RUSK COUNTY, WISCONSIN FEDERAL AND STATE SINGLE AUDIT REPORTS YEAR ENDED DECEMBER 31, 2016

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1 FEDERAL AND STATE SINGLE AUDIT REPORTS YEAR ENDED DECEMBER 31, 2016

2 TABLE OF CONTENTS YEAR ENDED DECEMBER 31, 2016 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 1 SCHEDULE OF STATE FINANCIAL ASSISTANCE 4 NOTES TO SCHEDULES OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE 7 INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 9 INDEPENDENT AUDITORS' REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM, REPORT ON INTERNAL CONTROL OVER COMPLIANCE, AND REPORT ON THE SCHEDULES OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE REQUIRED BY THE UNIFORM GUIDANCE AND STATE SINGLE AUDIT GUIDELINES 11 SCHEDULE OF FINDINGS AND QUESTIONED COSTS 14

3 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED DECEMBER 31, 2016 Federal Granter Agency/Pass-Through Agency/ Program Title and Year U S Department of Agriculture Special Supplemental Food Program for Woman, Infants and Children State Matching Grant for Food Stamp Program (SNAP Cluster) Income Maintenance Contract Food Stamp Agency Incentives Total SNAP Cluster Total U.S. Department of Agriculture U S Department of Justice Crime Victim Assistance State Criminal Alien Assistance Program Bulletproof Vests Partnership Program Total U.S. Department of Justice U S Department of Transportation Formula Grants for Rural Areas Enhanced Mobility for Seniors and Individuals with Disabilities Highway Safety Cluster: Highway Safety Grants National Priority Safety Programs Total Highway Safety Cluster Total U.S. Department of Transportation Environmental Protection Agency Indoor Radon Program U S Department of Education Special Education Grants for Infants and Families: Major Federal Program Federal Pass-Through Entity Passed (Deferred) CFDA Pass-Through Identifying Through to Reimbursements Number Entit:io: Number Subreci11ients 1/1/16 CARS #154710, , WIDHS $ $ 12, W1 OHS I Northern IM Consortium CARS #284, 293, ,350 WIDCF C0Re# , V , W1 DOJ 2015-V , Direct N/A Direct N/A , WIDOT Section 5311 FY16 448, , WIDOT Section 5310 FY16 50,551 11, WIDOT FG-2016-Rusk Co FG-2016-Rusk Co , FG-2016-Rusk Co , FG WIDOT 2016-Rusk Co WIDHS CARS # WIDHS CARS# , ,690 Grant (Deferred) Prior Year Federal Reimburse- Reimbursements Adjustments Ex11endltures ments 12131/16 $ $ 99,072 $ 107,564 $ 4,337 79, ,724 8, , ,423 12,512-26,738 26,765 4, ,495 28,436 4, , , ,497 50,551 33,641 28,395 6,929 6,929 16, , , , ,320 3,500 3,500-16,355 16,355 See Notes to Schedules of Expenditures of Federal Awards and State Financial Assistance (1)

