Audit 305504

Criteria: 2 CFR Part 200 requires that non-federal entities establish and maintain effective internal control over federal awards to provide reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the specific award. The financial management system of each nonfederal entity must provide accurate, current, and complete disclosure of the financial results of each federal award in accordance with grant requirements. Condition: During our testing of the City’s compliance with the reporting requirements of the Substance Abuse and Mental Health Service (SAMHSA), we noted that the required annual Federal Financial Report (FFR), due on December 28, 2022, was not submitted by the City until January 8, 2023. Cause: The City’s internal controls over compliance were not sufficiently designed to prevent noncompliance with the terms of the SAMHSA grant. Effect: The City did not meet the reporting requirement of the SAMHSA grant because the required annual report was not filed timely. Recommendation: We recommend the City design controls to ensure an adequate process is in place to submit the required reports for federal grants by the deadlines set forth by the federal government. Auditee’s Response: We agree with the finding and will ensure controls are in place for timely reporting.

Criteria: 2 CFR section 200.331(f) requires that pass-through entities verify that subrecipients expected to be audited are taking timely and appropriate action on deficiencies detected through audits. Condition: Internal controls should be in place to ensure the City is in compliance with all requirements of the federal award program. For the fiscal year ended June 30, 2023, the City did not verify whether the subrecipients of grant funds were required to be audited, as required by 2 CFR section 200.33 (f). Context/Cause: The City did not have adequate internal controls to ensure compliance with all subrecipient monitoring requirements. Testing was performed to determine whether the City verified if the three (3) subrecipients of grant funds were required to be audited for the fiscal year ended June 30, 2023. Effect: Noncompliance at the subrecipient level may occur due to the subrecipient not being aware of all of the grant’s requirements. The City will be unable to effectively monitor the subrecipient if the City is unaware of whether the subrecipient is required to be audited. Recommendation: We recommend the City enhances internal controls to ensure compliance with subrecipient monitoring requirements. Auditee’s Response: We agree with the finding and will ensure controls are put in place to adequately monitor all subrecipient monitoring requirements.

Criteria: 2 CFR Part 200 requires that non-federal entities establish and maintain effective internal control over federal awards to provide reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the specific award. The financial management system of each nonfederal entity must provide accurate, current, and complete disclosure of the financial results of each federal award in accordance with grant requirements. Condition: During our testing of the City’s compliance with the reporting requirements of the Substance Abuse and Mental Health Service (SAMHSA), we noted that the required annual Federal Financial Report (FFR), due on December 28, 2022, was not submitted by the City until January 8, 2023. Cause: The City’s internal controls over compliance were not sufficiently designed to prevent noncompliance with the terms of the SAMHSA grant. Effect: The City did not meet the reporting requirement of the SAMHSA grant because the required annual report was not filed timely. Recommendation: We recommend the City design controls to ensure an adequate process is in place to submit the required reports for federal grants by the deadlines set forth by the federal government. Auditee’s Response: We agree with the finding and will ensure controls are in place for timely reporting.

Criteria: 2 CFR section 200.331(f) requires that pass-through entities verify that subrecipients expected to be audited are taking timely and appropriate action on deficiencies detected through audits. Condition: Internal controls should be in place to ensure the City is in compliance with all requirements of the federal award program. For the fiscal year ended June 30, 2023, the City did not verify whether the subrecipients of grant funds were required to be audited, as required by 2 CFR section 200.33 (f). Context/Cause: The City did not have adequate internal controls to ensure compliance with all subrecipient monitoring requirements. Testing was performed to determine whether the City verified if the three (3) subrecipients of grant funds were required to be audited for the fiscal year ended June 30, 2023. Effect: Noncompliance at the subrecipient level may occur due to the subrecipient not being aware of all of the grant’s requirements. The City will be unable to effectively monitor the subrecipient if the City is unaware of whether the subrecipient is required to be audited. Recommendation: We recommend the City enhances internal controls to ensure compliance with subrecipient monitoring requirements. Auditee’s Response: We agree with the finding and will ensure controls are put in place to adequately monitor all subrecipient monitoring requirements.