County auditor flags weaknesses in ARPA workforce grant oversight, issues 10 recommendations

Washington County Auditor Adams Swanberg on Dec. 17 presented an audit of the county's ARPA workforce development grant that found lapses in grant administration, contract development and monitoring for community partners who received subawards.

The audit, led by senior management auditor Sherry Kirk, concluded the county lacked written grant policies and procedures, awarded and implemented contracts after providers had already begun services, relied on unvalidated partner reporting, and had insufficient financial controls. "What we found was the county did not have grant administration policies and procedures that they needed in order to implement the ARPA grant," Kirk told the Board during the presentation.

The report found contracts were delayed between 123 and 277 days and that eight of nine community partners began work before contracts were executed. The auditors said the county's risk-assessment tool lacked transparent methodology and produced scores that did not reflect program risks. Federal compliance requirements for verifying beneficiary eligibility were not included in contracts, leading partners to rely largely on self-attestation, the audit said. Auditors also identified duplicate and nonresident beneficiaries and instances where household income exceeded allowable thresholds in partner-submitted records.

On financial controls, auditors said monthly partner reporting requirements were limited to a general ledger and a template, with few supporting documents required routinely; auditors cited missing invoices, timesheets and case plans tied to beneficiary payments. The audit also flagged incorrect application of an indirect cost rate in partner claims, a recurring error across several partners.

"We made a total of 10 recommendations to address each of the findings," Kirk said, outlining recommendations that included countywide grant procedures, updates to contract-administration Policy 403, a documented contract-administration training process, new and revised contracts aligned to the county's ARPA framework and federal compliance, a new risk-assessment tool, contract language requiring beneficiary eligibility documentation, a grant monitoring plan, data-verification processes, improved internal financial controls, and review of indirect costs.

County management provided a written response read into the record by county staff. The response agreed with most recommendations and said the finance department and county administrator will create and implement countywide grant procedures, update Policy 403, require contract-administration training, improve monitoring and documentation practices, and develop a risk-assessment tool with an 18-to-24-month target tied to staffing and budget transformation efforts. The management response disagreed with the recommendation to review and monitor indirect costs, saying the county relied on federally negotiated indirect-rate letters and followed 2 C.F.R. —6 200 guidance for federal awards.

Commissioners asked follow-up questions. Commissioner Roy Rogers asked whether the audit would be expanded to other federal grants; Swanberg said that was not the auditor's intention at this time. Commissioner Willie and others thanked auditors for the report and emphasized that staff had worked under difficult conditions to disburse funds during the pandemic. Swanberg and Kirk noted limitations in partner documentation and data access during fieldwork, which affected the auditors' ability to verify some program-level claims.

The auditors said the workforce-development program was new, staffed by new personnel and operating under pressure to distribute one-time ARPA funds quickly. The audit and the county's management response both stressed that the county will use the findings to strengthen grant administration going forward. No formal board action was taken on the audit report at the meeting; the auditors opened the floor for questions under the meeting's time limits and then closed the presentation.