ATTCHMNT F SINGLE AUDIT MC JUNE 2016.PDF

ATTACHMENT F- SINGLE AUDIT REP, MARICOPA COUNTY,
YEAR ENDED JUNE 30, 2016 (FOR ORIGINAL COPY)
FTF-RC011-19-0612-00 Page 175 of 227

Maricopa County
Single Audit Report
ARIZONA
Debra K. Davenport
Auditor General AuditorGeneral
Making a Positive Difference

The Auditor General is appointed by the Joint Legislative Audit Committee, a bipartisan committee composed of
five senators and five representatives. Her mission is to provide independent and impartial information and specific
recommendations to improve the operations of state and local government entities. To this end, she provides
financial audits and accounting services to the State and political subdivisions, investigates possible misuse of
public monies, and conducts performance audits and special reviews of school districts, state agencies, and the
programs they administer.
The Joint Legislative Audit Committee
Senator Bob Worsley, Chair Representative Anthony Kern, Vice Chair
Senator Judy Burges Representative John Allen
Senator John Kavanagh Representative Rusty Bowers
Senator Sean Bowie Representative Rebecca Rios
Senator Lupe Contreras Representative Athena Salman
Senator Steve Yarbrough (ex officio) Representative J.D. Mesnard (ex officio)
Contact Information
Arizona Office of the Auditor General
2910 N. 44th St.
Ste. 410
Phoenix, AZ 85018
(602) 553-0333
www.azauditor.gov

Auditors Section
Independent auditors report on internal control over financial reporting and on
compliance and other matters based on an audit of basic financial statements
performed in accordance with Government Auditing Standards 1
Independent auditor& report on compliance for each major federal program; report
on internal control over compliance; and report on schedule of expenditures of federal
awards required by the Uniform Guidance 3
Schedule of Findings and Questioned Costs 7
Summary of auditors' results 7
Financial statement findings 9
Federal award findings and questioned costs 14
County Section
Schedule of expenditures of federal awards 25
Notes to schedule of expenditures of federal awards 31
County Response
Corrective action plan
Summary schedule of prior audit findings
Report Issued Separately
Comprehensive annual financial report
Maricopa County 1 Year Ended June 30, 2016
PAGE i

Arizona Auditor General Maricopa County f Year Ended June 30, 2016
PAGE ii

STATE OF ARIZONA
DEBRA AUDITOR K. DAVENPORT, GEN 7tAL CPA OFFICE OF THE DEPUTY MELANIE AUDITOR M. CHESNEY GENERAL
AUDITOR GENERAL
Independent auditors' report on internal control over financial reporting and
on compliance and other matters based on an audit of basic financial
statements periormed in accordance with Government Auditing Standards
Members of the Arizona State Legislature
The Board of Supervisors
Maricopa County, Arizona
We have audited, in accordance with U.S. generally accepted auditing standards and the standards
applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller
General of the United States, the financial statements of the governmental activities, business-type activities,
discretely presented component unit, each major fund, and aggregate remaining fund information of
Maricopa County as of and for the year ended June 30, 2016, and the related notes to the financial
statements, which collectively comprise the County's basic financial statements, and have issued our report
thereon dated February 28, 2017. Our report includes a reference to other auditors who audited the financial
statements of the Stadium District, Risk Management, Employee Benefits Trust, Housing Authority, and
Industrial Development Authority, as described in our report on the County's financial statements. This report
includes our consideration of the results of the other auditors' testing of internal control over financial
reporting and compliance and other matters that are reported on separately by those other auditors.
However, this report, insofar as it relates to the results of the other auditors, is based solely on the reports
of the other auditors.
Internal control over financial reporting
In planning and performing our audit of the financial statements, we considered the County's internal control
over financial reporting (internal control) to determine the audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinions on the basic financial statements, but not for the
purpose of expressing an opinion on the effectiveness of the County's internal control. Accordingly, we do
not express an opinion on the effectiveness of the County's internal control.
Our consideration of internal control was for the limited purpose described in the preceding paragraph and
was not designed to identify all deficiencies in internal control that might be material weaknesses or
significant deficiencies, and therefore, material weaknesses or significant deficiencies may exist that were
not identified. However, as described in the accompanying schedule of findings and questioned costs, we
and the other auditors identified certain deficiencies in internal control over financial reporting that we
consider to be material weaknesses and significant deficiencies.
2910 1I14Shtirl-1 44" TREET SUITE 410 - P1-142)ENIX, AIRIZC.1.1.0. 85018 (602) 553-0833 - EA.X (502) 553-0051

A deficiency in internal control exists when the design or operation of a control does not allow management
or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct,
misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in
internal control such that there is a reasonable possibility that a material misstatement of the County's basic
financial statements will not be prevented, or detected and corrected, on a timely basis. We consider the
deficiencies described in the accompanying schedule of findings and questioned costs as items 2016-01
and 2016-02 to be material weaknesses.
A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe
than a material weakness, yet important enough to merit attention by those charged with governance. We
consider the deficiencies described in the accompanying schedule of findings and questioned costs as
items 2016-03, 2016-04, 2016-05, and 2016-06 to be significant deficiencies.
Compliance and other matters
As part of obtaining reasonable assurance about whether the County's basic financial statements are free
from material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts, and grant agreements, noncompliance with which could have a direct and material
effect on the determination of financial statement amounts. However, providing an opinion on compliance
with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion.
The results of our tests and those of the other auditors disclosed no instances of noncompliance or other
matters that are required to be reported under Government Auditing Standards.
Maricopa County's response to findings
Maricopa County's responses to the findings identified in our audit are presented in its corrective action plan
at the end of this report, The County's responses were not subjected to the auditing procedures applied in
the audit of the basic financial statements, and accordingly, we express no opinion on them.
Purpose of this report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the County's internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the County's internal control and compliance. Accordingly,
this communication is not suitable for any other purpose.
Jay Zsorey, CPA
Financial Audit Director
February 28, 2017
PAGE 2

STATE OF ARIZONA
DEBRA AUDITOR K. DAVENPORT, GENERAL CPA OFFICE OF THE DEPUTY MELANIE AUDITOR M. CHESNEY GENERAL
AUDITOR GENERAL
Independent auditors' report on compliance for each major federal program;
report on internal control over compliance; and report on schedule of
expenditures of federal awards required by the Uniform Guidance
Members of the Arizona State Legislature
The Board of Supervisors
Maricopa County, Arizona
Report on compliance for each major federal program
We have audited Maricopa County's compliance with the types of compliance requirements described in
the U. S. Office of Management and Budget (OMB) Compliance Supplement that could have a direct and
material effect on each of its major federal programs for the year ended June 30, 2016, except for the Section
8 Housing Choice Voucher (14.871) major federal program administered by the Housing Authority of
Maricopa County. That major federal program was audited by other auditors whose report has been
furnished to us, and our opinion, insofar as it relates to that major federal program's compliance with the
types of compliance requirements described in the OMB Compliance Supplement, is based solely on the
report of the other auditors. The County's major federal programs are identified in the summary of auditors'
results section of the accompanying schedule of findings and questioned costs.
Management's responsibility
Management is responsible for compliance with federal statutes, regulations, and the terms and conditions
of its federal awards applicable to its federal programs.
Auditors' responsibility
Our responsibility is to express an opinion on compliance for each of the County's major federal programs
based on our audit of the types of compliance requirements referred to above. We conducted our audit of
compliance in accordance with U.S. generally accepted auditing standards; the standards applicable to
financial audits contained in Government Auditing Standards, issued by the Comptroller General of the
United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform
Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain
reasonable assurance about whether noncompliance with the types of compliance requirements referred to
above that could have a direct and material effect on a major federal program occurred. An audit includes
examining, on a test basis, evidence about the County's compliance with those requirements and
performing such other procedures as we considered necessary in the circumstances.
2910 TIC,IIRTH 44-.. STREET' - LJI .r ..110 - 1.H€DEN1X, A.IRIZ.:DNA 86018 - (602) 662-0a3z - PAX (602) 553-0061

We believe that our audit and the report of the other auditors provide a reasonable basis for our opinion on
compliance for each major federal program. However, our audit does not provide a legal determination of
the County's compliance.
Basis for qualified opinion on Child Support Enforcement and Low-Income Home Energy Assistance
programs
As described in the accompanying schedule of findings and questioned costs, the County did not comply
with certain compliance requirements that are applicable to the major federal programs listed below,
Compliance with such requirements is necessary, in our opinion, based on our audit for the County to
comply with the requirements applicable to that program.
CFDA Finding
Program name number Compliance requirements number
Child Support Enforcement 93.563 Allowable costs/cost principles 2016-109
Low-Income Home Energy 93.568 Activities allowed and unallowed and 2016-110
Assistance allowable costs/cost principles
Qualified opinion on Child Support Enforcement and Low-Income Home Energy Assistance programs
In our opinion, except for the noncompliance described in the basis for qualified opinion paragraph,
Maricopa County complied, in all material respects, with the types of compliance requirements referred to
above that could have a direct and material effect on the Child Support Enforcement (93.563) and Low-
Income Home Energy Assistance (93.568) programs for the year ended June 30, 2016.
Unmodified opinion on each of the other major federal programs
In our opinion, based on our audit and the report of the other auditors, Maricopa County complied, in all
material respects, with the types of compliance requirements referred to above that could have a direct and
material effect on each of its other major federal programs identified in the summary of auditors' results
section of the accompanying schedule of findings and questioned costs for the year ended June 30, 2016.
Other matters
The results of our auditing procedures disclosed other instances of noncompliance that are required to be
reported in accordance with the Uniform Guidance and that are described in the accompanying schedule
of findings and questioned costs as items 2016-101, 2016-102, 2016-103, 2016-104, 2016-105, 2016-106,
2016-107, and 2016-108. Our opinion on each major federal program is not modified with respect to these
matters,
Report on internal control over compliance
The County's management is responsible for establishing and maintaining effective internal control over
compliance with the types of compliance requirements referred to above. In planning and performing our
audit of compliance, we considered the County's internal control over compliance with the types of
requirements that could have a direct and material effect on each major federal program to determine the
auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on
compliance for each major federal program and to test and report on internal control over compliance in
accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the
effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the
effectiveness of the County's internal control over compliance.
PAGE 4