4 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (CONTINUED) YEAR ENDED DECEMBER 31, 2016 Federal Pass-Through Entity Passed (Deferred) Federal Grantor Agency/Pass-Through Agency/ CFDA Pass-Through Identifying Through to Reimbursements Prior Year Program Title and Year Number Entijy: Number Subrecloients 1/1/16 Adjustments U.S. Degartment of Health and Human Services Preventive Health - Title Ill D WI DHS I GWAAR CARS # $ $ 835 $ Aging Cluster: Supportive Services - Title Ill B WI DHS I GWAAR CARS # Title II I-Part C-Nutrition Services: WI DHS I GWAAR CARS #560350, Nutrition Services Incentives Program WI DHS I GWAAR CARS # Total Aging Cluster - National Family Caregivers Support Program WI DHS I GWAAR CARS # ,997 Public Health Emergency Preparedness WIDHS CARS # ,281 Immunization Grants WIDHS CARS# State Health Insurance Assistance Program WI DHS I GWAAR CARS # Safe & Stable Families WIDCF CDRe#3306 4,052 Temporary Assistance for Needy Fam Illes (TANF Cluster): Children and Families Basic County Allocation WIDCF CORe #3377, 3380, ,840 Social Services and Community Programs Contract WIDHS CARS# Total TANF Cluster 12,359 CORe #7332, 7477, 7482, Child Support Enforcement WIDCF 7506, 7606, 7613, ,975 AD , Low Income Home Energy Assistance Program WIDOA AD ,495 Child Care and Development Fund: Child Care Certification WIDCF CORe#831 (1,185) Child Care Administration Vilas County CORe# Total Child Care and Development Fund 7,860 Children's Justice Act Grant WIDOJ OCVS Sub Grant Award Stephanie Tubbs Jones Child WeWare Services Program: Community Youth and Family Aids Program WIDOC CY Basic Children and Families Allocation WIDCF CORe #3561, 3413 Total Stephanie Tubbs Jones Child Welfare Services Program 327 Grant (Deferred) Federal Reimburse- Reimbursements Expenditures ments 12131/16 $ 2,'227 $ 1,444 $ 1,618 38,092 38,092 58,295 55,087 3, , ,063 3,208 10,334 7,'228 7,103 34,126 34,699 13,708 5,722 6,160 (138) 6,500 6,500-29,737 21,555 12,234 19,454 17,265 5, ,456 65,288 17, , ,535 39,249 20,609 21,454 2,650 6,868 4,502 1, ,580 54,583 5,857 12,000 12, ,809 1, Major Federal Program See Notes to Schedules of Expenditures of Federal Awards and State Financial Assistance (2)

5 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (CONTINUED) YEAR ENDED DECEMBER 31, 2016 Federal Pass-Through Entity Passed (Deferred) Grant (Deferred) Federal Grantor Agency/Pass-Through Agency/ CFDA Pass-Through Identifying Through to Reimbursements Prior Year Federal Reimburse- Reimbursements Proeram Title and Year Number Entity Number Subrecipients 1/1/16 Adjustments Expenditures ments 12131/16 U.S. Department of Health and Human Services {Continued) Foster Care-Title IV-E: Community Youth and Family Aids Program WIDOC CY2015 $ $ 577 $ - $ $ 577 $ Basic Children and Families Allocation WIDCF CORe #3561, 3413, , Total Foster Care - Title IV-E , ,364 7,514 Social Services Block Grant Aging and Disability Resource Center (ADRC) WI DHS I Barron County CARS # Human Services Contract WIDHS CARS# ,552 Total Social Services Block Grant 17,585 96,402 90,405 23,582 Chafee Foster Care Independence Program WIDCF C0Re# Children's Health Insurance Program WI DHS I Northern JM Consortium CARS #284, 293, 298 3,752 10,420 13,101 1,071 Medicaid Cluster Case Management WIDHS Payee ID # ,969 11,969 Human Services Contract WIDHS CARS#878 4,522-6,424 4,522 6,424 CARS #560061, , Aging and Disability Resource Center (ADRC) WI DHS I Barron County , , ,607 71,530 77,494 7,643 Children's Long-Term Support (CLTS) WIDHS/WPS CY ,643 50,409 37,187 15,865 Children's Long-Term Support (CLTS) -via Third Party Administrator M WPS CY ,383 56,383 l&a Elderly Benefit Specialist WI DHS/GWAAR CARS # (2,061) 16,627 9,800 4,766 Basic Children and Families Allocation WIDCF CORe# Income Maintenance Contract WI DHS I Northern IM Consortium CARS #284, 293, , , ,855 12,037 Public Health Contract WIDHS CARS # Wisconsin Medical Assistance Cost Reporting (WIMCR) WIDHS Final ,331 1,331 Total Medicaid Cluster 54, , ,215 46,872 Block Grants for Community Mental Health Services WIDHS CARS #515, ,581 25,642 6,939 Block Grants for Prevention and Treatment of Substance Abuse WIDHS CARS#570 31,583 23,027 8,556 Maternal and Child Health Services Block Grant WIDHS CARS#159320, ,327 28, Total U.S. Department of Health and Human Services 172,959 1,196,648 1,168, ,964 U.S. Department of Homeland Security Hazard Mttigation Grant WIDMA FEMA-1933-DR-WI - (7,272) 7,272 Emergency Management Performance Grant WIDMA EMPG FY14, FY Total U.S. Department of Homeland Securtty 8,747 9,939 36,701 50,613 4,774 TOTAL FEDERAL AWARDS $ 498,893 $ 355,443 $ 9,939 $ 1,981,462 $ 1,938,482 $ 408,362 ** Major Federal Program /IA See Note 5 See Notes to Schedules of Expenditures of Federal Awards and State Financial Assistance (3)

