Greenlee CountyLocal Government

2023-101- Single Audit Reporting Package Not Filed Timely (Repeat Finding; Significant deficiency, Compliance Finding) Federal program information: Funding agencies: U.S. Department of Agriculture; U.S. Department of Treasury Titles: Watershed Protection and Flood Prevention; Coronavirus State and Local Fiscal Recovery Funds; Local Assistance and Tribal Consistency Fund. Assistance Listings Number: 10.904; 21.027; 21.032 Award numbers and years NR229457XXXXC004; None; None; July 1, 2022 through June 30, 2023; March 1, 2021 through December 31, 2024; July 1, 2022 through June 30, 2023 Compliance Requirements: Reporting Questioned Costs: Not applicable Criteria: 2 CFR 200.512 of the Uniform Guidance requires that the County submit an annual single audit reporting package and submit the data collection form prior to nine months after the end of the audit period. Condition: The County did not submit its single audit reporting package or data collection form within the required deadline. The fiscal year ending June 30, 2023 general ledger accounts were not fully closed and reconciled with prepared financial statements until September 2024. As a result, the audit did not begin until well after the County’s reporting deadlines for fiscal year 2023. This finding is similar to prior year finding 2022-101 and was initially reported in fiscal year 2021. Cause and Effect: The County has a limited staff within the finance and accounting department. As such, it is difficult for the department to close each year’s books and reconcile all accounts in a timely manner. As a result the County was unable to meet the nine-month reporting guideline required by the Uniform Guidance. Auditors’ Recommendations: The County should dedicate additional resources to ensure that the accounting records are closed and accurate financial statements are prepared within three to six months after year end. The County’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.

2023-102- Reporting (Significant Deficiency, Compliance Finding) Federal program information: Funding agencies: U.S. Department of Treasury Titles: State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Award numbers and years: None; March 1, 2021 through December 31, 2024 Compliance Requirements: Reporting Questioned Costs: None Criteria: The County is required to submit quarterly and annual Compliance Reports, which includes current period expenditures, cumulative expenditures and a project description along with certain other required information. Condition: During fiscal year 2023, the quarterly and annual Compliance Reports submitted indicated no expenditures incurred. However, expenditures totaling $331,609 were intended to be funded by this program and were ultimately reported within the subsequent fiscal year (2024) Compliance Reports. As a result, the 2023 Compliance Reports were incorrect. Cause and Effect: The County misunderstood the reporting requirements when the Compliance Reports were initially submitted in fiscal year 2023. Upon discovering the error, County personnel contacted the grantor and was informed that expenditures should be reported on the next period’s report. However, the reports submitted for fiscal year 2023 were ultimately incorrect and not in compliance with Treasury guidelines. Auditors’ Recommendations: The County should establish policies to ensure that all federal expenditures are reported in the correct period to the grantor and that the reporting requirements are fully understood. The County’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.

Federal program information: Funding agencies: U.S. Department of Agriculture; U.S. Department of Transportation, U.S. Department of Treasury Titles: Forest Service Schools and Roads Cluster; Watershed Protection and Flood Prevention; Airport Improvement Program; Coronavirus State and Local Fiscal Recovery Funds. Assistance Listing Number: 10.665; 10.904; 20.106; 21.027 Award numbers and years None; NR209457XXXXC004; 3-04-0009-014-2020; None and GR-ARPA-GLCF-070121-01; July 1, 2021 through June 30, 2022; July 1, 2021 through June 30, 2022; July 1, 2021 through June 30, 2022; March 1, 2021 through December 31, 2024 and July 1, 2021 through June 30, 2022 Pass-through grantor N/A; N/A; N/A; N/A and Arizona Office of the Governor Compliance Requirements: Reporting Questioned Costs: Not applicable Criteria: 200.512 of the Uniform Guidance requires that the County submit an annual single audit reporting package and submit the data collection form prior to nine months after the end of the audit period. Condition: The County did not submit its single audit reporting package or data collection form within the required deadline. This finding is similar to prior year finding 2021-103 Cause and Effect: The County experienced turnover in some of the departments administering federal funds. As a result, documents were not available in a timely enough manner to meet the single audit deadline of March 31, 2023. Auditors’ Recommendations: The County should monitor federal awards account reconciliations and the required documentation to ensure that all information is organized and available for subsequent review in a timely manner.

