EL PASO, COUNTY OF

2025-001- Late Submission of Semi-Annual Federal Financial Report (Noncompliance) FEDERAL AGENCY: U.S. Department of Commerce PROGRAM TITLE: Economic Development Cluster FEDERAL ASSISTANCE LISTING NUMBER: 11.307 AWARD YEAR: June 28, 2021 – June 28,2026 COMPLIANCE REQUIREMENT: Reporting – Financial and Performance Reports TYPE OF FINDING: Noncompliance CONDITION: El Paso County submitted the semi-annual federal financial report for the reporting period ending 09/30/2025 on 11/10/2025. CRITERIA: According to the Federal Financial Report Instructions, semi-annual interim reports must be submitted no later than 30 days after the end of the reporting period. For the period ending 09/30/2025, the required submission deadline was 10/30/2025. QUESTIONED COSTS: None Identified EFFECT: The recipient is out of compliance with federal reporting requirements, which may impact the timely oversight of federal funds by the Economic Development Administration (EDA). CAUSE: The report was submitted 11 days after the regulatory deadline. AUDITOR’S RECOMMENDATION: The recipient should implement internal controls to ensure all future interim FFRs are prepared and submitted within the 30-day window following the reporting period end date. MANAGEMENT RESPONSE: The El Paso County Auditor’s Office, Grants Compliance and Audit Division, is developing and implementing internal controls to ensure compliance with federal and state reporting requirements. RESPONSIBLE PARTY: Audit Manager Senior, Grants Compliance and Audit Division TIMELINE FOR CORRECTIVE ACTION: September 30, 2026

2023-002 – Coronavirus State and Local Fiscal Recovery Funds (ALN 21.027) – Pass-thru Grantor’s No. – SLFRP1174. Department of the Treasury. Passed-thru the Office of the Inspector General. – Procurement Compliance and Internal Control over Procurement Criteria: In accordance with the Uniform Grant Guidance (2 CFR 200.324), the County is required to comply with and maintain effective internal controls over the procurement requirements of the federal award, including the requirement to perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold, including contract modifications. In addition, the County must negotiate profit as a separate element of the price for each contract in which there is no price competition and in all cases where cost analysis is performed. Condition Found: The department did not document a cost or price analysis or profit negotiations for a sole source procurement action. Monitoring procedures to ensure compliance with the cost or price analysis and profit negotiations requirements were not in place. Cause: The department which initiated the sole source purchase was not familiar with the procurement requirement of the Uniform Grant Guidance for cost or price analysis or profit negotiations, and compliance with the cost or price analysis or profit negotiations requirements were not monitored. Effect: The County is not in compliance with the procurement requirements of the Uniform Grant Guidance related to the cost or price analysis. The design of internal control over compliance is ineffective in preventing and detecting noncompliance with the cost or price analysis or profit negotiations procurement requirement. Questioned Costs/Basis: Known questioned costs were determined by totaling the items tested that were found to be noncompliant with the applicable procurement requirements noted above made to the vendor under the program. Known questioned costs are $116,610 which represents the total paid to the vendor tested in the sample. Context: From a population of ten vendors totaling $6,690,578, three vendors were tested individually totaling $5,075,676, with zero questioned costs identified. Additionally from the remaining vendors, a sample of two totaling $256,728 was selected for testing. The test found payments to one vendor that were not in compliance and the related questioned costs totaled $116,610. The sample was a statistically valid sample. Repeat Finding: No Recommendation: We recommend the County provide ongoing procurement training to all departments. Internal control relating to monitoring procedures should also be implemented. These internal controls should include designing mechanisms that ensure an independent cost or price analysis, and if applicable, profit negotiations, are performed and well documented when awards funded with state or federal funds exceed the simplified acquisition threshold. The method and degree of cost or price analysis is dependent on the facts surrounding the procurement situation, but as a starting point, the grantee must make independent estimates before receiving bids or proposals. Caution should be exercised when awarding sole-source vendors that are funded with state or federal grants, and in all cases where cost analysis is performed, as this requires profit negotiation. Additionally, the purchasing department should implement monitoring procedures to help ensure all purchases and contracts are routed to the purchasing department and cost and price analysis are performed, if required. Management Response: The County Administrative Department agrees with the findings. The training deficiencies are county-wide and include all areas of the financial support department. We have established a Financial Management Training program to be implemented October 1, 2024. Weekly audits for buyers have been implemented to monitor the use of vendors and to avoid exceeding the statutory thresholds. To meet the requirement of Cost/Price Analysis when Federal/State funds are being used, the Bid & Award Request Form has been revised. The Bid & Award Request Form is provided to end users when starting the formal solicitation process.

2023-003 – All Federal Programs – Compliance - Data Collection Form Criteria: In accordance with the regulation found in the Uniform Guidance 2 CFR 200.512(a), the audit package and the data collection form shall be submitted to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Condition Found: The County did not submit the data collection form to the Federal Clearinghouse Single Audit by the required due date, June 30, 2024, in accordance with the federal requirements for the fiscal year ended September 30, 2023. Cause: The County fell behind in their financial reporting and thus did not meet the single audit submission deadline due to implementation of recent effective GASB standards (GASB 96) plus the additional financial reporting required of past GASB standards (GASB 87). With several GASB standard implementations, preparing the financial report requires additional time during the fiscal year to collect the necessary information and make proper evaluations but also requires time after fiscal year end to prepare the necessary entries and note disclosures. Effect: The County is not in compliance with federal requirements. Questioned Costs/Basis: N/A. Context: One out of one required submissions for FY 2023. Repeat Finding: No Recommendation: We recommend the County submit the data collection form upon completion of the audit for the fiscal year ended September 30, 2023. Going forward, we recommend management evaluate the resources (i.e. staffing and time) needed to prepare the County's financial report to ensure completion by the required due date. Management Response: The County Auditor’s Office agrees with the finding and the recommended procedures are in the process of being implemented. The County Auditor’s Office have requested for an additional position in the FY 2026 budget and will be using a temporary position to work the FY 2024 Financial reporting.