6 SCHEDULE OF STATE FINANCIAL ASSISTANCE YEAR ENDED DECEMBER 31, 2016 (Deferred) State Grantor Agency/ State Reimbursements Program Title and Year l.d. Number 1 /1/16 ~enditures Department of Agriculture, Trade and Consumer Protection Soil and Water Resource Management $ 109,337 $ 95,839 Land and Water Resource Management ,3~0 58,229 Total Department of Agriculture, Trade and Consumer Protection 133, ,068 Department of Safety and Professional Services Environmental Aids Private Sewage System ,156 Department of Natural Resources Utility-Terrain Vehicle Aids ** (1,200) 2,400 Boating Enforcement Aids ,070 6,472 All-Terrain Vehicle Enforcement Aids ,485 Snowmobile Enforcement Aids ,193 Wildlife Damage Abatement and Claims ,334 23,414 County Conservation Aids ,452 - County Recreation Aids (3,226) 4,405 County Forest ,214 Snowmobile Trails /575 ** (27, 109) 113,468 All-Terrain Vehicle Aids ** (40,505) 180,819 Recycling Grant ,438 State Forest and Park Road Aids ,176 PECFA Grant Administration and Abatement 370.NONE - 4,304 Total Department of Natural Resources (40, 184) 574,788 Department of Transportation Elderly and Handicapped County Transportation Aids ** - 68,844 Transit Operating Aids ** 49, ,732 County Forest Road Aids ,029 Total Department of Transportation 49, ,605 Department of Corrections Youth Aids ,071 - (Deferred) Reimburse- Reimbursements ments 12/31/16 $ 109,337 $ 95,839 54,762 27, , ,636 5,156 1,200 8,070 6,472 8,485 3,193 21,334 23,414 2,452 4,187 (3,008) 50, ,736 (45,377) 190,843 (50,529) 71, ,176 4, ,632 (69,028) 68, ,459 63,629 7, ,332 63,629 37,071 ** Major State Financial Assistance Program See Notes to Schedules of Expenditures of Federal Awards and State Financial Assistance (4)

