Polk CountyLocal Government

Identification of Federal Program 21.027 Coronavirus State and Local Fiscal Recovery Funds Criteria 2 CFR 200.320 Methods of procurement to be followed. The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and 200.317, 200.318, and 200.319 for formal methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. 2 CFR 200.320(b) Formal procurement methods. When the value of the procurement for property or services exceeds the simplified acquisition thresholf, formal procurement methods are required. Formal procurement methods require either sealed bids to be publicly solicited or requests for proposal publicized. Non-competitive procurement are only allowed if the purchase is under the micro-purchase threshold, if the item is only available from a single source, if public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation, if the Federal awarding agency or pass through agency expressly authorizes a non-competitive procurement, or if after solicitiation of a number of sources, competition is deemed inadequate. Condition The County did not follow formal procurement procedures related to the purchase of jail camera system. Cause The County followed its internal procurement policies which are less restrictive than formal procurement processes as required under 2 CFR 200.320. Potential Effect Open competition was not insured. Questioned Costs None Context The County followed their modified procurement procedure (PPCO 15.140(1) which allows for direct solicitation of bids from vendors that work with existing technology infrastructure already in place in the County in an effort to reduce cost and waste. As a result, formal procurement processes as required were not followed. Identification of a repeat finding, if applicable This is a new finding for the County Recommendations Formal procurement processes should be followed for all Federal award purchases that exceed the simplified acquisition threshold. Views of Responsible Officials The County agrees with the finding and will develop a corrective action plan.

Finding 2021-001 Identification of Federal Program 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases Passed through the Oregon Health Authority Criteria 2 CFR ?200.403 Factors affecting allowability of costs. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (g) Be adequately documented 2 CFR ?200.405 Allocable costs. (d) Direct cost allocation principles: If a cost benefits two or more projects or activities in proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefit. If a cost benefits two or more projects or activities in proportions that cannot be determined because of the interrelationship of the work involved, then, notwithstanding paragraph (c) of this section, the costs may be allocated or transferred to benefitted projects on any reasonable documented basis. Condition The County did not maintain documentation supporting the expenditures reported to the Oregon Health Authority. Cause The County Health Department was primarily responsible for implementing responses to the COVID-19 pandemic. During the year ended June 30, 2021, most of the Health Department?s activities directly related to the pandemic. The Oregon Health Authority provided multiple awards for the response to the pandemic. These conditions caused the Health Department to not maintain supporting documentation of expenditures for each of the grants separately. Potential Effect Unallowable costs or costs for unallowed activities could be charged to the federal award program. Questioned Costs $768,661 representing the total costs reported to Oregon Health Authority for the program for the year ended June 30, 2021. Section III - Federal Award Findings and Questioned Costs (Continued) Context During the year ended June 30, 2021, almost all of the Health Department?s activities and costs incurred related to the response to the pandemic. Additionally, the receipt of multiple awards, sometimes with overlapping purposes, made it difficult to identify specific costs that should be charged to each of the various programs. Identification as a repeat finding, if applicable This is a new finding as the County has not previously received an award under this program assistance listing. Recommendations Documentation of direct expenditures charged to programs should be maintained and methods used to allocate costs should be documented. Views of responsible officials The County agrees with the finding and will develop a corrective action plan.

Finding 2021-002 Identification of Federal Program 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases Passed through the Oregon Health Authority Criteria 2 CFR ?200.303 ? Internal controls. The non-Federal entity must (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). One of the elements of internal controls is information and communication which would include the maintenance of supporting documentation of amounts charged to federal award programs. Condition A material weakness in internal controls resulted in the County not maintaining documentation supporting the expenditures reported to the Oregon Health Authority. Cause The COVID-19 pandemic caused a significant increase in the demand for services from the County Health Department while also causing limitations on staffing resources to provide those services. Section III - Federal Award Findings and Questioned Costs (Continued) Potential Effect Unallowed costs could be charged to the federal award program and not be detected or corrected on a timely basis. Questioned Costs None Context The COVID-19 pandemic was unprecedented, and the County Health Department?s primary focus was on the response to the pandemic. Identification as a repeat finding, if applicable This is a new finding as the County has not previously received an award under this program assistance listing. Recommendations Internal controls should be established that ensure the maintenance of documentation supporting the expenditures charged to federal award programs. Views of responsible officials The County agrees with the finding and will develop a corrective action plan.

Criteria: The Frequently Asked Questions issued by the U.S. Treasury Department Updated as of September 2, 2020 states: Fund payments are considered to be federal financial assistance subject to the Single Audit Act (31 U.S.C. ??A7501-7507) and the related provisions of the Uniform Guidance, 2 C.F.R. ? 200.303 regarding internal controls??. 2 C.F.R. ? 200.303 states: ?The non-Federal entity must?establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.? The 2020 compliance supplement provides guidance on internal controls in part 6 including the need for segregation of duties and review of reimbursement requests to ensure accuracy. Condition: A deficiency in the design of the internal controls exists as a single individual was responsible for the management of the grant program, including the determination of allowable costs, maintenance of documentation of costs and submission of costs for reimbursement. Cause: To expedite the County?s response to the COVID-19 public health emergency, the management of the program was given to a single individual. Effect: Unallowable costs could be charged to the program, documentation may not be maintained and errors could occur. Questioned Costs: None Perspective: The need to respond to the public health emergency did not allow time for internal controls to be properly designed. Recommendations: The County should designate a second individual to review the documentation of costs to be claimed for reimbursement to ensure they are allowable under the guidance issued by the U.S. Treasury Department. Views of Responsible Officials: The County agrees with the finding and will implement controls that include a review of documentation of costs to be claimed for reimbursement.

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