Our consideration of internal control over compliance was for the limited purpose described in the preceding
paragraph and was not designed to identify all deficiencies in internal control over compliance that might
be material weaknesses or significant deficiencies, and therefore, material weaknesses 'or significant
deficiencies may exist that were not identified. However, as discussed below, we identified certain
deficiencies in internal control over compliance that we consider to be material weaknesses and significant
deficiencies.
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a
federal program on a timely basis. A material weakness in internal control over compliance is a deficiency,
or a combination of deficiencies, in internal control over compliance, such that there is a reasonable
possibility that material noncompliance with a type of compliance requirement of a federal program will not
be prevented, or detected and corrected, on a timely basis. We consider the deficiencies in internal control
over compliance described in the accompanying schedule of findings and questioned costs as items 2016-
103, 2016-105, 2016-109, 2016-110, 2016-111, and 2016-112, to be material weaknesses.
A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies,
in internal control over compliance with a type of compliance requirement of a federal program that is less
severe than a material weakness in internal control over compliance, yet important enough to merit attention
by those charged with governance. We consider the deficiencies in internal control over compliance
described in the accompanying schedule of findings and questioned costs as items 2016-101, 2016-102,
2016-104, 2016-106, 2016-107, and 201 6-1 08 to be significant deficiencies.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing
of internal control over compliance and the results of that testing based on the requirements of the Uniform
Guidance. Accordingly, this report is not suitable for any other purpose.
Maricopa County's response to findings
Maricopa County's responses to the findings identified in our audit are presented in its corrective action plan
at the end of this report. The County's responses were not subjected to the auditing procedures applied in
the audit of compliance, and accordingly, we express no opinion on them.
Report on schedule of expenditures of federal awards required by the Uniform Guidance
We have audited the financial statements of the governmental activities, business-type activities, discretely
presented component unit, each major fund, and aggregate remaining fund information of Maricopa County
as of and for the year ended June 30, 2016, and the related notes to the financial statements, which
collectively comprise the County's basic financial statements. We issued our report thereon dated
February 28, 2017, that contained unmodified opinions on those financial statements. Our report also
included a reference to our reliance on other auditors. Our audit was conducted for the purpose of forming
our opinions on the financial statements that collectively comprise the County's basic financial statements.
The accompanying schedule of expenditures of federal awards is presented for purposes of additional
analysis as required by the Uniform Guidance and is not a required part of the basic financial statements.
Such information is the responsibility of the County's management and was derived from and relates directly
to the underlying accounting and other records used to prepare the basic financial statements. The
information has been subjected to the auditing procedures applied in the audit of the basic financial
statements and certain additional procedures, including comparing and reconciling such information
directly to the underlying accounting and other records used to prepare the basic financial statements or to
PAGE 5

the basic financial statements themselves, and other additional procedures in accordance with U.S.
generally accepted auditing standards by us and the other auditors. In our opinion, based on our audit, the
procedures performed as described previously, and the report of the other auditors, the schedule of
expenditures of federal awards is fairly stated in all material respects in relation to the basic financial
statements as a whole.
Jay Zsorey, CPA
Financial Audit Director
March 28, 2017
PAGE 6

SCHEDULE OF FINDINGS
AND QUESTIONED COSTS
Summary of auditors' results
Financial statements
Type of auditors' report issued on whether the financial statements audited were
prepared in accordance with generally accepted accounting principles Unmodified
Internal control over financial reporting
Material weaknesses identified? Yes
Significant deficiencies identified? Yes
Noncompliance material to the financial statements noted? No
Federal awards
Internal control over major programs
Material weaknesses identified? Yes
Significant deficiencies identified? Yes
Type of auditors' report issued on compliance for major programs
Unmodified on all programs except for Child Support Enforcement (93.563) and Low-
Income Home Energy Assistance (93.568) which were qualified.
Any audit findings disclosed that are required to be reported in accordance with 2
CFR 200.516(a)? Yes
Identification of major programs
CFDA number Name of federal program or cluster
10.904 Watershed Protection and Flood Prevention
10.916 Watershed Rehabilitation Program
14,239 HOME Investment Partnerships Program
"14.871 Housing Voucher Cluster
20.205 Highway Planning and Construction Cluster
84.374 Teacher and School Leader Incentive Grants (formerly the
Teacher Incentive Fund)
Arizona Auditor General Maricopa County—Schedule o Findings and Questioned Costs I Year Ended June 30,2016
PAGE 7

93.224 Health Center Program CIuster
93.563 Child Support Enforcement
93.568 Low-Income Home Energy Assistance
93,600 Head Start
93.914 HIV Emergency Relief Project Grants
Dollar threshold used to distinguish between Type A and Type B programs $3,000,000
Auditee qualified as low-risk auditee? No
Other matters
Auditee's summary schedule of prior audit findings required to be reported in
accordance with 2 CFR 200.511(b)? Yes
Arizona Audito General Maricopa County--Seitedule of Findings arid Questioned Costs I Year Ended June 30,2016 .
PAGE 8

Financial statement findings
2016-01
The County should follow its policies and procedures when preparing financial statements and
note disclosures
Criteria—The County should follow its policies and procedures to ensure its financial statements are
prepared in accordance with U.S. generally accepted accounting principles (GAAP). Accurate financial
statements provide valuable information to those charged with governance, management, and other
financial statement users to make important decisions about the County's financial operations.
Condition and context—The County's Department of Finance did not consistently follow GAAP when
preparing its financial statements, note disclosures, and required supplementary information (RSi)
schedules. Specifically, the County did not:
• Present several balances correctly in its Condensed Financial Statements of County Treasurer's
Investment Pool note disclosure.
• Disclose its investments in accordance with new reporting requirements outlined in Governmental
Accounting Standards Board Statement No. 72, Fair Value Measurement and Application.
• Calculate the accrued liability balance and beginning fund balance restatement in the Detention
Operations Fund properly by $1.3 million and $300,000, respectively,
• Accurately report contractual commitments in its note disclosures by understating its commitments
balance by $34 million,
• Accrue accounts payable of 5753,000 in the County Improvement Fund,
In addition, there were other errors in note disclosures and RSI schedules that had to be corrected,
Effect—The County's financial statements, note disclosures, and RSI schedules were not initially prepared
in accordance with GAAP. The County made recommended audit adjustments to the financial statements,
note disclosures, and RSI schedules for all significant errors and omissions.
Cause—The County did not properly compile and review the financial statements, note disclosures, and
RSI schedules.
Recommendation—To help ensure accuracy of the County's financial statements, the County should
follow GAAP and its policies and procedures for compiling its financial statements, note disclosures, and
RSI schedules. In addition, the County should further develop its policies and procedures by requiring a
more detailed review of all data supporting the financial statements, note disclosures, and HSI schedules.
The County's responsible officials' views and planned corrective action are in its corrective action plan
included at the end of this report.
This finding is similar to prior-year finding 2015-01.
Arizona Auditor General Maricopa County—Schedule of Findings and Questioned Costs I Year Ended June 30, 2016
PAGE 9

2016-02
The County should improve access controls over its information technology resources
Criteria—Logical and physical access controls help to protect an entity's information technology TO
resources, which include its systems, network, infrastructure, and data from unauthorized or inappropriate
access or use, manipulation, damage, or loss. Logical access controls also help to ensure that
authenticated users access only what they are authorized to. Therefore, the County should have effective
internal control policies and procedures to control access to the Office of Enterprise Technology (OET) and
Treasurer's IT resources.
Condition and context—The OFT and Treasurer's Office did not have adequate policies and
procedures or consistently implement their policies and procedures to help prevent or detect unauthorized
or inappropriate access to their IT resources.
Effect—There is an increased risk that OET and the Treasurer's Office may not prevent or detect
unauthorized access or use, manipulation, damage, or loss of their IT resources, including sensitive and
confidential information.
Cause—OLT and the Treasurer's Office did not have sufficient policies and procedures to monitor
employee access to their IT resources.
Recommendation—To help prevent and detect unauthorized access or use, manipulation, damage, or
loss to their IT resources, OET and the Treasurer's Office need to develop and implement effective logical
access policies and procedures over their IT resources. The information below provides guidance and best
practices to help achieve this objective.
• Review user access—A periodic, comprehensive review should be performed of all existing employee
accounts to help ensure that network and system access granted is needed and compatible with job
responsibilities.
• Remove terminated employees' access to the entity's IT resources—Employees' data center
access should immediately be removed upon their terminations.
• Review contractor account access—A periodic review should be performed on contractor accounts
with access to an entity's IT resources to help ensure their access remains necessary and appropriate,
• Review all shared accounts—Shared network access accounts should be reviewed and eliminated,
or minimized when possible.
• Manage shared accounts—Shared accounts should be used only when appropriate and in
accordance with an established policy authorizing the use of shared accounts. In addition, account
credentials, such as passwords, should be reissued on shared accounts when a group member leaves.
• Update employees' access to IT resources when job responsibilities change—Employees' system
access should immediately be updated upon their change in job responsibilities.
• Review and monitor key activity of users—Key activities of users and those with elevated access
should be reviewed for propriety.
The County's responsible officials' views and planned corrective action are in its corrective action plan
included at the end of this report.
This finding is similar to prior-year finding 2015-02.
Arizona Auditor General Maricoria County—Schedule of Findings and Questioned Costs I Year Ended June 30, 2016
PAGE 10

2016-03
The County should establish internal controls over temporary employees' payroll
Criteria—The County should have policies and procedures to help ensure temporary election employees
are accurately paid and payroll expenditures are properly recorded on the financial statements.
Condition and context —The County Recorder's Office did not have adequate internal controls over
payroll for its approximately 1,800 temporary election poll workers. Specifically, the election poll workers
were paid by a stipend, and the employees signed a log-in sheet at the polling location. However, there was
no supervisory review of the log-in sheets prior to payment. In addition, the employees' temporary status
was not eliminated from the payroll system after their services were no longer required. The Recorder's
Office evaluates the temporary employees for removal every 5 to 6 years.
Effect —There is increased risk of fraudulent payroll transactions occurring and not being detected. In
addition, there is a risk employees were incorrectly paid.
Cause—Election poll workers are exempt from the standard payroll process, and compensating controls
were not implemented to verify stipends paid were accurate.
Recommendation —To prevent fraud and help ensure employees are accurately paid, the Recorder's
Office should implement internal control policies and procedures over employees exempt from the standard
payroll process. Specifically, a supervisor should review and approve the employees' log-in sheets for
accuracy. In addition, the Recorder's Office should evaluate how long election poll workers should be
maintained on the payroll system and remove in a timely manner those employees no longer expected to
work for the County.
The County's responsible officials' views and planned corrective action are in its corrective action plan
included at the end of this report.
2016-04
Justice Courts Administration needs to improve controls over purchasing cards
Criteria—The Justice Courts Administration (Administration) should follow the County's policies and
procedures over the assignment and use of purchasing cards. Additionally, purchases should be supported
by adequate documentation and should be made in accordance with the Arizona Constitution, Article IX,
section 7, which states that a county is not permitted to make any donation or grant, by subsidy or otherwise,
to any individual, association, or corporation. Further, Attorney General Opinion 110-003 directs that the
expenditure of public monies must be for a public purpose in which the expenditure does not exceed the
worth of the direct benefits enjoyed by the public body.
Condition and context —The Administration did not follow the County's purchasing card policies and
procedures. Specifically, the Administration allowed an employee to purchase goods and services without
maintaining documentation of the purchases and did not review the purchases for allowability or to ensure
the items purchased benefited the County. In addition, the employee's supervisor did not reconcile the
employee's purchasing card account. As a result, during fiscal years 2013 through 2016, the employee
purchased over $25,000 in goods and services that could either not be supported by receipts or were
Arizona Auditor General Maricopa County—Schedule of Findings and Questioned Costs 1 Year Ended June 30,2016.
PAGE 11

