FAC Explorer

Audit 303309

FY End
2022-09-30
Total Expended
$10.37M
Findings
4
Programs
11
Organization: City of Pharr, Texas (TX)
Year: 2022 Accepted: 2024-04-11
Auditor: Burton McCumber & Longoria LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
392988 2022-013 Significant Deficiency - AB
392989 2022-014 Significant Deficiency - AB
969430 2022-013 Significant Deficiency - AB
969431 2022-014 Significant Deficiency - AB

Programs

ALN Program Spent Major Findings
21.027 Coronavirus State and Local Fiscal Recovery Funds $6.73M Yes 1
20.205 Highway Planning and Construction $1.65M - 0
14.218 Community Development Block Grants/entitlement Grants $411,471 Yes 0
97.067 Homeland Security Grant Program $304,561 Yes 1
97.083 Staffing for Adequate Fire and Emergency Response (safer) $155,402 - 0
16.922 Equitable Sharing Program $79,573 - 0
16.738 Edward Byrne Memorial Justice Assistance Grant Program $16,775 - 0
16.575 Crime Victim Assistance $9,805 - 0
20.600 State and Community Highway Safety $8,762 - 0
20.616 National Priority Safety Programs $3,629 - 0
20.614 National Highway Traffic Safety Administration (nhtsa) Discretionary Safety Grants $756 - 0

Contacts

Name Title Type
KPJ2RC29LY68 Jamison Merrick Auditee
9564024150 Ricky Longoria Auditor
No contacts on file

Notes to SEFA

Title: Relationship to Federal Financial Status Reports Accounting Policies: 1. General Statement: The accompanying Schedule of Expenditures of Federal Awards (Schedule) presents the activity of all the federal award activity of the City of Pharr, Texas, under program of the federal government for the year ended September 30, 2022. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance). The City's reporting entity is defined in Note I.B. of the City's basic financial statements. All federal awards received directly from Federal agencies and federal awards passed through state agencies are included on the Schedule. Because the Schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position or changes in net position of City of Pharr, Texas. 2. Summary of Significant Accounting Policies: The federal grant funds were accounted for in the grant fund, a governmental fund type, and in an enterprise fund. The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. The governmental fund types are accounted for using a current financial resources measurement focus. With the governmental fund type measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. The modified accrual basis of accounting is used for the governmental fund types. This basis of accounting recognizes revenues in the accounting period in which they become susceptible to accrual, i.e., both measurable and available, and expenditures in the accounting period in which the fund liability is incurred, if measurable, except for certain compensated absences and claims and judgments, which are recognized when the obligations are expected to be liquidated with expendable available financial resources. Enterprise funds are used to account for those operations that are financed and operate in a manner similar to private business or where the governing body has decided that the determination of revenues earned, costs incurred, and/or net income is necessary for management accountability. Enterprise funds are accounted for on the flow of economic resources measurement focus and use the accrual basis of accounting. Under this method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. Federal grant funds are generally considered earned to the extent of expenditures made under the provisions of the grant, and accordingly, when such funds are received, they are recorded as deferred revenues until earned. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. Amounts reported on the Schedule may not agree with the amounts reported in the related federal financial status reports filed with grantor agencies, because of the effect of accruals made in the Schedule.

