Audit 295284

FY End
2023-04-30
Total Expended
$2.40M
Findings
14
Programs
4
Organization: City of Ottawa (IL)
Year: 2023 Accepted: 2024-03-15
Auditor: Wipfli LLP

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
380516 2023-003 Significant Deficiency - L
380517 2023-004 Material Weakness - L
380518 2023-004 Material Weakness - L
380519 2023-003 Significant Deficiency - L
380520 2023-004 Material Weakness - L
380521 2023-003 Significant Deficiency - L
380522 2023-004 Material Weakness - L
956958 2023-003 Significant Deficiency - L
956959 2023-004 Material Weakness - L
956960 2023-004 Material Weakness - L
956961 2023-003 Significant Deficiency - L
956962 2023-004 Material Weakness - L
956963 2023-003 Significant Deficiency - L
956964 2023-004 Material Weakness - L

Contacts

Name Title Type
TXPYTA3X9BL5 Don Harris Auditee
8154330161 Matt Schueler Auditor
No contacts on file

Notes to SEFA

Title: NonCash Assistance Accounting Policies: The accompanying schedule of expenditures of federal awards (the “Schedule”) includes the federal grant expenditures of City of Ottawa and is presented on the accrual basis of accounting for the year ended April 30, 2023. The information in this schedule is presented in accordance with requirements of the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”). The County elected to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The City has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The City did not dispense noncash assistance in the the year ended April 30, 2023.
Title: Other Federal Award Information Accounting Policies: The accompanying schedule of expenditures of federal awards (the “Schedule”) includes the federal grant expenditures of City of Ottawa and is presented on the accrual basis of accounting for the year ended April 30, 2023. The information in this schedule is presented in accordance with requirements of the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”). The County elected to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The City has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The City did not receive or administer any insurance, loans or loan guarantees during the fiscal year ended April 30, 2023.

Finding Details

Criteria or Specific Requirement: A government must have internal controls sufficient to be aware of and properly tracking all funds received and spent by the government, its agents, and associated custodial organizations. Condition: The government did not maintain records for, or reconciliation of funds received and spent related to the CDBG, CSLFRF, and FEMA grants received, as well as other grant funds paid directly to organizations they purchased from. Context: The City employs a third party agency to oversee several projects approved by City authority and paid for via grant funds received. These funds are deposited into City accounts and spent from the same under the oversight of their third party. Other grants funds may be received directly by external vendors/organizations on behalf of the City. Questioned Costs: None Effect: The City did not have record of $766,551 in grant funding in the initial trial balance. In addition, they had to obtain the bank records in order to rebuild the activity in those funds, meaning that the City was not monitoring or tracking those projects other than to place full reliance on the external third party. The internal controls associated with monitoring and awareness of these awards and expenditures are not functioning correctly, and any issues or errors would not be caught by the City in a timely manner. Cause: Reliance is placed on external agents to handle all requirements of spending, oversight, monitoring, and compliance. Repeat: No Auditor's Recommendation: We recommend that the City create procedures to ensure that the City is recording this activity regularly, that the City is part of the monitoring and oversight process, and that the City is at least spot-checking the third party agent's compliance with grant requirements and standards to ensure that the City is and remains in compliance. Further, for amounts paid directly to third party vendors, the City must create processes and procedures to verify that these revenues are properly recorded and all applicable expenditures are included in the records of the City. These steps will reduce the likelihood of error or fraud within the City and provide more accurate records for internal and external parties. View of Responsible Officials: Management concurs with the Auditor’s recommendation and will review with the third-party North Central Illinois Council of Governments (NCICG) to establish appropriate City monitoring and review.
