Federal Program - COVID-19 Coronavirus State and Local Fiscal Recovery Funds (AL #21.027); Activities Allowed/Unallowed and Allowable Costs/Cost Principles; Cash Management; Criteria - 2 CFR Part 200, Subpart E (Cost Principles), expenses charged to federal awards should be free of improper payments, including payments that should have been made or that were made in incorrect amounts (including overpayments and underpayments). Furthermore, reimbursement requests need to be for allowable expenses incurred. Condition - The City overpaid a contractor $124,367 because the contractor had an error in the "Pay Estimate." The construction project has several different funding sources, and this draw was 60% State and 40% Federal. The City submitted and received reimbursement of $74,621 from the State and $49,746 from the Coronavirus State and Local Fiscal Recovery Funds program (Al. #21.027). Questioned Costs - $49,746; Context - In 2023, the total amount paid to contractors for construction was $3,254,540. During our reconciliation of the 2023 construction expenses of $3,254,540 to the amount eligible on the "Pay Estimate," we identified an overpayment of $124,367. Cause - Management Oversight. Effect - The error occurred in the first half of the construction project and all parties were notified of the error in 2024. Repeat Finding - No. Recommendation - The City should contact the Contractor to determine if the amount that was overpaid will be refunded or adjusted on the next "Pay Estimate." The City will also need to contact the Grantor to determine if the reimbursed dollars should be returned or adjusted on the next draw. To mitigate the risk of overpayment in the future, the City should reconcile construction payments to the "Pay Estimates." View of Responsible Officials - The City agrees with the recommendation and will implement December 1, 2024.
Federal Program - 594 Environmental Infrastructure Assistance Program (AL 12.U01): Procurement, Suspension, and Debarment; Criteria - Per Uniform Guidance, “Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR section 200.318 through 200.326. They must use their own documented procurement procedures, which reflect appliable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Furthermore, “Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. Condition - During testing, we noted that the City does not have a procurement policy in place that follows Uniform Guidance. Also, we noted that the City entered into two covered transactions with vendors who were not reviewed for suspension and debarment before entering into these transactions. Questioned Costs - None. Context - The City does not have a procurement policy that follows Uniform Guidance. Also, we tested two vendors who were not reviewed for suspension and debarment from a population of two. Cause - Management Oversight. Effect - The City is not in compliance with Uniform Guidance. Also, there is an increased risk of the City entering into a covered transaction with an entity that is suspended or debarred from receiving federal funds. Repeat Finding - Yes. Prior audit finding 2022-004. Recommendation - The City should implement a written procurement policy that follows Uniform Guidance. Furthermore, vendors should be reviewed for suspension and debarment before entering into a covered transaction. View of Responsible Officials - The City agrees with the recommendation.
Federal Program - 594 Environmental Infrastructure Assistance Program (AL 12.U01); Cash Management, Matching, Level of Effort, Earmarking; Criteria - A system of internal controls requires all requests for reimbursements to be reviewed and approved before submission. Condition - During testing, we noted one request for reimbursement report that was not properly signed off on, per City procedures. Questioned Costs - None. Context - In a population of 11 requests for reimbursement reports submitted, we selected 3 to test. We noted that one of the reports tested was not signed off on, per City procedures. Cause - Management Oversight. Effect - There is an increased risk of the City submitting an inaccurate request for reimbursement. Repeat Finding - No. Recommendation - The City should follow their procedures for signing off on all request for reimbursement reports before submitting the federal reimbursement. View of Responsible Officials - The City agrees with the recommendation and will implement December 1, 2024.
Federal Program - COVID-19 Coronavirus State and Local Fiscal Recovery Funds (AL #21.027); Activities Allowed/Unallowed and Allowable Costs/Cost Principles; Cash Management; Criteria - 2 CFR Part 200, Subpart E (Cost Principles), expenses charged to federal awards should be free of improper payments, including payments that should have been made or that were made in incorrect amounts (including overpayments and underpayments). Furthermore, reimbursement requests need to be for allowable expenses incurred. Condition - The City overpaid a contractor $124,367 because the contractor had an error in the "Pay Estimate." The construction project has several different funding sources, and this draw was 60% State and 40% Federal. The City submitted and received reimbursement of $74,621 from the State and $49,746 from the Coronavirus State and Local Fiscal Recovery Funds program (Al. #21.027). Questioned Costs - $49,746; Context - In 2023, the total amount paid to contractors for construction was $3,254,540. During our reconciliation of the 2023 construction expenses of $3,254,540 to the amount eligible on the "Pay Estimate," we identified an overpayment of $124,367. Cause - Management Oversight. Effect - The error occurred in the first half of the construction project and all parties were notified of the error in 2024. Repeat Finding - No. Recommendation - The City should contact the Contractor to determine if the amount that was overpaid will be refunded or adjusted on the next "Pay Estimate." The City will also need to contact the Grantor to determine if the reimbursed dollars should be returned or adjusted on the next draw. To mitigate the risk of overpayment in the future, the City should reconcile construction payments to the "Pay Estimates." View of Responsible Officials - The City agrees with the recommendation and will implement December 1, 2024.
Federal Program - 594 Environmental Infrastructure Assistance Program (AL 12.U01): Procurement, Suspension, and Debarment; Criteria - Per Uniform Guidance, “Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR section 200.318 through 200.326. They must use their own documented procurement procedures, which reflect appliable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Furthermore, “Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. Condition - During testing, we noted that the City does not have a procurement policy in place that follows Uniform Guidance. Also, we noted that the City entered into two covered transactions with vendors who were not reviewed for suspension and debarment before entering into these transactions. Questioned Costs - None. Context - The City does not have a procurement policy that follows Uniform Guidance. Also, we tested two vendors who were not reviewed for suspension and debarment from a population of two. Cause - Management Oversight. Effect - The City is not in compliance with Uniform Guidance. Also, there is an increased risk of the City entering into a covered transaction with an entity that is suspended or debarred from receiving federal funds. Repeat Finding - Yes. Prior audit finding 2022-004. Recommendation - The City should implement a written procurement policy that follows Uniform Guidance. Furthermore, vendors should be reviewed for suspension and debarment before entering into a covered transaction. View of Responsible Officials - The City agrees with the recommendation.
Federal Program - 594 Environmental Infrastructure Assistance Program (AL 12.U01); Cash Management, Matching, Level of Effort, Earmarking; Criteria - A system of internal controls requires all requests for reimbursements to be reviewed and approved before submission. Condition - During testing, we noted one request for reimbursement report that was not properly signed off on, per City procedures. Questioned Costs - None. Context - In a population of 11 requests for reimbursement reports submitted, we selected 3 to test. We noted that one of the reports tested was not signed off on, per City procedures. Cause - Management Oversight. Effect - There is an increased risk of the City submitting an inaccurate request for reimbursement. Repeat Finding - No. Recommendation - The City should follow their procedures for signing off on all request for reimbursement reports before submitting the federal reimbursement. View of Responsible Officials - The City agrees with the recommendation and will implement December 1, 2024.