unallowable. For example, the employee purchased over $20,000 in VISA gift cards and $900 in restaurant
gift cards; $1,300 at in-state restaurants; and over $4,000 for other items that were unallowable or did not
have a documented public purpose. Auditors were unable to determine if the purchases were for a public
purpose because of the lack of documentation. The County terminated the employee but did not request
the employee to reimburse any of the monies that they noted had been spent inappropriately. Further, the
County did not have effective compensating controls to ensure purchases were reviewed by a second
employee or a process to perform data analysis that would help identify suspicious purchasing patterns. At
the time of this report's release, these expenditures were under further review by the Office of the Auditor
General.
Effect—County funds were used for inappropriate purposes.
Cause—The Administration did not follow the County's purchasing card policies and procedures to have
a second employee review and approve purchases made using the purchasing card,
Recommendation—The Administration should follow the County's purchasing card policies and
procedures to ensure that all purchasing card purchases are reviewed and approved by a second employee
and substantiated by supporting documentation that evidences the public purpose. The County should
implement other compensating controls, such as an electronic workflows process verifying secondary
reviews were performed or using analytical tools to analyze spending anomalies.
The County's responsible officials' views and planned corrective action are in its corrective action plan
included at the end of this report.
2016-05
The County should improve controls over purchasing cards
Criteria—The County should further develop its policies and procedures over the assignment and use of
purchasing cards. Additionally, purchases should be supported by adequate documentation and should be
made in accordance with the Arizona Constitution, Article IX, section 7, which states that a county is not
permitted to make any donation or grant, by subsidy or otherwise, to any individual, association, or
corporation. Further, Attorney General Opinion 110-003 directs that the expenditure of public monies must
be for a public purpose in which the expenditure does not exceed the worth of the direct benefits enjoyed
by the public body.
Condition and context—The County spent approximately $29 million using purchasing cards during
fiscal year 2016. Although the County has a purchasing card policy, the policy in effect during fiscal year
2016 did not adequately address the purchase of gift cards and was not approved by the Board of
Supervisors. As a result, for 4 of 14 purchasing card transactions tested, the purchases of over $10,000 in
gift cards were not supported by adequate documentation or were not in accordance with the Arizona
Constitution regarding public purpose. Specifically, county employees purchased gift cards, and there was
a lack of documentation to demonstrate who received the gift cards, how the gift cards were used, or the
benefit of the purchase to the County. In addition, for one of these transactions, the County discovered that
a county employee did not make the purchase. The County reported the fraudulent purchase to the bank
but did not ensure that the bank credited the monies back to the County. Further, critical information
technology (IT) controls at the County's bank, such as monthly purchasing limits on the purchasing cards,
were not activated from July 2015 through February 2016.
Arizona Auditor General Maricopa County—Schedule of Findings and Questioned Costs I Year Ended June 30,2018
PAGE 12

Effect—There is an increased risk of fraud, waste, and abuse if purchasing card expenditures are not
properly supported, reviewed, and approved. In addition, purchasing gift cards with purchasing cards
circumvents the County's procurement policies.
Cause—The County's policies and procedures in place during fiscal year 2016 did not specifically address
gift card use.
Recommendation —To help prevent and detect potential fraud, waste, and abuse related to purchasing
card transactions, the County should further develop its purchasing card policies and procedures to include
guidance on when gift cards are permitted to be purchased using purchasing cards and the documentation
required to support who received the gift cards and how they were used. Additionally, the County should
ensure that documentation, including public purpose, is maintained for all purchasing card transactions.
Further, the County should ensure that critical IT controls offered by the County's bank over its purchasing
cards are activated.
The County's responsible officials' views and planned corrective action are in its corrective action plan
included at the end of this report.
Other auditors' findings
The other auditors who audited the Housing Authority reported the following significant deficiency:
2016-06
General Ledger Maintenance
Criteria —Adequate internal controls require timely recording and periodic reconciliation of general ledger
activity to ensure accurate financial reporting and the safeguard of funds.
Condition and context—Financial information relating primarily to HCV portability accounts and
interprogram balances and transactions were not recorded appropriately and/or reconciled in a timely basis.
Effect—Significant yearend reconciliations and adjustments were necessary to report accurate financial
statements. Potentially adverse repercussions from HUD due to significant differences in reported yearend
results.
Cause—Significant employee turnover in the finance department combined with insufficient knowledge of
industry standard financial management and reporting requirements.
Recommendation —We recommend that financial activity be reconciled on a periodic basis to ensure
accurate and timely financial reporting. Further, additional month end financial closing procedures should
be designed and implemented to incorporate the review of interprogram balances and transactions for
appropriateness and purpose,
The County's responsible officials' views and planned corrective action are in its corrective action plan
included at the end of this report.
The finding is similar to prior-year finding 2015-05.
Arizona Auditor General Maricopa County—Schedule of ind Ings and Questioned Costs I Year Ended June 30, 2016
PAGE 13

Federal award findings and questioned costs
2016-101
CFDA no. and name: 10.904 Watershed Protection and Flood Prevention
Award numbers and years: 68-9457-15-537; December 1, 2009 through December 1, 2020
69-9457-12-509; October 18, 2012 through September 30, 2017
Federal agency: Department of Agriculture
Compliance requirement: Allowable costs/cost principles
Questioned costs: $407,584
Criteria—In accordance with 7 Code of Federal Regulations (CFR) §3016.22, the Maricopa County Flood
Control District (District) should request reimbursement of grant funds for only allowable costs of the District
and cost-type contractors.
Condition and context—The District's internal controls over the review and approval of program
expenditures were not adequate to ensure only allowable expenditures on projects were requested for
reimbursement. Specifically, for grant number 68-9457-12-509, the District requested reimbursement from
the federal grantor for construction overhead costs of $407,584 that occurred in fiscal years 2015 and 2016
that were unallowable. The District discovered the error and contacted the federal grantor to correct the error
prior to discovery by the auditors.
Effect—The District was reimbursed for $407,584 of expenditures that were unallowable for reimbursement
from the federal program,
Cause—The District did not have adequate policies and procedures to ensure the amounts billed for the
program were allowable under the grant agreement.
Recommendation—The District should strengthen its internal controls over grant reimbursement
requests to ensure that all amounts submitted for reimbursement are allowable in accordance with the grant
agreement. A knowledgeable employee should review and approve all requests for reimbursement.
The County's responsible officials' views and planned corrective action are in its corrective action plan
included at the end of this report.
201 6-1 02
CFDA no. and name: 10.904 Watershed Protection and Flood Prevention
Award numbers and years: 68-9457-15-537; December 1, 2009 through December 1, 2020
69-9457-12-509; October 18, 2012 through September 30, 2017
CFDA no. and name: 10.916 Watershed Rehabilitation Program
Award number and year: 68-9457-14-522; September 27, 2014 through September 30, 2019
Federal agency: Department of Agriculture
Compliance requirement: Reporting
Questioned costs: None
Criteria—To comply with 7 CFA §3016.20(b)(1), internal controls should be maintained over reporting to
provide reasonable assurance that federal program reports are accurate and reliable. Failure to accurately
Maricopa County—Schedule of Findings and Questioned Costs I Year Ended June 30,2016
PAGE 14

compile and report information could result in noncompliance with a program's reporting and matching
requirements.
Condition and context—The County's Flood Control District (District) did not adequately compile and
review the SF-425, Federal Financial Reports (FFR), submitted to the federal agency. Specifically, the District
incorrectly reported both programs recipient share of expenditures that accounts for the County's matching
contributions. The District incorrectly included all costs paid for the program from nonfederal monies rather
than the allowed matching amounts the federal agency certified for use, However, the District still met both
programs' matching requirement.
Effect—The FFRs submitted to the federal agency during the period July 1, 2015 through June 30, 2016,
were not accurate. The District overstated the recipient share of expenditures and matching contributions
on the reports.
Cause—The District did not have adequate policies and procedures to ensure data used to prepare the
FFRs was accurate prior to submission.
Recommendation—To help ensure the accuracy of the FFEls, the District should follow its policies and
procedures by requiring that a responsible employee performs a detailed review of the FFR and reconciles
them to supporting data. In addition, the FFR should be compiled using only allowable costs,
The County's responsible officials' views and planned corrective action are in its corrective action plan
included at the end of this report.
This finding is similar to prior year finding 2015-101.
2016-103
CFDA no. and name: 14.239 HOME Investment Partnerships Program
Award numbers and years: M09-DC040227; July 1,2009 through June 30, 2016
M10-DC040227; July 1,2010 through June 30, 2016
M11-DC040277; July 1,2011 through June 30, 2016
M12-DC040277; July 1,2012 through June 30, 2017
M13-DC040277; July 1, 2013 through June 30, 2017
M14-DC040277; July 1, 2014 through June 30, 2018
M15-DC040277; July 1,2015 through June 30, 2018
Federal agency: Department of Housing and Urban Development
Compliance requirement: Reporting
Questioned costs: None
Criteria—In accordance with 24 CFR §135,90, each recipient that administers a covered public housing
and community development assistance program exceeding $200,000 in a program year must submit a
HUD 60002, Section 3 Summary Report, Economic Opportunities for Low- and Very Low-Income Persons,
performance report annually to the U.S. Department of Housing and Urban Development (HUD), The fiscal
year 2014 report was required to be submitted on December 15,2015.
Condition and context—The Human Services Department (Department) lacks policies and procedures
over compiling its performance reports. Specifically, the Department did not compile and submit the fiscal
year 2014 HUD 60002, Section 3 Summary Report, Economic Opportunities for Low- and Very Low-Income
Maricopa County—Schedule of Findings and Questioned Costs I Veer Ended June 30, 2016
PAGE 15

Persons, report due on December 15, 2015, The Department submitted the report in September 2016 after
auditors brought the deficiency to its attention.
Effect—The Department was noncompliant with the program's reporting requirements.
Cause—The Department did not have procedures in place to ensure all performance reports were
submitted on time.
Recommendation—To help ensure the County complies with reporting requirements, the Department
should develop internal control policies and procedures to ensure it completes and submits reports by
established HUD deadlines. These procedures should include a knowledgeable employee reviewing and
approving the reports for accuracy prior to submission.
The County's responsible officials' views and planned corrective action are in its corrective action plan
included at the end of this report.
2016-104
Cluster name: WIA/WIOA Cluster
CFDA nos. and names: 17.258 WIA/WIOA Adult Program
17.259 WIA/WIOA Youth Activities
17.278 WIA/WIOA Dislocated Worker Formula Grants
Award numbers and years: ADES14-054318; April 1, 2013 through July 5, 2015
DE14-054318; April 1, 2014 through June 30,2016
DI16-002124; April 1,2014 through June 30, 2017
Federal agency: Department of Labor
Pass-through grantor Arizona Department of Economic Security
Compliance requirements: Activities allowed or unallowed and allowable costs/cost principles
Questioned costs: $110
Criteria—To comply with 20 CFR parts 660-671, the County should maintain effective internal controls
over federal award programs to provide reasonable assurance that it is managing its federal awards in
compliance with laws, regulations, and provisions of contracts and grants agreements, including charging
only allowable costs to the program.
Condition and context—The Human Services Department (Department) administers all Workforce
Investment Act (WIA) programs. The Department did not have adequate controls to ensure that all
expenditures submitted for reimbursement were valid. Specifically, a department employee's purchasing
card was compromised, and $110 in fraudulent transactions were processed before the issue was
discovered. Although the Department deactivated the card and filed a claim with its bank for the amount,
the Department did not ensure the bank credited the monies back to the County. Further, the Department
neglected to reverse the fraudulent transaction from program accounts and was subsequently reimbursed
for these costs with federal monies. After this was brought to the Department's attention, a request for
reimbursement was received from the bank, and the program was credited the amount in September 2016.
Effect—The Department was originally reimbursed for $110 in fraudulent expenditures.
Maricopa County—Scheduie of Findings and Questioned Costs Year Ended June 30, 201
PAGE 16

