Criteria
The A-102 Common Rule, OMB Circular A-110 and 2 CFR section 200.303 require that non-Federal entities receiving Federal awards establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR section 200.514 requires auditors to obtain an understanding of the non-Federal entity’s internal control over Federal programs sufficient to plan the audit to support a low assessed level of control risk of noncompliance for major programs, and, unless internal control is likely to be ineffective, plan the testing of internal control over major programs to support a low assessed level of control risk for the assertions relevant to the compliance requirements for each major program and perform testing of internal control as planned.
Condition
As noted in finding 2021-004, the City informed the auditors of a significant break down of internal controls resulting in them to be ineffective through most of the fiscal year.
Cause
Due to personnel turnover and the recent implementation of a new accounting system, the City did not have adequate controls and oversight in place to ensure accounting transactions were being processed accurately and timely. Unfamiliarity with the financial accounting system lead to inconsistencies in how transactions were being recorded
Effect
The City lacked internal controls to support a low assessed level of control risk for the assertions relevant to compliance requirements for the major program tested.
Recommendation
We recommend that the City institute a program to methodically identify and document its significant operational and accounting processes as they relate to Federal grants and compliance. Documenting a process involves identifying and gaining an understanding of the required compliance requirements, the automated or manual procedures used in performing the required processes, the person(s) or position(s) responsible for performing the procedures, the source documents used or generated, the procedures for approval and review and correction of any errors detected, and the financial or operational entries or reports summarizing the result of the process.
View of Responsible Officials
Management informed the auditors of this condition and agrees with the comment. Management also acknowledges that this occurred due to the staff turnover and subsequent difficulties in hiring mentioned in comments 2021-001, 002, and 003. In 2021-2022 the foundational processes have been stabilized (accounts payable, payroll, deposits) allowing staff to focus on reconciliations, procedures, and audit.
As processes are brought current or accounts are reconciled, staff will document procedures and ensure that internal controls are incorporated into the procedures.
Criteria
On May 17, 2017, the Office of Management and Budget (OMB) issued an addendum to Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) allowing nonfederal entities an additional year to implement the Uniform Guidance procurement requirements and the entity must document the decision to utilize the extension.
Condition
The City has not updated the Federal Grant Procedures manual for compliance with the Uniform Guidance as required for the fiscal year.
Cause
City management was not aware of the Uniform Guidance requirements and implementation dates.
Effect
The City's procurement policies and procedures are not in compliance with the Uniform Guidance.
Recommendation
We recommend the City review the Uniform Guidance procurement requirements and update the Federal Grant Procedures manual for compliance with the Uniform Guidance.
View of Responsible Officials
The City will implement procedures to ensure that the City's federal grant procedures manual will be updated to comply with OMB's Uniform procurement requirement.
Criteria
In accordance with CFR section 200.512 of the Uniform Guidance, the audit must be completed and the data collection form and reporting package must be submitted to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. In accordance with OMB Memo M-20-26, and due to the coronavirus pandemic, an extension of six months beyond the normal due date was granted for submission of the audit, data collection form, and reporting package.
Condition
The 2021 Single Audit reporting package and data collection form have not been submitted to the Federal Audit Clearinghouse by the original deadline of March 31, 2022, nor the extended deadline of September 30, 2022.
Cause
There were various accounting issues such as personnel turnover and accounting schedules not properly reconciling to the general ledger which caused delays in the completion of the 2020 annual audit.
Effect
The filing of the Single Audit Reporting package and data collection form is past the due date.
Recommendation
As noted in recommendation 2021-001, we recommend the City strive to close the year-end with properly prepared reconciliations within 3 - 4 months after year-end in order to complete the annual financial audit timely.
View of Responsible Officials
Management agrees with the finding. The City's Finance Department is implementing regular reconciliations of accounts and in 2022 started a year end closing process. Checklists have been developed and continue to be refined. Once the City becomes current this compliance issue will be mitigated.