Criteria or Specific Requirement: Under 2 CFR Part 200.502, the auditee must prepare the Schedule of Federal Awards to cover the appropriate audit period and to include all applicable federal expenditures expended during the audit period. Condition: The City has not historically created or provided a Schedule of Federal Awards for audit purposes and did not include all federal expenditures as required under 2 CFR Part 200.502. Context: The City did not have all federal expenditures recorded in their trial balance, and did not have accurate records of all expenditures spent during the audit period. In addition, they did not have all of the necessary information or training to create the Schedule of Federal Awards. Questioned Costs: None Effect: The City was unable to provide auditors with a complete Schedule of Federal Awards, and could not verify the completeness of expenditures recorded in their financial statements as provided for the audit. Cause: The City does not have processes in place to track all grant spending. Repeat: No Auditor's Recommendation: We recommend that the City create processes and procedures that capture all federal funding received, and track applicable expenditures. This report should be reconciled regularly (at least monthly) when requests for reimbursement are made, and should include all applicable information necessary to identify the funding agency, assistance listing number, and any other pertinent passthrough information. With this process in place, the City will be better able to track and monitor grant funding, plan future projects or future funding needs, and prepare for the annual audit. View of Responsible Officials: Management concurs with the Auditor’s recommendation and will review with the third-party North Central Illinois Council of Governments (NCICG) to establish appropriate City monitoring and review. City will also review with prior City Auditors to ensure proper overall procedures are in place to ensure all grants in the aggregate are monitored.
Criteria or Specific Requirement: Under 2 CFR Part 200.502, the auditee must prepare the Schedule of Federal Awards to cover the appropriate audit period and to include all applicable federal expenditures expended during the audit period. Condition: The City has not historically created or provided a Schedule of Federal Awards for audit purposes and did not include all federal expenditures as required under 2 CFR Part 200.502. Context: The City did not have all federal expenditures recorded in their trial balance, and did not have accurate records of all expenditures spent during the audit period. In addition, they did not have all of the necessary information or training to create the Schedule of Federal Awards. Questioned Costs: None Effect: The City was unable to provide auditors with a complete Schedule of Federal Awards, and could not verify the completeness of expenditures recorded in their financial statements as provided for the audit. Cause: The City does not have processes in place to track all grant spending. Repeat: No Auditor's Recommendation: We recommend that the City create processes and procedures that capture all federal funding received, and track applicable expenditures. This report should be reconciled regularly (at least monthly) when requests for reimbursement are made, and should include all applicable information necessary to identify the funding agency, assistance listing number, and any other pertinent passthrough information. With this process in place, the City will be better able to track and monitor grant funding, plan future projects or future funding needs, and prepare for the annual audit. View of Responsible Officials: Management concurs with the Auditor’s recommendation and will review with the third-party North Central Illinois Council of Governments (NCICG) to establish appropriate City monitoring and review. City will also review with prior City Auditors to ensure proper overall procedures are in place to ensure all grants in the aggregate are monitored.
Criteria or Specific Requirement: A government must have internal controls sufficient to be aware of and properly tracking all funds received and spent by the government, its agents, and associated custodial organizations. Condition: The government did not maintain records for, or reconciliation of funds received and spent related to the CDBG, CSLFRF, and FEMA grants received, as well as other grant funds paid directly to organizations they purchased from. Context: The City employs a third party agency to oversee several projects approved by City authority and paid for via grant funds received. These funds are deposited into City accounts and spent from the same under the oversight of their third party. Other grants funds may be received directly by external vendors/organizations on behalf of the City. Questioned Costs: None Effect: The City did not have record of $766,551 in grant funding in the initial trial balance. In addition, they had to obtain the bank records in order to rebuild the activity in those funds, meaning that the City was not monitoring or tracking those projects other than to place full reliance on the external third party. The internal controls associated with monitoring and awareness of these awards and expenditures are not functioning correctly, and any issues or errors would not be caught by the City in a timely manner. Cause: Reliance is placed on external agents to handle all requirements of spending, oversight, monitoring, and compliance. Repeat: No Auditor's Recommendation: We recommend that the City create procedures to ensure that the City is recording this activity regularly, that the City is part of the monitoring and oversight process, and that the City is at least spot-checking the third party agent's compliance with grant requirements and standards to ensure that the City is and remains in compliance. Further, for amounts paid directly to third party vendors, the City must create processes and procedures to verify that these revenues are properly recorded and all applicable expenditures are included in the records of the City. These steps will reduce the likelihood of error or fraud within the City and provide more accurate records for internal and external parties. View of Responsible Officials: Management concurs with the Auditor’s recommendation and will review with the third-party North Central Illinois Council of Governments (NCICG) to establish appropriate City monitoring and review.