Cause—The Department did not have adequate policies and procedures to ensure that the bank credited
fraudulent charges back to the County and that the Department properly reversed fraudulent charges out of
the federal program in its accounting system.
Recommendation—To help ensure that only allowable expenditures are submitted for reimbursement,
the Department should strengthen its controls to ensure that all purchasing card transactions submitted are
valid.
The County's responsible officials' views and planned corrective action are in its corrective action plan
included at the end of this report.
2016-105
CFDA no. and name: 84,374 Teacher and School Leader Incentive Grants (formerly
the Teacher Incentive Fund)
Award numbers and years: S374A100025; October 1, 2010 through September 30, 2016
S374A12089; October 1,2012 through September 30, 2017
Federal agency: Department of Education
Compliance requirement: Suspension and debarment
Questioned costs: None
Criteria—In accordance with 34 CFR §80.35, grantees and subgrantees must not make any award to or
contract with any party that is debarred or suspended or is otherwise excluded from or ineligible for
participation in federal assistance programs.
Condition and context—The County's Maricopa Education Service Agency (Agency) did not establish
adequate procedures to verify that subrecipients and vendors providing goods and services paid with
federal monies of $25,000 or more had not been suspended, debarred, or otherwise excluded from federal
contracts. As a result, for all subrecipients and two of three vendors tested for the Teacher Incentive Fund,
the Agency did not verify that the subrecipients and vendors were not suspended or debarred. Auditors
performed additional procedures for all subrecipients and vendors and determined no payments were made
to suspended or debarred parties; therefore, no questioned costs were noted,
Effect—The Agency could make payments to suspended or debarred subrecipients or vendors.
Cause—The Agency did not follow policies and procedures to ensure that subrecipients and vendors
receiving $25,000 or more in federal monies were not suspended or debarred.
Recommendation—The Agency should follow the County's policies and procedures to document its
determinations that all subrecipients and vendors being paid over $25,000 in federal monies have not been
suspended or debarred from doing business with governmental entities before incurring expenditures. This
verification may be accomplished by checking the System for Awards Management that the General
Services Administration maintains, or adding a clause or condition to the contract regarding suspension
and debarment.
The County's responsible officials' views and planned corrective action are in its corrective action plan
included at the end of this report.
This finding is similar to prior year finding 2015-102.
Arizona Auditor General Maricopa County—Schedule of Findings and Questioned Costs Year Ended June 30, 2016
PAGE 17

2016-106
CFDA no. and name: 84,374 Teacher and School Leader Incentive Grants (formerly
the Teacher Incentive Fund)
Award numbers and years: S374A100025; October 1, 2010 through September 30, 2016
S374A12089; October 1, 2012 through September 30, 2017
Federal agency: Department of Education
Compliance requirement: Reporting
Questioned costs: None
Criteria—To comply with 34 CFR §§75.702 and 75.730, internal controls should be maintained over
reporting to provide reasonable assurance that federal program reports are accurate and reliable and a
recipient's matching contributions are accurately reported. Failure to accurately compile and report
information could result in noncompliance with a program's reporting and matching requirements.
Condition and context —The County's Maricopa Education Service Agency (Agency) did not adequately
compile and review its federal program Annual Performance Report (APR). Specifically, the Agency
incorrectly reported its share of expenditures that accounts for its matching contributions. The Agency
incorrectly included budgeted amounts for its matching contributions from nonfederal monies rather than
the actual matching amounts the Agency's subrecipients certified. The Agency obtained additional
documentation from its subrecipients during the audit to verify that it met the program's matching
requirements.
Effect—The APR submitted to the federal grantor agency for the period October 1, 2014 through
September 30, 2015, was not accurate. The Agency overstated its share of expenditures and matching
contributions by approximately $120,000 on the report.
Cause—The Agency did not have adequate policies and procedures to ensure data used to prepare the
APR was accurate prior to submission.
Recommendation—To help ensure the APR is accurately compiled, including accurately reporting the
Agency's matching contributions, the Agency should further develop its policies and procedures by
requiring that a responsible employee performs a detailed review of the APR and reconciles it to supporting
matching contributions that subrecipients have certified.
The County's responsible officials' views and planned corrective action are in its corrective action plan
included at the end of this report.
Arizona Auditor General IViaricepa County--Schedule of Findings and Questioned Costs Year Ended June 30, 2016
PAGE 18

201 6-1 07
CFDA no and name: 84,374 Teacher and School Leader Incentive Grants (formerly
the Teacher Incentive Fund)
Award numbers and years: S374A100025; October 1, 2010 through September 30, 2016
3374A12089; October 1, 2012 through September 30, 2017
Federal agency: Department of Education
Compliance requirement: Subrecipient monitoring
Questioned costs: Unknown
Criteria—In accordance with 2 CFR, Appendix A, Part 170(3)(iii), a subaward should be provided through
a legal agreement. This agreement should identify the subawards grant requirements and grant award
period. In addition, to comply with 34 CFR §34.80, pass-through entities must ensure subrecipients are in
compliance with the terms and conditions of the subaward and should not reimburse costs after the contract
expires. Pass-through entities are also required to obtain Data Universal Numbering System (DUNS)
numbers from the subrecipients prior to issuance of the subaward.
Condition and context —The County's Maricopa Education Service Agency (Agency) was awarded the
Teacher and School Leader Incentive Grants program in 2010 along with its subrecipient school districts
that received approximately 33 percent of grant funds for the period of July 1, 2015 through June 30, 2016.
The County did not implement policies and procedures to properly perform all subrecipient monitoring
requirements over the school districts. Specifically, the Agency allowed its subrecipients to continue to
request reimbursement and reimbursed them for program expenditures after the subrecipients' contracts
expired. In addition, the Agency did not perform some of the required elements of before-the-award
monitoring such as obtaining the subrecipients' DUNS numbers.
Effect—The Agency did not comply with subrecipient monitoring requirements and ensure that its
subrecipients requested reimbursement for only allowable expenditures incurred during the contract period.
It was not practical to extend our auditing procedures sufficiently to determine the amount of questioned
costs, if any, that may have resulted from this finding. Based on review of the program's expenditures by
date, auditors estimated that the maximum potential questioned cost is approximately $60,000.
Cause—The Agency originally classified the subrecipients as partners based on the U.S, Department of
Education's direction and was notified in December 2015 that it should have classified them as
subrecipients. Additionally, the Agency did not have procedures in place to ensure its subrecipients were
reimbursed for only allowable expenditures incurred during the subrecipient's contract period.
Recommendation—To help ensure the Agency complies with subrecipient monitoring requirements, it
should evaluate and update, as appropriate, its existing policies and procedures to ensure they are aligned
with the federal agency's regulations. This must include obtaining DUNS numbers and ensuring its
subrecipients are reimbursed for only allowable expenditures incurred during the subrecipient's contract
period.
The County's responsible officials' views and planned corrective action are in its corrective action plan
included at the end of this report.
This finding is similar to prior year finding 2015-105.
Arizona Auditor General Maricopa County—Schedule of Findings and Questioned Costs 1 Year Ended June 30, 2016
PAGE 19

2016-108
Cluster name: Health Center Program Cluster
CFDA no. and name: 93.224 Health Center Program (Health Care for the Homeless)
Award number and year: H80CS00044; November 1,2001 through December 31, 2017
Federal agency: Department of Health and Human Services
Compliance requirement: Program income
Questioned costs: Unknown
Criteria—In accordance with 42 CFR §51c.303(f), the County's Public Health Department (Department)
should maintain a schedule of fees or payments for the provision of its health services designed to cover its
reasonable costs of operation and a corresponding schedule of discounts adjusted on the basis of the
patient's ability to pay. To comply with 42 CFR §51c,303(f), the schedule of discounts must provide for a full
discount to individuals and families with annual incomes at or below those set forth in the most recent
Community Services Act Poverty Income Guidelines (45 CFR §1060.2) and for no discount to individuals
and families with annual incomes greater than twice those set forth in such guidelines.
Condition and context—The Department did not adequately design its schedule of discounts for
collection of fees or payments. Specifically, the schedule of discounts incorrectly provided a 100 percent
discount to patients with annual incomes of 101 percent to 125 percent of Federal ,Poverty Guidelines (FRG)
and a 40 percent discount to patients with annual incomes above 200 percent of FPG. Additionally, the
County provided a 100 percent discount to any homeless patient regardless of the patient's family income
or size, effectively bypassing the required schedule of discounts.
Effect—The Department could be undercollecting fees from patients.
Cause—The Department did not have adequate policies and procedures in place to ensure a correct
schedule of discounts was designed and appropriately used.
Recommendation—The Department should ensure the correct guidelines are used when developing its
schedule of discounts, and it should design and implement policies and procedures to ensure the correct
discount is applied based on the patient's ability to pay,
The County's responsible officials' views and planned corrective action are in its corrective action plan
included at the end of this report.
2016-109
CFDA no. and name: 93.563 Child Support Enforcement
Award numbers and years: DE111171001; October 1,2010 through September 30, 2015
G1 604A74004; October 1, 2015 through September 30, 2020
Federal agency: Department of Health and Human Services
Pass-through grantor: Arizona Department of Economic Security
Compliance requirement: Allowable costs/cost principles
Questioned costs: Unknown
Criteria—In accordance with 2 CFR §225, Appendix B, Section 8.h, and 2 CFR §200.430(i), the County's
Superior Court should ensure that employee payroll costs charged to the Child Support Enforcement
Arizona Auditor General DAaricopa County—Schedule of Findings and Questioned Costs Year Ended June 30, 2016
PAGE 20

program are supported by personnel activity reports or equivalent documentation that support distribution
of each employee's activity during the period.
Condition and context—During the fiscal year, the County's Superior Court spent $1,125,721 in salaries
and wages for its Child Support Enforcement program. The Court charged salaries and wages to the
program based on spreadsheets used to track each employee's hours devoted to the program, but it did
not retain this documentation. Although county employees charging to the grant prepared a time sheet each
pay period, the time sheets did not specify the actual activity, and no periodic certifications were prepared.
As a result, auditors could not confirm the payroll amounts charged to the program were appropriate.
Further, this has the potential to affect previous award periods.
Effect—The Court may have charged inappropriate payroll costs to the program. It was not possible to
extend our auditing procedures to determine questioned costs, if any, that may have resulted from this
finding.
Cause—The Court did not have adequate policies and procedures to support its allocation of payroll costs
to the federal program.
Recommendation—The Court should develop and implement policies and procedures to ensure its
distribution of employees' payroll costs charged to the program are supported by items such as the
employees' time sheets or a time-study analysis.
The County's responsible officials' views and planned corrective action are in its corrective action plan
included at the end of this report.
This finding is similar to prior year finding 2015-108.
2016-110
CFDA no. and name: 93.568 Low-Income Home Energy Assistance
Award numbers and years: ADES15-089115; July 1,2015 through June 30, 2016
LW-ESA-12-2182-03Y4; July 1,2014 through June 30, 2015
LW-ESA-12-2182-03; July 1, 2015 through June 30, 2016
Federal agency: Department of Health and Human Services
Pass-through grantors: Arizona Department of Economic Security, Arizona
Department of Housing, and Governor's Office of Energy Policy
Compliance requirements: Activities allowed and unallowed and allowable costs/cost principles
Questioned costs: $111,702
Criteria—To comply with 2 CFR §§200.405, 200.430, and 200.56, costs charged to a federal award must
be allocable to that award. Further, employees who work on more than one grant should allocate and
specifically identify the time devoted to each federal award.
Condition and context—The County's Human Services Department (Department) received awards to
operate the Low-Income Home Energy Assistance program (L1HEAP) from both the Department of
Economic Security and Governor's Office of Energy Policy. In addition, the Department received additional
federal and nonfederal grant funds to operate and maintain a Community Action Agency and weatherization
Arizona Auditor General filaricopa County—Schedule of Findings and Questioned Costs I Year Ended June 30,2016
PAGE 21

