EIN: 916001359
UEI: ZLQHKM7CHCF3
Audited by: Office of the Washington State Auditor
Cognizant agency: 21 [Department of the Treasury]
View federal awards & risk assessment →
Data as of August 29, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on September 29, 2025. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by March 29, 2026 (153 days ago).
What is a management decision? →FAC accepted this audit on September 27, 2024 — management decision was due March 27, 2025.
FAC accepted this audit on September 28, 2023 — management decision was due March 28, 2024.
2022-001 The County had inadequate internal controls for ensuring compliance with federal reporting and Emergency Rental Assistance funds reallocation requirements. Assistance Listing Number and Title: 21.023 ? COVID-19 ? Emergency Rental Assistance Program Federal Grantor Name: U.S. Department of the Treasury Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Commerce Pass-through Award/Contract Number: 21-4616C-121 21-4618C-121 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The Emergency Rental Assistance (ERA) program provides direct payments to eligible entities so they can award financial assistance to eligible households and provide housing stability services. ERA grantees may provide assistance directly to eligible households or landlords and utility providers on behalf of eligible households. During fiscal year 2022, the County spent $34,259,366 of its ERA award from the Washington State Department of Commerce and $14,368,316 of its award from the U.S. Department of the Treasury to provide financial assistance to eligible households, including payment of rent, utilities and other housing stability services. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Reporting To comply with reporting requirements, the County must submit monthly and quarterly ERA 1 and ERA 2 reports (special reporting 1505-0266 and 1505-0270, respectively) to Treasury. The monthly reports identify key information such as the number of participating households that received ERA assistance of any kind and the total amount of ERA funds expended by the County to or for participating households. The quarterly reports identify the total amount obligated by the County and total amount expended. Both reports are important because Treasury uses the amounts expended and obligated to determine grantees? eligibility to receive reallocation payments, as well as whether they are subject to involuntary recapture of funds to be reallocated to other grantees or returned to the department. Special Tests and Provision ? ERA Funds Reallocation The County must ensure that all financial information reported in the monthly and quarterly ERA reports are accurate and that amounts reported as expended and obligated accurately capture the County?s housing activity at the time of submission. Description of Condition Our audit found the County?s controls were inadequate for ensuring it retained the data it used to prepare the monthly and quarterly ERA reports submitted to Treasury. During the audit, the County attempted to provide documentation to support the monthly and quarterly reports. However, we noted significant variances from the reports submitted, and the County was unable to ensure the information reported was accurate and complete. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Cause of Condition The County staff responsible for preparing the reports relied on decentralized departments to provide the data needed for the monthly and quarterly reports. However, the County did not retain the information. Effect of Condition The U.S. Department of Treasury uses these reports to determine grantees? eligibility to receive reallocation payments, as well as whether they are subject to involuntary recapture of funds to be reallocated to other grantees or returned to the grantor. Any inaccurate information in these monthly and quarterly reports limits Treasury?s ability to make reallocation decisions, maintain transparency, and fulfill its legal obligations. Since the County was unable to provide the data used to prepare the reports, it cannot demonstrate the accuracy of the information reported. During the audit, we tested expenditures charged to the program and determined they were allowable; therefore, we are not questioning costs. Recommendation We recommend the County establish internal controls to ensure it retains the data used to prepare the monthly and quarterly federal reports to demonstrate that the information reported is accurate and complete. County?s Response Pierce County understands the importance of providing accurate reports to awarding agencies. Pierce County Human Services has streamlined reporting procedures for 2023 so that documentation, related data, and reconciliations are retained in a dedicated file. As a result, County staff will be able to more readily provide information as requested and reporting accuracy will be improved. 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, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 329, Monitoring and reporting program performance, describes the requirements for auditees to perform oversight of the operations of the federal award supported activities to ensure compliance with applicable federal requirements and performance expectations. The Consolidated Appropriations Act, 2021, title V, Banking, subtitle A, Emergency Rental Assistance, section 501(g), Reporting requirements, describes the required performance and financial data and frequency of reports for this federal program. Section 501(b) describes the reallocation requirements.
