Audit 320800

FY End

2022-12-31

Total Expended

$2.38M

Findings

2

Programs

4

Organization: City of Middleton (WI)

Year: 2022 Accepted: 2024-09-25

Auditor: Baker Tilly US LLP

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
498124	2022-002	Significant Deficiency	-	ABGLN
1074566	2022-002	Significant Deficiency	-	ABGLN

ALN	Program	Spent	Major	Findings
97.036	Disaster Grants - Public Assistance (presidentially Declared Disasters)	$2.02M	Yes	1
21.027	Coronavirus State and Local Fiscal Recovery Funds	$336,262	-	0
20.600	State and Community Highway Safety	$22,192	-	0
16.607	Bulletproof Vest Partnership Program	$4,813	-	0

Contacts

Name	Title	Type
CJLZT9USJKR8	William Burns	Auditee
6088218356	John Rader	Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: Expenditures reported on the Schedule are reported on the accrual or modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where available. The underlying accounting records for some grant programs are maintained on the modified accrual basis of accounting. Under the modified accrual basis, revenues are recorded when susceptible to accrual, i.e., both measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Expenditures are recorded when the liability is incurred. The accounting records for other grant programs are maintained on the accrual basis, i.e., when the revenue has been earned and the liability is incurred. De Minimis Rate Used: N Rate Explanation: The City of Middleton has not elected to use the 10% de minimis indirect cost rate. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of the City of Middleton under programs of the federal government for the year ended December 31, 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). Because the Schedule presents only a selected portion of the operations of the City of Middleton, it is not intended to and does not present the financial position, changes in net position or cash flows of the City of Middleton.

Title: Pass Through Agencies Accounting Policies: Expenditures reported on the Schedule are reported on the accrual or modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where available. The underlying accounting records for some grant programs are maintained on the modified accrual basis of accounting. Under the modified accrual basis, revenues are recorded when susceptible to accrual, i.e., both measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Expenditures are recorded when the liability is incurred. The accounting records for other grant programs are maintained on the accrual basis, i.e., when the revenue has been earned and the liability is incurred. De Minimis Rate Used: N Rate Explanation: The City of Middleton has not elected to use the 10% de minimis indirect cost rate. The City of Omro received federal awards from the following pass-through agencies: WI DOA Wisconsin Department of Administration WI DMA Wisconsin Department of Military Affairs WI DOT Wisconsin Department of Transportation

Finding Details

Finding 2022-002

Criteria: Per the Single Audit Act and terms of the grant agreement, an annual audit is required if the City expended $750,000 or more in Federal financial assistance per fiscal year. The audit prepared by an independent licensed Certified Public Accountant or a State or Federal auditor, if allowed by the State, must be submitted within 9 months of the City’s fiscal year end. Condition: For the fiscal year ending December 31, 2022, the City did not submit an annual single audit report within nine months of year-end. Cause: Changing guidance from the awarding agency as to when FEMA expenditures are required to be reported on the schedule of federal awards has caused confusion as to when they should be reported. Initially, it was understood that they should be reported when they were both incurred, and when the Project Worksheets were approved. Subsequent guidelines by FEMA stated that the expenditures should be reported when the funds have been obligated and incurred. Effect: Non-compliance with the Single Audit Act and agreement provisions could result in a delay in the single audit. Questioned Costs: None noted Recommendation: The City should work with the granting agency to clarify reporting requirements under the Single Audit when unique guidance is provided. Management Response: The City reviewed the updated guidelines for FEMA projects and worked with its auditors and Wisconsin Emergency Management to clarify the reporting requirements and timeline. When it was determined that FEMA expenditures should be reported once the projects were obligated and costs incurred, the City proceeded to prepare and submit a 2022 single audit.

Finding 2022-002

Criteria: Per the Single Audit Act and terms of the grant agreement, an annual audit is required if the City expended $750,000 or more in Federal financial assistance per fiscal year. The audit prepared by an independent licensed Certified Public Accountant or a State or Federal auditor, if allowed by the State, must be submitted within 9 months of the City’s fiscal year end. Condition: For the fiscal year ending December 31, 2022, the City did not submit an annual single audit report within nine months of year-end. Cause: Changing guidance from the awarding agency as to when FEMA expenditures are required to be reported on the schedule of federal awards has caused confusion as to when they should be reported. Initially, it was understood that they should be reported when they were both incurred, and when the Project Worksheets were approved. Subsequent guidelines by FEMA stated that the expenditures should be reported when the funds have been obligated and incurred. Effect: Non-compliance with the Single Audit Act and agreement provisions could result in a delay in the single audit. Questioned Costs: None noted Recommendation: The City should work with the granting agency to clarify reporting requirements under the Single Audit when unique guidance is provided. Management Response: The City reviewed the updated guidelines for FEMA projects and worked with its auditors and Wisconsin Emergency Management to clarify the reporting requirements and timeline. When it was determined that FEMA expenditures should be reported once the projects were obligated and costs incurred, the City proceeded to prepare and submit a 2022 single audit.