{"database": "mytown-research", "table": "audit_findings", "rows": [[5, "wa-sao", "1019842", "2016-001", null, "WA", "Ferry County", "County", "0113", "53019", "no_match", "Washington State Auditor's Office", "Financial and Federal audit \u2014 Ferry County", "Financial and Federal", 2016, "2016-01-01", "2016-12-31", "2019-02-19", "federal_award_compliance", "material_weakness", null, null, "The County\u2019s internal controls over financial statement preparation were inadequate to ensure accurate reporting of federal expenditures", "Background \nCounty management is responsible for designing and follo wing internal controls \nthat provide reasonable assurance regarding the reliability of financial reporting. \nOur audit identified deficiencies in internal controls that hindered the County\u2019s \nability to produce reliable financial statements. \nAll local gover nments in Washington that spend federal funds must prepare a \nSchedule of Expenditure of Federal Awards (SEFA) as part of the annual financial \nreport. Title 2 Part 200 Uniform Administrative Requirements, Cost Principles and \nAudit Requirements for Federal A wards (Uniform Guidance) requires grantees to \nidentify, in their accounts, all federal program awards received and spent and to \nreport all federal awards spent on the SEFA each fiscal year. \nDescription of Condition \nOur audit identified a deficiency in internal controls over financial reporting that \nrepresents a significant deficiency. The County\u2019s Accounting Department primarily \nrelied on individual departments to submit complete and accurate federal grant \nexpenditure information to the Accounting Depar tment for reporting. The \nDepartment did not have an adequate secondary review process of this information \nto verify whether grant expenditures were included in the proper period. \nCause of Condition \nThe Accounting Department compares federal grant revenue received in the year \nto federal expenditures reported by its departments to confirm that those \nexpenditures are reasonable. However, the Accounting Department did not also \nconsider reimbursements that County departments receive subsequent to year-end. \nIn addition, prior Public Works staff did not have sufficient knowledge of federal \nrequirements to report federal grant expenditures accurately. The Public Works \nDepartment inaccurately provided information for federal grant reimbursements, \nrather than expenditures. \n \nWashington State Auditor\u2019s Office Page 7 \nEffect of Condition \nInaccurate financial reports limit access to financial information used by County \nofficials, the public, state and federal agencies and other interested parties. \nInaccurate financial statements also can delay or hinder the audit process and \nincrease audit costs. \nThe County did not include $512,879 from a Highway Planning and Construction \ngrant on its SEFA. The omitted expenditures were significant to the County\u2019s major \nfederal program and required further audit examination for compliance with federal \nrequirements. \nInaccurate reporting of federal expenditures can also affect the amount of audit \ncoverage required and delay an audit beyond the required nine -month reporting \ndeadline. Should County staff not identify errors or omit ted financial information \nin a timely manner, the County might not meet its federal reporting deadline and \ncould jeopardize future federal funding. \nRecommendation s \nWe recommend that the County: \n\uf0b7 Improve controls over the accuracy and completeness of SEFA preparation \n\uf0b7 Provide training to all County staff responsible for federal grant reporting \nCounty\u2019s Response \nIn 2016 there was a misunderstanding regarding whether the expenditures or the \nrevenue should be reported. The confusion was due to the difference in reporting \nof FEMA revenues on the Schedule 16 where as other federal projects report \nexpenditures. \nAuditor\u2019s Remarks \nWe appreciate the County\u2019s commitment to resolving the issues noted. \nApplicable Laws and Regulations \nRCW 43.09.200 Local government account ing \u2013 Uniform system of accounting, \nrequires the State Auditor to prescribe the system of accounting and reporting for \nall local governments. \nGovernment Auditing Standards, December 2011 Revision, paragraph 4.23 \nestablishes reporting requirements related t o significant deficiencies or material \n \nWashington State Auditor\u2019s Office Page 8 \nweakness in internal control, instances of fraud or abuse, and noncompliance with \nprovisions of law, regulations, contracts, or grant agreements. \nThe American Institute of Certified Public Accountants defines signific ant \ndeficiencies and material weaknesses in its Codification of Statements on Auditing \nStandards, section 265, Communicating Internal Control Related Matters Identified \nin an Audit, paragraph 7. \nThe Budgeting, Accounting, and Reporting System (BARS) manual, 3.1.3, Internal \nControl, requires each local government to establish and maintain an effective \nsystem of internal controls that provides reasonable assurance that the government \nwill achieve its objectives. \n \n \nWashington State Auditor\u2019s Office Page 9 \nSCHEDULE OF FEDERAL AWARD FINDI NGS AND \nQUESTIONED COSTS \nFerry County \nJanuary 1, 2016 through December 31, 2016", "https://portal.sao.wa.gov/ReportSearch/Home/ViewReportFile?arn=1019842&isFinding=false&sp=false", "2026-07-30 13:24:54"]], "columns": ["rowid", "source", "report_number", "finding_number", "muni_id", "state", "entity_name", "entity_type", "entity_ext_id", "place_geoid", "match_method", "auditor", "report_title", "audit_type", "fiscal_year", "period_start", "period_end", "published_date", "finding_category", "severity", "questioned_cost", "cost_basis", "finding_title", "finding_text", "report_url", "fetched_at"], "primary_keys": ["rowid"], "primary_key_values": ["5"], "units": {}, "query_ms": 3.976081992732361, "source": "MyTown", "source_url": "https://mytown.theboringparts.com", "license": "CC BY 4.0", "license_url": "https://creativecommons.org/licenses/by/4.0/"}