7 SCHEDULE OF STATE FINANCIAL ASSISTANCE (CONTINUED) YEAR ENDED DECEMBER 31, 2016 (Deferred) State Granter Agency/ State Reimbursements Program Title and Year l.d. Number 1/1/16 ~enditures Department of Health Services Fluoride Supplement $ 622 $ 868 WIC Program WIC Farmers Market Grant Cons Contracts Lead Poisoning (1,913) 3,798 Cons Contracts PHHS ,860 Cons Contracts Maternal and Child Health Services Reproductive Health ,336 10,885 APS-Adult Protective Services ,202 21,949 Community Options Program (6,616) 6,616 Children's COP ,086 Alzheimer's Family Support ,394 8,205 Coordinated Services ,903 Community Mental Health ,374 Certified Mental Health Program ,239 - Birth to Three Initiative ,746 ADRC NH RELOC NON MA Aging and Disability Resource Center , ,004 Basic County Allocation ** 102, ,448 Family Support ,072 - Basic County Allocation - State/County Match ** (10,710) 10,710 CLTS DD OTH CWAADMIN GPR ,205 CL TS MH OTH CWA ADMIN GPR ,029 CL TS OTHER CWA ADMIN GPR ,522 6,424 Emergency Medical Services Funding Assistance 435.EMS (5,383) 2,991 Passed through Area Agency on Aging: Elderly Benefit Specialist Program ,936 10,959 Elderly Benefit Specialist Program ,566 Pharmaceutical Assistance Program ,275 State Senior Community Services ,264 Title Ill, Part C-1 Congregate Meals ,324 Title Ill, Part C-2 Home Delivered Meals ,985 Elder Abuse ,145 5,789 Passed through Great Rivers Income Maintenance Consortium: IMAA State Share ,269 IMAA ,313 Total Department of Health Services 151,576 1, 121,980 ** Major State Financial Assistance Program See Notes to Schedules of Expenditures of Federal Awards and State Financial Assistance (5) (Deferred) Reimburse- Reimbursements ments 12/31/16 $ 839 $ , , ,221 21,689 16,462 35,303 (9,217) 8,729 1,870 32,866 12, ,374 12,239 15, ,344 10, , ,238 8,072 18,813 (18,813) 20,014 9,191 4,817 2,212 4,522 6,424 6,652 (9,044) 9,562 6,333 9,800 4,766 3,275-5,264 15,935 4,389 2,985 7,692 2,242 73,269 1, ,085, ,445

8 SCHEDULE OF STATE FINANCIAL ASSISTANCE (CONTINUED) YEAR ENDED DECEMBER 31, 2016 (Deferred) State Granter Agency/ State Reimbursements Program Title and Year l.d. Number 1/1/16 Expenditures (Deferred) Reimburse- Reimbursements ments 12/31/16 Degartment of Children and Families Child Support Medical Support Liability Incentive $ - $ 11,451 Child Support Enforcement ,625 Child Support Medical Support Medicaid Agency Incentives JJ Community Intervention ,694 JJAODA JJ Youth Aids ,583 Basic County Allocation ** - 187,233 State/County Match ** - 14,929 CW WSACWIS Annual Op Maint Fee (1,972) Food Stamp Agency Incentives ,634 Medicaid Agency Incentives Total Department of Department of Children and Families ,081 Degartment of Justice Treatment Alternatives and Diversion , ,806 Victim Witness Assistance Program / ,775 21,860 Total Department of Justice 74, ,666 Degartment of Militarv Affairs Emergency Planning Grant ,210 6,458 Computer & Hazmat Equipment Grant Total Department of Military Affairs 3,210 7,248 Degartment of Administration Land Information Grant ,177 Public Benefits , Total Department of Administration ,033 Subtotal State Financial Assistance $ 414,012 $ 2,755,625 $ 10,615 $ , , ,526 71, ,233 4,952 9,977 (1,972) 1, ,800 82, ,417 64,807 23,343 10, ,760 75,099 9, ,458 98,912 (22,735) 18,525 3, {19,095) $ 2,724,856 $ 444,781 Claims Paid to Providers via Third Pal:! Administrator Children's Long Term Support AA 40,529 TOTAL STATE FINANCIAL ASSISTANCE EXPENDITURES $ 2,796,154 ** Major State Financial Assistance Program /\/\See Note 5 See Notes to Schedules of Expenditures of Federal Awards and State Financial Assistance (6)

9 NOTES TO SCHEDULES OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE DECEMBER 31, 2016 NOTE 1 REPORTING ENTITY Rusk County is governed by a board of supervisors consisting of nineteen elected members. The financial reporting entity for the County is based upon criteria set forth in generally accepted accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The financial reporting entity is defined by GASB to consist of (a) the primary government, (b) organizations for which the primary government is financially accountable, and (c) other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete. The basic financial statements of the County consist solely of the primary government. No other organizations were identified for inclusion in the financial reporting entity of the County. NOTE 2 BASIS OF PRESENTATION The schedules of expenditures of federal awards and state financial assistance have been presented on a basis to reflect the flow of available funds in the individual programs as follows: Expenditures - Expenditures are presented on the modified accrual basis of accounting. Grant expenditures represent the amount of program funds expended during the year. Receipts - Receipts recorded under the Grant Reimbursement category represent actual program funds received by the County during the year. Reimbursement - Amounts recorded as accrued reimbursements represent the excess of program funds expended over available program funds. Such amounts represent program funds receivable by the County. Deferred Reimbursement - Amounts recorded as deferred reimbursements represent available (unexpended) program funds held by the County. (7)

