FAC Explorer

Audit 323710

FY End
2023-09-30
Total Expended
$5.73M
Findings
2
Programs
7
Organization: City of Socorro, Texas (TX)
Year: 2023 Accepted: 2024-10-02
Auditor: Sbng PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
501661 2023-002 Significant Deficiency - L
1078103 2023-002 Significant Deficiency - L

Programs

ALN Program Spent Major Findings
20.205 Highway Planning and Construction $720,231 Yes 0
16.710 Public Safety Partnership and Community Policing Grants $75,932 - 0
21.027 Coronavirus State and Local Fiscal Recovery Funds $7,507 Yes 0
15.904 Historic Preservation Fund Grants-in-Aid $5,382 - 0
45.164 Promotion of the Humanities_public Programs $2,036 - 0
95.001 High Intensity Drug Trafficking Areas Program $0 - 0
97.067 Homeland Security Grant Program $0 - 0

Contacts

Name Title Type
S3FLN4MTM1B5 Adriana Rodarte Auditee
9158582915 Tello Cabrera Auditor
No contacts on file

Notes to SEFA

Title: Basis of Accounting and Presentation Accounting Policies: This summary of significant accounting policies of City of Socorro, Texas is presented to assist in understanding City of Socorro, Texas’ Schedule of Expenditures of Federal Awards. The Schedule and notes are representations of City of Socorro, Texas’ management, who is responsible for their integrity and objectivity. The Schedule of Expenditures of Federal Awards is prepared using the accrual basis of accounting. The information in this schedule is presented in accordance with the Uniform Guidance. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. City of Socorro, Texas does not currently have a negotiated indirect cost reimbursement rate approved by a Federal Cognizant Agency; therefore, the City has elected to use the de minimis rate of 10% of modified total direct costs as an indirect cost allocation factor, as allowed under 2CFR §200.414. The City passes through certain funds to subgrantee organizations. Expenditures incurred by the subgrantees and reimbursed by the City are presented in the Schedule of Expenditures of Federal Awards. Funds passed through to subgrantees totaled $275,000 for the year ended September 30, 2023. De Minimis Rate Used: Y Rate Explanation: City of Socorro, Texas does not currently have a negotiated indirect cost reimbursement rate approved by a Federal Cognizant Agency; therefore, the City has elected to use the de minimis rate of 10% of modified total direct costs as an indirect cost allocation factor, as allowed under 2CFR §200.414. The Schedule of Expenditures of Federal Awards is prepared using the accrual basis of accounting. The information in this schedule is presented in accordance with the Uniform Guidance. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements.
Title: Indirect Costs Accounting Policies: This summary of significant accounting policies of City of Socorro, Texas is presented to assist in understanding City of Socorro, Texas’ Schedule of Expenditures of Federal Awards. The Schedule and notes are representations of City of Socorro, Texas’ management, who is responsible for their integrity and objectivity. The Schedule of Expenditures of Federal Awards is prepared using the accrual basis of accounting. The information in this schedule is presented in accordance with the Uniform Guidance. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. City of Socorro, Texas does not currently have a negotiated indirect cost reimbursement rate approved by a Federal Cognizant Agency; therefore, the City has elected to use the de minimis rate of 10% of modified total direct costs as an indirect cost allocation factor, as allowed under 2CFR §200.414. The City passes through certain funds to subgrantee organizations. Expenditures incurred by the subgrantees and reimbursed by the City are presented in the Schedule of Expenditures of Federal Awards. Funds passed through to subgrantees totaled $275,000 for the year ended September 30, 2023. De Minimis Rate Used: Y Rate Explanation: City of Socorro, Texas does not currently have a negotiated indirect cost reimbursement rate approved by a Federal Cognizant Agency; therefore, the City has elected to use the de minimis rate of 10% of modified total direct costs as an indirect cost allocation factor, as allowed under 2CFR §200.414. City of Socorro, Texas does not currently have a negotiated indirect cost reimbursement rate approved by a Federal Cognizant Agency; therefore, the City has elected to use the de minimis rate of 10% of modified total direct costs as an indirect cost allocation factor, as allowed under 2CFR §200.414.
Title: Sub-Recipients Accounting Policies: This summary of significant accounting policies of City of Socorro, Texas is presented to assist in understanding City of Socorro, Texas’ Schedule of Expenditures of Federal Awards. The Schedule and notes are representations of City of Socorro, Texas’ management, who is responsible for their integrity and objectivity. The Schedule of Expenditures of Federal Awards is prepared using the accrual basis of accounting. The information in this schedule is presented in accordance with the Uniform Guidance. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. City of Socorro, Texas does not currently have a negotiated indirect cost reimbursement rate approved by a Federal Cognizant Agency; therefore, the City has elected to use the de minimis rate of 10% of modified total direct costs as an indirect cost allocation factor, as allowed under 2CFR §200.414. The City passes through certain funds to subgrantee organizations. Expenditures incurred by the subgrantees and reimbursed by the City are presented in the Schedule of Expenditures of Federal Awards. Funds passed through to subgrantees totaled $275,000 for the year ended September 30, 2023. De Minimis Rate Used: Y Rate Explanation: City of Socorro, Texas does not currently have a negotiated indirect cost reimbursement rate approved by a Federal Cognizant Agency; therefore, the City has elected to use the de minimis rate of 10% of modified total direct costs as an indirect cost allocation factor, as allowed under 2CFR §200.414. The City passes through certain funds to subgrantee organizations. Expenditures incurred by the subgrantees and reimbursed by the City are presented in the Schedule of Expenditures of Federal Awards.