Show full finding ▾Hide full finding ▴2022-001 The County had inadequate internal controls for ensuring compliance with federal reporting and Emergency Rental Assistance funds reallocation requirements. Assistance Listing Number and Title: 21.023 ? COVID-19 ? Emergency Rental Assistance Program Federal Grantor Name: U.S. Department of the Treasury Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Commerce Pass-through Award/Contract Number: 21-4616C-121 21-4618C-121 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The Emergency Rental Assistance (ERA) program provides direct payments to eligible entities so they can award financial assistance to eligible households and provide housing stability services. ERA grantees may provide assistance directly to eligible households or landlords and utility providers on behalf of eligible households. During fiscal year 2022, the County spent $34,259,366 of its ERA award from the Washington State Department of Commerce and $14,368,316 of its award from the U.S. Department of the Treasury to provide financial assistance to eligible households, including payment of rent, utilities and other housing stability services. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Reporting To comply with reporting requirements, the County must submit monthly and quarterly ERA 1 and ERA 2 reports (special reporting 1505-0266 and 1505-0270, respectively) to Treasury. The monthly reports identify key information such as the number of participating households that received ERA assistance of any kind and the total amount of ERA funds expended by the County to or for participating households. The quarterly reports identify the total amount obligated by the County and total amount expended. Both reports are important because Treasury uses the amounts expended and obligated to determine grantees? eligibility to receive reallocation payments, as well as whether they are subject to involuntary recapture of funds to be reallocated to other grantees or returned to the department. Special Tests and Provision ? ERA Funds Reallocation The County must ensure that all financial information reported in the monthly and quarterly ERA reports are accurate and that amounts reported as expended and obligated accurately capture the County?s housing activity at the time of submission. Description of Condition Our audit found the County?s controls were inadequate for ensuring it retained the data it used to prepare the monthly and quarterly ERA reports submitted to Treasury. During the audit, the County attempted to provide documentation to support the monthly and quarterly reports. However, we noted significant variances from the reports submitted, and the County was unable to ensure the information reported was accurate and complete. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Cause of Condition The County staff responsible for preparing the reports relied on decentralized departments to provide the data needed for the monthly and quarterly reports. However, the County did not retain the information. Effect of Condition The U.S. Department of Treasury uses these reports to determine grantees? eligibility to receive reallocation payments, as well as whether they are subject to involuntary recapture of funds to be reallocated to other grantees or returned to the grantor. Any inaccurate information in these monthly and quarterly reports limits Treasury?s ability to make reallocation decisions, maintain transparency, and fulfill its legal obligations. Since the County was unable to provide the data used to prepare the reports, it cannot demonstrate the accuracy of the information reported. During the audit, we tested expenditures charged to the program and determined they were allowable; therefore, we are not questioning costs. Recommendation We recommend the County establish internal controls to ensure it retains the data used to prepare the monthly and quarterly federal reports to demonstrate that the information reported is accurate and complete. County?s Response Pierce County understands the importance of providing accurate reports to awarding agencies. Pierce County Human Services has streamlined reporting procedures for 2023 so that documentation, related data, and reconciliations are retained in a dedicated file. As a result, County staff will be able to more readily provide information as requested and reporting accuracy will be improved. 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, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 329, Monitoring and reporting program performance, describes the requirements for auditees to perform oversight of the operations of the federal award supported activities to ensure compliance with applicable federal requirements and performance expectations. The Consolidated Appropriations Act, 2021, title V, Banking, subtitle A, Emergency Rental Assistance, section 501(g), Reporting requirements, describes the required performance and financial data and frequency of reports for this federal program. Section 501(b) describes the reallocation requirements.
Finding ref number: 2022-001 Finding caption: The County had inadequate internal controls for ensuring compliance with federal reporting and ERA Funds Reallocation requirements. Name, address, and telephone of Pierce County?s contact person: Thomas Taylor 950 Fawcett Ave., Suite 100 Tacoma, WA 98402 253-798-7577 Corrective action the auditee plans to take in response to the finding: Pierce County has streamlined reporting procedures for 2023 so that documentation, related date, and reconciliations are retained in a dedicated file. As a result, County staff will be able to more readily provide information as requested and reporting accuracy will be improved. Anticipated date to complete the corrective action: September 1, 2023