Criteria or Specific Requirement: Under 2 CFR Part 200.502, the auditee must prepare the Schedule of Federal Awards to cover the appropriate audit period and to include all applicable federal expenditures expended during the audit period. Condition: The City has not historically created or provided a Schedule of Federal Awards for audit purposes and did not include all federal expenditures as required under 2 CFR Part 200.502. Context: The City did not have all federal expenditures recorded in their trial balance, and did not have accurate records of all expenditures spent during the audit period. In addition, they did not have all of the necessary information or training to create the Schedule of Federal Awards. Questioned Costs: None Effect: The City was unable to provide auditors with a complete Schedule of Federal Awards, and could not verify the completeness of expenditures recorded in their financial statements as provided for the audit. Cause: The City does not have processes in place to track all grant spending. Repeat: No Auditor's Recommendation: We recommend that the City create processes and procedures that capture all federal funding received, and track applicable expenditures. This report should be reconciled regularly (at least monthly) when requests for reimbursement are made, and should include all applicable information necessary to identify the funding agency, assistance listing number, and any other pertinent passthrough information. With this process in place, the City will be better able to track and monitor grant funding, plan future projects or future funding needs, and prepare for the annual audit. View of Responsible Officials: Management concurs with the Auditor’s recommendation and will review with the third-party North Central Illinois Council of Governments (NCICG) to establish appropriate City monitoring and review. City will also review with prior City Auditors to ensure proper overall procedures are in place to ensure all grants in the aggregate are monitored.
Criteria or Specific Requirement: A government must have internal controls sufficient to be aware of and properly tracking all funds received and spent by the government, its agents, and associated custodial organizations. Condition: The government did not maintain records for, or reconciliation of funds received and spent related to the CDBG, CSLFRF, and FEMA grants received, as well as other grant funds paid directly to organizations they purchased from. Context: The City employs a third party agency to oversee several projects approved by City authority and paid for via grant funds received. These funds are deposited into City accounts and spent from the same under the oversight of their third party. Other grants funds may be received directly by external vendors/organizations on behalf of the City. Questioned Costs: None Effect: The City did not have record of $766,551 in grant funding in the initial trial balance. In addition, they had to obtain the bank records in order to rebuild the activity in those funds, meaning that the City was not monitoring or tracking those projects other than to place full reliance on the external third party. The internal controls associated with monitoring and awareness of these awards and expenditures are not functioning correctly, and any issues or errors would not be caught by the City in a timely manner. Cause: Reliance is placed on external agents to handle all requirements of spending, oversight, monitoring, and compliance. Repeat: No Auditor's Recommendation: We recommend that the City create procedures to ensure that the City is recording this activity regularly, that the City is part of the monitoring and oversight process, and that the City is at least spot-checking the third party agent's compliance with grant requirements and standards to ensure that the City is and remains in compliance. Further, for amounts paid directly to third party vendors, the City must create processes and procedures to verify that these revenues are properly recorded and all applicable expenditures are included in the records of the City. These steps will reduce the likelihood of error or fraud within the City and provide more accurate records for internal and external parties. View of Responsible Officials: Management concurs with the Auditor’s recommendation and will review with the third-party North Central Illinois Council of Governments (NCICG) to establish appropriate City monitoring and review.
