Grant CountyLocal Government

2023-005 Federal Awarding Agency: Department of Agriculture Program title and ALN: Forest Schools and Roads Cluster, Title III, ALN #10.666 Compliance requirements applicable to finding: Reporting Findings: Material Weakness in Internal Control over Compliance of Major Programs Questioned Costs: We are reporting no questioned costs. Criteria: The Secure Rural Schools and Community Self-Determination Act of 2000 requires a county receiving Title III funds to submit to the Secretary of Agriculture an annual certification by February 1 for each calendar year that funds have been spent for authorized uses. The report is required to certify all expenditures under the Title III program. Condition and Context: During our review of the annual certification for calendar year 2022, we found the report was submitted after required deadlines and incorrectly reported the total expenditures of Title III funds. According to the general ledger, the county spent $139,982 of Title III funds in calendar year 2022. The certification reported total expenditures of $139,932. While differences identified in the 2022 certification were not deemed material to the major program, it was the result of missing all expenditures from Fund 142, the Forest Title III Fund for the third year in a row and the combination of reporting errors resulted in material noncompliance with the program. Furthermore, recommendations made by auditors and plans of corrective action identified by management in prior years were insufficiently addressed. Cause: There is a lack of internal control over compliance related to reporting total Title III expenditures and the governing body in charge of ensuring compliance took limited responsibility in ensuring the report was submitted timely or accurately. Effect: The effect was noncompliance with reporting requirements. Recommendations: It is recommended that the county implement secondary review procedures prior to submission of the certification to the Secretary of Agriculture. We also recommend the responsible officials providing approval over the certification acquire proficiencies with the general ledger software and its reporting to identify accurate information for reporting and take responsibility to ensure timely completion of the reporting requirements. Views of responsible officials and planned corrective actions: A County Court member will meet with the contractor providing Title III services to discuss corrective action regarding timely completion of reporting and meeting reporting requirements.

2023-006 Federal Awarding Agency: Department of the Treasury Program title and ALN: Coronavirus State and Local Fiscal Recovery Funds #21.027 126 GRANT COUNTY, OREGON SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2023 Compliance requirements applicable to finding: Activities Allowed or Unallowed Findings: Other findings disclosed in accordance with 2 CFR 200.516(a) Questioned Costs: $90,122 in known questioned costs related to the non-major federal program Criteria: The county spent $90,122 in Coronavirus State and Local Fiscal Recovery Funds on the remodel of a county building planned to materially be used for the new offices of the county’s emergency management department. Coronavirus State and Local Fiscal Recovery Funds under ALN #21.027 are required to be spent on projects that directly respond to the public health and negative economic impacts of the COVID-19 pandemic. Under 602(c)(1)(A) or 603(c)(1)(A), a general infrastructure project typically would not be considered a response to the public health emergency and its negative economic impacts unless the project responds to a specific pandemic-related public health need (e.g., investments in facilities for the delivery of vaccines) or a specific negative economic impact of the pandemic (e.g., affordable housing in a Qualified Census Tract). The emergency management department does not fit these criteria, which means this remodel project is an unallowed cost. Condition and Context: As a result of following up on prior year findings reported on the Schedule of Findings and Questioned Costs for the year ended June 30, 2022, significant transactions were identified that directly relate to noncompliance over the federal program that occurred during the June 30, 2023, fiscal year. These transactions were not tested as a major program during the 2023 fiscal year and were not subject to current year auditing procedures; however, noncompliance and known questioned costs were identified that met requirements for disclosure. Furthermore, recommendations made by auditors and plans of corrective action identified by management in prior years were insufficiently addressed. Cause: Unfamiliarity with program requirements from those accumulating and tracking costs charged to the program and lack of knowledgeable oversight over the program was a significant cause for these findings. The county lacked internal controls to ensure expenditures reimbursed through the program met compliance requirements. Effect: Known questioned costs related to the compliance of federal programs in the amount of $90,122 related to expenditures in the 2023 fiscal year were identified. Recommendation: We recommend the county adopt formal policies to address transactional compliance over grant awards. Given the volume of grant activity, identifying a grant compliance officer with the requisite experience in program compliance monitoring should be an included control. The current general ledger system has historically been sufficient to address the appropriate segregation and tracking of individual awards but has been used inappropriately to be implemented as a control. Monitoring of controls over expenditures and grant award compliance should be implemented, and deviations from controls in place should be addressed timely. Views of responsible officials and planned corrective actions: The County does not have available funding to hire a grant compliance officer, however, the County plans to seek training resources for current staff responsible for grant administration.

