JEFFERSON COUNTY COMMISSIONLocal Government

Finding 2021-001 ? Subrecipient Monitoring ? Significant Deficiency Information on the Federal Program: COVID-19 Coronavirus Relief Fund, Assistance Listing #21.019 Criteria: 2 CFR 200.302(b)(1) of the Uniform Guidance states that a nonfederal entity must identify in its accounts all federal awards received and expended, as well as the federal programs under which they were received. The Uniform Guidance also requires federal expenditures to be recorded properly and timely to ensure accuracy and completeness of the expenditure amounts reported on the schedule of expenditures of federal awards (SEFA). 2 CFR 200.332 requires pass-through entities follow certain requirements with respect to subrecipients. A summary of the requirements includes (1) subawards include certain required information, (2) the pass-through entity performs a risk assessment over each subrecipient, (3) imposing specific subaward conditions upon a subrecipient if appropriate, (4) monitor the activities of the subrecipient, (5) perform additional monitoring if necessary based on the risk assessment, (6) verify each subrecipient is audited if the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the single audit threshold, (7) consider the results of the subrecipient's audits, on-site reviews or other monitoring, and (8) take enforcement action against noncompliant subrecipients if necessary. Condition: During the audit, revisions were made to the SEFA to correct expenditures passed through to subrecipients that were not accurately reported. These revisions impacted the total federal expenditures reported on the SEFA and the major program determination. In addition, of the five subrecipients selected for testing, we noted the following: 1) All five agreements with the subrecipients did not clearly contain the Assistance Listing number and name, subrecipients? unique entity identifier or the federal award date. 2) A risk assessment was not formally documented for subrecipients. 3) While the Commission has a process in place to approve all expenditures prior to disbursement, there was no formal documentation of the review retained by the Commission. Additionally, an on-site review of the subrecipients was not performed and financial and programmatic reports were not provided to the Commission for review. 4) The Commission did not verify that every subrecipient received a Single Audit when applicable. No review of Single Audits was performed by the Commission. Cause: Program managers, Department of Finance or other Commission personnel are responsible to ensure accurate information is reported as federal expenditures on the SEFA. Due to the decentralized nature of grant management within the Commission?s departments and divisions that receive federal assistance, amounts may not be accurately or completely reported. Additionally, the Commission?s policies and procedures were not properly aligned with the requirements applicable to subrecipients. JEFFERSON COUNTY COMMISSION SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED SEPTEMBER 30, 2021 16 Effect: The lack of effective internal controls over the preparation of the SEFA could result in the inaccurate reporting of the Commission?s expenditures as reported on the SEFA. The Commission is not in compliance with Federal requirements as outlined in 2 CFR 200.302(b)(1) and 2 CFR 200 Section 200.332 related to subrecipient monitoring. Questioned Costs: N/A Context: At the time of audit, subrecipient expenditures were misstated for two of the major programs. Total Federal expenditures for the Coronavirus Relief Fund were $37,892,774 for the year ended September 30, 2021. Total subrecipient expenditures for the year ended September 30, 2021 were $4,632,735. Repeat Finding: No. Auditors? Recommendation: As part of an effective internal control system, we recommend that the Commission develop procedures to ensure that all information included in the SEFA is correctly reported. We also recommend that the Commission update policies and procedures to ensure that all required elements are communicated to subrecipients at the time subawards are made or in subsequent subaward modifications if data elements change. Further, the Commission should ensure that risk assessments related to subrecipients and monitoring of subrecipients are formally documented. Views of Responsible Officials: See Management?s Response and Corrective Action Plan included at the end of the report.