Finding Details

Finding 2023-002
Criteria: According to 2 CFR 200.303, non-federal entities should establish and maintain effective internal control over a 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). Condition: During our single audit procedures over reporting compliance requirements for ARPA grants, we noted that grant expenditures in the Annual SLFR Compliance Report P&E 2024 were overstated by $56,850. Cause: Due to adjustments made throughout the fiscal year to address journal entries with incorrect general ledger codes, fund codes, etc., accounting reports provided by the finance department to grants department were not updated as of the date of ARPA reports submission. The grants department accidentally reported duplicate transactions for projects No. RC02 and No. GSP05. Per review of allowable expenses testwork, auditors verified transactions noted as duplicated in the general ledger detail were only paid once, and these expenditures were allowed under the program. Effect: Lack of proper expenditure reconciliation led to the City overstating reported expenses by $56,850. Failure to properly reconcile federal grants could result in misstatements in the financial statements, and non-compliance with federal grant requirements. Questioned costs: None. Recommendation: We recommend that management develop and implement a reconciliation process for ARPA grant expenditures. Reconciliation should be performed on a regular basis and be properly documented. Any discrepancies identified should be investigated and promptly resolved. We also recommend the City adjust and correct duplicate expenses for project RC02 and GSP05 when submitting its next required Annual Report to the U.S. Department of Treasury. Management’s response: Management agrees with auditor recommendation. Refer to Corrective Action Plan.
Finding 2023-002
Criteria: According to 2 CFR 200.303, non-federal entities should establish and maintain effective internal control over a 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). Condition: During our single audit procedures over reporting compliance requirements for ARPA grants, we noted that grant expenditures in the Annual SLFR Compliance Report P&E 2024 were overstated by $56,850. Cause: Due to adjustments made throughout the fiscal year to address journal entries with incorrect general ledger codes, fund codes, etc., accounting reports provided by the finance department to grants department were not updated as of the date of ARPA reports submission. The grants department accidentally reported duplicate transactions for projects No. RC02 and No. GSP05. Per review of allowable expenses testwork, auditors verified transactions noted as duplicated in the general ledger detail were only paid once, and these expenditures were allowed under the program. Effect: Lack of proper expenditure reconciliation led to the City overstating reported expenses by $56,850. Failure to properly reconcile federal grants could result in misstatements in the financial statements, and non-compliance with federal grant requirements. Questioned costs: None. Recommendation: We recommend that management develop and implement a reconciliation process for ARPA grant expenditures. Reconciliation should be performed on a regular basis and be properly documented. Any discrepancies identified should be investigated and promptly resolved. We also recommend the City adjust and correct duplicate expenses for project RC02 and GSP05 when submitting its next required Annual Report to the U.S. Department of Treasury. Management’s response: Management agrees with auditor recommendation. Refer to Corrective Action Plan.