2022-002 The County did not have adequate internal controls for ensuring compliance with federal match requirements. Assistance Listing Number and Title: 14.267 ? Continuum of Care Program Federal Grantor Name: U.S. Department of Housing and Urban Development Federal Award/Contract Number: N/A Pass-through Entity Name: N/A Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $186,109 Prior Year Audit Finding: N/A Background The Continuum of Care (CoC) program is designed to promote community-wide commitment to the goal of ending homelessness. The program provides funding for efforts by nonprofit providers and state and local governments to quickly re-house people and families experiencing homelessness while minimizing the trauma and dislocation it causes. The program also optimizes self-sufficiency and promotes access to and effective use of mainstream programs by people and families experiencing homelessness. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established internal controls. The CoC program requires recipients and subrecipients to provide nonfederal matching funds equaling 25 percent of their total federal expenditures. Federal regulations also require that match contributions be adequately documented and come from allowable expenditures meeting federal cost principles. The County contracts with its subrecipients on a project basis, and the required matching amount is based on each project amount. In 2022, the County completed 13 projects with seven subrecipients who provided a total match of $1,051,806 over the life of the contract. As the prime recipient, the County is responsible for monitoring its subrecipients? activities to ensure they comply with federal regulations, including that their match contributions come from an allowable source and are adequately documented. Description of Condition The County?s controls were inadequate for ensuring it consistently reviewed and retained subrecipient match documentation to gain assurance that the contributions were from allowable sources. The County provides a spreadsheet to subrecipients so they can identify the match source and amount when they submit monthly invoices. Although the County reviews subrecipients? invoices, it did not sufficiently review the matching contributions to ensure they were accurate and valid. Further, our audit found the County?s controls were inadequate for ensuring it took the appropriate corrective action when a subrecipient did not meet the 25 percent match that the grantor requires. Subrecipient invoices track match contributions by month and in total. This information is recorded on a spreadsheet that is configured to identify whether subrecipients have met the total match requirements. We determined the County?s spreadsheet identified two subrecipients that did not meet the required match. However, the County did not take corrective action to reduce future reimbursements to adjust for this difference. We consider these deficiencies in internal controls to be a significant deficiency. Cause of Condition On a monthly basis, County staff review whether subrecipients? match contributions are on track to meet the 25 percent requirement. The County determines if a subrecipient met the required match during the final monthly invoice review and contract closing process. However, this review was insufficient for ensuring the match contributions had adequate support. Further, the County expected to verify that subrecipients? match contributions were allowable and adequately supported as part of its subrecipient monitoring processes. However, it did not select matching as an area to review. Lastly, staff were aware that the two subrecipients did not meet the 25 percent match requirement, but the County did not reduce subsequent reimbursements to account for the unmet match. Effect of Condition and Questioned Costs The County did not review and obtain adequate documentation of subrecipients? match contributions to demonstrate compliance. Using a statistical sampling method, we selected 28 matching transactions to review. We identified 10 match transactions totaling $96,240 in known questioned costs. Based on the projection of our statistical sample, we identified an additional $215,690 in projected overpayments. Further, the County did not have support for in-kind match transactions totaling $58,586, resulting in known questioned costs. Additionally, since two subrecipients did not meet the 25 percent match requirement, the County should have reduced subsequent reimbursement requests by $31,283. We are questioning these costs. Without adequate documentation to support subrecipients? match contributions, the County is not in compliance with the granting agency?s recordkeeping and matching requirements. Further, the County cannot assure federal grantors that matching contributions reported are accurate and valid. Any unsupported match contributions could result in a reduction of future federal awards. Recommendation We recommend the County strengthen internal controls over federal match contributions from subrecipients to ensure it reviews and retains adequate documentation of the source and allowability of the match, and to ensure it provides the minimum amount of match contributions required by the grantor. County?s Response Pierce County Human Services understands the importance of properly tracking and documenting the source and allowability of required match contributions. Staff have already worked with the U.S. Department of Housing and Urban Development to bring contracts with match requirements into compliance and to implement internal controls so that adequate information will be reviewed and retained. 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, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 306, Cost sharing or matching, describes the requirements for match contributions to be allowable under federal cost principles. Title 2 CFR Part 200, Uniform Guidance, section 403, Factors affecting allowability of costs, describes the requirements for federal expenditures to be adequately documented. Title 24 CFR Part 578, Continuum of Care Program, section 103, Recordkeeping requirements, describes the requirements for recipients to keep records of the source and use of match contributions.
Show full finding ▾Hide full finding ▴2022-002 The County did not have adequate internal controls for ensuring compliance with federal match requirements. Assistance Listing Number and Title: 14.267 ? Continuum of Care Program Federal Grantor Name: U.S. Department of Housing and Urban Development Federal Award/Contract Number: N/A Pass-through Entity Name: N/A Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $186,109 Prior Year Audit Finding: N/A Background The Continuum of Care (CoC) program is designed to promote community-wide commitment to the goal of ending homelessness. The program provides funding for efforts by nonprofit providers and state and local governments to quickly re-house people and families experiencing homelessness while minimizing the trauma and dislocation it causes. The program also optimizes self-sufficiency and promotes access to and effective use of mainstream programs by people and families experiencing homelessness. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established internal controls. The CoC program requires recipients and subrecipients to provide nonfederal matching funds equaling 25 percent of their total federal expenditures. Federal regulations also require that match contributions be adequately documented and come from allowable expenditures meeting federal cost principles. The County contracts with its subrecipients on a project basis, and the required matching amount is based on each project amount. In 2022, the County completed 13 projects with seven subrecipients who provided a total match of $1,051,806 over the life of the contract. As the prime recipient, the County is responsible for monitoring its subrecipients? activities to ensure they comply with federal regulations, including that their match contributions come from an allowable source and are adequately documented. Description of Condition The County?s controls were inadequate for ensuring it consistently reviewed and retained subrecipient match documentation to gain assurance that the contributions were from allowable sources. The County provides a spreadsheet to subrecipients so they can identify the match source and amount when they submit monthly invoices. Although the County reviews subrecipients? invoices, it did not sufficiently review the matching contributions to ensure they were accurate and valid. Further, our audit found the County?s controls were inadequate for ensuring it took the appropriate corrective action when a subrecipient did not meet the 25 percent match that the grantor requires. Subrecipient invoices track match contributions by month and in total. This information is recorded on a spreadsheet that is configured to identify whether subrecipients have met the total match requirements. We determined the County?s spreadsheet identified two subrecipients that did not meet the required match. However, the County did not take corrective action to reduce future reimbursements to adjust for this difference. We consider these deficiencies in internal controls to be a significant deficiency. Cause of Condition On a monthly basis, County staff review whether subrecipients? match contributions are on track to meet the 25 percent requirement. The County determines if a subrecipient met the required match during the final monthly invoice review and contract closing process. However, this review was insufficient for ensuring the match contributions had adequate support. Further, the County expected to verify that subrecipients? match contributions were allowable and adequately supported as part of its subrecipient monitoring processes. However, it did not select matching as an area to review. Lastly, staff were aware that the two subrecipients did not meet the 25 percent match requirement, but the County did not reduce subsequent reimbursements to account for the unmet match. Effect of Condition and Questioned Costs The County did not review and obtain adequate documentation of subrecipients? match contributions to demonstrate compliance. Using a statistical sampling method, we selected 28 matching transactions to review. We identified 10 match transactions totaling $96,240 in known questioned costs. Based on the projection of our statistical sample, we identified an additional $215,690 in projected overpayments. Further, the County did not have support for in-kind match transactions totaling $58,586, resulting in known questioned costs. Additionally, since two subrecipients did not meet the 25 percent match requirement, the County should have reduced subsequent reimbursement requests by $31,283. We are questioning these costs. Without adequate documentation to support subrecipients? match contributions, the County is not in compliance with the granting agency?s recordkeeping and matching requirements. Further, the County cannot assure federal grantors that matching contributions reported are accurate and valid. Any unsupported match contributions could result in a reduction of future federal awards. Recommendation We recommend the County strengthen internal controls over federal match contributions from subrecipients to ensure it reviews and retains adequate documentation of the source and allowability of the match, and to ensure it provides the minimum amount of match contributions required by the grantor. County?s Response Pierce County Human Services understands the importance of properly tracking and documenting the source and allowability of required match contributions. Staff have already worked with the U.S. Department of Housing and Urban Development to bring contracts with match requirements into compliance and to implement internal controls so that adequate information will be reviewed and retained. 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, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 306, Cost sharing or matching, describes the requirements for match contributions to be allowable under federal cost principles. Title 2 CFR Part 200, Uniform Guidance, section 403, Factors affecting allowability of costs, describes the requirements for federal expenditures to be adequately documented. Title 24 CFR Part 578, Continuum of Care Program, section 103, Recordkeeping requirements, describes the requirements for recipients to keep records of the source and use of match contributions.
Finding ref number: 2022-002 Finding caption: The County did not have adequate internal controls for ensuring compliance with federal match requirements. Name, address, and telephone of Pierce County?s contact person: Thomas Taylor 950 Fawcett Ave., Suite 100 Tacoma, WA 98402 253-798-7577 Corrective action the auditee plans to take in response to the finding: County staff have already worked with the U.S. Department of Housing and Urban Development to bring contracts with match requirements into compliance and to implement internal controls so that adequate information will be reviewed and retained. Anticipated date to complete the corrective action: September 1, 2023
2022-003 The County did not have adequate internal controls for ensuring compliance with federal subrecipient monitoring requirements. Assistance Listing Number and Title: 21.027 ? COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Grantor Name: US Department of the Treasury Federal Award/Contract Number: AWD-100786 Pass-through Entity Name: City of Lakewood Washington State Department of Commerce Pass-through Award/Contract Number: 2021-363 21-4619C-121 Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The purpose of the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program is to respond to the COVID-19 pandemic?s negative effects on public health and the economy, provide premium pay to essential workers during the pandemic, provide government services to the extent COVID-19 caused a reduction in revenues collected, and make necessary investments in water, sewer or broadband infrastructure. During 2022, the County spent $49,228,275 in program funds to cover expenditures related to supporting public health and safety services, paying employees who perform essential government services, and investing in water, sewer, and broadband infrastructure. The program funds included $31,950,387 passed through to 33 subrecipients in 2022 to fulfill components of the program?s objectives. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. When the County passes on federal funds to subrecipients, federal regulations require the County to ensure every subaward agreement clearly identifies that it is a federal award and includes the applicable federal requirements. The County is required to report 14 federal award identification elements in each subaward agreement. Whenever passing federal funding to subrecipients, federal regulations require the County to monitor them and ensure they comply with the terms and conditions of the federal award. Description of Condition Our audit found the County?s internal controls were ineffective for ensuring it included all 14 required elements in six subaward agreements established in 2022. The missing elements included: ? Subrecipients? Unique Entity Identifier ? Federal Award Identification Number (FAIN) ? Federal award date ? Amount of federal funds obligated ? Total amount of the federal award committed ? Name of the federal awarding agency ? Assistance Listing Number and program title We consider this deficiency in internal controls to be a significant deficiency. Cause of Condition County staff relied on the agreement templates developed at the time it established contracts for SLFRF subawards, and did not ensure that the template included all required elements. Further, the County experienced turnover in the program specialist positions responsible for managing this program, and it lacked adequate staffing resources to ensure the six federal subaward agreements contained all the required contract elements. Effect of Condition When subaward agreements do not include the required information, subrecipients are at an increased risk of not knowing they received federal funding and need to comply with specific program requirements, which could lead to spending the funds for unallowable purposes. Due to turnover in the program specialist positions, the County was unable to confirm that it subsequently shared the missing information with the subrecipients. Recommendation We recommend the County ensure it includes all required elements in federally funded subaward agreements. County?s Response Pierce County understands the importance of providing all necessary information and expectations to subrecipients. Pierce County Human Services has taken steps to improve contracting oversight procedures for 2023 so that contracts with subrecipients will contain the required elements. 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, section 303 Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 332, Requirements for passthrough entities, establishes subrecipient monitoring and management requirements for pass through entities.
Show full finding ▾Hide full finding ▴2022-003 The County did not have adequate internal controls for ensuring compliance with federal subrecipient monitoring requirements. Assistance Listing Number and Title: 21.027 ? COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Grantor Name: US Department of the Treasury Federal Award/Contract Number: AWD-100786 Pass-through Entity Name: City of Lakewood Washington State Department of Commerce Pass-through Award/Contract Number: 2021-363 21-4619C-121 Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The purpose of the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program is to respond to the COVID-19 pandemic?s negative effects on public health and the economy, provide premium pay to essential workers during the pandemic, provide government services to the extent COVID-19 caused a reduction in revenues collected, and make necessary investments in water, sewer or broadband infrastructure. During 2022, the County spent $49,228,275 in program funds to cover expenditures related to supporting public health and safety services, paying employees who perform essential government services, and investing in water, sewer, and broadband infrastructure. The program funds included $31,950,387 passed through to 33 subrecipients in 2022 to fulfill components of the program?s objectives. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. When the County passes on federal funds to subrecipients, federal regulations require the County to ensure every subaward agreement clearly identifies that it is a federal award and includes the applicable federal requirements. The County is required to report 14 federal award identification elements in each subaward agreement. Whenever passing federal funding to subrecipients, federal regulations require the County to monitor them and ensure they comply with the terms and conditions of the federal award. Description of Condition Our audit found the County?s internal controls were ineffective for ensuring it included all 14 required elements in six subaward agreements established in 2022. The missing elements included: ? Subrecipients? Unique Entity Identifier ? Federal Award Identification Number (FAIN) ? Federal award date ? Amount of federal funds obligated ? Total amount of the federal award committed ? Name of the federal awarding agency ? Assistance Listing Number and program title We consider this deficiency in internal controls to be a significant deficiency. Cause of Condition County staff relied on the agreement templates developed at the time it established contracts for SLFRF subawards, and did not ensure that the template included all required elements. Further, the County experienced turnover in the program specialist positions responsible for managing this program, and it lacked adequate staffing resources to ensure the six federal subaward agreements contained all the required contract elements. Effect of Condition When subaward agreements do not include the required information, subrecipients are at an increased risk of not knowing they received federal funding and need to comply with specific program requirements, which could lead to spending the funds for unallowable purposes. Due to turnover in the program specialist positions, the County was unable to confirm that it subsequently shared the missing information with the subrecipients. Recommendation We recommend the County ensure it includes all required elements in federally funded subaward agreements. County?s Response Pierce County understands the importance of providing all necessary information and expectations to subrecipients. Pierce County Human Services has taken steps to improve contracting oversight procedures for 2023 so that contracts with subrecipients will contain the required elements. 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, section 303 Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 332, Requirements for passthrough entities, establishes subrecipient monitoring and management requirements for pass through entities.