programs in Maricopa County to provide community services and financial assistance to eligible participants
during the period of July 1, 2015 through June 30, 2016. For 3 of 60 transactions tested, the Department did
not properly allocate costs to the LIHEAP program. Specifically:
• For grant number ADES15-089115, the Department assigned individual employees to charge their
payroll to a specific community service program even though the employee may have worked on
multiple programs. These employees did not track their time worked on specific federal programs. In
addition, there are nonpayroll resources shared between the federal programs. As a result, some of the
expenditures charged to LIHEAP may have been for various other community service programs that
were funded with federal, state, and local funds. Likewise, other community service programs may have
paid for LIHEAP expenditures. The Department transferred $108,673 in expenditures originally charged
to another federal program to LIHEAP for costs that benefited multiple programs. These costs included
goods and services, payroll, and indirect costs. Although a portion of these expenditures could have
been for the LIHEAP program, the Department was unable to provide supporting documentation that
these expenditures were used solely for LIH EAR.
• For grant number LW-ESA-12-2182-03, the Department allocates weatherization-related costs to
LIHEAP and other weatherization programs; however, the Department did not properly allocate costs.
Specifically, the Department allocated $3,029 in direct and indirect costs to the LIHEAP program;
however, the Department was unable to provide supporting documentation that these expenditures were
used solely for LIHEAP.
Effect--The Department was reimbursed Si11,702 in program expenditures originally charged to other
community service programs or allocated incorrectly. It was not practical to extend our auditing procedures
sufficiently to determine if any additional questioned costs may have resulted from this finding.
Cause—The Department transferred and allocated expenditures incorrectly between programs based on
which programs had available monies.
Recommendation—The Department should follow the County's policies and procedures and charge
expenditures to the appropriate fund and programs. Direct expenditures should benefit the program or be
allocated to multiple programs according to use. Payroll expenditures should be certified through time and
effort or time sheet reporting, and indirect costs should be based on actual payroll costs allocated to the
specific program.
The County's responsible officials' views and planned corrective action are in its corrective action plan
included at the end of this report.
This finding is similar to prior-year finding 2015-109.
Arizona Auditor Gener Maricopa County—Schedule of Findings and Questioned Costs I Year Ended June 30.2016
PAGE 22

2016-111
CFDA no. and name: 93.600 Head Start
Award numbers and years: 09CH7096149; July 1, 2014 through June 30, 2015
09CH7096/50; July 1,2015 through June 30, 2016
09HP0004/01; January 1,2015 through June 30, 2016
Federal agency: Department of Health and Human Services
Compliance requirement: Matching
Questioned costs: None
Criteria—In accordance with 45 CFA §1303.4, the County's Human Services Department (Department) is
required to match at least 20 percent of the total cost of the Head Start program, which can include cash
and in-kind matching contributions.
Condition and context—The Department records in-kind contributions in its Child Plus database system
using data from approved in-kind contribution forms. However, for 6 of 40 in-kind contributions tested, the
Department did not have proper controls to ensure the amounts recorded in the system were accurate,
supported, or approved by an authorized employee. Specifically, a department employee did not approve
and validate 2 of the in-kind contributions, and the Department did not retain documentation to support 1
contribution. Additionally, for the other 3 contributions, the information recorded in the Child Plus database
system did not agree to the approved in-kind contribution forms. Based on these sample items, the
Department both understated and overstated in-kind contributions. Auditors projected the total error in the
population to be approximately $250,000 and determined that it appears the Department met its matching
requirement by more than $2 million despite the instances of under- and overreported donated time
identified.
Effect—Failure to properly enter information into the Child Plus database system could result in future
noncompliance with the program's matching requirements. It could also result in inaccurate data being
submitted to the federal grantor.
Cause—The Department did not follow its policies and procedures to review and approve all in-kind
contributions. Also, the Department did not perform additional reviews or audits to correct errors in data
entered into the Child Plus database system.
Recommendation—To help ensure that only allowable in-kind contributions are used to match federal
expenditures and the program's matching requirements are met, the Department should strengthen its
policies and procedures for reviewing, approving, and documenting its in-kind match in the Child Plus
database system. Someone who is not responsible for entering the data into the system should perform this
review.
The County's responsible officials' views and planned corrective action are in its corrective action plan
included at the end of this report.
Arizona Auditor General Maricopa County—Schedule ol Findings and Questioned Costs I Year Ended June 30,
PAGE 23

2016-112
CFDA no. and name: 93.600 Head Start
Award numbers and years: 09CH7096/49; July 1,2014 through June 30,2015
09CH7096/50; July 1, 2015 through June 30, 2016
09HP0004/01; January 1, 2015 through June 30, 2016
Federal agency: Department of Health and Human Services
Compliance requirement: Reporting
Questioned costs: None
Criteria—In accordance with 45 CFR §75,341, the County's Human Services Department (Department)
should complete the SF-425, Federal Financial Report (FFR), to report federal expenditures, The County
should prepare the report using the designated accounting basis and accurately report in-kind contributions
and the federal share of expenditures.
Condition and context—The Department did not adequately review the FFRs. For four of six reports
tested, there were errors in the amounts reported. Specifically, for two semiannual reports the Department
did not retain documentation supporting its in-kind contributions for the Head Start/Early Head Start and
Early Head Start Child Care Partnership programs. In addition, for its two annual reports, the Department
indicated the reports were prepared on the cash basis of accounting but prepared them under the accrual
basis of accounting. As a result, the Department reported the total federal share of expenditures incorrectly.
Effect—The Department underreported the in-kind contributions on semiannual FFRs for the Head
Start/Early Head Start and Early Head Start Child Care Partnership programs by $46,819 and $322,176,
respectively. In addition, the Department overstated the total federal share of expenditures on the annual
FFRs for the Head Start/Early Head Start and Early Head Start Child Care Partnership programs by $574,551
and $25,918, respectively.
Cause—The Department did not retain documentation for all amounts reported in its semiannual reports
at the time the FFRs were compiled and submitted. In addition, the Department's review of the annual FFRs
failed to identify the errors because of oversight.
Recommendation —The Department should further develop its policies and procedures over its review
process to ensure the FFRs are compared to supporting records and any errors noted are corrected prior
to submitting them. In addition, the Department should retain documentation to support the amounts
included in the FFRs.
The County's responsible officials' views and planned corrective action are in its corrective action plan
included at the end of this report.
Arizona Auditor General icopa County—Schedule of Findings and Questioned Costs I Year Ended June 30,2018
PAGE 24


Maricopa County
Schedule of expenditures of federal awards
Year ended June 30, 2016
Federal Pass-through Amount
agency/CFDA Pass-through grantor's Program provided to
number Federal program name Cluster title grantor numbers expenditures subrecipients
10 551 Supplemental Nutrition Assistance Program SNAP Cluster 'Arizona Department ADHS12-030680
of Health Services 1,101,598 $ 477,804
10 561 State Administrative Matching Grants for the SNAP Cluster Arizona Department ADHS16-106547
Supplemental Nutrition Assistance Program of Health Services 1,256,768 253,563
Total SNAP Cluster 2,358,366 731,367
10 553 School Breakfast Program Child Nutrition Cluster Arizona Department ED09-0001
of Education 110,45/
10 553 School Breakfast Program (Non cash) Child Nutrition Cluster Arizona Department E009-0001
of Education 15,027
Total /0.553 125,478
10 555 National School Lunch Program Child Nutrition Cluster Arizona Department ED09-0001
of Education 173,1713
10 555 National School Lunch Program (Non Cash) Child Nutrition Cluster Arizona Department ED09-0001
of Education 23,503
Total 10.555 196,681
Total Child Nutrition Cluster 322,159
10 657 Special Supplemental Nutrition Program for Arizona Department ADHS14-053007,
Women, Infants, and Children of Health Services ADHS15-084210 10,929,645
10 558 Child and Adult Care Food Program Arizona Department KH02-1170-ALS
of Education 338 588
10 578 WIC Grants To States (/GS) Arizona Department ADHS14-053007
of Health Services 36,169
10 665 Schools and Roads—Grants to States Forest Service Schools
and Roads Cluster 420,436
10 904 Watershed Protection and Flood .Prever)LLn 16502,311
10 916 Watershed Hehabilitation Program 10,306,249
10 11-LE-11031200-005 Cooperative LEW Enforcement Agreement 58,092
10 16-LE-11031200-005 Cooperative Law Enforcement Agreement 26,623
Total Department of Agriculture 41,398,638 731,367
Mont of Housing and Ur it
14 218 Community Development Block CDBG - Entitlement
Grants/Entitlement Grants Grants Cluster 2,648,941 2,009,729
. . . .
14 231 Emergency Solutions Grant Program 240,716 220,000
14 231 Emergency Solutions Grant Program . City of Phoenix 140484-0 149,296
Total 14231 390,012 220,000
14 239 HOME Investment Partnerships Program 5,337,616 4,824,385
14 850 Public and Indian Housing 2,810,956
14 870 Resident Opportunity and Supportive Services -
Service Coordinators 77,116
14 871 Section 8 Housing Choice Vouchers Housing Voucher Cluster 13,179,6/0
14 872 Public Housing Capital Fund 1 151 268
14 896 Family . . Self-Sufficiency ... Program 49,856
14 900 Lead-Based Paint Hazard Control in Privately- City of Phoenix 141175-0
Owned Housing 126,679
Total Department of Housing and Urban Development 25,772,114 7,054,114
Department of the Interior
15 226 Payments in Lieu of Taxes 3,285,655
15 227 Distribution of Receipts to State and Local
Governments 8,108
Total Department of the Interior 3,293,763
See accompanying notes to schedule.
PAGE 25

Maricopa County
Schedule of expenditures of federal awards
Year ended June 30, 2016
Federal Pass-through Amount
agency/CFDA Pass-through grantor's Program provided to
number Federal program name Cluster title grantor numbers expenditures subreciplents
Departine
16 523 Juvenile Accountability Block Grants Arizona Governor's JB-CSG-14-4365-
Office tor Children, 03Y2
Youth and Families 118,802
16 540 Juvenile Justice and Delinquency Arizona Governor's J2-CSG-14-4181-
Prevention—Allocation to States Office for Children, 06Y2
Youth and Families 230
16 554 National Criminal History Improvement Program • Arizona Criminal NCP14-15-002,
(NCHIP) Justice Commission NCP14-15-004,
NCP15-16-003 126,565
16 575 Crime Victim Assistance Arizona Department 2013-VA-GX-0019,
of Public Safety 2014-VA-GX-0018,
2015-VA-GX-0032 260,776
16 . 576 Crime Victim Compensation Arizona Criminal VC-15-056, VC-16-
Justice Commission 056 829,722
16 593 Residential Substance Abuse Treatment for Arizona Criminal RSAT-15-005, RSAT-
State Prisoners Justice Commission 16-005 47,048
„ .
16 726 Juvenile Mentoring Program National CASA AZ10766-13-0614-
Association L2 796
16 735 PREA Program: Demonstration Projects to
Establish 'Zero Tolerance' Cultures ior Sexual
Assault in Correctional Facilities 76364
16 738 Edward Byrne Memorial Justice Assistance
Grant Program 950,978 745,000
10 738 Edward Byrne Memorial Justice Assistance Arizona Criminal 00-16-027
Grant Program Justice Commission 994,784
Total 18.738 1,945,762 745,000
16 742 Paul Covofdell Forensic Sciences Improvement Arizona Criminal CV-15-15-002
Grant Program . . . . . . . . Justice Commission 8,406
.16 750 Support for Adam Walsh Act Implementation
Grant Program 13,131
16 754 Harold Rogers Prescription Drug Monitoring Arizona Criminal POMP-15-001
Program Justice Commission 93,979
16 755 Southwest Border Prosecution Initiative 527,359
16 812 Second Chance Act Reentry initiative 549,549 36,584
16 88A-PX-46088 Desert Hawk Violent Crime Task Force 31,476
16 SWAZP0706 Organized Crime Drug Enforcement Task
Forces 153,309
16 SWAZP0734 Organized Crime Drug Enforcement Task
Forces 229,899
16 unknown DEA Task Force 65,011
Total Department of Justice 5,078,191 781,584
17 258 WIANVIOA Adult Program WIA/VViuA Cluster Arizona Department DE14-054318, DI16-
of Economic 002124
Security 5,679,281 427,912
17 259 WIANVIOA Youth Activities WIANVIOA Cluster Arizona Department ADES14-054318,
of Economic DE14-054318, 0116-
Security . . 002124... ...... 1,402,937 84,825
17 Mf WIAMIGA Dislocated Worker Formula Grants WIAMICA Cluster Arizona Department ADES14-054318,
of Economic DE14-054318, DI16-
Security 002124 6,547,967
Total Workforce investment Act (WIA) Cluster 13,630,185 512,737
17 281 WIAMIGA Dislocated Worker National Reserve Arizona Department 0116-002124
Technical Assistance and Training of Economic
Security 25,847
Total Department of Labor 13,656,032 512,737
See accompanying notes to schedule.
PAGE 26

