FAC Explorer

Audit 322539

FY End
2023-12-31
Total Expended
$4.01M
Findings
2
Programs
9
Organization: City of Richmond (IN)
Year: 2023 Accepted: 2024-09-30
Auditor: Crowe LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
499730 2023-003 Material Weakness Yes I
1076172 2023-003 Material Weakness Yes I

Programs

ALN Program Spent Major Findings
21.027 Covid-19 - Coronavirus State and Local Fiscal Recovery Funds $2.29M Yes 1
11.307 Economic Adjustment Assistance $966,002 Yes 0
93.391 Activities to Support State, Tribal, Local and Territorial (stlt) Health Department Response to Public Health Or Healthcare Crises $174,800 - 0
20.509 Formula Grants for Rural Areas and Tribal Transit Program $135,553 - 0
10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program $40,289 - 0
10.664 Cooperative Forestry Assistance $19,608 - 0
20.205 Highway Planning and Construction $7,860 - 0
20.526 Buses and Bus Facilities Formula, Competitive, and Low Or No Emissions Programs $5,811 - 0
12.401 National Guard Military Operations and Maintenance (o&m) Projects $2,758 - 0

Contacts

Name Title Type
QEU3QCC61JU8 Tracy McGinnis Auditee
7659837222 Scott Nickerson Auditor
No contacts on file

Notes to SEFA

Title: NOTE 1 - BASIS OF PRESENTATION Accounting Policies: Expenditures reported on the Schedule are reported on the cash basis of accounting. Such expenditures are recognized following the cost principles in OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, or the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowed or are limited as to reimbursement. When federal grants are received on a reimbursement basis, the federal awards are considered expended when the reimbursement is received. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. Basis of Presentation The accompanying Schedule of Expenditures of Federal Awards (the “Schedule”) includes the federal grant activity of the City of Richmond (the “City”) under programs of the federal government for the year ended December 31, 2023. The information in the 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 select portion of the operations of the City, it is not intended to and does not present the receipts, disbursements, and cash and investment balances – regulatory basis of the City. Expenditures reported on the Schedule are reported on the cash basis of accounting. Such expenditures are recognized following the cost principles in OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, or the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowed or are limited as to reimbursement. When federal grants are received on a reimbursement basis, the federal awards are considered expended when the reimbursement is received.
Title: NOTE 2 - INDIRECT COST RATE Accounting Policies: Expenditures reported on the Schedule are reported on the cash basis of accounting. Such expenditures are recognized following the cost principles in OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, or the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowed or are limited as to reimbursement. When federal grants are received on a reimbursement basis, the federal awards are considered expended when the reimbursement is received. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. The City has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance.
Title: NOTE 3 - OTHER INFORMATION Accounting Policies: Expenditures reported on the Schedule are reported on the cash basis of accounting. Such expenditures are recognized following the cost principles in OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, or the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowed or are limited as to reimbursement. When federal grants are received on a reimbursement basis, the federal awards are considered expended when the reimbursement is received. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. The City did not have any subrecipient activity for the year ended December 31, 2023.
Title: NOTE 4 - CALCULATION OF EXPENDITURES OF THE ECONOMIC DEVELOPMENT CLUSTER PRESENTED ON THE SEFA Accounting Policies: Expenditures reported on the Schedule are reported on the cash basis of accounting. Such expenditures are recognized following the cost principles in OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, or the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowed or are limited as to reimbursement. When federal grants are received on a reimbursement basis, the federal awards are considered expended when the reimbursement is received. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. See table in financial statement

Finding Details

Finding 2023-003
FINDING 2023-003 Subject: Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: U.S. Department of Treasury Assistance Listing Number: 21.027 Federal Award Number: FY 2021 Pass-Through Entity: Direct grant Compliance Requirements: Procurement and Suspension and Debarment Audit Findings: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ‘Standards for Internal Control in the Federal Government’ issued by the Comptroller General of the United States or the ‘Internal Control Integrated Framework’, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)….” 31 CFR 19.300 states: “When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person.” Condition: The City elected to receive the standard revenue loss allowance, allowing them to claim its total State and Local Fiscal Recovery Funds (SLFRF) allocation as revenue loss to use for government services. As such, all SLFRF program funds were expended under the revenue loss eligible use category. The U.S. Department of the Treasury (Treasury) determined that there are no subawards under this eligible use category, and that recipients’ use of revenue loss funds would not give rise to subrecipient relationships given that there is no federal program or purpose to carry out in the case of the revenue loss portion of the award. Prior to entering into subawards and covered transactions with SLFRF award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. “Covered transactions” include, but are not limited to contracts for goods and services awarded under a non-procurement transaction (i.e. grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAM exclusions, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. Due to the Treasury’s determination that the revenue loss eligible use category does not give rise to subawards, the City was only required to comply with suspension and debarment requirements related to covered transactions. Cause: Management had not established a system of internal control that would have ensured proper Suspension and Debarment procedures are followed. Context: We noted there was one vendor that the City entered into contract within the current year that exceeded $25,000 paid from SLFRF funds. This transaction, totaling $364,374 was selected for testing. The City was not able to provide support proving that the City had verified the vendor was not suspended or debarred prior to entering into the contract. Management asserts that this is being done, but support is not maintained. Effect: Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Identification as a repeat finding, if applicable: Yes. Comment appeared in prior year as Finding 2022- 002. Recommendation: We recommended that the City’s management establish controls related to the grant agreement and the Suspension and Debarment compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Finding 2023-003
FINDING 2023-003 Subject: Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: U.S. Department of Treasury Assistance Listing Number: 21.027 Federal Award Number: FY 2021 Pass-Through Entity: Direct grant Compliance Requirements: Procurement and Suspension and Debarment Audit Findings: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ‘Standards for Internal Control in the Federal Government’ issued by the Comptroller General of the United States or the ‘Internal Control Integrated Framework’, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)….” 31 CFR 19.300 states: “When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person.” Condition: The City elected to receive the standard revenue loss allowance, allowing them to claim its total State and Local Fiscal Recovery Funds (SLFRF) allocation as revenue loss to use for government services. As such, all SLFRF program funds were expended under the revenue loss eligible use category. The U.S. Department of the Treasury (Treasury) determined that there are no subawards under this eligible use category, and that recipients’ use of revenue loss funds would not give rise to subrecipient relationships given that there is no federal program or purpose to carry out in the case of the revenue loss portion of the award. Prior to entering into subawards and covered transactions with SLFRF award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. “Covered transactions” include, but are not limited to contracts for goods and services awarded under a non-procurement transaction (i.e. grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAM exclusions, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. Due to the Treasury’s determination that the revenue loss eligible use category does not give rise to subawards, the City was only required to comply with suspension and debarment requirements related to covered transactions. Cause: Management had not established a system of internal control that would have ensured proper Suspension and Debarment procedures are followed. Context: We noted there was one vendor that the City entered into contract within the current year that exceeded $25,000 paid from SLFRF funds. This transaction, totaling $364,374 was selected for testing. The City was not able to provide support proving that the City had verified the vendor was not suspended or debarred prior to entering into the contract. Management asserts that this is being done, but support is not maintained. Effect: Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Identification as a repeat finding, if applicable: Yes. Comment appeared in prior year as Finding 2022- 002. Recommendation: We recommended that the City’s management establish controls related to the grant agreement and the Suspension and Debarment compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.