Finding ref number: 2022-003 Finding caption: The County did not have adequate internal controls for ensuring compliance with federal subrecipient monitoring requirements. Name, address, and telephone of Pierce County?s contact person: Thomas Taylor 950 Fawcett Ave., Suite 100 Tacoma, WA 98402 253-798-7577 Corrective action the auditee plans to take in response to the finding: Pierce County has taken steps to improve contracting oversight procedures for 2023 so that contracts with subrecipients will contain the required elements. Anticipated date to complete the corrective action: September 1, 2023
FAC accepted this audit on September 28, 2022 — management decision was due March 28, 2023.
FAC accepted this audit on December 1, 2023 — management decision was due June 1, 2024.
FAC accepted this audit on March 24, 2022 — management decision was due September 24, 2022.
SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Pierce County January 1, 2020 through December 31, 2020 2020-002 The County improperly charged the Coronavirus Relief Fund program for unallowable expenditures, and its internal controls were inadequate for ensuring compliance with federal subrecipient monitoring requirements. CFDA Number and Title: 21.019 - COVID-19 - Coronavirus Relief Fund Federal Grantor Name: U.S. Department of the Treasury Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Commerce Pass-through Award/Contract Number: 20-3260C-075 21-4614C-121 Questioned Cost Amount: $1,158,818 Background Allowable Costs The purpose of the Coronavirus Relief Fund (CRF) is to provide direct payments to state, territorial, tribal, and certain eligible local governments to cover necessary expenditures incurred because of the COVID-19 pandemic. For the CRF program, the costs that recipients submit for reimbursement must not have been previously included in budgets prior to March 27, 2020, and they must have been incurred between March 1, 2020, and December 31, 2021. Recipients are not required to use CRF payments as the source of funding of last resort. However, recipients may not use CRF payments to cover expenditures for which they will receive reimbursement from other sources. Governments are responsible for determining what expenditures are necessary for responding to the COVID-19 pandemic. During fiscal year 2020, the County spent $166,512,610 in CRF program funds under four awards?one received directly from the U.S. Department of the Treasury (Treasury) and three indirectly from two pass-through agencies. Subrecipient Monitoring Whenever the County passes on federal funding to subrecipients, federal regulations require the County to monitor them to ensure they comply with the terms and conditions of the federal award. To determine the appropriate level of monitoring, the County must evaluate each subrecipient?s risk of noncompliance with federal requirements. For these awards, monitoring would include verifying the subrecipients only provided assistance to participants who met program eligibility requirements and claimed reimbursement for allowable costs. The amount of verification would depend on each subrecipient?s risk of noncompliance. Description of Condition Allowable Costs In December 2020, the Washington State Department of Commerce (Commerce) awarded the County $1,398,420 in CRF program funds (contract number 20-3260C-075) to assist with operating its Low-income Home Energy Assistance Program (LIHEAP). LIHEAP is a federal grant program funded by the U.S. Department of Housing and Urban Development. Commerce instructed the County to transfer expenditures equal to the amount of the award, which were already reimbursed under its LIHEAP award, to the CRF award. Out of the total transferred amount, the County spent $1,158,818 for regular LIHEAP clients without considering whether the expenditures were necessary due to COVID-19. The costs were also considered as budgeted under the original LIHEAP grant and, therefore, do not meet the first two requirements to be allowable under the CRF award. Subrecipient Monitoring The County provided CRF payments to subrecipients under its direct award from Treasury and indirect award from Commerce (number 21-4614C-121) to administer COVID-19 assistance programs to the public, including rental, shelter, utilities, childcare and behavioral health assistance. The County did not perform risk assessments for two out of 18 subrecipients tested to determine the appropriate amount of monitoring and did not monitor 55 of its 56 subrecipients to determine if they only provided assistance to participants who met program eligibility requirements, as federal regulations require. We consider this internal control deficiency to be material weakness that led to material noncompliance. These issues were not reported as a finding in the prior audit. Cause of Condition Due to the effects of the COVID-19 pandemic, it was crucial for the County to establish programs and disburse available funds quickly to assist the public. Allowable Costs Based on Commerce?s directive, the County transferred its reimbursed expenditures from the LIHEAP grant to the CRF award without considering the specific requirements of the CRF award. Subrecipient Monitoring The County had a process for performing risk assessments and monitoring subrecipients. However, due to high turnover, a lack of staffing, and the high number of subrecipients during the audit period, the County did not follow established procedures. Effect of Condition and Questioned Costs Allowable Costs The County charged $1,158,818 to the CRF program that did not comply with program requirements. The expenditures were unallowable and, as a result, we are questioning these costs. Subrecipient Monitoring Without performing risk assessments and monitoring subrecipients, the County cannot ensure subrecipients are complying with program requirements and only providing funding to eligible participants. The County passed $29,765,240 to subrecipients. Based on our review of a sample, we estimate the unsupported payments to program participants to be $25.8 million. Recommendation We recommend the County ensure the expenditures