Maricopa County
Schedule of expenditures of federal awards
Year ended June 30, 2016
Federal Pass-through Amount
agency/CFDA Pass-through grantor's Program provided to
number Federal program name Cluster title grantor numbers expenditures subrecipients
r
20 205 Highway Planning and Construction Highway Planning and Arizona Department AC STP-MMA-
Construction Cluster of Transportation 0(239), CM-MMA-
0(206), CM-MMA-
0(235), CM MMA-
0(237), CM-MMA-
0(242)D, CM-MMA-
0(243), CM-MMA-
0(244), CM-MMA-
0(240), CM-MMA-
0(247), CM-MMA-
0(260)8, JPA 12-
001, MMA-0(218),
MMA-0(257)F, MMA-
0(258)F, STP MMA-
0(224), STP OCR-
0(001) 4,025,296
20 205 Highway Planning and Construction Highway Planning arid Maricopa 656 SW MMA -
Construction Cluster Association of 0(217)
Governments 956,063 360,348
Total Highway Planning and Construction
Cluster 4,981,359 360,348
20 600 State and Community Highway Safety Highway Safety Cluster Arizona Governor's 2015-AI-001, 2015-
Office of Highway PT-022, 2015-PT-
Safety 063, 2016-AI-001,
2016-AL-013, 2016-
AL-014, 2016-CIOT-
009, 2016-PT-018,
2016-pT-065 232,249
20 616 'National Priority Safety Programs Highway Safety Cluster Arizona Governor's 2015-405D-005,
Office of Highway 2015-PT-063
Safety 24,324
Total Highway Safety Cluster 256,573
Total Department of Transportation 5,237,932 360,348
stihtte of4 rary $0r
45 310 Grants to States Arizona State 2015-35026-16
Library, Archives
and Public Records 9,075
Environmental rotection gene)"
66 001 Air Pollution Control Program Support 771,430 241,328
66 034 Surveys, Studies, Research, I rWestigations,
Demonstrations r and Special Purpose Activities
Relating to the Clean Air Act 170,939
Total Environmental Protection Agency 942,369 241,328
t of Ener - "-' -
81 042 Weatherization Assistance for Low-Income Arizona Department EW-ESA-14-4181 -03
Persons of Administration
Office of Grants
and Federal
Resources 204,460
See accompanying notes to schedule.
PAGE 27

Maricopa County
Schedule of expenditures of federal awards
Year ended June 30, 2016
Federal Pass-through Amount
agency/CFDA Pass-through grantor's Program provided to
number Federal program name Cluster title grantor numbers expenditures subrecipients
t of
84 002 Adult Education—Basic Grants to states Arizona Department 15FAEABE-570694-
of Education 16B, 16FAEABE-
613237-1613,
16FAEAEF-613237-
168, 16FAEAPL-
613237-16B,
16EAEW10-613237-
05A, 16AEWEL-
613237-05A 216,415
84 013 This I State Agency Program for Neglected and Arizona Department 16ELOCCL-613245-
Delinquent Children and Youth of Education 02A 87,514
84 027 Special Education—Grants to States Specie Education Cluster Arizona Department 16FESSCG-570692-
(IDEA) of Education 16FESCBG-
613229-09A,
16FESSCB-613229-
55B 246,705
84 365 English Language Acquisition State Grants Arizona Department 16FELENG-613245-
of Education 66A 22,662 22,662
84 374 Teacher and School Leader Incentive Grants
(formerly the Teacher incentive Fund) 18,957,401 6,264,590
84 396 ARRA State Fiscal Stabilization Fund (SFSF)---Race-to- Arizona Department 13-02-EDSG
thei-Top incentive Grants of Education 28,777 .
84 411 Investing in Innovation (i3) Fund 590,472 21,602
Total Department of Education 20,149,946 6,308,854
aleatth and Human ervices
93 044 Special Programs for the Aging.—Title Ill, Part Aging Cluster Area Agency on 2016-27-MCI
B—Grants tor Supportive Services and Senior Aging
Centers 301,023
93 069 Public Health Emergency Preparedness Arizona Department ADHS12-007891
of Health Services 199,617
93 074 Hospital Preparedness Program (I-I pp) and Arizona Department ADHS12-007891
Public Health Emergency Preparedness (PREP) ot Health Services
Aligned Cooperative Agreements 2,627,603
93 103 Food and Drug Administration— Research 48,916
93 116 Project Grants and Cooperative Agreements far Arizona Department ADHS13-042100
Tuberculosis Control Programs of Health Services 337,224
. • -
93 136 Injury Prevention Oriel Control Research and Arizona Department ADHS16-109742
State and Community Based Programs of Health Services 29,592
93 224 Health Center Program (Health Care for the Health Center Program
Homeless) Cluster 3,363,2,52 93,441
93 243 Substance Abuse and Mental Health Arizona Criminal SAP-15-004, SAP-
Services—Projects of Regional and National Justice Commission 15-008
Significance 79,934
93 268 irnmunilation Cooperative Agreements Arizona Department ADHS13-041805
of Health Services 800,561
93 297 . Teenage Pregnancy Prevention Program 613,272 . 142,939
93 332 Cooperative Agreement to Support Navigators
in Federally-facilitated and State Partnership
Marketplaces . .
93 505 Affordable Care Act (ACA) Maternal, Infant, arid Arizona Department ADHS12-923419
Early Childhood Home Visiting Program of Health Services 2,634,620 663,0138
93 539 PPHF Capacity Building Assistance to Arizona Department ADHS13-041805
Strengthen Public Health Immunization of Health Services
Infrastructure and Performance financed in part
by Prevention and Public Health Funds .... . . 208,506
- • •• •
93 558 Temporary Assistance tor Needy Families TANF Cluster Arizona Department ADES15-089115,
of Economic DE111071001
Security 541,728
See accompanying notes to schedule.
PAGE 2B

Maricopa County
Schedule of expenditures of federal awards
Year ended June 30, 2016
Federal Pass-through Amount
agency/CFDA Pass-through grantor's Program provided to
number Federal program name Cluster title grantor numbers expenditures subrecipients
93 563 Child Support Enforcement Arizona Department DE111162-001,
of Economic DE111171001, D116-
Security 002158,
G1604AZ4004 2,462,432
93 568 Low-Income Home Energy Assistance Arizona Department ADES15-089115,
of Economic DE111071001
Security 2,631,361
93 568 Low-Income Home Energy Assistance Arizona Department LW-ESA-12-2182-03
of Housing 351,933
93 568 Low-Income Home Energy Assistance Governor's Office of LW-ESA-12-2182-
Energy Policy 03Y4 159,471
Total 93.568 3,342,765
93 569 Community Services Block Grant Arizona Department ADES 15-089115,
of Economic DE1-11071001
Security , 828,232 352,148
93 576 Refugee and Entrant Assistance—Discretionary Arizona Department DE101038001
Grants of Economic
Security 924,432
93 597 Grants to States for Access and Visitation Arizona 'Department G1101A7SAVP,0116-
Programs of Economic 002145
Security 44,261
93 600 Head Start 27,194,837 9,347,083
93 617 Voting Access for individuals with Arizona Secretary al HHS-2006-ACF-
Disabilities—Grants to States State ADD-VOTE-0135 545,729
93 667 Social Services Block Grant Area Agency on 2016-27-MCH
Aging 255,869
93 667 Social Services Block Grant Arizona DepSniment ADES15-089115,
of Economic DE111071001
Security 306,251 294,589
Total 93.667 562,120 294,589
93 758 Preventive Health and Health Services Block Arizona Department ADHS15-078134,
Grant funded solely with Prevention and Public of Health Services AD9IS16-102232
Health Funds PPHF) 288,909
93 914 HIV Emergency Relief Project Grants 8,810,240 5,881,425
93 917 HIV Care Formula Grants Arizona Department ADHS14-059037
of Health Services 57,600
93 926 Healthy Start Initiative 2,315,207 82,820
93 940 HIV Prevention Activities—Health Department Arizona Department ADHS13-034910,
Based of Health Services ADHS14-059037,
ADHS15-089449 885,695
63 944 Human Immunodeficiency Virus (HIV)/Acquired Arizona Department ADHS12-016584
Immunodeficiency Virus Syndrome (AIDS of Health Services
Surveillance 25,146
93 945 Assistance Programs for Chronic Disease Arizona Department ADHS14-0618,77,
Prevention and Control of Health Services ADHS16-113997,
ADHS16-114422 233,154
93 977 Preventive Health Services—Sexually Arizona Department ADHS14-071224,
Transmitted Diseases Control Grants of Health Services ADHS16-116340,
HG052195 424,457
93 991 Preventive Health and Health Services Block Arizona Department HG854371
Grant ... . of Health Services 76,641
.93 994 Maternal and Child Health Services Block Grant Arizona Department ADHS12-010921,
to the States of Health Services ADHS12-015902,
ADHS12-021145,
ADHS13-037845,
ADHS14-074958,
719,603
ADHS16-102232
Total Department of Health and Human Services 61,532,648 16,857,533
See accompanying notes to schedule,
PAGE 2S

Maricopa County
Schedule of expenditures of federal awards
Year ended June 30, 2016
Federal Pass-through Amount
agency/CFDA Pass-through grantor's Program provided to
number Federal program name Cluster title grantor numbers expenditures subrecipients
94 006 AmeriCorps Arizona Governor's AC-VSG-15-090115-
Office for Children, 07
Youth and Families 61,134
of the United:States
High Intensity Drug Trafficking Areas PrograTri
555,941
97 .045 Cooperating Technical partners 375,774
97 047 Pie-Disaster Mitigation Arizona Department E.MF-2014-PC-0003
of Emergency and
Military Affairs 4,594
97 067 Homeland Security Grant Program Arizona Department 130202-01, 130814-
of Homeland 04,140805-01,
Security 140805-03, 140805-
04, 140805-05 r
150203-01, 150811-
01, 150811-02,
150811-03 504,531
97 091 Homeland Securfty eilowatch Program 468:975
Total Department of Homeland Security 1,908,815
Total expenditures of federal awards $ 179,766,211 $ 32,847,865
See accompanying notes to schedule.
PAGE 30

