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A T <br /> 18 <br /> Orange County, North Carolina <br /> Audit Finding <br /> • 2023-001 Reporting of Employee Costs to NCDHHS <br /> In our testing of employee costs charged to the Medicaid and SNAP programs, we noted four (4) total instances <br /> (three (3) out of forty (40) for Medicaid and one (1) out of forty (40) for SNAP) where the employee's day sheet <br /> (where time is tracked by service code in 6-minute increments) included more time than the employee's approved <br /> timesheet for the week. <br /> No questioned costs noted. <br /> Management Points (Recommendations) <br /> • Capitalization Thresholds for Right-to-Use Assets <br /> Over the last two (2) fiscal periods, the County was required to implement the provisions of two (2) new accounting <br /> standards (GASB Statement No. 87, Leases and GASB Statement No. 96, Subscription-based Information Technology <br /> Arrangements) that have significantly changed the way local governments account for leasing activities and <br /> information technology (IT) contracts. These new standards have created a new class of asset that is recorded in <br /> the County's statement of net position known as a "right-to-use" asset. Similar to capital assets, these right-to-use <br /> assets are capitalized and amortized over the life of the underlying agreement(s) or underlying asset's useful life <br /> (whichever is shorter). We recommend the County adopt a capitalization threshold for recording right-to-use assets <br /> in the same way that the County has a capitalization threshold for recording tangible capital assets. Establishing a <br /> threshold will make it easier for the County to more efficiently evaluate agreements that could give rise to the <br /> recording of right-to-use assets and eliminate what could be time spent on items that are immaterial to the County's <br /> financial statements. <br /> Auditor's Discussion &Analysis (AD&A) Going Further. <br /> June 30, 2023 <br />