FAC Explorer

Audit 14333

FY End
2023-06-30
Total Expended
$8.89M
Findings
4
Programs
9
Organization: City of Port Huron, Michigan (MI)
Year: 2023 Accepted: 2024-01-30
Auditor: Plante & Moran PLLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
10668 2023-002 Material Weakness Yes I
10669 2023-003 Material Weakness - I
587110 2023-002 Material Weakness Yes I
587111 2023-003 Material Weakness - I

Programs

ALN Program Spent Major Findings
21.027 Coronavirus State and Local Fiscal Recovery Funds $7.40M Yes 2
15.916 Outdoor Recreation_acquisition, Development and Planning $300,000 - 0
14.218 Community Development Block Grants/entitlement Grants $54,990 Yes 0
16.710 Public Safety Partnership and Community Policing Grants $14,815 - 0
14.239 Home Investment Partnerships Program $11,525 - 0
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $11,222 - 0
16.607 Bulletproof Vest Partnership Program $6,508 - 0
97.067 Homeland Security Grant Program $4,871 - 0
20.600 State and Community Highway Safety $4,676 - 0

Contacts

Name Title Type
GL6FPGJ7MM26 Lee Ward Auditee
8109849727 David Herrington Auditor
No contacts on file

Notes to SEFA

Title: Disaster Grants Public Assistance Program (ALN 97.036) Accounting Policies: The accompanying schedule of expenditures of federal awards (the "Schedule") includes the federal grant activity of the City of Port Huron, Michigan (the "City") under programs of the federal government for the year ended June 30, 2023. The information in the Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the "Uniform Guidance"). Because the Schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net position, or cash flows of the City. Expenditures reported in the Schedule are reported on the same basis of accounting as the basic financial statements. Such expenditures are recognized following the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Passed through entity identifying numbers are presented where available. The City has elected not to use the 10 percent de minimis indirect cost rate to recover indirect costs, as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10 percent de minimis indirect cost rate to recover indirect costs, as allowed under the Uniform Guidance. Included in the Schedule for the year ended June 30, 2023 is $11,222 of expenditures incurred, under the Disaster Grants Public Assistance grant (ALN 97.036), in a previous fiscal year. The project worksheet for these expenditures was approved in the current fiscal year, and these expenditures have been reported in the current fiscal year in accordance with the reporting requirements outlined in the 2023 Compliance Supplement.