it charges to federal programs meet all applicable requirements. We also recommend the County assess its subrecipients? risk and monitor them accordingly to verify they are only providing funds to eligible participants and complying with federal statutes, regulations, and the terms and conditions of the subawards. County?s Response Providing a timely and effective response to the pandemic drove the way federal funds were managed. Meeting the needs of Pierce County residents during this crisis was paramount. The County implemented and used a centralized control process to provide, transparency, accurate reporting, and accountability. The Washington State Department of Commerce directed that $1.158 million of these funds should pay for services to certain otherwise eligible low-income clients in place of Low Income Housing Energy Assistance Program (LIHEAP) funds ? now deemed contradictory to federal guidance. In response to this 2020 audit, the County: ? Will charge the LIHEAP Program instead of the state-provided CARES Act fund source; and ? Will seek additional clarification and guidance from Commerce on grants and grant award conditions as needed in the future. ? Will ensure compliance with federal subrecipient monitoring requirements. 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 audit period. 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, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. Title 2 CFR Part 200, Uniform Guidance, section 332, Requirements for pass through entities, establishes subrecipient monitoring and management requirements for pass-through entities. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 42 U.S. Code of Federal Regulations (CFR) Part 801, Coronavirus Relief Fund establishes allowable costs of the program. Supplemental Guidance on Use of Funds Federal Register/Vol. 86, No.10: ?The requirement that expenditures be incurred ``due to?? the public health emergency means that expenditures must be used for actions taken to respond to the public health emergency?. The CARES Act also requires that payments be used only to cover costs that were not accounted for in the budget most recently approved as of March 27, 2020. A cost meets this requirement if either (a) the cost cannot lawfully be funded using a line item, allotment, or allocation within that budget or (b) the cost is for a substantially different use from any expected use of funds in such a line item, allotment, or allocation.?
Show full finding ▾Hide full finding ▴SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Pierce County January 1, 2020 through December 31, 2020 2020-002 The County improperly charged the Coronavirus Relief Fund program for unallowable expenditures, and its internal controls were inadequate for ensuring compliance with federal subrecipient monitoring requirements. CFDA Number and Title: 21.019 - COVID-19 - Coronavirus Relief Fund Federal Grantor Name: U.S. Department of the Treasury Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Commerce Pass-through Award/Contract Number: 20-3260C-075 21-4614C-121 Questioned Cost Amount: $1,158,818 Background Allowable Costs The purpose of the Coronavirus Relief Fund (CRF) is to provide direct payments to state, territorial, tribal, and certain eligible local governments to cover necessary expenditures incurred because of the COVID-19 pandemic. For the CRF program, the costs that recipients submit for reimbursement must not have been previously included in budgets prior to March 27, 2020, and they must have been incurred between March 1, 2020, and December 31, 2021. Recipients are not required to use CRF payments as the source of funding of last resort. However, recipients may not use CRF payments to cover expenditures for which they will receive reimbursement from other sources. Governments are responsible for determining what expenditures are necessary for responding to the COVID-19 pandemic. During fiscal year 2020, the County spent $166,512,610 in CRF program funds under four awards?one received directly from the U.S. Department of the Treasury (Treasury) and three indirectly from two pass-through agencies. Subrecipient Monitoring Whenever the County passes on federal funding to subrecipients, federal regulations require the County to monitor them to ensure they comply with the terms and conditions of the federal award. To determine the appropriate level of monitoring, the County must evaluate each subrecipient?s risk of noncompliance with federal requirements. For these awards, monitoring would include verifying the subrecipients only provided assistance to participants who met program eligibility requirements and claimed reimbursement for allowable costs. The amount of verification would depend on each subrecipient?s risk of noncompliance. Description of Condition Allowable Costs In December 2020, the Washington State Department of Commerce (Commerce) awarded the County $1,398,420 in CRF program funds (contract number 20-3260C-075) to assist with operating its Low-income Home Energy Assistance Program (LIHEAP). LIHEAP is a federal grant program funded by the U.S. Department of Housing and Urban Development. Commerce instructed the County to transfer expenditures equal to the amount of the award, which were already reimbursed under its LIHEAP award, to the CRF award. Out of the total transferred amount, the County spent $1,158,818 for regular LIHEAP clients without considering whether the expenditures were necessary due to COVID-19. The costs were also considered as budgeted under the original LIHEAP grant and, therefore, do not meet the first two requirements to be allowable under the CRF award. Subrecipient Monitoring The County provided CRF payments to subrecipients under its direct award from Treasury and indirect award from Commerce (number 21-4614C-121) to administer COVID-19 assistance programs to the public, including rental, shelter, utilities, childcare and behavioral health assistance. The County did not perform risk assessments for two out of 18 subrecipients tested to determine the appropriate amount of monitoring and did not monitor 55 of its 56 subrecipients