Federal program information: Funding agencies: U.S. Department of Agriculture Titles: Forest Service Schools and Roads Cluster Assistance Listing Number: 10.665 Award numbers and years: July 1, 2021 through June 30, 2022 Pass-through grantor N/A Compliance Requirements: Allowable Costs/Cost Principles Questioned Costs: None Criteria: The County received $754,090 of Title I funding related to the Forest Service Schools and Roads Cluster. These funds are to be used for public roads and public schools of the County in which the national forest is situated. The Uniform Guidance requires nonfederal entities that receive federal funding to identify in its accounts the specific expenditures that are paid for by each federal assistance program. Condition: During fiscal year 2022, $454,089 of the grant funding was passed through to various schools located within the County and $300,000 was transferred to the County’s Road Fund. Sufficient expenditures appeared to have been incurred in the Road Fund during 2022 that were not funded by other sources to account for the allowable federal expenditures of this $300,000. However, the County does not specifically identify the expenditures incurred that are being allocated to this federal funding. Cause and Effect: The County has typically transferred these funds to the Road Fund and has assumed that all costs incurred within the Road Fund are allowable under the Schools and Roads- Grants to State program. Because these federal expenditures are not separately identified and budgeted each year, there is an increased possibility that federal expenditures could be used for unallowed purposes. Auditors’ Recommendations: The County should establish policies to ensure that all federal expenditures are budgeted and separately identifiable.

Federal program information: Funding agencies: U.S. Department of Health and Human Services Titles: Public Health Emergency Preparedness and COVID-19 Public Health Emergency Preparedness Assistance Listing Number: 93.069 Award numbers and years ADHS17-133192 (COVID-19 and Non COVID-19); July 1, 2020 through June 30, 2021 Pass-through grantor Arizona Department of Health Services Compliance Requirements: Allowable Costs/Cost Principles Questioned Costs: Unknown Criteria: The Uniform Guidance, 2 CFR 200.430, requires that payroll charges be based on actual costs incurred and accurately reflects the work performed. Further, documentation must be maintained that supports payroll related costs that are allocated to more than one federal program or to a federal program and nonfederal programs. Condition: We selected one pay period for test work for seven of the eight employees charged to the program during fiscal year 2021. The total payroll charged to the program for the entire fiscal year for the employees selected for testing was $104,654 of the $129,578 total charged to the program during 2021. The total payroll charged to all programs for these employees, including the Public Health Emergency preparedness program was $403,668.45. Each employee had a portion of their salary charged to the program and a portion charged to other federal programs, nonfederal programs, or both. However, as required by the Uniform Guidance, the County did not maintain detailed time sheets or time studies supporting the allocation of payroll costs to the program. See the following table for a summary of employees selected for testing and total payroll costs: SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTGS FOR TABLE Cause and Effect: The County has not implemented procedures that require payroll costs that are allocated to multiple programs be supported by detailed documentation (such as timesheets or recent time studies) supporting the allocation. As a result, costs could be charged to federal programs that do not coincide with actual work performed by the employee. Auditors? Recommendations: The County should establish policies to ensure that payroll costs charged to multiple departments or programs be based on actual time incurred by each employee and that the allocation be supported by time and attendance records.

Federal program information: Funding agencies: U.S. Department of Health and Human Services Titles: Public Health Emergency Preparedness and COVID-19 Public Health Emergency Preparedness Assistance Listing Number: 93.069 Award numbers and years ADHS17-133192 (COVID-19 and Non COVID-19); July 1, 2020 through June 30, 2021 Pass-through grantor Arizona Department of Health Services Compliance Requirements: Reporting Questioned Costs: Unknown Criteria: The intergovernmental agreement, section 5.1.1 requires the County to submit a midyear report no later than January 31st and an end of year report not later than May 31st. Condition: Although County personnel indicated that the reports were submitted within the required time-frame, these reports were submitted electronically and the County could not access them for audit review. As a result, the auditor could not verify accuracy or timeliness of required reports. Cause and Effect: The County has not implemented adequate procedures at the department level to ensure that documents are maintained in an organized and retrievable manner in cases where there has been significant employee turnover. As a result, documents that should have been available for audit review were unable to be located. Auditors? Recommendations: The County should establish policies to ensure any electronically filed document is subsequently accessible.

