Harris County

Noncompliance Finding and Significant Deficiency – Reporting Criteria: 2CFR 200.303 establishes that grant recipients should establish, document, and maintain effective internal control over federal awards, including controls over reviews of reports and compliance with reporting requirements. 2 CFR 200.239(c) establishes that grant recipients should submit performance reports timely. Condition: During our testing, D&T inspected 16 programmatic reports whereby there should have been appropriate levels of review and compliance with submission requirements. Two reports were submitted to the granting agency late, 3 reports did not have any evidence of review and approval of the reports prior to submission, and 4 reports did not have proper segregation of duties as related to the preparation and submission of the reports. Cause: For the late reports, department management did not monitor and ensure that the reports were submitted in a timely manner due to other emergency events at the County taking priority. For the reports with lack of review support, management did not maintain supporting documentation of the review performed on the reports prior to submission. Lastly, for the reports without proper segregation of duties, Harris County did not design or implement a segregation of duties control to ensure separate preparer and reviewer. Effect: Failure to review and approve the reports prior to submission to the grantor, late submission of the reports, and lack of segregation of duties increases the risk of submitting an inaccurate report and may result in the early termination of the award, reimbursement of award funds, and cessation of future funding. Recommendation: Management should establish detailed and precise controls to ensure timely reviews, clear identification of preparers and reviewers, and retain evidence of such reviews to ensure compliance with grant requirements. Views of Responsible Officials: See Corrective Action Plan County Contact Person(s): Richard Williams, Deputy Chief Financial Officer of Harris County Public Health Danielle Calhoun, Associate Director of Harris County Public Health Allison Hare, Director of Public Health Emergency Preparedness Beatrice Best, Lead Grant Program Supervisor of Harris County Public Health

Noncompliance and Significant Deficiency in Internal Control Over Reporting Criteria: Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA), direct recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Condition: During our testing, D&T inspected 3 separate grants or ALN’s with 14 subrecipients for completion of the FFATA report. D&T selected 11 subrecipients for testing and identified Harris County did not submit 11 FFATA reports within FSRS. As such, the control was not designed or implemented. Cause: Grant management was not aware of the FFATA reporting requirement. Effect: Failure to report sub-award data could potentially constitute an event of material noncompliance with the award contract, which may result in the early termination of the grant award, non-reimbursement of grant funding, or cessation of future funding. Context: Of 14 subrecipients related to 3 separate grants, D&T tested 11 and identified 11 instances of FFATA report not submitted. Recommendation: Grant management should ensure that they have a mechanism for reporting subaward data in the FSRS and a process for informing departments of all parts of the applicable requirements. Views of Responsible Officials: See Corrective Action Plan County Contact Person(s): 93.686: Richard Williams, Deputy Chief Financial Officer, Harris County Public Health 14.218: Craig Atkins, Chief Financial Officer, Harris County Housing and Community Development 16.575: Tom Hargis, Director Grants and Partnerships, Office of County Administration.

2024-008–Noncompliance and Significant Deficiency in Internal Control Over Period of Performance Criteria: Per 2CFR 200.1, the requirements of period of performance are defined as the time interval between the start and end date of a Federal award, which may include one or more budget periods. Each grant has a specified period of performance for the period which should be followed in accordance with the grant agreement. Condition: During our testing, D&T identified expenditures which were inappropriately classified to the wrong grant year for period of performance. Cause: The department did not perform a detailed review of the period of performance due to department turnover. Effect: Failure to ensure expenses are properly reviewed and coded to the correct period or grant could result in noncompliance with the award contract, which may result in the early termination of the grant award, non-reimbursement of grant funding, or cessation of future funding. Recommendation: Grant management should ensure that a detailed review of the period of performance is performed. Views of Responsible Officials: See Corrective Action Plan County Contact Person(s): Leah Barton, Interim Executive Director of Public Health

2024-009– Significant Deficiency in Internal Control Over Procurement Criteria: Per OMB 2 CFR 200.213, a pass-through entity must verify that the subrecipient is not excluded or disqualified from receiving or participating in Federal Awards. Further, per Harris County’s Procedure for Executive Order 12549 Debarment and Suspension, prior to award in Commissioners Court, the Harris County Purchasing Office will determine if a vendor has been debarred or suspended by the Federal Government. Condition: During our testing, D&T identified Harris County could not provide evidence indicating that 2 of the 3 vendors selected for testing were properly checked against the excluded parties list before entering into a contract with the vendor. It was determined that the entities were neither suspended nor debarred as of the testing date. Cause: The County failed to search all vendors for suspension and debarment and maintain evidence of the search within the bid package. Effect: Grant funded contracts could be awarded to vendors that are suspended/debarred, which would be in violation of federal regulations and may result in the early termination of the grant award, non-reimbursement of grant funding, or cessation of future funding. Context: We were not able to receive evidence for 2 of 3 vendor selections to support Harris County verified the vendors were not suspended/debarred before entering into contracts with the vendors. Recommendation: Harris County should implement policies in alignment with the OMB 2 CFR 200.213 (Suspension and debarment) to ensure that all vendors used in federal award programs are not suspended or debarred and that documentation of this procedure is maintained in the vendor files prior to entering into a contract and expending funds. Views of Responsible Officials: See Corrective Action Plan County Contact Person(s): Paige McInnis, Purchasing Agent Tiffany Harris, Compliance Manager

2023-004– Noncompliance and Significant Deficiency in Internal Control Over Eligibility Criteria: The grant agreement requires the County to comply with the following eligibility criteria when determining eligibility for inmates: 1) incarceration for 4 consecutive days, 2) undocumented status, and 3) conviction of a felony or two misdemeanors. Condition: Harris County did not retain and could not provide evidence indicating that 1 of 40 inmate selections met the third eligibility requirement. Cause: The Sheriff’s Department was not able to provide sufficient eligibility documentation because the criminal databases the Sheriff’s Department uses to support eligibility determinations are on a live basis. Thus, for 1 out of 40 selections, the eligibility information could not be provided to evidence conviction of a felony or two misdemeanors. Effect: Ineligible inmates could be included in the data submitted to the granting agency and potentially impact funding received. Context: We were not able to receive evidence of eligibility for 1 of 40 inmate selections to support either a felony or two misdemeanors. However, there is not a direct correlation between the number of inmates served, the total costs incurred by the County, and the funding received. Thus, an amount for questioned costs cannot be determined. Recommendation: Harris County should implement procedures to ensure the Sheriff’s department maintains the supporting records for each inmate to demonstrate that the eligibility requirements were met. Views of Responsible Officials: See Corrective Action Plan County Contact Person(s): Michael Lanham, Director of Finance Harris County Sheriff’s Office