FAC Explorer

Audit 333827

FY End
2024-06-30
Total Expended
$4.02M
Findings
8
Programs
3
Organization: City of Kingsford (MI)
Year: 2024 Accepted: 2024-12-19
Auditor: Cliftonlarsonallen LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
516056 2024-004 Significant Deficiency - CIL
516057 2024-004 Significant Deficiency - CIL
516058 2024-004 Significant Deficiency - CIL
516059 2024-005 Material Weakness - I
1092498 2024-004 Significant Deficiency - CIL
1092499 2024-004 Significant Deficiency - CIL
1092500 2024-004 Significant Deficiency - CIL
1092501 2024-005 Material Weakness - I

Programs

ALN Program Spent Major Findings
66.468 Drinking Water State Revolving Fund $1.31M Yes 2
21.027 Coronavirus State and Local Fiscal Recovery Funds $204,509 Yes 1
10.766 Community Facilities Loans and Grants $60,800 - 0

Contacts

Name Title Type
CQ9BJKU3GAQ7 Holly Palmer Auditee
9067743526 Scott Sternhagen, CPA Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting for awards and financial assistance received in governmental funds and the accrual basis of accounting for financial assistance received in the proprietary funds, which are described in Note 1 to the City’s basic financial statements. 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. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The City of Kingsford has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of the City of Kingsford under programs of the federal government for the year ended June 30, 2024. The information in this Schedule is presented in accordance with the requirements of 2 CFR 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 Kingsford, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the City of Kingsford.
Title: Federal Loan Programs Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting for awards and financial assistance received in governmental funds and the accrual basis of accounting for financial assistance received in the proprietary funds, which are described in Note 1 to the City’s basic financial statements. 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. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The City of Kingsford has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Balances and transactions relating to these programs are included in the City of Kingsford’s basic financial statements. Loans outstanding at the beginning of the year and loans received during the year are included in the federal expenditures presented in the Schedule. The balance of loans outstanding at June 30, 2024 consists of:

