LINN COUNTYLocal Government

Identification of the federal program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Criteria: Per 2 CFR §200.320, non-federal entities are required to follow federal procurement standards, including adhering to established procurement methods and thresholds when expending federal funds. Condition: The County has an established procurement policy, however, the policy does not align with current federal procurement thresholds. Cause: The County has not updated its procurement policy to reflect federal procurement standards under the Uniform Guidance. Effect: Noncompliance with federal procurement requirements increases the risk of improper procurement methods being used for federally funded purchases, which could result in questioned costs. Questioned Costs: None Recommendations: The County should review and update its procurement policy to ensure alignment with current federal procurement thresholds. Additionally, we recommend implementing a periodic review process to ensure the policy remains consistent with future regulatory updates. Views of responsible officials: The County agrees with the finding.

Identification of the federal program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Criteria: In accordance with 2 CFR 200.328, non-Federal entities must submit financial reports at the interval required by the Federal awarding agency or pass-through entity no later than the specified due date. Additionally, reports are required to be reviewed prior to submission. Condition: The annual report was submitted after the due date and was not reviewed by someone other than the creator. Cause: The County did not have the due date written on the calendar, and as such, was not aware it was due. Effect: Annual report was not submitted to the grantor by the due date and requests for extension of the due date were not made. Questioned Costs: None Recommendations: The County should implement a review process over the reports so that way two individuals are responsible for the information and due dates of them. When timely submission may not be possible, the County should request an extension from the grantor by providing a notice of the delay and rationale for the late report, and, if approved, submit the report by the extended deadline. Views of responsible officials: The County agrees with the finding.

Identification of the federal program: 93.958 Block Grant for Community Mental Health Services Criteria: Per 2 CFR §200.320, non-federal entities are required to follow the Mental Health Block Grant (MHBG) allowable costs definitions. Condition: During testing of allowable activities, allowable costs, and period of performance transactions, we noted one instance in which the County applied grant funding to an individual who provided legitimate charges to the grant purposes, but also included a lumpsum payout of vacation, compensation time, and other related expenses to an employee who retired in the fiscal year. Cause: The County did not consistently follow established federal allowable costs procedures requiring the targeted charges for services rendered during the grant period. Effect: Charges to the grant funding were made which were outside of the allowable costs of the grant stipulations. Questioned Costs: $27,154 Recommendations: We recommend the County strengthen internal controls over allowable costs to ensure that charges made to grant funding reflect the allowable costs under the program. Views of responsible officials: The County agrees with the finding.

Criteria: Per 2 CFR §200.320, non-federal entities are required to follow the Mental Health Block Grant (MHBG) allowable costs definitions. Condition: During testing of allowable activities and allowable costs, we noted four instances in which the County applied grant funding to individuals’ time based on estimated time spent working within the program rather than actual time spent. Cause: The County did not consistently follow established federal allowable costs procedures requiring personnel costs to be charged to the program based on actual hours spent working on the program. Effect: Charges to the grant funding were made which were not reflective of the actual time working within the program and as such allowable costs of the grant stipulations were not accurate. Questioned Costs: $45,892 Recommendations: We recommend the County strengthen internal controls over allowable costs to ensure that charges made to grant funding reflect the allowable costs under the program. Views of responsible officials: The County agrees with the finding.

SA 2023 - 001 – SIGNIFICANT DEFICIENCY FEDERAL PROGRAM: 21.027 – Coronavirus State and Local Fiscal Recovery Funds SPECIFIC REQUREMENT: Expenditures being reported under the major program were made in accordance within grant compliance CONDITION: During our testing of Quarterly Project and Expenditure Reporting forms, we noted that there was inaccurate reporting of expenditures, where monies expended in fiscal year 2022 were reported as 2023 expenditures. Forms submitted prior to fiscal year 2023 start, had a clerical error where the second quarter of fiscal year 2022 was improperly identified as the third quarter of 2022. QUESTIONED COST: None noted CONTEXT: This finding is limited to this major program and the context noted in the condition. The minimum noted in questioned cost, is the amount where no documentation was maintained and maximum is the amount reimbursed under this program related to the condition notedEFFECT: Without adequate controls or procedures in place to review reporting documents, the possibility exists that expenditures may be improperly charged to inaccurate fiscal years under a federal grant program. CAUSE: The County did not have adequate review processes in place to ensure accuracy of reporting forms. RECOMMENDATION: We recommend the County implement review policies and procedures for federal awards to ensure proper usage and ensure compliance with federal award provisions. VIEWS OF RESPONSIBLE OFFICIALS: Management agrees with the finding. The County has implemented a grant reporting process where before grant reports are filed with the corresponding agency, that they are reviewed for accuracy by a second person.

SA2022 - 001 – MATERIAL WEAKNESS FEDERAL PROGRAM: 93.323 – Epidemiology and Laboratory Capacity for Infectious Diseases SPECIFIC REOUREMENT: All federal expenditures related to the program should be reported in the fiscal year they are expended. CONDITION: Adequate controls were not in place to ensure the schedule of expenditures of federal awards was accurate at year end. QUESTIONED COST: None noted CONTEXT: This finding is limited to this major program and the context noted in the condition. EFFECT: Without adequate controls or procedures in place to ensure accuracy of the schedule of expenditures of federal awards there exists the risk of material misstatement.CAUSE: The County did not have adequate procedures and policies in place for individual departments reporting their federal award expenditures for compilation and reporting. RECOMMENDATION: We recommend the County implement policies and procedures to ensure accuracy of the schedule of expenditures of federal awards. VIEWS OF RESPONISBLE OFFICIALS: Management agrees with the finding and has implemented procedures to ensure that all federal expenditures are included on the schedule of federal expenditures of federal awards. Departments receiving federal awards now report all of these grants to the accounting department.

SA2021 - 01 - SIGNIFICANT DEFICIENCY FEDERAL PROGRAM: Coronavirus Relief Fund SPECIFIC REOUREMENT: Expenditures being reimbursed through major program were made in accordance within grant compliance CONDITION: During our testing of reimbursement forms, we noted that there was limited internal controls in practice for reviewing individual departments' reimbursement forms that were turned over to the Treasurer's Office. Furthermore there was no internal control in place at the Treasurer's Office to ensure expenditures claimed for reimbursement by individual departments were accurate. Veteran's Department did not maintain claim documents. QUESTIONED COST: None noted CONTEXT: This finding is limited to this major program and the context noted in the condition. The minimum noted in questioned cost, is the amount where no documentation was maintained and maximum is the amount reimbursed under this program related to the condition noted EFFECT: Without adequate controls or procedures in place to review reimbursement claims for accuracy, the possibility exists that expenditures may be improperly charged to a federal grant program. CAUSE: The County did not have adequate review processes in place to ensure accuracy of claim forms. RECOMMENDATION: We :recommend the County implement review policies and procedures for federal awards to ensure proper usage and ensure compliance with federal award provisions. VIEWS OF RESPONSIBLE OFFICIALS: Management agrees with the finding and has implemented a process in departments regarding documentation for Federal Grant Awards. The process will be that documentation will be reviewed by 2 people prior to submission for reimbursement. All documentation will be maintained and held for audit.