JOHNSTON COUNTY

Finding 2021-010 ? Lack of County-Wide Internal Controls Over Major Federal Program ? Coronavirus Relief Fund PASS-THROUGH GRANTOR: Oklahoma Office of Management and Enterprise Services and Oklahoma Department of Emergency Management and Homeland Security FEDERAL AGENCY: U.S. Department of Treasury ASSISTANCE LISTING: 21.019 FEDERAL PROGRAM NAME: Coronavirus Relief Fund FEDERAL AWARD YEAR: 2021 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 internal 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 complies with grant requirements. Effect of Condition: This condition could result in noncompliance with grant requirements. Recommendation: OSAI recommends the County implement a system of internal controls to ensure compliance with grant requirements. Management Response: Chairman of the Board of County Commissioners: We will work to implement a Risk Assessment plan. We will implement controls to help make sure we are in compliance with all grant requirements and federal funds are expended in accordance with grant agreements and in a timely manner. We will ensure employees have the current and correct compliance supplement to work from. Criteria: 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 Number: 2021-010 Assistance Listing Number & Name of Federal Program-Assistance Listings Number: 21.019 Coronavirus Relief Fund Planned Corrective Action: We will work to implement a risk assessment plan. We will implement controls to help make sure we are in compliance with all grant requirements and federal funds are expended in accordance with grant agreements and in a timely manner. We will ensure employees have the current and correct compliance supplement to work from. Anticipated Completion Date: 7/1/2022 Responsible Contact Person: Jacky Hallmark, BOCC Chairman

Finding 2021-011 ? Lack of Internal Controls Over Major Federal Program ? Coronavirus Relief Fund PASS-THROUGH GRANTOR: Oklahoma Office of Management and Enterprise Services and Oklahoma Department of Emergency Management and Homeland Security FEDERAL AGENCY: U.S. Department of Treasury ASSISTANCE LISTINGS NO: 21.019 FEDERAL PROGRAM NAME: Coronavirus Relief Fund FEDERAL AWARD YEAR: 2021 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 that Johnston County has not established procedures to ensure compliance with the following 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 federal expenditures are made in accordance with federal compliance requirements. Effect of Condition: This condition could result in noncompliance to grant requirements and could lead to a loss of federal funds to the County. Recommendation: OSAI recommends the County gain an understanding of requirements for federal awards and design and implement internal controls to ensure compliance with requirements. Management Response: Chairman of the Board of County Commissioners: The Board of County Commissioners will work with all County Officials to go over all grants and federal monies that the County receives to ensure that proper internal controls are implemented. Criteria: OMB 2 CFR 200, Subpart D. ?_ .303(a) reads as follows: Subpart D-Post Federal Award Requirements ?200.303 Internal Controls 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). Further, accountability and stewardship should be overall goals in management's accounting of federal funds. Internal controls should be designed to monitor compliance with laws and regulations pertaining to grant contracts.

Finding Number: 2021-011 Assistance Listing Number & Name of Federal Program-Assistance Listings Number: 21.019 Coronavirus Relief Fund Planned Corrective Action: The Board of County Commissioners will work with all County Officials to go over all grants and federal monies that the County receives to ensure that proper internal controls are implemented. Anticipated Completion Date: 7/1/2022 Responsible Contact Person: Jacky Hallmark, BOCC Chairman