KINGFISHER COUNTY

Finding 2021-005 ? Lack of County-Wide Controls Over Major Federal Program ? Disaster Grants ? Public Assistance (Presidentially Declared Disasters) PASS-THROUGH GRANTOR: Oklahoma Department of Emergency Management FEDERAL AGENCY: U.S. Department of Homeland Security ALN: 97.036 FEDERAL PROGRAM NAME: Disaster Grants - Public Assistance (Presidentially Declared Disasters) FEDERAL AWARD NUMBER: N/A FEDERAL AWARD YEAR: 2021 CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Period of Performance; Reporting; and Special Tests and Provisions.Condition: 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 complied with grant requirements. Effect of Condition: This condition could result in noncompliance to grant requirements and loss of federal funds to the County. Recommendation: OSAI recommends that the County design and implement a system of internal controls to ensure compliance with grant requirements. Management Response: Chairman of the Board of County Commissioners, County Clerk, and County Treasurer: The County Officers will meet in a County Officers? meeting to discuss federal grants that are awarded to the County. 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 2021-006 ? Lack of Internal Controls Over Major Federal Programs - Disaster Grants - Public Assistance (Presidentially Declared Disasters) PASS-THROUGH GRANTOR: Oklahoma Department of Emergency Management FEDERAL AGENCY: U.S. Department of Homeland Security ALN: 97.036 FEDERAL PROGRAM NAME: Disaster Grants - Public Assistance (Presidentially Declared Disasters) FEDERAL AWARD NUMBER: N/A FEDERAL AWARD YEAR: 2021 CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Period of Performance; Reporting; and Special Tests and Provisions. QUESTIONED COSTS: $0 Condition: During the process of documenting the County?s internal controls regarding federal disbursements, we noted that Kingfisher County has not established procedures to ensure compliance with the following requirements: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Period of Performance; Reporting; and Special Tests and Provisions. Cause of Condition: Policies and procedures have not been designed and implemented to ensure compliance with grant requirements. Effect of Condition: This condition could result in noncompliance to grant requirements and loss of federal funds to the County. Recommendation: OSAI recommends the County gain an understanding of requirements for this program and design and implement internal control procedures to ensure compliance with grant requirements. Management Response: Chairman of the Board of County Commissioners, District 1 County Commissioner, and District 2 County Commissioner: When the County Officers meet to discuss federal grants, we will also discuss the compliance supplement and any contract or agreements for each Federal Grant. Criteria: 2 CFR ? 200.303(a) Internal Controls 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).Further, GAO Standards ? Section 2 ? Establishing an Effective Internal Control System ? OV2.23 states in part: Objectives of an Entity ? Compliance Objectives Management conducts activities in accordance with applicable laws and regulations. As part of specifying compliance objectives, the entity determines which laws and regulations apply to the entity. Management is expected to set objectives that incorporate these requirements.

Condition: 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 complies with grant requirements. Effect of Condition: This condition could result in noncompliance to grant requirements. Recommendation: OSAI recommends that the County design and implement a system of internal controls to ensure compliance with grant requirements. Management Response: Chairman of the Board of County Commissioners, County Clerk, and County Treasurer: The County Officers will meet in a County Officers? meeting to discuss federal grants that are awarded to the County. 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.

Condition: During the process of documenting the County?s internal controls regarding federal disbursements, we noted that Kingfisher County has not established procedures to ensure compliance with the following requirements: Activities Allowed and Unallowed; Allowable Costs/Costs Principles; Equipment Real Property Management; Period of Performance; Program Income; Reporting; and Special Tests and Provisions. Cause of Condition: Policies and procedures have not been designed and implemented to ensure compliance with Uniform Grant Guidance. Effect of Condition: This condition could result in noncompliance to grant requirements and loss of federal funds to the County. Recommendation: OSAI recommends the County gain an understanding of requirements for this program and design and implement internal control procedures to ensure compliance with grant requirements. Management Response: Chairman of the Board of County Commissioners, County Clerk, and County Treasurer: When the County Officers meet to discuss federal grants, we will also discuss the compliance supplement and any contract or agreements for each Federal Grant. Criteria: 2 CFR ? 200.303(a) Internal Controls 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). Further, GAO Standards ? Section 2 ? Establishing an Effective Internal Control System ? OV2.23 states in part: Objectives of an Entity ? Compliance Objectives Management conducts activities in accordance with applicable laws and regulations. As part of specifying compliance objectives, the entity determines which laws and regulations apply to the entity. Management is expected to set objectives that incorporate these requirements.