Lewis County

The County improperly charged the program for unallowable expenditures incurred outside the grant period. The County spent $2,915,946 in Airport Improvement Program grant funds. Of this total, $50,000 came from funding through the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The purpose of these funds is to assist sponsors, owners, or operators of public-use airports in the development of a nationwide system of airports adequate to meet the needs of civil aeronautics. Description of Condition The County had adequate internal controls for ensuring it materially complied with allowable cost requirements. However, the County must ensure all expenditures it claims for reimbursement under each federal award are incurred within the period stated in the grant agreement. For this award, the County?s agreement specified that all expenditures it claimed for reimbursement must have been incurred on or after January 20, 2020. The County requested and received reimbursement for expenditures incurred on August 21, 2018, which was before the period stated in the agreement. This issue was not reported as a finding in the prior audit. Cause of Condition County officials were aware the expenses in question were from outside the grant period, and they reached out to the grantor to determine whether the costs would still be eligible for reimbursement. The County attached the invoices associated with these expenses to its communication with the grantor, but the County?s question about the eligibility of the costs did not specifically point out the fact that they were outside the grant period. As a result, the County received guidance from the grantor that the costs would be eligible for reimbursement; however, these costs were actually ineligible because they were incurred before the start of the grant period. Effect of Condition and Questioned Costs We tested all expenditures the County charged to the program during the audit period. We are questioning $50,000 the County charged to the program for expenses incurred before January 20, 2020. Federal regulations require the State Auditor?s Office to report known questioned costs that are greater than $25,000 for each type of compliance requirement. We question costs when we find the entity has not complied with grant regulations and/or when it does not have adequate documentation to support expenditures. Recommendation We recommend the County ensure it complies with all terms stated in its grant agreements, including the allowable period for incurring expenditures, before submitting expenditures for reimbursement. County?s Response The County respectfully concurs with the finding. We have implemented additional levels of review of allowable costs included in grant reimbursements prior to submission to the grant agency. The County has implemented an additional internal control to have Accounting staff review each reimbursement request and confirm that all supporting documents match the reimbursement request. This will also include reviewing prior reimbursement requests to ensure that if there are any significant variances, there is documentation to support the variance. The additional internal control has been implemented for all reimbursement requests received after June 1, 2021. Auditor?s Remarks We appreciate the County?s commitment to resolve this finding and thank the County for its cooperation and assistance during the audit. We will review the corrective action taken during our next regular audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, Subpart E, Cost Principles, establishes requirements for determining allowable costs and supporting costs allocated to federal programs.

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