Finding Details

Finding 2023-002
Listing Number, Federal Agency, and Program Name - ALN 21 .027, Department of the Treasury, Coronavirus State and Local Fiscal Recovery Fund Federal Award Identification Number and Year - SLFRP2024-2001 Pass-through Entity - Not applicable Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes 2022-002 Criteria - The City should ensure there is a process in place, prior to entering contracts with subrecipients, to verify that such subrecipients are not suspended, debarred, or otherwise excluded pursuant to 2 CFR Section 180.300. Condition - We noted during testing that the City had unintentionally omitted a subrecipient from its search to ensure that the subrecipient was not suspended, debarred, or otherwise excluded pursuant to 2 CFR Section 180.300. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable Context - From July 1, 2022 through June 30, 2023, any subrecipient with which the City entered into a contract using federal award funds should have been verified as not being suspended, debarred, or otherwise excluded pursuant to 2 CFR Sections 200.212, 200.318(h), and 180.300 and 48 CFR Section 52.209-6. We selected three subrecipients for testing, and one lacked any verification. However, based on our testing, we noted that the one subrecipient was not suspended, debarred, or otherwise excluded pursuant to 2 CFR Section 180.300, thereby creating no questioned costs. Cause and Effect - The City is required to verify that any subrecipient with which it plans to enter into a contract using federal award funds is not suspended, debarred, or otherwise excluded pursuant to 2 CFR Section 180.300. The City did not complete this requirement due to timing of final approval of the subrecipient pass-through funds. Recommendation - We recommend that an additional internal control be put in place to ensure the dual verification of subrecipients occurs. Views of Responsible Officials and Corrective Action Plan - Procedures have already been put into place to ensure that each new contractor is not on the federal list of suspended and/or debarred contractors. Furthermore, all vendors previously paid have been searched for in the federal list, and none were suspended and/or debarred.
Finding 2023-003
Assistance Listing Number, Federal Agency, and Program Name - ALN 21 .027, Department of the Treasury, Coronavirus State and Local Fiscal Recovery Fund Federal Award Identification Number and Year - SLFRP2024-2001 Pass-through Entity - Not applicable Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - The City should ensure there is a process in place, prior to theprocurement of goods and services, to verify that the City has followed its internal procurement policy pursuant to 2 CFR 200.319 and 200.320. Condition - We identified 4 expenditures, during testing, that the City did not verify were in accordance with its internal procurement policy, pursuant to 2 CFR 200.319 and 200.320 prior to entering into contracts with award funds. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable Context - From July 1, 2022 through June 30, 2023, any good or service purchased by the City is subject to the City's internal procurement policy, pursuant to 2 CFR 200.319 and 200.320. We selected 22 expenditures for testing, and 4 lacked evidence of the City following its internal procurement policy. However, based on our testing, we noted that all 4 expenditures were allowable under the terms of the grant, thereby creating no questioned costs. Cause and Effect - The City is required to verify that there is a process in place to ensure all eligible expenditures adhere to its internal procurement policy, pursuant to 2 CFR 200.319 and 200.320. The City did not complete this requirement due to override of preexisting controls implemented by the City. Recommendation - We recommend that an additional internal control be put in place to ensure that all eligible expenditures adhere to the City's internal procurement policy. Views of Responsible Officials and Planned Corrective Actions - Procedures have already been put into place to ensure that each purchase adheres to the internal purchasing policies. City management and staff will continue to improve communication with and between departments to ensure all staff understand the purchasing policy.
Finding 2023-002
Listing Number, Federal Agency, and Program Name - ALN 21 .027, Department of the Treasury, Coronavirus State and Local Fiscal Recovery Fund Federal Award Identification Number and Year - SLFRP2024-2001 Pass-through Entity - Not applicable Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes 2022-002 Criteria - The City should ensure there is a process in place, prior to entering contracts with subrecipients, to verify that such subrecipients are not suspended, debarred, or otherwise excluded pursuant to 2 CFR Section 180.300. Condition - We noted during testing that the City had unintentionally omitted a subrecipient from its search to ensure that the subrecipient was not suspended, debarred, or otherwise excluded pursuant to 2 CFR Section 180.300. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable Context - From July 1, 2022 through June 30, 2023, any subrecipient with which the City entered into a contract using federal award funds should have been verified as not being suspended, debarred, or otherwise excluded pursuant to 2 CFR Sections 200.212, 200.318(h), and 180.300 and 48 CFR Section 52.209-6. We selected three subrecipients for testing, and one lacked any verification. However, based on our testing, we noted that the one subrecipient was not suspended, debarred, or otherwise excluded pursuant to 2 CFR Section 180.300, thereby creating no questioned costs. Cause and Effect - The City is required to verify that any subrecipient with which it plans to enter into a contract using federal award funds is not suspended, debarred, or otherwise excluded pursuant to 2 CFR Section 180.300. The City did not complete this requirement due to timing of final approval of the subrecipient pass-through funds. Recommendation - We recommend that an additional internal control be put in place to ensure the dual verification of subrecipients occurs. Views of Responsible Officials and Corrective Action Plan - Procedures have already been put into place to ensure that each new contractor is not on the federal list of suspended and/or debarred contractors. Furthermore, all vendors previously paid have been searched for in the federal list, and none were suspended and/or debarred.
Finding 2023-003
Assistance Listing Number, Federal Agency, and Program Name - ALN 21 .027, Department of the Treasury, Coronavirus State and Local Fiscal Recovery Fund Federal Award Identification Number and Year - SLFRP2024-2001 Pass-through Entity - Not applicable Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - The City should ensure there is a process in place, prior to theprocurement of goods and services, to verify that the City has followed its internal procurement policy pursuant to 2 CFR 200.319 and 200.320. Condition - We identified 4 expenditures, during testing, that the City did not verify were in accordance with its internal procurement policy, pursuant to 2 CFR 200.319 and 200.320 prior to entering into contracts with award funds. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable Context - From July 1, 2022 through June 30, 2023, any good or service purchased by the City is subject to the City's internal procurement policy, pursuant to 2 CFR 200.319 and 200.320. We selected 22 expenditures for testing, and 4 lacked evidence of the City following its internal procurement policy. However, based on our testing, we noted that all 4 expenditures were allowable under the terms of the grant, thereby creating no questioned costs. Cause and Effect - The City is required to verify that there is a process in place to ensure all eligible expenditures adhere to its internal procurement policy, pursuant to 2 CFR 200.319 and 200.320. The City did not complete this requirement due to override of preexisting controls implemented by the City. Recommendation - We recommend that an additional internal control be put in place to ensure that all eligible expenditures adhere to the City's internal procurement policy. Views of Responsible Officials and Planned Corrective Actions - Procedures have already been put into place to ensure that each purchase adheres to the internal purchasing policies. City management and staff will continue to improve communication with and between departments to ensure all staff understand the purchasing policy.