COUNTY OF HUMBOLDTLocal Government

Federal agency: Federal Aviation Administration Federal program title: Airport Improvement Program Assistance Listing Number: 20.106 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: July 1, 2024 to June 30, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matter Criteria: Federal Aviation Administration (FAA) guidelines require Airport Improvement Program recipients to submit periodic financial reports, including SF-425 (Federal Financial Report), Form 5100-127 (Operating and Financial Summary), Form 5100-126 (Financial Government Payment Report), Form 5370-1 (Construction Progress and Inspection Report), and Form SF-271 (Requests for Reimbursement) in accordance with 2 CFR §200.328 and §200.329. Condition: During our testing, we noted that 3 of the 5 grants tested for SF-425 were not submitted for Fiscal year ended June 30, 2025. Questioned costs: None Context: Three of the five SF-425 reports selected for testing that were required to be submitted during the fiscal year were not prepared by the County and, therefore, were not submitted to the grantor agency. As a result, these reports were unavailable for audit. Cause: The Aviation Department continued working through a backlog of previously unsubmitted grant reports. The Department has been coordinating with the FAA to address historical non‑submission and ensure all required reports are submitted. While progress has been made, the volume of prior‑year reports and ongoing staffing constraints have contributed to delays in completing and submitting the remaining backlog. Effect: The County’s failure to submit all the required reports for each of its three Airport Improvement Program grants resulted in noncompliance with FAA reporting requirements under 2 CFR §200.328 and §200.329. This lack of reporting may impact the County’s ability to demonstrate proper stewardship of federal funds, delay reimbursement processing, and potentially affect future grant eligibility or funding decisions. Repeat Finding: Finding is a repeat finding from the prior year (2024-006). Recommendation: CLA recommends that the County continue providing staff with training related to identifying and complying with grant reporting requirements. In addition, CLA recommends that the County maintain and enhance tracking procedures, such as a monitoring checklist, to ensure all required grant reports including those related to prior‑year activity are submitted accurately and in a timely manner. Views of responsible officials: There is no disagreement with the audit finding.

Federal agency: Federal Aviation Administration Federal program title: Airport Improvement Program Assistance Listing Number: 20.106 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: July 1, 2023 to June 30, 2024 Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria: Federal Aviation Administration (FAA) guidelines require Airport Improvement Program recipients to submit periodic financial reports, including SF-425 (Federal Financial Report), Form 5100- 127 (Operating and Financial Summary), Form 5100-126 (Financial Government Payment Report), Form 5370-1 (Construction Progress and Inspection Report), and Form SF-271 (Requests for Reimbursement) in accordance with 2 CFR §200.328 and §200.329. Condition: During our testing, we noted that for each of the County’s seven Airport Improvement Program grants, only Form SF-271 was submitted for the audit period, despite requirements to submit five distinct report types per grant. Questioned costs: None Context: We initially sampled 31 of 105 reports required to be submitted during the year by the granting agency. 11 of the 11 SF-271 reports were received from the county and tested without exception. The department explained that Forms SF-425, 5100-127, 5100-126, and 5370-1 had not been submitted for the year under audit and therefore could not be provided. Cause: The aviation department was previously not aware of the reporting requirements of the grant. When the department became aware of the requirements they began working with the FAA to ensure all required reports were submitted. The delay in becoming aware of these requirements resulted in a significant backlog to be submitted which was exacerbated by understaffing at the department. Effect: The County’s failure to submit four of the five required reports for each of its seven Airport Improvement Program grants resulted in noncompliance with FAA reporting requirements under 2 CFR §200.328 and §200.329. This lack of reporting may impact the County’s ability to demonstrate proper stewardship of federal funds, delay reimbursement processing, and potentially affect future grant eligibility or funding decisions. Repeat Finding: This is not a repeat finding. Recommendation: CLA recommends that the County provide staff with training related to identifying and complying with grant requirements. Additionally, CLA recommends that the County implement tracking procedures, such as a monitoring checklist, to ensure all required reports are submitted in a timely manner. Views of responsible officials: There is no disagreement with the audit finding.

