FAC Explorer

Audit 321630

FY End
2023-12-31
Total Expended
$2.62M
Findings
4
Programs
2
Organization: Ellwood City Borough (PA)
Year: 2023 Accepted: 2024-09-27
Auditor: Mark C Turnley CPA

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
498868 2023-001 Material Weakness - L
498869 2023-001 Material Weakness - L
1075310 2023-001 Material Weakness - L
1075311 2023-001 Material Weakness - L

Programs

ALN Program Spent Major Findings
66.458 Clean Water State Revolving Fund $1.61M Yes 1
14.239 Home Investment Partnerships Program $335,649 - 0

Contacts

Name Title Type
PL71FDRCHK46 Kevin Swogger Auditee
7247587777 Mark Turnley Auditor
No contacts on file

Notes to SEFA

Title: NOTE 1 - BASIS OF PRESENTATION Accounting Policies: NOTE 2 - BASIS OF ACCOUNTING: Expenditures reported on the Schedule are presented using the cash basis of accounting. Under this method, loan proceeds from PENNVEST are recorded when received and are recognized as debt obligations on the statement of net position. Grant proceeds from PENNVEST are recorded when received and recognized as revenues. PENNVEST loan and grant proceeds are recognized on the Schedule to the extent of eligible project costs approved and reimbursed by PENNVEST. The federal expenditures are recognized, as applicable, under the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or limited to reimbursement. De Minimis Rate Used: N Rate Explanation: The Borough of Ellwood City has elected to not use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (the ‘Schedule’) includes the federal grant activity administered by the Borough of Ellwood City for the year ended December 31, 2023. 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 Grant Guidance – UGG). Because the Schedule presents only a selected portion of the operations of the Borough of Ellwood City, it is not intended to and does not present the financial position or changes in net position of the Borough of Ellwood City.
Title: NOTE 3 - RELATIONSHIP TO FINANCIAL STATEMENTS Accounting Policies: NOTE 2 - BASIS OF ACCOUNTING: Expenditures reported on the Schedule are presented using the cash basis of accounting. Under this method, loan proceeds from PENNVEST are recorded when received and are recognized as debt obligations on the statement of net position. Grant proceeds from PENNVEST are recorded when received and recognized as revenues. PENNVEST loan and grant proceeds are recognized on the Schedule to the extent of eligible project costs approved and reimbursed by PENNVEST. The federal expenditures are recognized, as applicable, under the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or limited to reimbursement. De Minimis Rate Used: N Rate Explanation: The Borough of Ellwood City has elected to not use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. Federal loan proceeds received from the Pennsylvania Infrastructure Investment Authority are recorded as part of long-term liabilities – Note Payable (PENNVEST) in the accompanying financial statements (Exhibit A and H). Federal principal forgiveness (grant) proceeds received from the Pennsylvania Infrastructure Investment Authority are recorded as revenue in the accompanying financial statements (Exhibit I). Grant proceeds received from the U.S. Department of Housing and Urban Development are recognized as part of General Fund intergovernmental revenue in the accompanying financial statements (Exhibit E and G).

