Audit 301938

Project and Expenditure Report (Quarterly Report) Criteria – The Uniform Guidance, Part 200.303, requires the auditee establish and maintain effective internal control over the federal award which provides reasonable assurance the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms of the federal award. The City is required to submit an annual project and expenditures report. Condition – The required report was submitted 3 days late. Cause – City procedures have not been established to ensure the report is submitted timely. Effect – The lack of established policies and procedures resulted in the late submission of the required report. Recommendation – The City should establish policies and procedures to ensure reports are submitted timely in accordance with the Compliance and Reporting Guidance. Response and Corrective Action Planned – A policy and procedure will be established to ensure the annual Project and Expenditure Report is submitted prior to the reporting deadline. Conclusion – Response accepted.

Bid Letting Criteria – The Uniform Guidance, Part 200.318, requires the auditee establish and maintain effective internal control over the federal award which provides procurement procedures, consistent with State, local and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. Condition – There was no bid letting for engineering fees related to the Bank Stabilization Project and Sewer Lining Project due to assuming cost would be below required bid letting amount. Cause – City procedures have not been established to ensure that bid letting is submitted for all required services. Effect – The lack of enforced policies and procedures resulted in no bid letting for engineering fees related to two projects. Recommendation – The City should establish policies and procedures to ensure that all engineering and contractors are properly bid out in regards to federal funding. Response and Corrective Action Planned – At the time of the projects were undertaken, the City believed that the total cost for engineering would be below the $50,000 micro-purchase threshold. The costs actually incurred were approximately 2% over this mark. This overrun was identified by the State of Iowa. The City clarified their position with the State of Iowa that bidding would have happened if the City believed the engineering cost was going to exceed the micro-purchase threshold and the matter was resolved. The City will pay close attention to the required bidding thresholds in the future and request bids when required. Conclusion – Response accepted.

Project and Expenditure Report (Quarterly Report) Criteria – The Uniform Guidance, Part 200.303, requires the auditee establish and maintain effective internal control over the federal award which provides reasonable assurance the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms of the federal award. The City is required to submit an annual project and expenditures report. Condition – The required report was submitted 3 days late. Cause – City procedures have not been established to ensure the report is submitted timely. Effect – The lack of established policies and procedures resulted in the late submission of the required report. Recommendation – The City should establish policies and procedures to ensure reports are submitted timely in accordance with the Compliance and Reporting Guidance. Response and Corrective Action Planned – A policy and procedure will be established to ensure the annual Project and Expenditure Report is submitted prior to the reporting deadline. Conclusion – Response accepted.

Bid Letting Criteria – The Uniform Guidance, Part 200.318, requires the auditee establish and maintain effective internal control over the federal award which provides procurement procedures, consistent with State, local and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. Condition – There was no bid letting for engineering fees related to the Bank Stabilization Project and Sewer Lining Project due to assuming cost would be below required bid letting amount. Cause – City procedures have not been established to ensure that bid letting is submitted for all required services. Effect – The lack of enforced policies and procedures resulted in no bid letting for engineering fees related to two projects. Recommendation – The City should establish policies and procedures to ensure that all engineering and contractors are properly bid out in regards to federal funding. Response and Corrective Action Planned – At the time of the projects were undertaken, the City believed that the total cost for engineering would be below the $50,000 micro-purchase threshold. The costs actually incurred were approximately 2% over this mark. This overrun was identified by the State of Iowa. The City clarified their position with the State of Iowa that bidding would have happened if the City believed the engineering cost was going to exceed the micro-purchase threshold and the matter was resolved. The City will pay close attention to the required bidding thresholds in the future and request bids when required. Conclusion – Response accepted.