Criteria
The A-102 Common Rule, OMB Circular A-110 and 2 CFR section 200.303 require that non-Federal entities receiving Federal awards establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR section 200.514 requires auditors to obtain an understanding of the non-Federal entity’s internal control over Federal programs sufficient to plan the audit to support a low assessed level of control risk of noncompliance for major programs, and, unless internal control is likely to be ineffective, plan the testing of internal control over major programs to support a low assessed level of control risk for the assertions relevant to the compliance requirements for each major program and perform testing of internal control as planned.
Condition
As noted in finding 2021-004, the City informed the auditors of a significant break down of internal controls resulting in them to be ineffective through most of the fiscal year.
Cause
Due to personnel turnover and the recent implementation of a new accounting system, the City did not have adequate controls and oversight in place to ensure accounting transactions were being processed accurately and timely. Unfamiliarity with the financial accounting system lead to inconsistencies in how transactions were being recorded
Effect
The City lacked internal controls to support a low assessed level of control risk for the assertions relevant to compliance requirements for the major program tested.
Recommendation
We recommend that the City institute a program to methodically identify and document its significant operational and accounting processes as they relate to Federal grants and compliance. Documenting a process involves identifying and gaining an understanding of the required compliance requirements, the automated or manual procedures used in performing the required processes, the person(s) or position(s) responsible for performing the procedures, the source documents used or generated, the procedures for approval and review and correction of any errors detected, and the financial or operational entries or reports summarizing the result of the process.
View of Responsible Officials
Management informed the auditors of this condition and agrees with the comment. Management also acknowledges that this occurred due to the staff turnover and subsequent difficulties in hiring mentioned in comments 2021-001, 002, and 003. In 2021-2022 the foundational processes have been stabilized (accounts payable, payroll, deposits) allowing staff to focus on reconciliations, procedures, and audit.
As processes are brought current or accounts are reconciled, staff will document procedures and ensure that internal controls are incorporated into the procedures.
Criteria
On May 17, 2017, the Office of Management and Budget (OMB) issued an addendum to Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) allowing nonfederal entities an additional year to implement the Uniform Guidance procurement requirements and the entity must document the decision to utilize the extension.
Condition
The City has not updated the Federal Grant Procedures manual for compliance with the Uniform Guidance as required for the fiscal year.
Cause
City management was not aware of the Uniform Guidance requirements and implementation dates.
Effect
The City's procurement policies and procedures are not in compliance with the Uniform Guidance.
Recommendation
We recommend the City review the Uniform Guidance procurement requirements and update the Federal Grant Procedures manual for compliance with the Uniform Guidance.
View of Responsible Officials
The City will implement procedures to ensure that the City's federal grant procedures manual will be updated to comply with OMB's Uniform procurement requirement.
Criteria
In accordance with CFR section 200.512 of the Uniform Guidance, the audit must be completed and the data collection form and reporting package must be submitted to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. In accordance with OMB Memo M-20-26, and due to the coronavirus pandemic, an extension of six months beyond the normal due date was granted for submission of the audit, data collection form, and reporting package.
Condition
The 2021 Single Audit reporting package and data collection form have not been submitted to the Federal Audit Clearinghouse by the original deadline of March 31, 2022, nor the extended deadline of September 30, 2022.
Cause
There were various accounting issues such as personnel turnover and accounting schedules not properly reconciling to the general ledger which caused delays in the completion of the 2020 annual audit.
Effect
The filing of the Single Audit Reporting package and data collection form is past the due date.
Recommendation
As noted in recommendation 2021-001, we recommend the City strive to close the year-end with properly prepared reconciliations within 3 - 4 months after year-end in order to complete the annual financial audit timely.
View of Responsible Officials
Management agrees with the finding. The City's Finance Department is implementing regular reconciliations of accounts and in 2022 started a year end closing process. Checklists have been developed and continue to be refined. Once the City becomes current this compliance issue will be mitigated.
