Audit 27978

Finding No. 2022-001: Financial Statement and Schedule of Expenditures of Federal Awards Preparation Federal Program Affected: Community Development Block Grant (ALN #14.228) Compliance Requirement: Reporting Questioned Costs: None Condition and Cause: We were requested to draft the audited financial statements and related footnote disclosures as part of our regular audit services. Ultimately, it is management?s responsibility to provide for the preparation of the City?s statements and footnotes, and the responsibility of the auditor to determine the fairness of presentation of those statements. From a practical standpoint, we do both for the City at the same time in connection with our audit. This is not unusual for us to do this with cities of your size. Criteria and Effect: It is our responsibility to inform the Council that this deficiency could result in a material misstatement to the financial statements that could have been prevented or detected by the City?s management. Repeat Finding from Prior Year: Yes, prior year Finding No. 2021-001. Recommendation: As in prior years, we have instructed management to review a draft of the auditor prepared financials in detail for their accuracy, we have answered any questions they might have, and we have encouraged research of any accounting guidance in connection with the adequacy and appropriateness of classification and disclosure in your statements. We are satisfied the appropriate steps have been taken to provide the City with the completed financial statements. It is the responsibility of management and the City Council to make the decision whether to accept the degree of risk associated with this condition because of cost or other considerations. Response/Corrective Action Plan: See City?s Corrective Action Plan.

Finding No. 2022-004: Written Uniform Guidance Policies Federal Program Affected: Community Development Block Grant (ALN #14.228) Compliance Requirement: Allowable Costs/Cost Principles Questioned Costs: None Condition and Cause: The City does not have written policies for allowable costs/cost principles. Criteria and Effect: Uniform Guidance specifically requires entities to maintain written policies for allowable costs/cost principles. Not properly maintaining such policies leads to noncompliance and potential unallowable costs. Repeat Finding from Prior Year: No. Recommendation: The City should create written policies for allowable costs/cost principles. Response/Corrective Action Plan: The City is in agreement with the finding. See City?s Corrective Action Plan.

Finding No. 2022-001: Financial Statement and Schedule of Expenditures of Federal Awards Preparation Federal Program Affected: Community Development Block Grant (ALN #14.228) Compliance Requirement: Reporting Questioned Costs: None Condition and Cause: We were requested to draft the audited financial statements and related footnote disclosures as part of our regular audit services. Ultimately, it is management?s responsibility to provide for the preparation of the City?s statements and footnotes, and the responsibility of the auditor to determine the fairness of presentation of those statements. From a practical standpoint, we do both for the City at the same time in connection with our audit. This is not unusual for us to do this with cities of your size. Criteria and Effect: It is our responsibility to inform the Council that this deficiency could result in a material misstatement to the financial statements that could have been prevented or detected by the City?s management. Repeat Finding from Prior Year: Yes, prior year Finding No. 2021-001. Recommendation: As in prior years, we have instructed management to review a draft of the auditor prepared financials in detail for their accuracy, we have answered any questions they might have, and we have encouraged research of any accounting guidance in connection with the adequacy and appropriateness of classification and disclosure in your statements. We are satisfied the appropriate steps have been taken to provide the City with the completed financial statements. It is the responsibility of management and the City Council to make the decision whether to accept the degree of risk associated with this condition because of cost or other considerations. Response/Corrective Action Plan: See City?s Corrective Action Plan.

Finding No. 2022-004: Written Uniform Guidance Policies Federal Program Affected: Community Development Block Grant (ALN #14.228) Compliance Requirement: Allowable Costs/Cost Principles Questioned Costs: None Condition and Cause: The City does not have written policies for allowable costs/cost principles. Criteria and Effect: Uniform Guidance specifically requires entities to maintain written policies for allowable costs/cost principles. Not properly maintaining such policies leads to noncompliance and potential unallowable costs. Repeat Finding from Prior Year: No. Recommendation: The City should create written policies for allowable costs/cost principles. Response/Corrective Action Plan: The City is in agreement with the finding. See City?s Corrective Action Plan.