Criteria or Specific Requirement: Under 2 CFR Part 200.502, the auditee must prepare the Schedule of Federal Awards to cover the appropriate audit period and to include all applicable federal expenditures expended during the audit period. Condition: The City has not historically created or provided a Schedule of Federal Awards for audit purposes and did not include all federal expenditures as required under 2 CFR Part 200.502. Context: The City did not have all federal expenditures recorded in their trial balance, and did not have accurate records of all expenditures spent during the audit period. In addition, they did not have all of the necessary information or training to create the Schedule of Federal Awards. Questioned Costs: None Effect: The City was unable to provide auditors with a complete Schedule of Federal Awards, and could not verify the completeness of expenditures recorded in their financial statements as provided for the audit. Cause: The City does not have processes in place to track all grant spending. Repeat: No Auditor's Recommendation: We recommend that the City create processes and procedures that capture all federal funding received, and track applicable expenditures. This report should be reconciled regularly (at least monthly) when requests for reimbursement are made, and should include all applicable information necessary to identify the funding agency, assistance listing number, and any other pertinent passthrough information. With this process in place, the City will be better able to track and monitor grant funding, plan future projects or future funding needs, and prepare for the annual audit. View of Responsible Officials: Management concurs with the Auditor’s recommendation and will review with the third-party North Central Illinois Council of Governments (NCICG) to establish appropriate City monitoring and review. City will also review with prior City Auditors to ensure proper overall procedures are in place to ensure all grants in the aggregate are monitored.
Criteria or Specific Requirement: A government must have internal controls sufficient to be aware of and properly tracking all funds received and spent by the government, its agents, and associated custodial organizations. Condition: The government did not maintain records for, or reconciliation of funds received and spent related to the CDBG, CSLFRF, and FEMA grants received, as well as other grant funds paid directly to organizations they purchased from. Context: The City employs a third party agency to oversee several projects approved by City authority and paid for via grant funds received. These funds are deposited into City accounts and spent from the same under the oversight of their third party. Other grants funds may be received directly by external vendors/organizations on behalf of the City. Questioned Costs: None Effect: The City did not have record of $766,551 in grant funding in the initial trial balance. In addition, they had to obtain the bank records in order to rebuild the activity in those funds, meaning that the City was not monitoring or tracking those projects other than to place full reliance on the external third party. The internal controls associated with monitoring and awareness of these awards and expenditures are not functioning correctly, and any issues or errors would not be caught by the City in a timely manner. Cause: Reliance is placed on external agents to handle all requirements of spending, oversight, monitoring, and compliance. Repeat: No Auditor's Recommendation: We recommend that the City create procedures to ensure that the City is recording this activity regularly, that the City is part of the monitoring and oversight process, and that the City is at least spot-checking the third party agent's compliance with grant requirements and standards to ensure that the City is and remains in compliance. Further, for amounts paid directly to third party vendors, the City must create processes and procedures to verify that these revenues are properly recorded and all applicable expenditures are included in the records of the City. These steps will reduce the likelihood of error or fraud within the City and provide more accurate records for internal and external parties. View of Responsible Officials: Management concurs with the Auditor’s recommendation and will review with the third-party North Central Illinois Council of Governments (NCICG) to establish appropriate City monitoring and review.
Criteria or Specific Requirement: Under 2 CFR Part 200.502, the auditee must prepare the Schedule of Federal Awards to cover the appropriate audit period and to include all applicable federal expenditures expended during the audit period. Condition: The City has not historically created or provided a Schedule of Federal Awards for audit purposes and did not include all federal expenditures as required under 2 CFR Part 200.502. Context: The City did not have all federal expenditures recorded in their trial balance, and did not have accurate records of all expenditures spent during the audit period. In addition, they did not have all of the necessary information or training to create the Schedule of Federal Awards. Questioned Costs: None Effect: The City was unable to provide auditors with a complete Schedule of Federal Awards, and could not verify the completeness of expenditures recorded in their financial statements as provided for the audit. Cause: The City does not have processes in place to track all grant spending. Repeat: No Auditor's Recommendation: We recommend that the City create processes and procedures that capture all federal funding received, and track applicable expenditures. This report should be reconciled regularly (at least monthly) when requests for reimbursement are made, and should include all applicable information necessary to identify the funding agency, assistance listing number, and any other pertinent passthrough information. With this process in place, the City will be better able to track and monitor grant funding, plan future projects or future funding needs, and prepare for the annual audit. View of Responsible Officials: Management concurs with the Auditor’s recommendation and will review with the third-party North Central Illinois Council of Governments (NCICG) to establish appropriate City monitoring and review. City will also review with prior City Auditors to ensure proper overall procedures are in place to ensure all grants in the aggregate are monitored.
