final preparation of the SEFA. The SEFA for fiscal year 2019 was materially misstated. The treasurer?s original SEFA total was $349,699. The Kentucky Infrastructure Authority (KIA) federal loan in the amount of $964,226 was omitted from the Marshall County Fiscal Court?s SEFA, and the Homeland Security Grant, which was expended on ambulance equipment in April 2019, was understated by $22,217. Additionally, the fiscal court failed to submit the SEFA to the Department for Local Government and the Auditor of Public Accounts. This is a material weakness in internal controls over the SEFA?s preparation and reporting. This misstatement is largely the result of turnover in the county treasurer?s office near the end of the fiscal year, and the lack of familiarity with the reporting requirements. The county treasurer prepared the SEFA based on grant awards received rather than grant funds expended. The fiscal court failed to implement internal controls procedures to ensure the SEFA was accurate and complete. Based on the amount of federal funds omitted from the SEFA, the fiscal court was not aware that they met the requirements of CFR Part 200 of the Uniform Guidance which increases the risk of material noncompliance. Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance) states: ?200.502 Basis for determining Federal awards expended. (a) Determining Federal awards expended. The determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs. (b) Loan and loan guarantees (loans). Since the Federal Government is at risk for loans until the debt is repaid, the following guidelines must be used to calculate the value of Federal awards expended under loan programs, except as noted in paragraphs (c) and (d) of this section: (1) Value of new loans made or received during the audit period; plus (2) Beginning of the audit period balance of loans from previous years for which the Federal Government imposes continuing compliance requirements; plus (3) Any interest subsidy, cash, or administrative cost allowance received. ?200.510 Financial Statements (b) Schedule of expenditures of Federal awards. The auditee must also 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 Basis for determining Federal awards expended. We recommend the fiscal court provide knowledgeable and independent oversight of SEFA preparation and ensure staff responsible for it do an effective job, perform a detailed reconciliation of the federal assistance reported by the treasurer, and establish reporting guidance and assistance to the treasurer to ensure timely, accurate and consistent information and periodically assess the effectiveness of the treasurer?s records to ensure accurate reporting.
Views of Responsible Official and Planned Corrective Action: County Judge/Executive?s Response: This finding relates to the comment that the Schedule of Expenditures of Federal Awards (SEFA) was materially misstated. The SEFA form requests a reporting of all federal awards expended. The county expended funds from a KIA loan program that ultimately resulted in this finding. The Treasurer?s office was unaware that this loan would be required to be reported as an ?award;? further, the Treasurer?s office was unaware that this loan was funded through federal dollars. This misstatement is largely the result of turnover of the entire Treasurer?s office in the last month of the 2019 fiscal year. Planned corrective actions include verifying outstanding loan balances and sources at fiscal year-end prior to completing the SEFA. Further, collaborative researching efforts between the Treasurer?s Office, the County Judge/Executive, Deputy Judge and any department director responsible for grants will occur prior to external reporting of federal funding.
Data source: This information comes from the Federal Audit Clearinghouse, the official repository of Single Audit data. All data is public domain. Verify this organization's audit history at fac.gov.
Track your findings and corrective action plans across audit cycles.
Start tracking findings →Monitor subrecipient audit findings and compliance status.
Start monitoring →© 2026 Single Audit Intelligence. All data is public domain.