Maricopa County
Notes to schedule of expenditures of federal awards
Year ended June 30, 2016
Note 1 - Basis of presentation
The accompanying schedule of expenditures of federal awards includes Maricopa County's federal grant
activity for the year ended June 30, 2016, The information in this schedule is presented in accordance with
the requirements of Title 2 U.S, Code of Federal Regulations (CFR) Part 200, Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).
Note 2 - Summary of significant accounting policies
Expenditures reported on the schedule are reported on the modified accrual basis of accounting, except for
the following programs: Schools and Roads—Grants to States (10.665), Payments in Lieu of Taxes (15,226),
and Distribution of Receipts to State and Local Governments (15,227). For these programs, revenues
received during the fiscal year are considered earned and are reported as expenditures. All remaining
expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein
certain types of expenditures are not allowable or are limited as to reimbursement. Therefore, some amounts
presented in this schedule may differ from amounts presented in, or used in the preparation of, the financial
statements.
Note 3 - Catalog of Federal Domestic Assistance (CFDA) numbers
The program titles and CFDA numbers were obtained from the federal or pass-through grantor or the 2016
Catalog of Federal Domestic Assistance, When no CFDA number had been assigned to a program, the two-
digit federal agency identifier and the federal contract number were used. When there was no federal
contract number, the two-digit federal agency identifier and the word "unknown' were used.
Note 4 - Indirect cost rate
The County did not elect to use the 10 percent de minimis indirect cost rate as covered in 2 CFR §200.414.
PAGE 31

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PAGE 32


Maricopa Coun
Office of Assistant County Manager and Department of Finance
Shelby L Scharbach
CPA, CO EM
Assistant County Manager March 28, 2017
and
Chief Financial Officer
301 West Jefferson St Suite
Pier, AZ 85003-2148
Phone: 602-506-3561
Fax: 602-506-4451
www.rnaricopa,gov
Debbie Davenport
Auditor General
2910 North 44th Street, Suite 410
Phoenix, AZ 85018
Dear Ms. Davenport:
We have prepared the accompanying corrective action plan as required by the
standards applicable to financial audits contained in Government Auditing
Standards and by the audit requirements of Title 2 U.S. Code of Federal
Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and
Audit Requirements for Federal Regulations (Uniform Guidance). Specifically, for
each finding we are providing you with the names of the contact people
responsible for corrective action, the corrective action planned, and the
anticipated completion date.
Sincerely,
Shelby L. Scharbach
Assistant County Manager — Chief Financial Officer

Maricopa County
Corrective Action Plan
Year Ended June 30, 2016
Financial statement findings
2016-01 MgiMiteAiWfief.MZWV of.W 1'74:
The County should follow its policies and procedures when preparing financial statements
and note disclosures
Contact person(s): John Lewis, Deputy Director, Department of Finance, (602) 506-1376
Anticipated completion date: March 31, 2017
Concur. The County will update its processes to ensure that county departments are
providing financial information in compliance with GAAP. Although the Department of
Finance performs multilevel detailed reviews of all financial statements, note disclosures,
and required supplementary information, errors can occur due to the complex nature of
the disclosures and manner in which analysis is performed. All items were corrected prior
to issuance of the financial statements.
2016-02
The County should improve access controls over its information systems
Contact person(s): Phil Van Kley, Information Systems Manager, Maricopa County
Treasurer, (602) 506-4635
Contact person(s): Robert O'Connor, Maricopa County Chief Information Security Officer
Anti9imated compi J9r1 date: July 31, 2017 and Februjry 28, 2017, respectively
Concur. The Treasurer's Office will improve existing access controls of IT systems.
Regular reviews of user accounts will be enhanced to include reviews of users with
multiple active accounts to ensure access is necessary and- appropriate. A daily audit
report will be developed to identify authorization modifications to the Treasurer's legacy
system. This will ensure changes are documented, forwarded to appropriate individuals,
and reviewed within the IT Division daily. Additionally, the Treasurer's Office is currently
implementing a new system, and it is anticipated that controls for this system will adhere
to current National Institute of Standards and Technology guidelines. It is anticipated that
portions of this new system will be in use beginning in fiscal year 2018 and be fully
implemented by fiscal year 2019. The Office of Enterprise Technology will verify that
generic accounts are restricted appropriately and will maintain sufficient documentation
to track generic account access.
r2O1603
The County - should establish 'internal controls over temporary employees payroll
'Contact person(s) i De-yan Bunievio, Administrator, Maricopa County Recorder, (602) 506-
24 .71
Mticipated c.orivigtion dte NQ oh 31, 2017
Concur. The County has reviewed procedures relating to temporary election poll workers.
The log-in sheets are now certified by an inspector, who acts as supervisor under Arizona
Revised Statute 16-534. The County also reviewed its policy to retain the temporary poll
workers information for one election cycle. If the worker is not employed in two county-
wide general elections, then they are removed from the payroll system.

Maricopa County
Corrective Action Plan
Year Ended June 30, 2016
2016404 _ .z.me eniffit:1
Justice Courts Administration needs to improve controls over purchasing cards
.Contact person(s): _Jeff Fine, Administrator, Justice Courts, (602) 372-1561
!Anticipated_completion date: October 31, 201_5
Concur. The finding relates to discovery by Justice Court Administration in fiscal year
2016 of mismanagement and misuse of the department's sole purchasing card by a
former employee. Upon discovery, the card was immediately deactivated (approximately
October 2015) and a procurement audit was immediately conducted. Based on initial
findings, the Justice Court Administrator initiated the disciplinary process during which
the employee resigned. The procurement audit found that the former employee failed to
retain many receipts, failed to prepare and submit reconciliation reports and failed in their
role as the department's financial officer to establish proper management and control
systems. As a result, many purchases could not be supported by receipts, and some
appear to violate applicable procedure and policy. Further investigation, including efforts
made pursuant to this additional review, yielded additional receipts through banking
officials. This matter has been referred for further review and investigation. To date, the
Administrator has elected not to reinstate the use of a purchasing card and all purchases
are made through the County's procurement system.
sms,tAc,A
20-1-6-05
The County should improve controls over purchasing cards
Contact person(s): Lisa Nash, Procurement Services Administrator, Maricopa County
Procurement Services, (602) 506-8019
Anticipated completion date: Deceint)er 31, 2016
Concur. Maricopa County procedures and polices relating to purchasing cards have been
updated to clarify negotiable tender items and define allowable exceptions and
reconciliation requirements. The County is also researching additional IT controls such
as blocking additional vendor merchant category codes to improve controls over improper
purchases.
Responses to other auditors' finding:
2016-06
Housing Authority of Maricopa County (HAMC): General Ledger Maintenance
Contact person(s): Mario L, Aniles, HAMC Finance Director, (602) 744-4517
Aolitpwa gappletion date -, !),...lippaim,r 31, 2017
Concur. HAMC has fully implemented a review and reconciliation of all balance sheet
accounts on a monthly basis. Additionally, trainings and technical assistance have been
obtained to accelerate and address the agency's learning curve for newer staff.

Maricopa County
Corrective Action Plan
Year Ended June 30, 2016
Federal award findings and questioned costs
2016-101
CFDA No: 10.904 Watershed Protection and Flood Prevention
Department: Maricopa County Flood Control District
Contact person(s): David Turner, Finance Support Supervisor Flood Control District,
(602) 506-8617
MMpated completion date: March 31, 2017
County Response: Concur
County Corrective Action Plan: The Maricopa County Flood Control District has updated
its procedures regarding program expenditures and the reimbursement process. These
changes will ensure that reimbursement requests include only allowable costs. The
district discovered and contacted the grantor regarding the unallowable expenditures prior
to the audit. The grantor agreed to deduct the amount from a recent reimbursement
request. Additionally, all requests for reimbursement will be reviewed by a knowledgeable
person prior to submission.
r2016-102
CFDA No_: 10.904 Watershed Protection and Flood Prevention
Department: Maricopa County Flood Control District
Contact person(s): Sharon Rogers, Contract Office, Flood Control Distr ct, (602) 506-
6764
Completion date: September 30, 2016
County Response: Concur
County Corrective Action Plan: The Maricopa County Flood Control District updated its
policies and procedures to ensure that required reports are completed accurately and
submitted on time. Internal reports have been developed to ensure financial data on
projects can be obtained on demand. Certified expenditures will be reported on FFR
rather than total expenditures. Additionally, all reports are reviewed for accuracy to
supporting documentation by a knowledgeable person prior to submission.
I20 -16-103
,CFDA No.: 14.239 HOME Investment Partnership Program
'Department: Maricapa County Human Services Department
Contact person(s): Celeste Bautista, Finance Manager, (602) 506-2513
Completion date: March 10, 2017
County Response: Concur
County Corrective Action Plan: The Maricopa County Human Services Department
updated its procedures to ensure all required reports are submitted to HUD on time.
These procedures include clarifying which staff members are responsible for preparing
and submitting required reports. Additionally, all reports are reviewed for accuracy prior
to submission by a knowledgeable person. The 2014 HUD 60002, Section 3 Summary
report was submitted to HUD September 30, 2016.

Maricopa County
Corrective Action Plan
Year Ended June 30, 2016
6-104 tWigiPr,
CFDA No: 17,258 VV1ANVIOA Adult Program
17.259 WIANV10A Youth Activities
17178 VVIA/WIDA Dislocated Work Formula Grans
:Department: Maricopa County Human Services Department
Contact person(s): Celeste Bautista, Finance Manager, (602) 506-2513
Co jjate, March 10, 2017
County Response: Concur
County Corrective Action Plan: The Maricopa County Human Services Department
updated its policies and procedures to ensure that only allowable charges are submitted
for reimbursement. Specifically, the updated policies include guidelines related to
fraudulent activity. Additionally, the charge identified during the audit was corrected when
the bank issued a credit and expenditures in that period were reduced by $110.
2016-105
CFDA No.: 84.374 Teacher incentive Fund
Department: Maricopa County Education Service Agency
Contact person(s): Marc Kuffner, Assistant Superintendent for Economic Managemen
(602) 506-2068
Anticipated completion date: September 30, 2016
County Response: Concur
County Corrective Action Plan: The Maricopa County Education Service Agency
(MCESA) updated its policies and procedures to ensure new vendors and subrecipients
who receive $25,000 in federal funds are not suspended or debarred. Corrective action
was fully implemented in September 2016. MCESA verified and documented the vendor's
status by checking the Excluded Parties List System (EPLS), obtaining vendor
certification, or adding a clause or condition to the contract.
2016-;-1
CFDA No,: 84.374 Teacher incentive Fund
Department: Maricopa County Education Service Agency
Contact person(s): Marc Kuffner, Assistant Superintendent for Economic Managemen
(602) 506-2068
Anticipated completion date: lune 30, 2017
County Response: Concur
County Corrective Action Plan: The Maricopa County Education Service Agency
(MCESA) updated its policies and procedures to ensure that reports are completed
accurately and reflect certified actual match amounts rather than budgeted match
amounts. All reports will also be reviewed to supporting documentation by a
knowledgeable person prior to submission.