10 NOTES TO SCHEDULES OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE DECEMBER 31, 2016 NOTE 3 ADJUSTMENTS TO BEGINNING ACCRUED (DEFERRED} REIMBURSEMENT Prior year adjustments included in the schedules of expenditures of federal awards and state financial assistance represent adjustments to the January 1, 2016 accrued (deferred) reimbursement balances of the individual programs based on subsequent funding of the programs in 2016 and/or adjustment of accruals resulting from prior year audit findings. NOTE 4 CDBG PROGRAM REVOLVING LOAN FUND Housing Rehabilitation The County was awarded Community Development Block Grants (CDBG) in prior years for financing housing rehabilitation loans. Repayments received on the loans are recorded in a separate revolving loan fund by the County and are used to finance similar loans in accordance with the original grant agreements. Loans issued under the CDBG programs were $37,705 during the year ended December 31, The balance of loans outstanding was $2,694,992 as of December 31, These transactions are not included in the schedule of expenditures of federal awards. NOTE 5 CLAIMS PAID VIA THIRD PARTY ADMINISTRATOR Amounts shown as paid via Third Party Administrator (TPA) are payments made by a TPA for County authorized services. The TPA makes payments directly to service providers, and receives reimbursement for these services directly from the Wisconsin Department of Health Services (DHS). The activity between the TPA and service providers is not recorded in the County's financial accounting system; however, DHS guidance dictates that these transactions are to be included in the Schedules of Expenditures of Federal Awards and State Financial Assistance. NOTE 6 INDIRECT COSTS The County has not elected to use the 10% de minim is indirect cost rate. (8)

11 G CliftonlarsonAllen Cliftonl.arsonAllen LI.P CLAconnect.com INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS The County Board Rusk County, Wisconsin We have audited, in accordance with auditing standards generally accepted in the United States of America and 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, the business-type activities, each major fund and the aggregate remaining fund information of Rusk County, Wisconsin (County) as of and for the year ended December 31, 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 September 22, Our report includes a reference to other auditors who audited the financial statements of the Rusk County Memorial Hospital, as described in our report on Rusk County's financial statements. This report does not include the results of the other auditors' testing of internal control over financial reporting or compliance and other matters that are reported on separately by those auditors. The financial statements of Rusk County Memorial Hospital were not audited in accordance with Government Auditing Standards. 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 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 identified certain deficiencies in internal control that we consider to be material weaknesses and significant deficiencies. 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 financial statements will not be prevented, or detected and corrected on a timely basis. We consider the deficiency described in the accompanying Schedule of Findings and Questioned Costs as item to be a material weaknesses. ) A member of ~ ~;:sl~ (9)

12 The County Board Rusk County, Wisconsin A significant deficiency is a deficiency, or combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit the attention by those charged with governance. We consider item in the accompanying Schedule of Findings and Questioned Costs to be a significant deficiency. Compliance and Other Matters As part of obtaining reasonable assurance about whether the County's 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 test disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Rusk County's Response to Findings The County's responses to the findings identified in our audit are described in the accompanying Schedule of Findings and Questioned Costs. The County's responses were not subjected to the auditing procedures applied in the audit of the 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 result 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. CliftonlarsonAllen LLP Eau Claire, Wisconsin September 22, 2017 (10)