Criteria or Specific Requirement: Under 2 CFR Part 200.502, the auditee must prepare the Schedule of Federal Awards to cover the appropriate audit period and to include all applicable federal expenditures expended during the audit period. Condition: The City has not historically created or provided a Schedule of Federal Awards for audit purposes and did not include all federal expenditures as required under 2 CFR Part 200.502. Context: The City did not have all federal expenditures recorded in their trial balance, and did not have accurate records of all expenditures spent during the audit period. In addition, they did not have all of the necessary information or training to create the Schedule of Federal Awards. Questioned Costs: None Effect: The City was unable to provide auditors with a complete Schedule of Federal Awards, and could not verify the completeness of expenditures recorded in their financial statements as provided for the audit. Cause: The City does not have processes in place to track all grant spending. Repeat: No Auditor's Recommendation: We recommend that the City create processes and procedures that capture all federal funding received, and track applicable expenditures. This report should be reconciled regularly (at least monthly) when requests for reimbursement are made, and should include all applicable information necessary to identify the funding agency, assistance listing number, and any other pertinent passthrough information. With this process in place, the City will be better able to track and monitor grant funding, plan future projects or future funding needs, and prepare for the annual audit. View of Responsible Officials: Management concurs with the Auditor’s recommendation and will review with the third-party North Central Illinois Council of Governments (NCICG) to establish appropriate City monitoring and review. City will also review with prior City Auditors to ensure proper overall procedures are in place to ensure all grants in the aggregate are monitored.
Criteria or Specific Requirement: A government must have internal controls sufficient to be aware of and properly tracking all funds received and spent by the government, its agents, and associated custodial organizations. Condition: The government did not maintain records for, or reconciliation of funds received and spent related to the CDBG, CSLFRF, and FEMA grants received, as well as other grant funds paid directly to organizations they purchased from. Context: The City employs a third party agency to oversee several projects approved by City authority and paid for via grant funds received. These funds are deposited into City accounts and spent from the same under the oversight of their third party. Other grants funds may be received directly by external vendors/organizations on behalf of the City. Questioned Costs: None Effect: The City did not have record of $766,551 in grant funding in the initial trial balance. In addition, they had to obtain the bank records in order to rebuild the activity in those funds, meaning that the City was not monitoring or tracking those projects other than to place full reliance on the external third party. The internal controls associated with monitoring and awareness of these awards and expenditures are not functioning correctly, and any issues or errors would not be caught by the City in a timely manner. Cause: Reliance is placed on external agents to handle all requirements of spending, oversight, monitoring, and compliance. Repeat: No Auditor's Recommendation: We recommend that the City create procedures to ensure that the City is recording this activity regularly, that the City is part of the monitoring and oversight process, and that the City is at least spot-checking the third party agent's compliance with grant requirements and standards to ensure that the City is and remains in compliance. Further, for amounts paid directly to third party vendors, the City must create processes and procedures to verify that these revenues are properly recorded and all applicable expenditures are included in the records of the City. These steps will reduce the likelihood of error or fraud within the City and provide more accurate records for internal and external parties. View of Responsible Officials: Management concurs with the Auditor’s recommendation and will review with the third-party North Central Illinois Council of Governments (NCICG) to establish appropriate City monitoring and review.
