Audit 290770

Finding 2023-003; Coronavirus State and Local Fiscal Recovery Funds, Assistance Listing no. 21.027 Reporting Criteria: The U.S. Department of Treasury requires the City to submit quarterly reports, which include, among other items, cumulative amounts expended and obligated. Condition: The amounts reported to Treasury through June 30, 2023, did not agree to the City’s Schedule of Expenditures of Federal Awards (SEFA) or to the underlying amounts supporting the City’s SEFA. Cause: Procedures had not been fully established to ensure accurate quarterly reporting occurred. Effect: Inaccurate reporting may be occurring on the City’s required quarterly reports. Questioned Costs: None Context: The City’s total federal expenditures on the SEFA for the year ended June 30, 2023 were approximately $3.2 million. Amounts reported by the City to Treasury through June 30, 2023 totaled approximately $2.5 million. Recommendation: We recommend that the City review its procedures to ensure that accurate quarterly reporting occurs. Views of Responsible Officials and Planned Corrective Actions: Reporting of the quarterly ARPA submissions is based on recorded transactions as of the due date of the quarterly report. The finance software posts invoices based on the invoice date rather than posting when the invoice is paid. Upon reconciliation of the difference noted above, it was discovered that invoices that were dated as of a particular quarter were paid and recorded well after the due date of the quarterly ARPA submission so could not be included in the quarterly report. Moving forward, we will reconcile to reflect only what is actually paid in time to be included in the ARPA submission so our internal records agree to the submission. We will not report to ARPA any funds that have not been expended because circumstances such as pricing, abandonment of a project, etc. can change before payment and if these items are reported before paid, it would cause erroneous reporting of ARPA funds.

Finding 2023-002; Federal Emergency Management, Assistance Listing no. 97.036 Allowable Costs Criteria: Controls should be sufficient to ensure that only allowable costs are charged to a federal program. Condition: Instances of unallowable costs being charged to the federal program were noted. Cause: City employees that assisted with disaster recovery efforts were eligible for reimbursement. Procedures were in place to identify and report these eligible employee costs but not appropriately followed or reviewed. Effect: Costs charged to the federal program may be disallowed. Questioned Costs: $2,521 Context: A sample of 31 charges regarding payroll costs totaling $8,077 was selected for audit from a population of approximately 1,000 items totaling $390,500. Our test found nine charges that were incorrectly included as a charge to the federal program totaling $2,521. Our sample was not a statistically valid sample. Recommendation: We recommend that the City ensure controls are in place to charge only costs allowable under the program. Views of Responsible Officials and Planned Corrective Actions: In fiscal year 23-24 the City moved all grant administration to a designated grant department. The duties of the grant administration department are to track, vet and confirm compliance with applicable guidelines on the grants the City applies for. Additionally, the grant administration department will actively assist with submission and seek new grant opportunities, and will be available to train City employees on proper grant documentation and substantiation. The City engages outside consultants to review grant submission and the City is engaging this outside consultant to review the grant submissions more often throughout the year than previously engaged to allow more time to adequately review and obtain all necessary information for grant compliance.

Finding 2023-003; Coronavirus State and Local Fiscal Recovery Funds, Assistance Listing no. 21.027 Reporting Criteria: The U.S. Department of Treasury requires the City to submit quarterly reports, which include, among other items, cumulative amounts expended and obligated. Condition: The amounts reported to Treasury through June 30, 2023, did not agree to the City’s Schedule of Expenditures of Federal Awards (SEFA) or to the underlying amounts supporting the City’s SEFA. Cause: Procedures had not been fully established to ensure accurate quarterly reporting occurred. Effect: Inaccurate reporting may be occurring on the City’s required quarterly reports. Questioned Costs: None Context: The City’s total federal expenditures on the SEFA for the year ended June 30, 2023 were approximately $3.2 million. Amounts reported by the City to Treasury through June 30, 2023 totaled approximately $2.5 million. Recommendation: We recommend that the City review its procedures to ensure that accurate quarterly reporting occurs. Views of Responsible Officials and Planned Corrective Actions: Reporting of the quarterly ARPA submissions is based on recorded transactions as of the due date of the quarterly report. The finance software posts invoices based on the invoice date rather than posting when the invoice is paid. Upon reconciliation of the difference noted above, it was discovered that invoices that were dated as of a particular quarter were paid and recorded well after the due date of the quarterly ARPA submission so could not be included in the quarterly report. Moving forward, we will reconcile to reflect only what is actually paid in time to be included in the ARPA submission so our internal records agree to the submission. We will not report to ARPA any funds that have not been expended because circumstances such as pricing, abandonment of a project, etc. can change before payment and if these items are reported before paid, it would cause erroneous reporting of ARPA funds.

Finding 2023-002; Federal Emergency Management, Assistance Listing no. 97.036 Allowable Costs Criteria: Controls should be sufficient to ensure that only allowable costs are charged to a federal program. Condition: Instances of unallowable costs being charged to the federal program were noted. Cause: City employees that assisted with disaster recovery efforts were eligible for reimbursement. Procedures were in place to identify and report these eligible employee costs but not appropriately followed or reviewed. Effect: Costs charged to the federal program may be disallowed. Questioned Costs: $2,521 Context: A sample of 31 charges regarding payroll costs totaling $8,077 was selected for audit from a population of approximately 1,000 items totaling $390,500. Our test found nine charges that were incorrectly included as a charge to the federal program totaling $2,521. Our sample was not a statistically valid sample. Recommendation: We recommend that the City ensure controls are in place to charge only costs allowable under the program. Views of Responsible Officials and Planned Corrective Actions: In fiscal year 23-24 the City moved all grant administration to a designated grant department. The duties of the grant administration department are to track, vet and confirm compliance with applicable guidelines on the grants the City applies for. Additionally, the grant administration department will actively assist with submission and seek new grant opportunities, and will be available to train City employees on proper grant documentation and substantiation. The City engages outside consultants to review grant submission and the City is engaging this outside consultant to review the grant submissions more often throughout the year than previously engaged to allow more time to adequately review and obtain all necessary information for grant compliance.