Federal agency: Centers for Medicare and Medicaid Services Federal program title: Medical Assistance Program Assistance Listing Number: 93.778 Pass-Through Agency: State of California, Department of Health Care Services Pass-Through Number(s): N/A Award Period: July 1, 2023 to June 30, 2024 Type of Finding: Significant deficiency in Internal Control over Compliance, Other Matters Criteria: As required at 42 CFR 435.916, states must renew MAGI-based determinations of eligibility once every 12 months and no more frequently than once every 12 months. For non-MAGI beneficiaries, states must renew eligibility at least once every 12 months as described in the Medicaid state plan. Condition: During the review of 60 sampled cases, 2 cases were found where redeterminations were performed outside the required 12-month window, indicating non-compliance with federal renewal timing requirements. And one of the two cases were deemed ineligible during the re-evaluation. Questioned costs: None Context: Out of 60 sampled cases, 2 cases had redeterminations performed outside the federally required 12-month window. And one of the two cases were deemed ineligible during the re-evaluation. Additionally, of the 60 cases scheduled for lead or supervisor-level review, 6 were not completed in accordance with the review requirements. This gap in oversight may contribute to procedural inconsistencies and potential noncompliance with Medicaid renewal protocols. Cause: The delay in performing redeterminations beyond the required 12-month window was due to understaffing, which limited the team's capacity to process eligibility renewals in a timely manner. Additionally, the failure to complete scheduled lead/supervisor reviews in 6 cases was attributed to ineffective internal controls, including insufficient tracking and oversight mechanisms to ensure that supervisory reviews were consistently executed. Effect: Failure to perform redeterminations within the required 12-month timeframe may result in individuals retaining Medicaid coverage beyond their eligibility period, potentially leading to inaccurate benefit payments and noncompliance with federal regulations. Additionally, the absence of scheduled lead/supervisor reviews weakens oversight and quality assurance processes, increasing the risk of procedural errors, inconsistent eligibility determinations, and reduced program integrity. Repeat Finding: This is not a repeat finding. Recommendation: CLA recommends that the County implement or reinforce tracking procedures, such as a monitoring checklist, to ensure lead and supervisor reviews are completed and accountability is maintained. Additionally, CLA recommends that the County conduct targeted refresher training for staff and supervisors on renewal timelines and review protocols to strengthen procedural compliance and minimize errors. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Health and Human Services Federal Program Title: COVID-19 Epidemiology and Laboratory Capacity Program Assistance Listing Number: 93.323 Pass-Through Agency: California Department of Public Health Pass-Through Number(s): N/A Award Period: July 1, 2020 to June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter Condition: During our audit, we noted for the Enhancing Detection Expansion grant, which is part of the Epidemiology and Laboratory Capacity program, the County submitted one report to the granting agency that did not include all expenditures incurred for the program. Criteria: Grant compliance requires that the County submit quarterly expenditure reports to the California Department of Public Health of all expenditures incurred for the program within a particular timeframe. Questioned Costs: None. Context: CLA reviewed 19 reports submitted to the granting agency across four different grants for the Epidemiology and Laboratory Capacity Program. We discovered one report that did not contain all expenditures shown on the Schedule of Expenditures of Federal Awards (SEFA) for the program. Effect: The County underreported expenditures for the program. Cause: The grantor requires the reports to be sent by a certain date. At the time of the due date, the County had not completed their closing procedures, and were still reviewing expenditures incurred for the program. The report was sent prior to the completion of this review. Repeat Finding: Not a repeat finding. Recommendation: We recommend the County review their reports in a timely fashion and complete their closing procedures in time to comply with grant requirements. Views of Responsible Officials: There is no disagreement with the audit finding.