BRYAN COUNTYLocal Government

Finding 2021-010 ? County-Wide Controls Over Major Federal Program ? Coronavirus Relief Fund PASS-THROUGH GRANTOR: Oklahoma Department of Emergency Management and Oklahoma Office of Management and Enterprise Services FEDERAL AGENCY: U.S. Department of Treasury ASSISTANCE LISTING: 21.019 FEDERAL PROGRAM NAME: Coronavirus Relief Fund FEDERAL AWARD NUMBER: 4530-DR-OK and SA-0076 FEDERAL AWARD YEAR: 2020 CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; and Period of Performance QUESTIONED COSTS: $-0- Condition: Through the process of gaining an understanding of the County?s internal control structure for federal programs, it was noted that county-wide controls regarding Control Environment, Risk Assessment, Information and Communication, and Monitoring have not been designed. Cause of Condition: Policies and procedures have not been designed and implemented to ensure the County is in compliance with federal award requirements. Effect of Condition: Without an adequate system of county-wide controls, there is greater risk of a breakdown in control activities which could result in noncompliance to federal award requirements. Recommendation: OSAI recommends that the County design and implement a system of county-wide procedures to identify and address risks related to compliance with federal award requirements and to ensure that information is communicated effectively. OSAI also recommends that the County design and implement monitoring procedures to assess the quality of performance over time. These procedures should be written policies and procedures and could be included in the County?s policies and procedures handbook. Management Response: Chairman of the Board of County Commissioners: Bryan County will implement the recommendations to address these concerns and prevent reoccurrence. Information regarding federal grants will be communicated during the Board of County Commissioner?s Meetings and Quarterly Elected Officials? Meetings. Criteria: 2 CFR ? 200.303 Internal Controls (a) reads as follows: The non-Federal entity must: 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Also, the GAO Standards ? Section 1 ? Fundamental Concepts of Internal Control ? OV1.01 states in part: Definition of Internal Control Internal control is a process effected by an entity?s oversight body, management, and other personnel that provides reasonable assurance that the objectives of an entity will be achieved. Additionally, GAO Standards ? Section 2 ? Establishing an Effective Internal Control System ? OV2.04 states in part: Components, Principles, and Attributes Control Environment - The foundation for an internal control system. It provides the discipline and structure to help an entity achieve its objectives. Risk Assessment - Assesses the risks facing the entity as it seeks to achieve its objectives. This assessment provides the basis for developing appropriate risk responses. Information and Communication - The quality information management and personnel communicate and use to support the internal control system. Monitoring - Activities management establishes and operates to assess the quality of performance over time and promptly resolve the findings of audits and other reviews.

Finding 2021-011 ? Internal Controls Over Major Federal Program ? Coronavirus Relief Fund PASS-THROUGH GRANTOR: Oklahoma Department of Emergency Management and Oklahoma Office of Management and Enterprise Services FEDERAL AGENCY: U.S. Department of Treasury ASSISTANCE LISTING: 21.019 FEDERAL PROGRAM NAME: Coronavirus Relief Fund FEDERAL AWARD NUMBER: 4530-DR-OK and SA-0076 FEDERAL AWARD YEAR: 2020 CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; and Period of Performance QUESTIONED COSTS: $-0- Condition: During the process of documenting the County?s internal controls regarding the disbursement of federal awards, we noted the County has not established procedures to ensure compliance with thefollowing compliance requirements: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; and Period of Performance. Cause of Condition: Policies and procedures have not been designed and implemented to ensure compliance with federal award requirements. Effect of Condition: This condition could result in noncompliance to federal grant requirements and loss of federal funds to the County. Recommendation: OSAI recommends the County gain an understanding of award requirements for federal awards and design and implement internal controls to ensure compliance with award requirements. Management Response: Chairman of the Board of County Commissioners: Bryan County will implement the recommendations to address these concerns and prevent reoccurrence. Information regarding federal grants will be communicated during the Board of County Commissioners Meetings and Quarterly Elected Officials Meetings. Criteria: 2 CFR ? 200.303 Internal Controls (a) reads as follows: The non-Federal entity must: 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The GAO Standards ? Section 1 ? Fundamental Concepts of Internal Control ? OV1.01 states in part: Definition of Internal Control Internal control is a process effected by an entity?s oversight body, management, and other personnel that provides reasonable assurance that the objectives of an entity will be achieved. Additionally, GAO Standards ? Section 2 ? Establishing an Effective Internal Control System ? OV2.04 states in part: Components, Principles, and Attributes Control Activities ? The actions management establishes through policies and procedures to achieve objectives and respond to risks in the internal control system, which includes the entity?s information system.

