MCCLAIN COUNTYLocal Government

Finding 2021-001 ? Lack of County-Wide Controls Over Major Federal Programs ? Coronavirus Relief Fund PASS THROUGH GRANTOR: Oklahoma Office of Management and Enterprise Services and Oklahoma Department of Emergency Management FEDERAL AGENCY: U.S. Department of Treasury ASSISTANCE LISTING: 21.019 FEDERAL PROGRAM NAME: Coronavirus Relief Fund FEDERAL AWARD NUMBER: SA-0291 and EMPG-2020S FEDERAL AWARD YEAR: 2020 CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Period of Performance QUESTIONED COSTS: $-0- 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 with grant requirements. Recommendation: The Oklahoma State Auditor & Inspector?s Office (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: McClain County will strive to implement policies and procedures regarding Control Environment, Risk Assessment, Information and Communication, and Monitoring to ensure the County is in compliance with grant requirements. Criteria: The United States Government Accountability Office?s Standards for Internal Control in the Federal Government (2014 version) aided in guiding our assessments and conclusion. Although this publication (GAO Standards) addresses controls in the federal government, this criterion can be treated as best practices and may be applied as a framework for an internal control system for state, local, and quasigovernmental entities. The GAO Standards ? Section 1 ? Fundamental Concepts of Internal Controls ? 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 2021-002 ? Lack of Internal Controls Over Major Federal Programs ? Coronavirus Relief Fund PASS THROUGH GRANTOR: Oklahoma Office of Management and Enterprise Services and Oklahoma Department of Emergency Management FEDERAL AGENCY: U.S. Department of Treasury ASSISTANCE LISTING: 21.019 FEDERAL PROGRAM NAME: Coronavirus Relief Fund FEDERAL AWARD NUMBER: SA-0291 and EMPG-2020S FEDERAL AWARD YEAR: 2020 CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Period of Performance QUESTIONED COSTS: $-0- Condition: During the process of documenting the County?s internal controls regarding federal disbursements, we noted that McClain 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 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 implement a system of internal control procedures to ensure compliance with grant requirements. Management Response: Chairman of the Board of County Commissioners: McClain County will strive to implement policies and procedures regarding federal disbursements to ensure the County is in compliance with grant requirements. 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).

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