COUNTY OF GALLATINLocal Government

U.S. Department of Transportation Federal Financial Assistance Listing 20.106 Airport Improvement Program Award #3-30-0077-016-2021 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: Recipients of federal financial assistance through the Airport Improvement Program are required to submit reporting form SF-271, Outlay Report and Request for Reimbursement for Construction Programs, and retain all supporting documentation for amounts requested for reimbursement. Condition: The County could not provide adequate supporting documentation for the amount requested for reimbursement for one SF-271 submission. Cause: The County does not have an internal control system designed to provide for the retention of supporting documentation for amounts reported on the Outlay Report and Request for Reimbursement for Construction Programs. Effect: The County is unable to substantiate that the reimbursement amount was properly reported or approve. Questioned Costs: None reported. Context/Sampling: A non-statistical sample of 3 reports out of a population of 10 reports were selected for testing, with 1 sample selection incurring errors. Repeat Finding from Prior Year(s): No Recommendation: The County should review its internal control over compliance processes surrounding the reporting function to ensure that reports are accurately prepared and reviewed for agreement with the accounting records before they are submitted and that all supporting documentation for reimbursement requests are retained. Views of Responsible Officials: The County acknowledges that supporting documentation for one sampled reimbursement request was not readily available during audit testing. This issue was identified within a limited sample and relates to documentation retention rather than the underlying accounting records. The County is implementing improved documentation retention and review procedures to ensure all supporting materials are maintained and accessible.

U.S. Department of Treasury Federal Financial Assistance Listing 21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: Recipients of federal financial assistance through the Coronavirus State and Local Fiscal Recovery Funds program were required to submit Project and Expenditure Reports showing amounts expended/obligated in the current period and the cumulative expenditures/obligations for the award. Condition: Various amounts reported as expended or obligated did not agree with amounts supported by the County’s accounting records. Cause: The County does not have an internal control system designed to provide for the accurate completion and review of the Project and Expenditure Report. Effect: The Project and Expenditure Reports that were submitted do not accurately report the proper amounts expended or obligated under the award. Questioned Costs: None reported. Context/Sampling: A non-statistical sample of 11 reports out of a population of 55 reports were selected for testing, with 4 sample selections incurring errors. Repeat Finding from Prior Year(s): No Recommendation: The County should review its internal control over compliance processes surrounding the reporting function to ensure that reports are accurately prepared and reviewed for agreement with the accounting records before they are submitted. Views of Responsible Officials: The County acknowledges discrepancies identified between reported amounts and underlying accounting records for certain reports. These issues relate to external reporting and classification processes rather than the completeness of the County’s accounting records. The County is strengthening review procedures to ensure reports agree to underlying financial data prior to submission.

2022-003 Audit report deadline (Repeated 2021-004, 2020-003, and 2019-003) CFDA Title: Coronavirus Relief Fund and Immunization CFDA Number: 21,027 and 93.268 Federal Award Number: N/A and 22-07-4-31-116-0 Federal Agency: Department of Treasury and U.S. Department of Health and Human Services Pass-through Entity: Montana Department of Administration Local Government Services and Montana Department of Public Health and Human Services Condition: Montana local governments with a June 30th fiscal year end must submit their audit report to the MT Department of Administration and the Federal Clearing house by March 31st, following the fiscal year end. The County did not have an audit completed until August 2023. Context: Per review of the audit compliance requirements for both the State of Montana and the Federal government. Criteria: The audit for the fiscal year ended June 30th, 2022, was due to the State and the Federal government by March 31, 2023, as required by MT Administrative Rules 2.4.411 and the Federal Uniform Guidance/A-133 rules. Effect: The County was over a year late in completing their fiscal year 2022 audit. Cause: The Co nty did not complete its 2021 audit until March 2023 in order to finish the close out of its fiscal year 2022 year to be ready for audit. Recommendation: We recommend the County complete their annual audits in compliance with MT Administrative Rules 2.4.411 and federal rules described in the Uniform Guidance/A-133.

2021-004 Audit Report Deadline (Repeat Finding 2020-003 and 2019-003) CFDA Title: Coronavirus Relief Fund CFDA Number: 21.019 Federal Award Number: N/A Federal Agency: Department of the Treasury Pass-through Entity: Montana Department of Administration Local Government Services Condition: Montana local governments with a June 30th fiscal year end must submit their audit report to the MT Department of Administration and the Federal Clearing house by March 31st (later postponed to September 30th due to COVID), following the fiscal year end. The County did not have an audit completed until March 2023. Context: Per review of the audit compliance requirements for both the State of Montana and the Federal government. Criteria: The audit for the fiscal year ended June 30th 2021 was due to the State and the Federal government by September 30th, 2021 as required by MT Administrative Rules 2.4.411 and the Federal Uniform Guidance/A-133 rules. Effect: The County was over a year late in completing their fiscal year 2021 audit. Cause: The County did not complete its 2020 audit until December 2022 in order to finish the close out of its fiscal year 2021 year to be ready for audit. Recommendation: We recommend the County complete their annual audits in compliance with MT Administrative Rules 2.4.411 and federal rules described in the Uniform Guidance/A-133.

#2020-003 Late Submission of the Single Audit Reporting Package and Data Collection Form to the Federal Audit Clearinghouse (?FAC?) Criteria: Under Uniform Guidance (2 CFR section 200.512), the single audit reporting package and data collection form should be submitted to the FAC thirty days after receipt of the auditor?s report, or 9 months after the end of the fiscal year, whichever comes first. Condition: Submission of the single audit reporting package and data collection form was not performed within the timeframe required under the Uniform Guidance. Major programs affected by the late filing are as follows: United States Department of Treasury passed through Montana State Department of Administration: #21.019 ? Coronavirus Relief Funds (the County?s award date is March 12, 2020). Context: The audit report was not completed until approximately 24 months after the end of the audited period, causing a late submission of the single audit reporting package and data collection form. We noted that the single audit reporting package and data collection form for the fiscal year ended June 30, 2020 is required to be submitted to the FAC in March 2021. Effect: Late filing will result in noncompliance for timely submission of financial information to granting agencies. Cause: Management did not have adequate procedures in place to ensure the timely filing of the single audit reporting package and data collection form to the FAC Recommendation: We recommend that the County implement procedures to ensure that the general ledger is complete and accurate through proper review and reconciliation of year-end journal entries and account balances. We also recommend that year-end audit documentation be reviewed and reconciled to the general ledger prior to being submitted to the auditors. These procedures should make it so that the single audit reporting package and data collection form is able to be submitted in a timely manner.