Federal program information: Funding agencies: U.S. Department of Treasury; U.S. Department of Health and Human Services Titles: COVID-19 Coronavirus Relief Fund; Public Health Emergency Preparedness and COVID-19 Public Health Emergency Preparedness Assistance Listing Number: 21.019; 93.069 Award numbers and years ARMT-20-046; ADHS17-133192 (COVID-19 and Non COVID-19); March 1, 2020 through December 30, 2020; July 1, 2020 through June 30, 2021 Pass-through grantor Arizona Office of the Governor; Arizona Department of Health Services Compliance Requirements: Reporting Questioned Costs: Not applicable Criteria: 200.512 of the Uniform Guidance requires that the County submit an annual single audit reporting package and submit the data collection form prior to nine months after the end of the audit period. Resulting from the ongoing COVID-19 pandemic, this single audit deadline was extended from March 31, 2022 to September 30, 2022 for the County?s fiscal year ending June 30, 2021 single audit reports. Condition: The County did not submit its single audit reporting package or data collection form within the required deadline. Cause and Effect: The County experienced turnover in some of the departments administering federal funds. As a result, documents were not available in a timely enough manner to meet the single audit deadline of September 30, 2022. Auditors? Recommendations: The County should monitor federal awards and the required documentation to ensure that all information is organized and available for subsequent review.

2020-101- Allowable Costs/Cost Principles (Significant Deficiency, Compliance Finding) Federal program information: Funding agencies: U.S. Department of Agriculture Titles: Forest Service Schools and Roads Cluster Assistance Listing Number: 10.665 Award numbers and years July 1, 2019 through June 30, 2020 Pass-through grantor N/A Compliance Requirements: Allowable Costs/Cost Principles Questioned Costs: None Criteria: The County received $669,633 of Title I funding related to the Forest Service Schools and Roads Cluster. These funds are to be used for public roads and public schools of the County in which the national forest is situated. The Uniform Guidance requires nonfederal entities that receive federal funding to identify in its accounts the specific expenditures that are paid for by each federal assistance program. Condition: During fiscal year 2020, $369,633 of the grant funding was passed through to various schools located within the County and $300,000 was transferred to the County?s Road Fund. Sufficient expenditures appeared to have been incurred in the Road Fund during 2020 that were not funded by other sources to account for the allowable federal expenditures of this $300,000. However, the County does not specifically identify the expenditures incurred that are being allocated to this federal funding. Cause and Effect: The County has typically transferred these funds to the Road Fund and has assumed that all costs incurred within the Road Fund are allowable under the Schools and Roads- Grants to State program. Because these federal expenditures are not separately identified and budgeted each year, there is an increased possibility that federal expenditures could be used for unallowed purposes. Auditors? Recommendations: The County should establish policies to ensure that all federal expenditures are budgeted and separately identifiable.

Criteria ? 2 CFR ?200.512(a) requires the audit to be submitted to the Federal Audit Clearinghouse (FAC) within nine months of the auditee?s fiscal year-end. Condition and context ? The County?s single audit reporting package for the fiscal year ended June 30, 2019 was not submitted to the FAC within nine months after the County?s year-end. Cause ? The cause was a lack of resources devoted to the accounting and year-end closing. Effect ? The effect is the untimely submission of the single audit reporting package resulting in noncompliance with federal requirements. Recommendation ? We recommend that the County evaluate its resources necessary to complete the year-end closing and financial reporting process and consider the need to devote additional resources to the financial reporting process. Doing so will improve the timeliness of the County?s submittal to the FAC.

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