Criteria
The A-102 Common Rule, OMB Circular A-110 and 2 CFR section 200.303 require that non-Federal entities receiving Federal awards establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR section 200.514 requires auditors to obtain an understanding of the non-Federal entity’s internal control over Federal programs sufficient to plan the audit to support a low assessed level of control risk of noncompliance for major programs, and, unless internal control is likely to be ineffective, plan the testing of internal control over major programs to support a low assessed level of control risk for the assertions relevant to the compliance requirements for each major program and perform testing of internal control as planned.
Condition
As noted in finding 2021-004, the City informed the auditors of a significant break down of internal controls resulting in them to be ineffective through most of the fiscal year.
Cause
Due to personnel turnover and the recent implementation of a new accounting system, the City did not have adequate controls and oversight in place to ensure accounting transactions were being processed accurately and timely. Unfamiliarity with the financial accounting system lead to inconsistencies in how transactions were being recorded
Effect
The City lacked internal controls to support a low assessed level of control risk for the assertions relevant to compliance requirements for the major program tested.
Recommendation
We recommend that the City institute a program to methodically identify and document its significant operational and accounting processes as they relate to Federal grants and compliance. Documenting a process involves identifying and gaining an understanding of the required compliance requirements, the automated or manual procedures used in performing the required processes, the person(s) or position(s) responsible for performing the procedures, the source documents used or generated, the procedures for approval and review and correction of any errors detected, and the financial or operational entries or reports summarizing the result of the process.
View of Responsible Officials
Management informed the auditors of this condition and agrees with the comment. Management also acknowledges that this occurred due to the staff turnover and subsequent difficulties in hiring mentioned in comments 2021-001, 002, and 003. In 2021-2022 the foundational processes have been stabilized (accounts payable, payroll, deposits) allowing staff to focus on reconciliations, procedures, and audit.
As processes are brought current or accounts are reconciled, staff will document procedures and ensure that internal controls are incorporated into the procedures.
Criteria
On May 17, 2017, the Office of Management and Budget (OMB) issued an addendum to Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) allowing nonfederal entities an additional year to implement the Uniform Guidance procurement requirements and the entity must document the decision to utilize the extension.
Condition
The City has not updated the Federal Grant Procedures manual for compliance with the Uniform Guidance as required for the fiscal year.
Cause
City management was not aware of the Uniform Guidance requirements and implementation dates.
Effect
The City's procurement policies and procedures are not in compliance with the Uniform Guidance.
Recommendation
We recommend the City review the Uniform Guidance procurement requirements and update the Federal Grant Procedures manual for compliance with the Uniform Guidance.
View of Responsible Officials
The City will implement procedures to ensure that the City's federal grant procedures manual will be updated to comply with OMB's Uniform procurement requirement.
Criteria
In accordance with CFR section 200.512 of the Uniform Guidance, the audit must be completed and the data collection form and reporting package must be submitted to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. In accordance with OMB Memo M-20-26, and due to the coronavirus pandemic, an extension of six months beyond the normal due date was granted for submission of the audit, data collection form, and reporting package.
Condition
The 2021 Single Audit reporting package and data collection form have not been submitted to the Federal Audit Clearinghouse by the original deadline of March 31, 2022, nor the extended deadline of September 30, 2022.
Cause
There were various accounting issues such as personnel turnover and accounting schedules not properly reconciling to the general ledger which caused delays in the completion of the 2020 annual audit.
Effect
The filing of the Single Audit Reporting package and data collection form is past the due date.
Recommendation
As noted in recommendation 2021-001, we recommend the City strive to close the year-end with properly prepared reconciliations within 3 - 4 months after year-end in order to complete the annual financial audit timely.
View of Responsible Officials
Management agrees with the finding. The City's Finance Department is implementing regular reconciliations of accounts and in 2022 started a year end closing process. Checklists have been developed and continue to be refined. Once the City becomes current this compliance issue will be mitigated.