Finding Details

Finding 2023-001
CONDITION: During my review of the Borough of Ellwood City’s internal controls over federal awards, I noted that the Borough does not have formal written policies and procedures surrounding the management of their federal award funds. Although not all-inclusive, an example of some of the required polices would include written procedures for procurement, conflict of interest, and allowable costs. CRITERIA: Section 2 CFR 200.303 of the Uniform Guidance requires non-federal entities such as the Borough of Ellwood City to maintain effective internal controls over federal awards. In addition, the Uniform Guidance also recommends these internal controls follow guidance in Standards for Internal Control in the Federal Government (the Green Book), issued by the Comptroller General of the United States. EFFECT: The Borough of Ellwood City is not in compliance with Section 2 CFR 200.303 of the Uniform Guidance which requires non-federal entities to maintain effective internal controls over federal awards. QUESTIONED COST: None CAUSE: It was not readily determinable as to why the Borough of Ellwood City had not formally adopted written policies and procedures surrounding the management of their federal award funds. RECOMMENDATION: I recommend that the Borough of Ellwood City adopt the required written policies and procedures surrounding the management of federal award funds as prescribed by Section 2 CFR 200.303 of the Uniform Guidance. The focus of these policies and procedures should be to ensure that the Borough officials who are responsible for carrying out the objectives of the federal financial award understand 1) the federal statutes, regulations, and terms and conditions of the award, 2) how to evaluate and properly monitor compliance, and 3) the steps to take if noncompliance is identified. VIEWS OF RESPONSIBLE OFFICIALS: The Borough of Ellwood City concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
Finding 2023-001
CONDITION: During my review of the Borough of Ellwood City’s internal controls over federal awards, I noted that the Borough does not have formal written policies and procedures surrounding the management of their federal award funds. Although not all-inclusive, an example of some of the required polices would include written procedures for procurement, conflict of interest, and allowable costs. CRITERIA: Section 2 CFR 200.303 of the Uniform Guidance requires non-federal entities such as the Borough of Ellwood City to maintain effective internal controls over federal awards. In addition, the Uniform Guidance also recommends these internal controls follow guidance in Standards for Internal Control in the Federal Government (the Green Book), issued by the Comptroller General of the United States. EFFECT: The Borough of Ellwood City is not in compliance with Section 2 CFR 200.303 of the Uniform Guidance which requires non-federal entities to maintain effective internal controls over federal awards. QUESTIONED COST: None CAUSE: It was not readily determinable as to why the Borough of Ellwood City had not formally adopted written policies and procedures surrounding the management of their federal award funds. RECOMMENDATION: I recommend that the Borough of Ellwood City adopt the required written policies and procedures surrounding the management of federal award funds as prescribed by Section 2 CFR 200.303 of the Uniform Guidance. The focus of these policies and procedures should be to ensure that the Borough officials who are responsible for carrying out the objectives of the federal financial award understand 1) the federal statutes, regulations, and terms and conditions of the award, 2) how to evaluate and properly monitor compliance, and 3) the steps to take if noncompliance is identified. VIEWS OF RESPONSIBLE OFFICIALS: The Borough of Ellwood City concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
Finding 2023-001
CONDITION: During my review of the Borough of Ellwood City’s internal controls over federal awards, I noted that the Borough does not have formal written policies and procedures surrounding the management of their federal award funds. Although not all-inclusive, an example of some of the required polices would include written procedures for procurement, conflict of interest, and allowable costs. CRITERIA: Section 2 CFR 200.303 of the Uniform Guidance requires non-federal entities such as the Borough of Ellwood City to maintain effective internal controls over federal awards. In addition, the Uniform Guidance also recommends these internal controls follow guidance in Standards for Internal Control in the Federal Government (the Green Book), issued by the Comptroller General of the United States. EFFECT: The Borough of Ellwood City is not in compliance with Section 2 CFR 200.303 of the Uniform Guidance which requires non-federal entities to maintain effective internal controls over federal awards. QUESTIONED COST: None CAUSE: It was not readily determinable as to why the Borough of Ellwood City had not formally adopted written policies and procedures surrounding the management of their federal award funds. RECOMMENDATION: I recommend that the Borough of Ellwood City adopt the required written policies and procedures surrounding the management of federal award funds as prescribed by Section 2 CFR 200.303 of the Uniform Guidance. The focus of these policies and procedures should be to ensure that the Borough officials who are responsible for carrying out the objectives of the federal financial award understand 1) the federal statutes, regulations, and terms and conditions of the award, 2) how to evaluate and properly monitor compliance, and 3) the steps to take if noncompliance is identified. VIEWS OF RESPONSIBLE OFFICIALS: The Borough of Ellwood City concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
Finding 2023-001
CONDITION: During my review of the Borough of Ellwood City’s internal controls over federal awards, I noted that the Borough does not have formal written policies and procedures surrounding the management of their federal award funds. Although not all-inclusive, an example of some of the required polices would include written procedures for procurement, conflict of interest, and allowable costs. CRITERIA: Section 2 CFR 200.303 of the Uniform Guidance requires non-federal entities such as the Borough of Ellwood City to maintain effective internal controls over federal awards. In addition, the Uniform Guidance also recommends these internal controls follow guidance in Standards for Internal Control in the Federal Government (the Green Book), issued by the Comptroller General of the United States. EFFECT: The Borough of Ellwood City is not in compliance with Section 2 CFR 200.303 of the Uniform Guidance which requires non-federal entities to maintain effective internal controls over federal awards. QUESTIONED COST: None CAUSE: It was not readily determinable as to why the Borough of Ellwood City had not formally adopted written policies and procedures surrounding the management of their federal award funds. RECOMMENDATION: I recommend that the Borough of Ellwood City adopt the required written policies and procedures surrounding the management of federal award funds as prescribed by Section 2 CFR 200.303 of the Uniform Guidance. The focus of these policies and procedures should be to ensure that the Borough officials who are responsible for carrying out the objectives of the federal financial award understand 1) the federal statutes, regulations, and terms and conditions of the award, 2) how to evaluate and properly monitor compliance, and 3) the steps to take if noncompliance is identified. VIEWS OF RESPONSIBLE OFFICIALS: The Borough of Ellwood City concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.