Criteria or Specific Requirement: Under 2 CFR Part 200.502, the auditee must prepare the Schedule of Federal Awards to cover the appropriate audit period and to include all applicable federal expenditures expended during the audit period. Condition: The City has not historically created or provided a Schedule of Federal Awards for audit purposes and did not include all federal expenditures as required under 2 CFR Part 200.502. Context: The City did not have all federal expenditures recorded in their trial balance, and did not have accurate records of all expenditures spent during the audit period. In addition, they did not have all of the necessary information or training to create the Schedule of Federal Awards. Questioned Costs: None Effect: The City was unable to provide auditors with a complete Schedule of Federal Awards, and could not verify the completeness of expenditures recorded in their financial statements as provided for the audit. Cause: The City does not have processes in place to track all grant spending. Repeat: No Auditor's Recommendation: We recommend that the City create processes and procedures that capture all federal funding received, and track applicable expenditures. This report should be reconciled regularly (at least monthly) when requests for reimbursement are made, and should include all applicable information necessary to identify the funding agency, assistance listing number, and any other pertinent passthrough information. With this process in place, the City will be better able to track and monitor grant funding, plan future projects or future funding needs, and prepare for the annual audit. View of Responsible Officials: Management concurs with the Auditor’s recommendation and will review with the third-party North Central Illinois Council of Governments (NCICG) to establish appropriate City monitoring and review. City will also review with prior City Auditors to ensure proper overall procedures are in place to ensure all grants in the aggregate are monitored.
Criteria or Specific Requirement: A government must have internal controls sufficient to be aware of and properly tracking all funds received and spent by the government, its agents, and associated custodial organizations. Condition: The government did not maintain records for, or reconciliation of funds received and spent related to the CDBG, CSLFRF, and FEMA grants received, as well as other grant funds paid directly to organizations they purchased from. Context: The City employs a third party agency to oversee several projects approved by City authority and paid for via grant funds received. These funds are deposited into City accounts and spent from the same under the oversight of their third party. Other grants funds may be received directly by external vendors/organizations on behalf of the City. Questioned Costs: None Effect: The City did not have record of $766,551 in grant funding in the initial trial balance. In addition, they had to obtain the bank records in order to rebuild the activity in those funds, meaning that the City was not monitoring or tracking those projects other than to place full reliance on the external third party. The internal controls associated with monitoring and awareness of these awards and expenditures are not functioning correctly, and any issues or errors would not be caught by the City in a timely manner. Cause: Reliance is placed on external agents to handle all requirements of spending, oversight, monitoring, and compliance. Repeat: No Auditor's Recommendation: We recommend that the City create procedures to ensure that the City is recording this activity regularly, that the City is part of the monitoring and oversight process, and that the City is at least spot-checking the third party agent's compliance with grant requirements and standards to ensure that the City is and remains in compliance. Further, for amounts paid directly to third party vendors, the City must create processes and procedures to verify that these revenues are properly recorded and all applicable expenditures are included in the records of the City. These steps will reduce the likelihood of error or fraud within the City and provide more accurate records for internal and external parties. View of Responsible Officials: Management concurs with the Auditor’s recommendation and will review with the third-party North Central Illinois Council of Governments (NCICG) to establish appropriate City monitoring and review.
Criteria or Specific Requirement: Under 2 CFR Part 200.502, the auditee must prepare the Schedule of Federal Awards to cover the appropriate audit period and to include all applicable federal expenditures expended during the audit period. Condition: The City has not historically created or provided a Schedule of Federal Awards for audit purposes and did not include all federal expenditures as required under 2 CFR Part 200.502. Context: The City did not have all federal expenditures recorded in their trial balance, and did not have accurate records of all expenditures spent during the audit period. In addition, they did not have all of the necessary information or training to create the Schedule of Federal Awards. Questioned Costs: None Effect: The City was unable to provide auditors with a complete Schedule of Federal Awards, and could not verify the completeness of expenditures recorded in their financial statements as provided for the audit. Cause: The City does not have processes in place to track all grant spending. Repeat: No Auditor's Recommendation: We recommend that the City create processes and procedures that capture all federal funding received, and track applicable expenditures. This report should be reconciled regularly (at least monthly) when requests for reimbursement are made, and should include all applicable information necessary to identify the funding agency, assistance listing number, and any other pertinent passthrough information. With this process in place, the City will be better able to track and monitor grant funding, plan future projects or future funding needs, and prepare for the annual audit. View of Responsible Officials: Management concurs with the Auditor’s recommendation and will review with the third-party North Central Illinois Council of Governments (NCICG) to establish appropriate City monitoring and review. City will also review with prior City Auditors to ensure proper overall procedures are in place to ensure all grants in the aggregate are monitored.