Curry County

Identification of the federal program: ALN 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Fund Criteria or specific requirement: Per 2 CFR 200.318, non-Federal entities must have and use documented procurement procedures, consistent with state, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in ?? 200.317 through 200.327. Condition/Context: The County has not updated their procurement policy since 2008 and the policy in place does not conform to the procurement standards identified in ?? 200.317 through 200.327. Although no instances of noncompliance were noted, we believe there is risk of noncompliance as a result of the outdated procurement policy. Cause: Lack of staffing and turnover in the legal department and finance department resulted in delays in implementing a new procurement policy. Effect: Potential noncompliance with procurement and suspension and debarment. Repeated finding: Yes, prior year 2021-004 Questioned costs: None. Recommendation: We recommend the County update their procurement policy to document procurement procedures that conform to the procurement standards identified in ?? 200.317 through 200.327 and establish internal controls to ensure the procurement policy is followed. Views of responsible officials: Curry County updated its procurement policy January 2023 to conform with procurement standards and establish internal controls.

Finding 2021-003 Allowable Cost Principles, Material Weakness in Internal Controls Over Compliance and Instance of Material Non-Compliance Identification of the federal program: ALN 21.019 COVID-19 Coronavirus Relief Fund Criteria or specific requirement: Section 601(d) of the Social Security Act, as added by section 5001 of the CARES Act and as amended by section 1001 of Division N of the Consolidated Appropriations Act, requires that States, Tribal governments, or units of local government use the funds received to cover only those costs that (1) are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID-19); (2) were not accounted for in the budget most recently approved as of March 27, 2020, for the State or government; and (3) were incurred during the period that begins on March 1, 2020, and ends on December 30, 2021. Condition/Context: Two transactions selected for testwork were reimbursements to two different vendors for a total of $24,330 incurred by the vendors on behalf of the County. Based on review of the invoices, one expenditure was for road work engineering, and the other expenditure was for County park maintenance. Neither of these expenditures appear to be necessary expenditures incurred due to the public health emergency. Additionally, the population of total expenditures provided by the County of $519,587 did not agree to the schedule of expenditures and federal awards $554,230 and the County could not provide a reconciliation resulting in a difference of $34,643. Cause: Management did not review expenditures in the accounting system, Caselle, after recording to the COVID-19 grant code. Additionally, there was a change in the Finance Director position and the supporting reconciliations between Caselle and the expenditures charged to the award were not able to be located or were not prepared. Effect: Non-compliance with allowable cost principles. Known Questioned costs: $58,973 Recommendation: We recommend the County establish a control system to ensure federal funds are used only for allowable expenditures in accordance with the federal requirements. Views of responsible officials: The current control in place is that department managers understand the expenses allowed by their grants and code and approve expenditures accordingly to the correct grant. The County is unsure how this wasn't caught. However, as an additional control the SEFA will be reconciled twice a year to ensure expenditures tie out to the award. All documents required to reconcile will be maintained.

Finding 2021-004 Procurement and Suspension and Debarment, Significant Deficiency in Internal Controls Over Compliance and Instances of Non-Compliance Identification of the federal program: ALN 20.513 Transit Services Programs Cluster Criteria or specific requirement: Per 2 CFR 200.318, non-Federal entities must have and use documented procurement procedures, consistent with state, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in ?? 200.317 through 200.327. Condition/Context: The County has not updated their procurement policy since 2008 and the policy in place does not conform to the procurement standards identified in ?? 200.317 through 200.327. As a result, one sample tested did not have documentation sam.gov was checked for suspension/debarment, and the County entered into a covered transaction prior to the contract being signed. Ultimately, the vendor tested was not suspended or debarred per review of sam.gov. Cause: Management did not review expenditures in Caselle after posting to the COVID-19 grant code. Additionally, there was a change in the Finance Director position and the supporting reconciliations between Caselle and the expenditures charged to the award were not able to be located or were not prepared. Effect: Noncompliance with procurement and suspension and debarment. Questioned costs: None. Recommendation: We recommend the County update their procurement policy to document procurement procedures that conform to the procurement standards identified in ?? 200.317 through 200.327 and establish internal controls to ensure the procurement policy is followed. Views of responsible officials: Curry County is in the process of updating the procurement policy to conform with procurement standards identified in section 200.317 through 200.327. Internal controls will also be updated to ensure the policy is followed.

FINDING 2019-005 - Report - Significant Deficiency This is a repeat finding from 2018. CRITERIA: Section 2 CFR 200.512 of the Uniform Guidance outlines the frequency required for audits. The Uniform Guidance states that audits shall be performed annually, when the federal award recipient meets the audit requirement of the Uniform Guidance. Section 2 CFR 200.512(a) also outlines the requirement that the audit shall be completed and submitted within the earlier of 30 days after receipts of the auditor's report, or nine months after the year end of the audit period. CONDITION: In 2019, the County did not submit a program-specific single audit in a timely manner to be in compliance with the audit requirement under the Uniform Guidance. The 2019 audit report was due on March 31, 2020, and is just now being filed. CONTEXT: The County did not meet their reporting deadline for March 31, 2020. EFFECT: Audit was not performed and submitted in a timely manner. The County has not met the reporting requirements under the Uniform Guidance. CAUSE: While the County prepared a working trial balance earlier than the prior year's audited financials, a finalized version was not provided to the auditors until May 06, 2020, and other items such as an updated inventory balance were not available until June 19, 2020. RECOMMENDATION: We recommend that the County prepare a finalized working trial balance in enough time to provide for proper filing of the SEFA and Audited Financial Statements with the Federal Government. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: The County Board of Commissioners compiled a strategic plan in fiscal year 2019-20 which stressed the need to improve efficiencies and implement software and practices to minimize error. They also looked at past audits and added staff where needed, and re-assigned duties or reorganized staff in some departments to guarantee a segregation of duties. They also cut down on the number of funds and have been centralizing finance-related duties to within the Finance Department, which will improve the County readiness for subsequent audits.

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