2021-004 Federal Awarding Agency: Department of the Treasury Program title and CFDA number: Coronavirus Relief Fund, CFDA #20.019 Compliance requirements applicable to finding: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance, and Subrecipient Monitoring Findings: Material weakness in internal control over compliance of major programs and material noncompliance related to the financial statements and federal programs Questioned Costs: $285,122 in known questioned costs and $9,360 in likely questioned costs Criteria: The Coronavirus Relief Fund (CRF) requires payments from the CRF be used only to cover: ? Necessary expenditures incurred due to the public health emergency with respect to COVID-19; ? Costs that were not accounted for in the government?s most recently approved budget as of March 27, 2020; and ? Costs that were incurred during the period that began on March 1, 2020 and ended on December 30, 2021. ? Acquisitions must be necessary due to the COVID-19 public health emergency (this includes any installation of modifications to permit social distancing) o It must be determined that it is not able to meet the needs by leasing property or improving currently owned property Regarding subrecipient monitoring, the OMB 2021 Compliance Supplement (3-M-1) requires all pass-through entities (PTEs) to: clearly identify to the subrecipient: (1) the award as a subaward at the time of a subaward (or subsequent subaward modification) by providing the information described in 2 CFR Section 200.331(a)(1). Condition and Context: Random sampling of expenditures reimbursed under the CRF program revealed significant spending related to costs that were not considered necessary due to the public health emergency with respect to COVID-19 including the purchase of redundant cost accounting software and the renovation of the fairgrounds pavilion. The renovation of the fairgrounds pavilion was also identified to have been included in the county?s budget prior to March 27, 2020. These resulted in known questioned costs. 117 GRANT COUNTY, OREGON SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2021 Insufficient documentation was maintained in some instances to determine whether compliance requirements were met which resulted in likely questioned costs. During our review of the county contract for the subaward of CRF funds passed through to subrecipients, we noted no clear communication of the pass-through entity/subcontractor relationship. In some cases, we also noted no clear contract or agreement in place designating a subaward. The county?s treatment of the relationship indicated the funds were being monitored, as required throughout the contract. Terms of the county?s contract for funding with the Oregon Health Authority referenced in the county?s subrecipient contracts included all detailed terms and conditions of programs as required. Cause: Unfamiliarity with program requirements and lack of oversight over the program was a significant cause for these findings. The county lacked internal controls to ensure expenditures reimbursed through the CRF program met compliance requirements. Controls in place over expenditures of county funds were disregarded or overridden by management and/or the governing body. There was also lack of control over communication of subrecipient relationships. The county, in some instances, failed to have agreements in place for pass-through awards and in instances where a contract was in place, there was a failure to clearly identify subrecipient nature of agreements. Effect: In total, we identified $285,122 in known questioned costs and $9,360 in likely questioned costs. We also identified material noncompliance with the program.

2021-005 Federal Awarding Agency: Department of Agriculture Program title and CFDA number: Forest Schools and Roads Cluster, Title III, CFDA #10.666 Compliance requirements applicable to finding: Reporting Findings: Material Weakness in Internal Control over Compliance of Major Programs Questioned Costs: We are reporting no questioned costs Criteria: The Secure Rural Schools and Community Self-Determination Act of 2000 requires a county receiving Title III funds to submit to the Secretary of Agriculture an annual certification that funds have been spent for authorized uses. Condition and Context: During our review of the annual certification for calendar year 2020, we found the report incorrectly reported the total expenditures of Title III funds. According to the general ledger, the county spent $211,605 of Title III funds in calendar year 2020. The certification reported total expenditures of $260,087. This finding was presented to the county as a significant deficiency in the fiscal year 2020. Plans of corrective action identified by management went unaddressed. Cause: There is a lack of internal control over compliance related to reporting total Title III expenditures. The county lacks report verification process prior to submission Effect: The effect is noncompliance with reporting requirements.

2021-006 Federal Awarding Agency: Department of Health and Human Services Program title and CFDA number: Epidemiology and Laboratory Capacity for Infectious Diseases, CFDA #93.323 Compliance requirements applicable to finding: Subrecipient Monitoring Findings: Significant Deficiency in Internal Control over Compliance of major programs Questioned Costs: We are reporting no questioned costs Criteria: According to the OMB 2021 Compliance Supplement (3-M-1), all pass-through entities (PTEs) must: clearly identify to the subrecipient: (1) the award as a subaward at the time of a subaward (or subsequent subaward modification) by providing the information described in 2 CFR Section 200.331(a)(1). Condition and Context: During our review of the county contract for the subaward of the funds passedthrough to subrecipient, we noted no clear communication of the pass-through entity/subcontractor relationship. 119 GRANT COUNTY, OREGON SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2021 The county?s treatment of the relationship indicated the funds were being monitored, as required throughout the contract. Terms of the county?s contract for funding with the Oregon Health Authority referenced in the county?s contracts included all detailed terms and conditions of programs as required. Cause: There is a lack of control over communication of subrecipient relationships. The county?s contracts with subrecipients fail to clearly identify subrecipient nature of agreements. Effect: The effect is potential noncompliance due to lack of clarity in subrecipient agreements.

