Audit 302069

Federal Program: Highway Safety Improvement Program, Assistance Listing Number 20.205 Criteria: Per CFR 200.302, the financial management system of each non-Federal entity must provide records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Condition: During our procedures over the matching compliance requirement, we reviewed reimbursement requests and noted that the amount requested for reimbursement did not agree to the expenditures listed in the City’s expenditure detail. This is because the City implemented a cost sharing/split approach for total project costs where total costs were to be split by various funding sources. The City would account for this by recording each funding source’s portion of the costs in their system as projects were split up by expense and funding source strings. Reimbursement requests were supposed to be submitted based on each funding source’s portion of the costs. The amounts actually requested for reimbursement on the request included total project costs instead of the programs’ specified portion of the project cost resulting in an overpayment. As a result, the City’s records would not identify the proper application of program funds as there is no expenditure to agree to the funds that were overpaid. Cause: Due to the decentralized nature of the reimbursement request process, the reimbursement requests are not reviewed prior to submission to the granting agency. Effect: The City could potentially fund the same expenditures under multiple grants and jeopardize future grant funding due to program noncompliance. Questioned Costs: $31,869. This amount was determined by totaling the overpayments identified. Context/Sampling: A nonstatistical sample of two reimbursement requests were selected for testing which account for $39,389 of federal program expenditures. Recommendation: We recommend the City implement a review process to ensure that reimbursement requests are submitted for the appropriate amounts. Management’s Response: See Corrective Action Plan.

Federal Program: Highway Safety Improvement Program, Assistance Listing Number 20.205 Criteria: Per CFR 200.302, the financial management system of each non-Federal entity must provide records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Condition: During our procedures over the matching compliance requirement, we reviewed reimbursement requests and noted that the amount requested for reimbursement did not agree to the expenditures listed in the City’s expenditure detail. This is because the City implemented a cost sharing/split approach for total project costs where total costs were to be split by various funding sources. The City would account for this by recording each funding source’s portion of the costs in their system as projects were split up by expense and funding source strings. Reimbursement requests were supposed to be submitted based on each funding source’s portion of the costs. The amounts actually requested for reimbursement on the request included total project costs instead of the programs’ specified portion of the project cost resulting in an overpayment. As a result, the City’s records would not identify the proper application of program funds as there is no expenditure to agree to the funds that were overpaid. Cause: Due to the decentralized nature of the reimbursement request process, the reimbursement requests are not reviewed prior to submission to the granting agency. Effect: The City could potentially fund the same expenditures under multiple grants and jeopardize future grant funding due to program noncompliance. Questioned Costs: $31,869. This amount was determined by totaling the overpayments identified. Context/Sampling: A nonstatistical sample of two reimbursement requests were selected for testing which account for $39,389 of federal program expenditures. Recommendation: We recommend the City implement a review process to ensure that reimbursement requests are submitted for the appropriate amounts. Management’s Response: See Corrective Action Plan.