Maricopa County
Corrective Action Plan
Year Ended June 30, 2016
2016-107
CFDA No.. 84.374 Teacher Incentive Fund
'Department Tvlaricopa County Education Service Agency
Contact person(s): Marc Kuffner, Assistant Superintendent for Economic Managernen
(602) 506-2068
Inticipated completion date: June 30, 2017
County Response: Concur
County Corrective Action Plan: The Maricopa County Education Service Agency
(MCESA) has policies and procedures to ensure that before the award monitoring,
including obtaining DUNS numbers, is completed for new subrecipients. DUNS numbers
were verified for all current subrecipients by March 2017. The Teacher Incentive Fund
grant is a five year award and MCESA received a one year no cost extension from the
U.S. Department of Education. However, the intergovernmental agreement with the
subrecipients was not extended. These allowable expenditures did occur within the grant
awards period of availability.
'5-108 HING 115: *Mai
Cluster name, Health Center Program Cluster
CFDA 93.224 Health Center Program (Health Care for the Homeless)
Department: Maricopa County Department of Public Health
Contact person(s): Corinne Velasquez, Clinical Services Division Administrator, Maricopa
County Department of Public Health, (602) 506-6657
Antidtgaled cOnapletiOri date: April 30 2017
County Response: Concur
County Corrective Action Plan: The Maricopa County Department of Public Health
updated their procedures and policies to ensure fee schedules comply with grant
requirements. The revised policies and schedules have been placed on the next Board
meeting for approval. Additionally, the policy was updated to require annual review of the
sliding fee scale program.
2016-109
OFDA No.: 93.563 Child Support Enforcement
Department: Maricopa County Superior Court
Contact person(s): Chen Clark, Family Court Administrator/Director Conciliation Services,
(602) 506-2109
Anticipated co pletion date: June n, 2017
County Response: Concur
County Corrective Action Plan: The Maricopa County Superior Court obtained a software
application that will permit staff to record time spent on Child Support Enforcement eligible
activities. The application will create timesheets that will be used to support payroll
charges to the grant. The staff will sign these timesheets which will act as certifications.
Training is scheduled for April 2017 and the new process will be implemented beginning
in May 2017.

Maricopa County
Corrective Action Plan
Year Ended June 30, 2016
2016-110 •445,;)
CFDA No: 93.568 Low-Ineome Home Energy Assistance
Department: Maricopa County Human Services Department
Contact person(s): Celeste Bautista, Finance Manager, (602) 506-2513
Completion date: March 10, 2017
County Response: Concur
County Corrective Action Plan: The Maricopa County Human Service Department has
strengthened its procedures by requiring staff who work on multiple programs to track
their time and complete Personnel Allocation Report forms. These will be used to
document time and effort spent on each program. The department finance team will also
work with the programs to ensure general ledger and ADP reports are reconciled.
Additionally, all transfers will be reviewed and analyzed to ensure expenditures were
incurred for the specific program. All transfer journal vouchers will include explanations
and supporting documentation.
12016-111
iCFDA No.: 93.600 Head Start
Department: Maricopa County Human Services Department
Contact person(s): Celeste Bautista, Finance Manager, (602) 506-2513
Anticipated completion date: March 31 2017
County Response: Concur
County Corrective Action Plan: The Maricopa County Human Services Department has
revised its procedures related to in-kind match documentation. A new application is being
developed that will permit real time recording of volunteer time contributions. The
Department has also revised its procedures to improve consistency in entering and
storage of the in-kind forms. These improvements should reduce data entry errors.
Additionally, policies were updated to define the staff responsibilities for reviewing in-kind
match documentation to ensure compliance with program requirements. A secondary
review by program staff not responsible for in-kind forms is also being implemented.
2016-112
CFDA No: 93,600 Head Start
Department; Maricopa County Human Services Department
'Contact person(s): Celeste Bautista, Finance Manager, (602) 506-2513
cpwalgtip7„ Narch 10 2017
County Response: Concur
County Corrective Action Plan: The Maricopa County Human Services Department
updated its policies to ensure required financial reports are completed accurately. The
department now includes supporting documents that will be retained with copies of the
financial reports. Additionally, reports are reviewed to supporting documentation by the
program and finance managers for accuracy prior to submission.

Maricopa County
Office of Assistant County Managet and Department of Finance
Shelby L. Scharbach
CPA, CGFIvi
Assistant County March 28, 2017
Manager and
Chief Financial Officer
301 West Jefferson St
Suite 960
Pbx, AZ 85003-2148
Phone: 602-506-3561
Fax: 602-506-4451
www.maricopa.gov
Debbie Davenport
Auditor General
2910 North 44th Street, Suite 410
Phoenix, AZ 85018
Dear Ms. Davenport:
We have prepared the accompanying summary schedule of prior audit findings
as required by the audit requirements of Title 2 U.S. Code of Federal Regulations
Part 200, Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards (Uniform Guidance). Specifically, we are
reporting the status of audit findings included in the prior audit's schedule of
findings and questioned costs. This schedule also includes the status of audit
findings reported in the prior audit's summary schedule of prior audit findings that
were not corrected.
Sincerely,
Shelby L. Scharbach
Assistant County Manager — Chief Financial Officer

Status of financial statement findings
The County should - follow its polit es and procedures when preparin g financial
statements and note disclosures
Finding No. 2015-01
Status: Partially corrected.
Although the Department of Finance performs multilevel detailed reviews of all financial
statements, note disclosures, and required supplementary information, errors can occur due
to the complex nature of the disclosures and manner in which analysis is performed. All
items were corrected prior to issuance of the financial statements. The Department of
Finance continues to work with county departments to ensure financial information is
provided in compliance with accounting policies to prevent future errors from occurring.
Contact person is John Lewis, Deputy Director, Department of Finance, (602) 506-1373.
The County should improve access controls over its information technology
resources
1Finding No. 2015-02
[Status; Partiatty corr
Access control procedures for Treasurer IT systems have been updated to ensure users
with multiple Ds are identified and approvals are fully documented. Access controls related
to new employees have been revised to prevent access prior to management approval. The
Treasurer's Office is currently implementing a new financial system that will be implemented
in fiscal year 2018. It is anticipated that controls for this system will adhere to current National
Institute of Standards and Technology guidelines and help correct the remaining
deficiencies. Contact person is Phil Van Kley, Information Systems Manager, Maricopa
County Treasurer, (602) 506-4635.
the County should monitor controls over its outside service organizations
,Finding No. 2015-03
'Status: Fully corrected.
-The County should maintain documentation of its calculation of indirect cost
expenditures
Finding No 2015-04
tStatus: Fully corrected.
Housing Authority of Maricopa County (HAMC) General Ledger Maintenance
.Finding No. 2015-05
,41,40: Not pqrcectecl
HAMC is in the process of implementing a monthly balance sheet account reconciliation and
is providing trainings to new staff. See finding 2016-06 for additional information.

Status of Federal Award Findings and Questioned Costs
CFDA No.: 16.738 Edward 'Byrne Memorial Justice Assistance Grant Program
iFinding No, 2014-105
:itatus: Fully co
't FDA No.: 84.374 Teacher Incentive Fund
Finding No. 2014-108
itAty#: Pa4i0ty corrected.
The Maricopa County Education Service Agency (MCESA) updated its policies and
procedures to ensure new vendors and subrecipients who receive $25,000 in federal funds
are not suspended or debarred. As the Single Audit for fiscal year 2015 was not completed
until March 2016, corrective action was not fully implemented until September 2016. MCESA
verified and documented the vendor's status by checking the Excluded Parties List System
(EPLS), obtaining vendor certification, or adding a clause or condition to the contract.
Contact person is Marc Kuffner, Assistant Superintendent for Economic Management &
Consulting, (602) 506-2068.
tFbA No.: s 69. Public ealth Emergency Pre:04
Finding No. 2014-109
'Status: Fully corrected
,CFDA No.: 10,904 Watershed Protection and Flood Prevention
nding No, 2015-101
O.Nartint C4 cted.
The Maricopa County Flood Control District has updated its policies and procedures to
ensure that required reports are completed accurately and submitted on time. Internal
reports have been developed to ensure financial data on projects can be obtained on
demand. Additionally, all reports are reviewed for accuracy to supporting documentation by
a knowledgeable person prior to submission. As the Single Audit for fiscal year 2015 was
not completed until March 2016, corrective action was not fully implemented until March
2016. Contact person is David Turner, Finance Support Supervisor Flood Control District,
(602) 506-8617.
'CF-15- A No,: 10.904 Watershed Protection and Flood Prevention
84.374 Teacher incentive Fund
Finding No.: 2015-102
Status: Partially corrected,
The Maricopa County Education Service Agency (MCESA) updated its policies and
procedures to ensure new vendors and subrecipients who receive $25,000 in federal funds
are not suspended or debarred. As the Single Audit for fiscal year 2015 was not completed
until March 2016, corrective action was not fully implemented until September 2016. MCESA
verified and documented the vendor's status by checking the Excluded Parties List System
(EPLS), obtaining vendor certification, or adding a clause or condition to the contract.

Contact person is Marc Kuffner, Assistant Superintendent for Economic Management &
Consulting, (602) 506-2068.
The Maricopa County Flood Control District amended its procedures in the contract
department to ensure that all contracts (Contractor or consultant) are reviewed to ensure
vendors and subrecipients receiving more than $25,000 in federal funds are not suspended
or disbarred by reviewing the excluded parties list system (EPLS), obtaining a vendor
certification, or including a clause in new contracts. This finding was fully corrected for this
program. Contact person is David Turner, Finance Support Supervisor Flood Control District,
(602) 506-8617.
CFDA No.: 16,738 Edward Byrne Memorial Justice Assistance Grant Program
Finding No_ 2015-103
SUVA,: Fully 6121
t - FDA No.: 84.374 Teacher Incentive Fund
Finding No. 2015-104
Status: Fully corrected.
CFDA No.: 84.374 Teacher Incentive Fund
Finding NO. 2015-105
rrected,
The Maricopa County Education Service Agency (MCESA) has policies and procedures to
ensure that before the award monitoring including obtaining DUNS numbers is completed
for new subrecipients. As the Single Audit was not completed until March 2016, corrective
action was not fully implemented until September 2016. During FY 2016, MCESA modified
its procedures and provided subrecipients with program information and followed up on audit
findings by issuing management decisions within 6 months.
'CFDA No 93.069 Public Health Emergency Preparedness (PHEP)
inding No. 2015-106
Fully corrected.
LCFDA No 93.4i3Child Support Enforcement
Finding No. 2015-107
Status: Does not warrant further action
No further action is required because the pass-through entity no longer requires the report.
cFDA No.: 81. 83 ChM Support Enforcement
Finding No„ 2015-108
Slatuft: Not corrected.
The Superior Court will update its policies and procedures to ensure that employee payroll
costs charged to the program follow 2 CFR §225 and 2 CFR §200.430(i) for payroll
documentation and time distribution. Specifically, policies and procedures will ensure
employee payroll costs will be supported by personnel activity reports or equivalent

documentation that reflect an after-the-fact distribution of each employee's actual activity
during the period. In addition, these procedures will include at least monthly certifications
that the employee signs. The process for implementing a solution began in June 2016, but
took longer than anticipated to implement. Training began in March 2017 and is anticipated
to be fully implemented by April 2017. Contact person is Cheri Clark, Family Court
Administrator/Director Conciliation Services, (602) 506-2109.
o.: 93. orre ErWtance
finding No. 2015-109
Status: Not corrected,
The Maricopa County Human Services Department will update its policies to utilize a
Personnel Activity Report (PAR) that split funded employees can record and certify actual
time spent on each project or funding strings. The PAR will be reconciled to ADP payroll
distribution reports and a correcting journal entry will be prepared on a semiannual basis to
align actual hours worked for each grant. This will ensure that payroll and indirect
expenditures are charged to the appropriate grant. As the Single Audit for fiscal year 2015
was not completed until March 2016, corrective action is anticipated to be fully implemented
in June 2017. Contact person is Celeste Bautista, Finance Administrator, (602) 506-2513.
OA No 93.600 Head Start
Finding No. 2015-110
'Statup Fully corrected, m

ARIZONA
AuditorGeneral
Making a Positive Difference