to determine if they only provided assistance to participants who met program eligibility requirements, as federal regulations require. We consider this internal control deficiency to be material weakness that led to material noncompliance. These issues were not reported as a finding in the prior audit. Cause of Condition Due to the effects of the COVID-19 pandemic, it was crucial for the County to establish programs and disburse available funds quickly to assist the public. Allowable Costs Based on Commerce?s directive, the County transferred its reimbursed expenditures from the LIHEAP grant to the CRF award without considering the specific requirements of the CRF award. Subrecipient Monitoring The County had a process for performing risk assessments and monitoring subrecipients. However, due to high turnover, a lack of staffing, and the high number of subrecipients during the audit period, the County did not follow established procedures. Effect of Condition and Questioned Costs Allowable Costs The County charged $1,158,818 to the CRF program that did not comply with program requirements. The expenditures were unallowable and, as a result, we are questioning these costs. Subrecipient Monitoring Without performing risk assessments and monitoring subrecipients, the County cannot ensure subrecipients are complying with program requirements and only providing funding to eligible participants. The County passed $29,765,240 to subrecipients. Based on our review of a sample, we estimate the unsupported payments to program participants to be $25.8 million. Recommendation We recommend the County ensure the expenditures it charges to federal programs meet all applicable requirements. We also recommend the County assess its subrecipients? risk and monitor them accordingly to verify they are only providing funds to eligible participants and complying with federal statutes, regulations, and the terms and conditions of the subawards. County?s Response Providing a timely and effective response to the pandemic drove the way federal funds were managed. Meeting the needs of Pierce County residents during this crisis was paramount. The County implemented and used a centralized control process to provide, transparency, accurate reporting, and accountability. The Washington State Department of Commerce directed that $1.158 million of these funds should pay for services to certain otherwise eligible low-income clients in place of Low Income Housing Energy Assistance Program (LIHEAP) funds ? now deemed contradictory to federal guidance. In response to this 2020 audit, the County: ? Will charge the LIHEAP Program instead of the state-provided CARES Act fund source; and ? Will seek additional clarification and guidance from Commerce on grants and grant award conditions as needed in the future. ? Will ensure compliance with federal subrecipient monitoring requirements. 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 audit period. 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, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. Title 2 CFR Part 200, Uniform Guidance, section 332, Requirements for pass through entities, establishes subrecipient monitoring and management requirements for pass-through entities. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 42 U.S. Code of Federal Regulations (CFR) Part 801, Coronavirus Relief Fund establishes allowable costs of the program. Supplemental Guidance on Use of Funds Federal Register/Vol. 86, No.10: ?The requirement that expenditures be incurred ``due to?? the public health emergency means that expenditures must be used for actions taken to respond to the public health emergency?. The CARES Act also requires that payments be used only to cover costs that were not accounted for in the budget most recently approved as of March 27, 2020. A cost meets this requirement if either (a) the cost cannot lawfully be funded using a line item, allotment, or allocation within that budget or (b) the cost is for a substantially different use from any expected use of funds in such a line item, allotment, or allocation.?
Finding ref number: 2020-002 Finding caption: The County improperly charged the Coronavirus Relief Fund program for unallowable expenditures, and its internal controls were inadequate for ensuring compliance with federal subrecipient monitoring requirements. Name, address, and telephone of Pierce County contact person: Brandon Kirkwood, Chief Accountant 950 Fawcett Avenue, Suite 100 Tacoma, WA 98402 (253) 798-7231 Corrective action the auditee plans to take in response to the finding: Providing a timely and effective response to the pandemic drove the way federal funds were managed. Meeting the needs of Pierce County residents during this crisis was paramount. The County implemented and used a centralized control process to provide, transparency, accurate reporting, and accountability. The Washington State Department of Commerce directed that $1.158 million of these funds should pay for services to certain otherwise eligible low-income clients in place of Low-Income Housing Energy Assistance Program (LIHEAP) funds ? now deemed contradictory to federal guidance. In response to this 2020 audit, the County: ? Will charge the LIHEAP Program instead of the state-provided CARES Act fund source; ? Will seek additional clarification and guidance from Commerce on grants and grant award conditions as needed in the future; and ? Will ensure compliance with federal subrecipient monitoring requirements. Anticipated date to complete the corrective action: 3/16/2022
FAC accepted this audit on August 12, 2020 — management decision was due February 12, 2021.
FAC accepted this audit on August 13, 2019 — management decision was due February 13, 2020.
GSA_MIGRATION
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2017-001
FAC accepted this audit on September 26, 2018 — management decision was due March 26, 2019.
GSA_MIGRATION
Show full finding ▾Hide full finding ▴FAC accepted this audit on September 27, 2017 — management decision was due March 27, 2018.
GSA_MIGRATION
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