Finding 2021-012 ? Noncompliance Over Major Federal Program ? Activities Allowed or Unallowed and Allowable Costs/Cost Principles PASS-THROUGH GRANTOR: Oklahoma Office of Management and Enterprise Services FEDERAL AGENCY: U.S. Department of Treasury ASSISTANCE LISTING: 21.019 FEDERAL PROGRAM NAME: Coronavirus Relief Fund FEDERAL AWARD NUMBER: SA-0076 FEDERAL AWARD YEAR: 2020 CONTROL CATEGORY: Activities Allowed or Unallowed and Allowable Costs/Cost Principles QUESTIONED COSTS: $111,960 Condition: After performing expenditure testwork on 100% of the program, disbursements totaling $111,960 were not expended in accordance with the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements due to unsubstantiated, duplicated and ineligible costs. ? Reimbursed payroll expenditures totaling $18,676 were previously reimbursed by another federal program. ? June payroll expenditures for an individual were claimed five times. Duplicated disbursements totaled $9,204. ? Ambulance Authority payroll expenditures totaling $57,868 were included in documentation submitted for audit; however, these disbursements were not included in submissions approved by pass-through entity (State of Oklahoma) for reimbursements awarded. ? Expenditures totaling $26,212 were unaccounted for and were not supported by adequate documentation to determine costs were incurred for allowable activities and allowable cost. Cause of Condition: Policies and procedures have not been designed and implemented to ensure compliance with federal award requirements. Effect of Condition: These conditions resulted in noncompliance with grant requirements. The County runs the risk of misappropriation of funds which could hinder the County from receiving future federal funding. Further, this could result in the repayment of funds . Recommendation: OSAI recommends that the County design and implement policies and procedures to ensure compliance with applicable grant requirements. Management Response: Chairman of the Board of County Commissioners: Bryan County will implement the recommendations to address these concerns and prevent reoccurrence. The County administrator applying for the federal awards on behalf of the County will be responsible for ensuring records are adequately maintained to reflect accurate detailed expenditures to prevent reoccurrence of this issue. Criteria: 2 CFR ? 200.303 Internal Controls (a) reads as follows: The non-Federal entity must: 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Additionally, 2 CFR ? 200.403 - Factors affecting allowability costs states in part, ?Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (g) Be adequately documented.? The Department of the Treasury Federal Register, Vol. 86, No. 10 states in part, ?Fund payments may not be used for expenses that have been or will be reimbursed by another federal program.? Additionally, guidance provided in the Subrecipient Agreement - Federal Funding Certification executed June 3, 2020 between Bryan County and the State of Oklahoma states in part, 4. Funds provided as direct payment from the State of Oklahoma pursuant to this certification for necessary expenditures that were or will be incurred during the period that begins on March 1, 2020, and ending on December 30, 2020, that are not expended on those necessary expenditures on or before March 31, 2021, by the political subdivision or its grantee(s), must be returned to the State of Oklahoma on or before April 1, 2021. 5. Funds provided as a direct payment from the State of Oklahoma pursuant to this certification must adhere to official federal guidance issued or to be issued on what constitutes a necessary expenditure. Any funds expended by a political subdivision or its grantee(s) in any manner that does not adhere to official federal guidance or in violation of this certification shall be returned to the State of Oklahoma Coronavirus Relief Fund. 6. Any local government entity receiving funds pursuant to this certification shall retain documentation of all uses of the funds,? 8. Any funds provided pursuant to this certification cannot be used as a revenue replacement for lower than expected tax or other revenue collections. 10. I acknowledge and certify that Recipient has not received, and will not apply for, federal funds from any other source, to reimburse it for the expenditures for which funds are sought pursuant hereto.

Finding 2021-013 ? Noncompliance Over Major Federal Program ? Period of Performance PASS-THROUGH GRANTOR: Oklahoma Office of Management and Enterprise Services FEDERAL AGENCY: U.S. Department of Treasury ASSISTANCE LISTING: 21.019 FEDERAL PROGRAM NAME: Coronavirus Relief Fund FEDERAL AWARD NUMBER: SA-0076 FEDERAL AWARD YEAR: 2020 CONTROL CATEGORY: Period of Performance QUESTIONED COSTS: $156,706 Condition: After performing expenditure testwork on 100% of the program, disbursements totaling $156,706 were not expended in accordance with the Period of Performance compliance requirement due to unsubstantiated and ineligible costs. ? Expenditures totaling $130,494 were included in documentation submitted for audit; however, these costs were incurred prior to the period of performance. ? Expenditures totaling $26,212 were unaccounted for and were not supported by adequate documentation to determine costs were incurred during period of performance. Cause of Condition: Policies and procedures have not been designed and implemented to ensure compliance with federal award requirements. Effect of Condition: These conditions resulted in noncompliance with grant requirements. The County runs the risk of misappropriation of funds which could hinder the County from receiving future federal funding. Further, this could result in the repayment of grant funds to the grantor agency. Recommendation: OSAI recommends that the County design and implement policies and procedures to ensure compliance with applicable grant requirements. Management Response: Chairman of the Board of County Commissioners: Bryan County will implement the recommendations to address these concerns and prevent reoccurrence. The County administrator applying for the federal awards on behalf of the County will be responsible for ensuring records are adequately maintained to reflect accurate detailed expenditures to prevent reoccurrence of this issue. Criteria: 2 CFR ? 200.303 Internal Controls (a) reads as follows: The non-Federal entity must: 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Department of the Treasury Federal Register, Vol. 86, No. 10 states in part, ?The CARES [Coronavirus Aid, Relief, & Economic Security] Act provides that payments from the Fund may only be used to cover costs that? 1. are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID19); 2. 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 3. were incurred during the period that begins on March 1, 2020, and ends on December 31, 2021.? This guidance further states, ??for a cost to be considered to have been incurred, performance or delivery must occur during the covered period ? Additionally, guidance provided in the Subrecipient Agreement - Federal Funding Certification executed June 3, 2020 between Bryan County and the State of Oklahoma states in part, 4. Funds provided as direct payment from the State of Oklahoma pursuant to this certification for necessary expenditures that were or will be incurred during the period that begins on March 1, 2020, and ending on December 30, 2020, that are not expended on those necessary expenditures on or before March 31, 2021, by the political subdivision or its grantee(s), must be returned to the State of Oklahoma on or before April 1, 2021. 5. Funds provided as a direct payment from the State of Oklahoma pursuant to this certification must adhere to official federal guidance issued or to be issued on what constitutes a necessary expenditure. Any funds expended by a political subdivision or its grantee(s) in any manner that does not adhere to official federal guidance or in violation of this certification shall be returned to the State of Oklahoma Coronavirus Relief Fund.