13 e CliftonLarsonAllen Cflf!onLarsonAllen LLP CLAconnecl.rom INDEPENDENT AUDITORS' REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM, REPORT ON INTERNAL CONTROL OVER COMPLIANCE, AND REPORT ON THE SCHEDULES OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE REQUIRED BY THE UNIFORM GUIDANCE AND STATE SINGLE AUDIT GUIDELINES The County Board Rusk County, Wisconsin Report on Compliance for Each Major Federal and State Program We have audited Rusk County, Wisconsin's (County) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the County's major federal programs for the year ended December 31, We have also audited the County's compliance with types of compliance requirements described in the State Single Audit Guidelines, issued by the Wisconsin Department of Administration that are applicable to each of its major state programs (including federal programs required to be tested as major state programs) for the same period. The County's major federal programs and major state programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Rusk County's basic financial statements include the operations of the Rusk County Memorial Hospital, an enterprise fund of the County, which expended federal awards that are not included in the schedule of expenditures of federal awards during the year ended December 31, Our audit, described below, did not include the operations of the Rusk County Memorial Hospital. Management's Responsibility Management is responsible for compliance with federal and state statutes, regulations, and the terms and conditions of its federal and state awards applicable to its federal and state programs. Auditor's Responsibility Our responsibility is to express an opinion on compliance for each of the County's major federal and state programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; 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); and the State Single Audit Guidelines, issued by the Wisconsin Department of Administration. Those standards, the Uniform Guidance and state guidelines 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 or state 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. ~Ne~i~ ~ International (11)

14 The County Board Rusk County, Wisconsin We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal and state program. However, our audit does not provide a legal determination on the County's compliance. Opinion on Each Major Federal and State Program In our opinion, the County complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on to each of its major federal and state programs identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs for the year ended December 31, Report on Internal Control over Compliance Management of the County 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 or state program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major program and to test and report on internal control over compliance in accordance with the Uniform Guidance and State Single Audit Guidelines, 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. 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 or state program on a timely basis. A material weakness in internal control over compliance is a deficiency, or 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 or state program will not be prevented, or detected and corrected, on a timely basis. 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 Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 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 result of that testing based on the requirements of the Uniform Guidance and State Single Audit Guidelines. Accordingly, this report is not suitable for any other purpose. (12)

15 The County Board Rusk County, Wisconsin Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance and Schedule of State Financial Assistance Required by State Single Audit Guidelines We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Rusk County as of and for the year ended December 31, 2016, and the related notes to the financial statements, which collectively comprise Rusk County's basic financial statements. We issued our report thereon dated September 22, 2017, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards and schedule of state financial assistance are presented for purposes of additional analysis as required by the Uniform Guidance and State Single Audit Guidelines, respectively, and are not a required part of the basic financial statements. Such information is the responsibility of 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 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 the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditure of federal awards and schedule of state financial assistance are fairly stated in all material respects in relation to the basic financial statements as a whole. CliftonlarsonAllen LLP Eau Claire, Wisconsin September 22, 2017 (13)

16 SCHEDULE OF FINDINGS AND QUESTIONED COSTS DECEMBER 31, 2016 PART I: SUMMARY OF AUDITOR'S RESULTS Financial Statements Type of auditors' report issued: Internal control over financial reporting: Material weakness( es) identified? Significant deficiency(ies) identified that are not considered to be material weaknesses? Noncompliance material to financial statements noted? Unmodified X yes no X yes none reported yes X no Federal Awards Internal control over major programs: Material weakness(es) identified? Significant deficiency(ies) identified that are not considered to be material weakness(es)? Type of auditors' report issued on compliance for major programs yes X no yes X none reported Unmodified Any audit findings disclosed that are required to be reported in accordance with 2 CFR (a) of the Uniform Guidance? yes X no Identification of major Federal programs: CFDA Number(s) Name of Federal Program or Cluster Public Transportation for Non-Urbanized Areas Child Support Enforcement Medical Assistance Program Dollar threshold used to distinguish between type A and type B programs: $ Auditee qualified as low-risk auditee? yes X no (14)