2021-007 Federal Awarding Agency: Department of the Treasury Program title and CFDA number: Coronavirus Relief Fund, CFDA #20.019 Compliance requirements applicable to finding: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance, and Subrecipient Monitoring Findings: Other findings disclosed in accordance with 2 CFR 200.516(a) Questioned Costs: $58,470 in abuse and likely questioned costs related to the 2020 fiscal year Criteria: The Coronavirus Relief Fund (CRF), which required payments from the CRF be used only to cover: ? Necessary expenditures incurred due to the public health emergency with respect to COVID-19 ? Acquisitions must be necessary due to the COVID-19 public health emergency (this includes any installation of modifications to permit social distancing) o It must be determined that it is not able to meet the needs by leasing property or improving currently owned property Condition and Context: As a result of testing the CFDA 20.019 as a major program, significant transactions were identified that directly relate to noncompliance over the federal program that occurred during the June 30, 2020, fiscal year. These transactions were not tested as a major program during the 2020 fiscal year and were not subject to current year auditing procedures. Reconciling draws on the grant award #1012 under the CRF program revealed reimbursements for costs that were not necessary due to the public health emergency with respect to COVID-19. This spending included significant equipment and supplies that were not applicable to pandemic conditions, costs related to the fairgrounds pavilion renovation when leased space was available and more cost-effective to the needs of the county, and costs related to software that was redundant to currently owned software available at the county with respect to the COVID-19 response. Cause: Unfamiliarity with program requirements and lack of oversight over the program was a significant cause for these findings. The county lacked internal controls to ensure expenditures reimbursed through the CRF program met compliance requirements. 120 GRANT COUNTY, OREGON SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2021 Effect: Abuse and likely questioned costs related to the compliance of federal programs in the amount of $58,470 related to expenditures in the 2020 fiscal year were identified.

2021-008 Federal Program: CFDA #10.666 ? Forest Service Schools and Roads Program title and CFDA number: Forest Schools and Roads Cluster, Title III, CFDA #10.666 Compliance requirements applicable to finding: Earmarking and Special Tests and Provisions Findings: Significant Deficiency in Internal Control over Compliance of major programs Questioned Costs: $4,214 in likely questioned costs Criteria or specific requirement (including statutory, regulatory, or other citation): The Secure Rural Schools and Community Self-Determination Act of 2000 requires a county receiving funds under the Forest Service Schools and Roads Cluster to perform an allocation of funds between Title I and Title III on county court certified allocations. In the current year, that allocation included a federal sequestration of funds that was also required to be allocated to Title I and Title III. Condition and Context: During our review of the allocation of 2021 funds received, we noted an error in the allocation performed by the county. Title III had an overallocation of funds by $4,214 and Title I had an under allocation of $4,214. The sequestration was the primary cause of the allocation error. Forest Title I was allocated 100% of the total sequestration when it should have received 98% of the sequestration based on the total funding of Title I and Title III. Questioned Costs: Likely questioned costs totaled $4,214 and consisted of amounts allocated to Title III Fund in error. Client documentation was insufficient to definitively determine the revenue source for current year expenditures (i.e., beginning fund balance versus current year revenue). Cause: There is a lack of internal control over earmarking and special tests and provisions over allocation of Forest Service Schools and Roads. The county lacks a review and approval control over the allocation of funds. 121 GRANT COUNTY, OREGON SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2021 Effect: The effect is noncompliance with earmarking and special tests and provisions requirements.

GRANT COUNTY, OREGONGRANT COUNTY, OREGON SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2020 FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS CURRENT YEAR 2020-002 Significant Deficiency in Internal Control over Compliance Criteria or specific requirement (including statutory, regulatory, or other citation): The Secure Rural Schools and Community Self-Determination Act of 2000 requires a county receiving Title III funds to submit to the Secretary of Agriculture an annual certification that funds have been spent for authorized uses. Condition: During our review of the annual certification for calendar year 2019, we found the report incorrectly reported the total expenditures of Title III funds. Context: According to the general ledger, the county spent $234,113 of Title III funds in calendar year 2019. The certification reported total expenditures of $302,651. Questioned Costs: We are reporting no questioned costs. All amounts expended in the program were allowable expenditures, properly approved, and compliant with program requirements. Overreporting was the result of a clerical error in preparing the report. Cause: There is a lack of internal control over compliance related to reporting total Title III expenditures. The county lacks report verification process prior to submission Effect: The effect is noncompliance with reporting requirements. Recommendation: It is recommended that the county implement review procedures to be completed prior to submitting the certification to the Secretary of the Agriculture. Views of Responsible Officials and Planned Corrective Actions: The county understands and concurs with this finding. It is the intention of the county to implement a review process to be completed prior to submitting the certification. PRIOR YEAR The audit for the year ended June 30, 2019 did not report any findings and questioned costs. 126

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