Section III: 9-2014- Material Weakness

(Taken directly from the auditors report; items in parentheses are my own statements)

Federal and State Award Finding and Questioned Costs
9-2014 Material Weakness

Program: Operation Stonegarden Grant; CFDA Number 97.067 and U.S. Presidential Permit; CFDA Number 20.205

Criteria: Federally funded grant agreements require specific supporting documentation and specific time requirements for documentation to be submitted when applying for reimbursement.
Condition: Reimbursement requests are being submitted to the grantor that do not have the required supporting documentation and are past the prescribed time period as outlined in the grant. The non-compliance results in a material disallowed cost amount the the County will be held liable for should an appeal not be granted.
Questioned Costs: The sub-recipient separate entity (PISD Police) received $64,871 in federal funding in which the supporting documentation did not meet the requirements as outlined by the Operation Stonegarden grant. The compliance requirement of the U.S. 67 Presidential Permit requires form FHWA-1589, Monthly Employment Report, to be submitted each month to submit this form to the State. No evidence of gathering this information was noted and the no dollar value is assigned to this finding. The compliance requirement of the U.S. 67 Presidential Permit allows a 90 day window of opportunity to submit costs for reimbursements. $12,970 was disallowed as a County employee submitted their time for reimbursement through the grant that was in excess of a year's time from the point the costs were incurred versus the date of the invoice.
Context: Material disbursements for the Operation Stonegarden grant were inspected of which one novice totaled $22,626. Once the conflict of interest was discovered all invoices to the sub-recipient separate entity (PISD Police) were inspected for fraud and abuse. Grant compliance requirements were determined by reading the approved grant documentation for each grant selected as a major program. Further inquiry and inspection determined necessary supporting documentation and time requirements were not being met on the sample of the population that was audited.
Cause: The County has gone through multiple grant administrators and has shifted the burden of document review to many different positions within the County over the years. This lack of consistency has caused the supporting documentation review prior to submission to be of a diminished quality.
Effect: A lack of supporting documentation could cause the County to not be reimbursed for expenditures it has incurred and budgeted for with the expectation of being reimbursed. This can also have a negative effect on the County's cash position if an audit from a granting agency is performed and a material amount of expenditures are disallowed.
Recommendation: A checklist that corresponds to each type of expenditure for each grant held by the County should be developed at the grant's inception so that in the event of inconsistency in the County's personnel choice decision to administer the grant there is a control in place that provides consistency in the required supporting documentation before the amount is requested for reimbursement.

(Now that the County has actual people in the relatively new Office of Management and Budget, I am hoping this particular problem will clear up. The County may be on the hook for those two amount. The Presidential Permit reimbursement amount refers to Jake Giesbrecht, who is heading that project. I seem to recall a Commissioners Court about a year ago authorizing payment of those back hours. County may be on the hook for those, since the submission to the grant was late. $64,871 refers to the overtime hours for the PISD Police, covered somewhat in the last post. There's so much more to that story... )