17 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) DECEMBER 31, 2016 PART I: SUMMARY OF AUDITOR'S RES UL TS (CONTINUED) State Awards Internal control over major programs: Material weakness(es) identified? yes X no Significant deficiency(ies) identified that are not considered to be material weakness(es)? yes X none reported Type of auditors' report issued on compliance for major programs Unmodified Any audit findings disclosed that are required to be reported in accordance with the State Single Audit Guidelines? yes X no Identification of major State programs: State ID Number{s) Name of State Program or Cluster , Snowmobile Trail Maintenance and Development , , ATV/UTV Trail Maintenance and Development Elderly and Handicapped County Transportation Aids Transit Operating Aids , Basic County Allocation , Community Services and MH Services - State/County Match Federal Programs Tested as Major State Programs: Medical Assistance Program - Human Services Contract Medical Assistance Program - Claims Paid by Third Party Administrator Medical Assistance Program - Case Management Wisconsin Medicaid Cost Reporting Dollar threshold used to distinguish between type A and type B programs: _$~2~5~0~,0~0~0 Auditee qualified as low-risk auditee? yes X no (15)

18 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) DECEMBER 31, 2016 PART II: FINDINGS RELATED TO INTERNAL CONTROL OVER FINANCIAL REPORTING: FINDING: Material Audit Adjustments Criteria: Condition: Context: Cause: Effect: Recommendation: The County should have controls in place to prevent or detect a material misstatement in the financial statements in a timely manner. The audit firm proposed and the County posted to its general ledger accounts journal entries for correcting certain misstatements. The County has informed us that they will continue to rely upon the audit firm to propose such audit adjustments as are necessary to adjust accounts in accordance with Generally Accepted Accounting Principles (GAAP). Management will review and approve those entries prior to recording them. The County has not established controls to ensure that all accounts are adjusted to their appropriate year end balances in accordance with GAAP. The potential exists that financial statements of the County may include inaccurate information not detected or prevented by County staff. The County should continue to evaluate its internal control processes to determine if additional internal control procedures should be implemented to ensure that accounts are adjusted to their appropriate year end balances in accordance with GAAP. Views of Responsible Officials and Planned Corrective Actions: The County will continue to rely upon the audit firm to propose audit adjustments necessary to adjust accounts in accordance with GAAP. Management will review and approve these entries prior to recording them. The Finance Director is the official responsible for ensuring corrective action of the deficiency. (16)

19 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) DECEMBER 31, 2016 PART 11: FINDINGS RELATED TO INTERNAL CONTROL OVER FINANCIAL REPORTING: (CONTINUED) FINDING: Limited Segregation of Duties Criteria: Condition: Context: Cause: Effect: Recommendation: Generally, a system of internal control contemplates separation of duties such that no individual has responsibility to execute a transaction, have physical access to the related assets, and have responsibility or authority to record the transaction. In some of the smaller County offices the available staff precludes a proper separation of duties to assure adequate internal control. The limited size of the County's staff in some departments responsible for accounting and financial duties precludes a complete segregation of incompatible duties. The County has informed us that it may not be cost effective to hire the additional personnel required to achieve complete segregation of duties. The condition is due to limited staff available. The potential exists that the design of the internal controls over financial reporting could affect the ability of the County to record, process, summarize and report financial data consistently with the assertions of management in the financial statements. In addition, this lack of segregation of duties may result in the county's inability to prevent/detect misappropriation of County assets. The County should continue to evaluate its staffing in order to segregate incompatible duties whenever possible. Views of Responsible Officials and Planned Corrective Actions: The County continues to work to achieve segregation of duties whenever cost effective. The Finance Director is the official responsible for ensuring corrective action of the deficiency. PART Ill: FINDINGS RELATED TO MAJOR FEDERAL AWARD PROGRAMS: None. PART IV: FINDINGS RELATED TO MAJOR STATE FINANCIAL ASSISTANCE PROGRAMS: None. PART V: FINDINGS RELATED TO STATE GENERAL REQUIREMENTS: None. (17)