Criteria
The A-102 Common Rule, OMB Circular A-110 and 2 CFR section 200.303 require that non-Federal entities receiving Federal awards establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR section 200.514 requires auditors to obtain an understanding of the non-Federal entity’s internal control over Federal programs sufficient to plan the audit to support a low assessed level of control risk of noncompliance for major programs, and, unless internal control is likely to be ineffective, plan the testing of internal control over major programs to support a low assessed level of control risk for the assertions relevant to the compliance requirements for each major program and perform testing of internal control as planned.
Condition
As noted in finding 2021-004, the City informed the auditors of a significant break down of internal controls resulting in them to be ineffective through most of the fiscal year.
Cause
Due to personnel turnover and the recent implementation of a new accounting system, the City did not have adequate controls and oversight in place to ensure accounting transactions were being processed accurately and timely. Unfamiliarity with the financial accounting system lead to inconsistencies in how transactions were being recorded
Effect
The City lacked internal controls to support a low assessed level of control risk for the assertions relevant to compliance requirements for the major program tested.
Recommendation
We recommend that the City institute a program to methodically identify and document its significant operational and accounting processes as they relate to Federal grants and compliance. Documenting a process involves identifying and gaining an understanding of the required compliance requirements, the automated or manual procedures used in performing the required processes, the person(s) or position(s) responsible for performing the procedures, the source documents used or generated, the procedures for approval and review and correction of any errors detected, and the financial or operational entries or reports summarizing the result of the process.
View of Responsible Officials
Management informed the auditors of this condition and agrees with the comment. Management also acknowledges that this occurred due to the staff turnover and subsequent difficulties in hiring mentioned in comments 2021-001, 002, and 003. In 2021-2022 the foundational processes have been stabilized (accounts payable, payroll, deposits) allowing staff to focus on reconciliations, procedures, and audit.
As processes are brought current or accounts are reconciled, staff will document procedures and ensure that internal controls are incorporated into the procedures.
Criteria
On May 17, 2017, the Office of Management and Budget (OMB) issued an addendum to Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) allowing nonfederal entities an additional year to implement the Uniform Guidance procurement requirements and the entity must document the decision to utilize the extension.
Condition
The City has not updated the Federal Grant Procedures manual for compliance with the Uniform Guidance as required for the fiscal year.
Cause
City management was not aware of the Uniform Guidance requirements and implementation dates.
Effect
The City's procurement policies and procedures are not in compliance with the Uniform Guidance.
Recommendation
We recommend the City review the Uniform Guidance procurement requirements and update the Federal Grant Procedures manual for compliance with the Uniform Guidance.
View of Responsible Officials
The City will implement procedures to ensure that the City's federal grant procedures manual will be updated to comply with OMB's Uniform procurement requirement.
Criteria
In accordance with CFR section 200.512 of the Uniform Guidance, the audit must be completed and the data collection form and reporting package must be submitted to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. In accordance with OMB Memo M-20-26, and due to the coronavirus pandemic, an extension of six months beyond the normal due date was granted for submission of the audit, data collection form, and reporting package.
Condition
The 2021 Single Audit reporting package and data collection form have not been submitted to the Federal Audit Clearinghouse by the original deadline of March 31, 2022, nor the extended deadline of September 30, 2022.
Cause
There were various accounting issues such as personnel turnover and accounting schedules not properly reconciling to the general ledger which caused delays in the completion of the 2020 annual audit.
Effect
The filing of the Single Audit Reporting package and data collection form is past the due date.
Recommendation
As noted in recommendation 2021-001, we recommend the City strive to close the year-end with properly prepared reconciliations within 3 - 4 months after year-end in order to complete the annual financial audit timely.
View of Responsible Officials
Management agrees with the finding. The City's Finance Department is implementing regular reconciliations of accounts and in 2022 started a year end closing process. Checklists have been developed and continue to be refined. Once the City becomes current this compliance issue will be mitigated.