The State Auditor found inadequacies in Douglas County’s 2021 Audit Report, detailing inadequacies in their reported use of COVID-19 relief funds.

On Feb. 17, State Auditor Pat McCarthy shared that the county lacked adequate internal controls that tracked how they were using COVID-19 Fiscal Recovery Funds.

These internal controls include basic understanding of program requirements, monitoring the effectiveness of funds, and retaining documentation for auditing purposes. 

COVID-19 Fiscal Recovery Funds were used towards curtailing the negative effects of the pandemic, whether it be by paying essential workers, or investing in county infrastructure.

In 2021, the county spent a total of $1,040,917 in relief funds.

Approximately $276,530 in grant funds are in question, which the county used towards road project costs.

The county failed to determine whether program funds were used for costs incurred before the required period of time, between March 3, 2021, through December 31, 2024.

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The county was also audited for not validating whether businesses they were contracting with were previously suspended or debarred from working with the federal government.

The county failed to verify whether five contractors were eligible in using the $909,801 in grant money they received. 

In a 2020 audit, Douglas County was previously audited for the following errors found in their financial reports:

  • Understated total beginning cash and investments by about $2 million.
  • Overstated revenues and other increases by about $730,000.
  • Overstated expenditures and other decreases by about $1 million.
  • Understated total ending cash and investments by about $2.7 million.
  • All investments to other local governments were reported in a custodial fund, but did not report an approximate $13.6 million in an investment trust fund and about $97.6 million in an external investment pool fund. 

These errors were later fixed by management, resulting in Douglas County Treasurer Natalie Marx getting suspended and the county filing a lawsuit over her conduct related to the payroll taxes and late fees.

You can read more about the 2021 Douglas County audit report here.

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