Finding Details

Finding 2022-013
ALN 97.067 - HOMELAND SECURITY GRANTS PROGRAM (HSGP) Reference Number 2022-013 Payroll Costs Criteria: The Homeland Security Grants program (Operation Stonegarden) allows funds to be used for operational overtime costs associated with law enforcement activities, in support of border law enforcement agencies for increased border security enhancement. Internal controls should be in place to ensure such overtime costs are accurately tracked to ensure reimbursement is requested only for allowable costs and allowable activities. Condition Found: Internal controls are not suitably designed to ensure overtime costs charged to the program are correct and accurate. A sample of 40 payroll transactions were selected for testing and the following inaccuracies were noted. One instance was noted where an employee worked 10 overtime hours performing Operation Stonegarden eligible activities, however, 16 overtime hours were charged to the program. One instance was noted where an employee worked 12.5 overtime hours performing Operation Stonegarden eligible activities, however, only 5.5 overtime hours were charged to the program. One instance was noted where an employee worked 8 overtime hours performing Operation Stonegarden eligible activities, however, the employee timesheet reflected 11.75 hours. Context: Condition was noted in conducting testing for internal controls over compliance and compliance. A random sample of 40 payroll transactions were selected for testing. Effect: Ineffective internal controls related to the tracking of overtime hours results in incorrect reimbursement requests submitted for reimbursement. Such errors may result in ineligible costs charged to the program. Questioned Costs: None reported. Cause: Controls are not suitably designed to ensure Operation Stonegarden hours are accurately tracked. Recommendation: We recommend the City strengthen internal controls related to the tracking of Operation Stonegarden overtime costs. As part of the process for requesting reimbursement, we recommend all supporting documentation be reviewed including employee timesheets, daily activity report summaries, OPSG overtime submission forms and reimbursement request forms. Repeat Finding from Prior Year(s): N/A Views of Responsible Officials: See management’s corrective action plan.
Finding 2022-014
ALN 21.027 - CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS (CSLFRF) Reference Number 2022-014 Program Costs Criteria: Internal controls should be suitably designed to ensure only eligible costs are charged to the program. Only eligible costs should be charged to the program. Condition Found: The City elected to use the standard allowance for revenue loss as allowed under the CSLFRF. The City elected to apply EMS payroll costs as costs as such costs used to support public health as allowed under CSLFRF. The City identified the payroll costs applied to the program for an amount equal to the revenue loss claimed and provided a detail for sample selection and testing. In testing internal controls over compliance and compliance, we noted one employee in the sample selected was a library employee during the pay period tested rather than EMS. Context: Condition was noted in conducting testing for internal controls over compliance and compliance over allowable costs and allowable activities in a random sample of 40 payroll transactions. Sample size was expanded to 71 and no other exceptions were noted. Effect: The effect of this matter results in unallowed costs. Questioned Costs: None reported. Cause: The employee was a library employee and later transferred to the EMS department in March 2022. The employee was erroneously included in the listing of EMS employees for the fiscal year ended September 30, 2022 in the list of costs claimed to the program. Recommendation: We recommend the City implement controls to ensure all costs identified as having been charged to the program are allowable. Repeat Finding from Prior Year(s): N/A Views of Responsible Officials: See management’s corrective action plan.
Finding 2022-013
ALN 97.067 - HOMELAND SECURITY GRANTS PROGRAM (HSGP) Reference Number 2022-013 Payroll Costs Criteria: The Homeland Security Grants program (Operation Stonegarden) allows funds to be used for operational overtime costs associated with law enforcement activities, in support of border law enforcement agencies for increased border security enhancement. Internal controls should be in place to ensure such overtime costs are accurately tracked to ensure reimbursement is requested only for allowable costs and allowable activities. Condition Found: Internal controls are not suitably designed to ensure overtime costs charged to the program are correct and accurate. A sample of 40 payroll transactions were selected for testing and the following inaccuracies were noted. One instance was noted where an employee worked 10 overtime hours performing Operation Stonegarden eligible activities, however, 16 overtime hours were charged to the program. One instance was noted where an employee worked 12.5 overtime hours performing Operation Stonegarden eligible activities, however, only 5.5 overtime hours were charged to the program. One instance was noted where an employee worked 8 overtime hours performing Operation Stonegarden eligible activities, however, the employee timesheet reflected 11.75 hours. Context: Condition was noted in conducting testing for internal controls over compliance and compliance. A random sample of 40 payroll transactions were selected for testing. Effect: Ineffective internal controls related to the tracking of overtime hours results in incorrect reimbursement requests submitted for reimbursement. Such errors may result in ineligible costs charged to the program. Questioned Costs: None reported. Cause: Controls are not suitably designed to ensure Operation Stonegarden hours are accurately tracked. Recommendation: We recommend the City strengthen internal controls related to the tracking of Operation Stonegarden overtime costs. As part of the process for requesting reimbursement, we recommend all supporting documentation be reviewed including employee timesheets, daily activity report summaries, OPSG overtime submission forms and reimbursement request forms. Repeat Finding from Prior Year(s): N/A Views of Responsible Officials: See management’s corrective action plan.
Finding 2022-014
ALN 21.027 - CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS (CSLFRF) Reference Number 2022-014 Program Costs Criteria: Internal controls should be suitably designed to ensure only eligible costs are charged to the program. Only eligible costs should be charged to the program. Condition Found: The City elected to use the standard allowance for revenue loss as allowed under the CSLFRF. The City elected to apply EMS payroll costs as costs as such costs used to support public health as allowed under CSLFRF. The City identified the payroll costs applied to the program for an amount equal to the revenue loss claimed and provided a detail for sample selection and testing. In testing internal controls over compliance and compliance, we noted one employee in the sample selected was a library employee during the pay period tested rather than EMS. Context: Condition was noted in conducting testing for internal controls over compliance and compliance over allowable costs and allowable activities in a random sample of 40 payroll transactions. Sample size was expanded to 71 and no other exceptions were noted. Effect: The effect of this matter results in unallowed costs. Questioned Costs: None reported. Cause: The employee was a library employee and later transferred to the EMS department in March 2022. The employee was erroneously included in the listing of EMS employees for the fiscal year ended September 30, 2022 in the list of costs claimed to the program. Recommendation: We recommend the City implement controls to ensure all costs identified as having been charged to the program are allowable. Repeat Finding from Prior Year(s): N/A Views of Responsible Officials: See management’s corrective action plan.