Audit 316460

The District failed to accurately report program costs. 1. Program Information: Water Storage Tank Project, CFDA Number 10.760. 2. Condition: During a review of progress reports submitted to USDA and actual costs incurred as recorded in the accounting records, it was noted that the total of interest costs reported USDA did not match to the total of interest costs recorded in the accounting records. 3. Criteria: 2 CFR Section 200.329 requires that entities receiving federal funds “relate financial data and accomplishments to performance goals and objectives of the Federal award. Also, in accordance with above mentioned common information collections, and when required by the terms and conditions of the Federal award, recipients must provide cost information to demonstrate cost effective practices (e.g., through unit cost data).” 4. Cause of Condition: A separation between accounting and reporting allowed reports to be submitted for costs that were not actually incurred. 5. Effect of Condition: The District reported $60,038 more interest than what was actually incurred during the year ended June 30, 2022. 6. Recommendation: All reports submitted in relation to federal programs should be reconciled to the accounting records before submission to the applicable federal entity. 7. Client response: While discussing this issue with the USDA over email it was agreed that other expenses that were previously paid by the district and not covered by the USDA loan would be acceptable to use instead of the miscalculated, overage of the interest expense. The district had spent several hundred thousand dollars in funds above the originally budgeted district contribution towards the Water Storage Tank Project previous to acquiring the loan with the USDA.

The District failed to accurately report program costs. 1. Program Information: Water Storage Tank Project, CFDA Number 10.760. 2. Condition: During a review of progress reports submitted to USDA and actual costs incurred as recorded in the accounting records, it was noted that the total of interest costs reported USDA did not match to the total of interest costs recorded in the accounting records. 3. Criteria: 2 CFR Section 200.329 requires that entities receiving federal funds “relate financial data and accomplishments to performance goals and objectives of the Federal award. Also, in accordance with above mentioned common information collections, and when required by the terms and conditions of the Federal award, recipients must provide cost information to demonstrate cost effective practices (e.g., through unit cost data).” 4. Cause of Condition: A separation between accounting and reporting allowed reports to be submitted for costs that were not actually incurred. 5. Effect of Condition: The District reported $60,038 more interest than what was actually incurred during the year ended June 30, 2022. 6. Recommendation: All reports submitted in relation to federal programs should be reconciled to the accounting records before submission to the applicable federal entity. 7. Client response: While discussing this issue with the USDA over email it was agreed that other expenses that were previously paid by the district and not covered by the USDA loan would be acceptable to use instead of the miscalculated, overage of the interest expense. The district had spent several hundred thousand dollars in funds above the originally budgeted district contribution towards the Water Storage Tank Project previous to acquiring the loan with the USDA.