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19 <br /> 81AULDIN N4920shl-1, <br /> -1 ENKINS <br /> Comments, Recommendations, ORANGE COUNTY <br /> and Other Issues (Continued) NORTH CAROLINA <br /> Federal Awards — Significant Deficiency <br /> 2016-006 Monitoring Controls over 1571 Reporting <br /> Sound internal controls require that all financial and performance reports be reviewed in detail by a knowledgeable <br /> person independent of the preparation process to ensure the accuracy and the completeness of the reports. This <br /> review should include both the verification and validation of the information included within the report, but also the <br /> accuracy of the information within the report. The reviewer should be able to verify the source information to the <br /> supporting sub-ledger information to ensure the valuation of the information included in the reports, the accuracy of the <br /> data, and the completeness of the information. During our testing of the preparation of the monthly 1571 report, as <br /> required by the North Carolina Department of Health and Human Services, we noted the County does not have <br /> sufficient controls in place to perform the necessary monitoring reviews to properly identify, summarize, and prepare <br /> the reports. By not having a detailed review of the report preparation and submission, the County is exposed to the risk <br /> of errors being included in the report. As the aggregation of information is very manual, with little direct monitoring <br /> controls, the County is at risk for errors to occur in the monthly reporting of federal and state expenditures and <br /> services. This report also provides information for the preparation of the County's schedule of expenditures of federal <br /> and state awards and any errors in this report would also result in an error to that schedule — see further discussion in <br /> finding 2016-005. <br /> 15 <br />