Finding Details

Finding 2024-004
2024-004 Uniform Grant Guidance Implementation Federal Agency: Across all agencies Federal Program Name: Across all programs Federal Assistance Listing Number: Across all Federal Award Identification Number and Year: Across all Pass-Through Agency: Across all agencies Pass-Through Number(s): Across all Award Period: n/a Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: Uniform Guidance requires the City to maintain certain policies related to cash management, cost allowability, procurement, and conflict of interest provisions, along with appropriate financial management systems and internal controls over federal awards to safeguard federal funds. Condition: The City has various policies and procedures in place to safeguard its assets and establish related controls over receipts, disbursements, payroll transactions and general ledger maintenance. Federal awards received and disbursed by the City are managed through these city-wide policies and procedures; however, the policies and procedures had not been evaluated to ensure compliance with the requirements of Uniform Guidance as of year-end. Questioned Costs: None noted Context: During our audit, the City did not have various written entity wide policies as required by the Uniform Guidance, or written grant level policies. Cause: The City has begun but not finalized an assessment of its financial management system and related internal controls over federal awards, along with an evaluation of existing policies for compliance with Uniform Guidance by year-end. Effect: The City could become noncompliant with requirement of Uniform Guidance, resulting in future findings and questioned costs related to federal awards administered by the City. Repeat Finding: No Recommendation: We recommend the City continue the process in assessing its financial management systems and related internal controls over federal awards during the 2025 fiscal year. This assessment should include evaluating existing policies and procedures to determine where additional enhancements should be made or new policies created, a plan to communicate these policies to City employees, and procedures to periodically review and update, as considered necessary. View of Responsible Officials There is no disagreement with the audit finding.
Finding 2024-004
2024-004 Uniform Grant Guidance Implementation Federal Agency: Across all agencies Federal Program Name: Across all programs Federal Assistance Listing Number: Across all Federal Award Identification Number and Year: Across all Pass-Through Agency: Across all agencies Pass-Through Number(s): Across all Award Period: n/a Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: Uniform Guidance requires the City to maintain certain policies related to cash management, cost allowability, procurement, and conflict of interest provisions, along with appropriate financial management systems and internal controls over federal awards to safeguard federal funds. Condition: The City has various policies and procedures in place to safeguard its assets and establish related controls over receipts, disbursements, payroll transactions and general ledger maintenance. Federal awards received and disbursed by the City are managed through these city-wide policies and procedures; however, the policies and procedures had not been evaluated to ensure compliance with the requirements of Uniform Guidance as of year-end. Questioned Costs: None noted Context: During our audit, the City did not have various written entity wide policies as required by the Uniform Guidance, or written grant level policies. Cause: The City has begun but not finalized an assessment of its financial management system and related internal controls over federal awards, along with an evaluation of existing policies for compliance with Uniform Guidance by year-end. Effect: The City could become noncompliant with requirement of Uniform Guidance, resulting in future findings and questioned costs related to federal awards administered by the City. Repeat Finding: No Recommendation: We recommend the City continue the process in assessing its financial management systems and related internal controls over federal awards during the 2025 fiscal year. This assessment should include evaluating existing policies and procedures to determine where additional enhancements should be made or new policies created, a plan to communicate these policies to City employees, and procedures to periodically review and update, as considered necessary. View of Responsible Officials There is no disagreement with the audit finding.
Finding 2024-004
2024-004 Uniform Grant Guidance Implementation Federal Agency: Across all agencies Federal Program Name: Across all programs Federal Assistance Listing Number: Across all Federal Award Identification Number and Year: Across all Pass-Through Agency: Across all agencies Pass-Through Number(s): Across all Award Period: n/a Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: Uniform Guidance requires the City to maintain certain policies related to cash management, cost allowability, procurement, and conflict of interest provisions, along with appropriate financial management systems and internal controls over federal awards to safeguard federal funds. Condition: The City has various policies and procedures in place to safeguard its assets and establish related controls over receipts, disbursements, payroll transactions and general ledger maintenance. Federal awards received and disbursed by the City are managed through these city-wide policies and procedures; however, the policies and procedures had not been evaluated to ensure compliance with the requirements of Uniform Guidance as of year-end. Questioned Costs: None noted Context: During our audit, the City did not have various written entity wide policies as required by the Uniform Guidance, or written grant level policies. Cause: The City has begun but not finalized an assessment of its financial management system and related internal controls over federal awards, along with an evaluation of existing policies for compliance with Uniform Guidance by year-end. Effect: The City could become noncompliant with requirement of Uniform Guidance, resulting in future findings and questioned costs related to federal awards administered by the City. Repeat Finding: No Recommendation: We recommend the City continue the process in assessing its financial management systems and related internal controls over federal awards during the 2025 fiscal year. This assessment should include evaluating existing policies and procedures to determine where additional enhancements should be made or new policies created, a plan to communicate these policies to City employees, and procedures to periodically review and update, as considered necessary. View of Responsible Officials There is no disagreement with the audit finding.
Finding 2024-005
2024-005 Suspension and Debarment Federal Agency: Environmental Protection Agency Federal Program Name: Drinking Water State Revolving Fund Federal Assistance Listing Number: 66.468 Federal Award Identification Number and Year: Unknown Award Period: March 03, 2021 – December 31, 2026 Type of Finding: Material Weakness in Internal Control over Compliance Criteria or Specific Requirement: 2 CFR 200.320 Methods of Procurement state that when a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: The City did not check suspension and debarment status was verified prior to entering into contract with vendors. Questioned Costs: None noted Context: While performing compliance procedures, it was noted that the City did not check vendors for suspension and debarment. Cause: The City does not have controls related to ensuring suspension and debarment are verified prior to entering into contract with vendors. Effect: The City may contract with a vendor that has been suspended or debarred from receiving federal funds. Repeat Finding: No Recommendation: We recommend the City continue the process in assessing its financial management systems and related internal controls over federal awards during the 2025 fiscal year. This assessment should include evaluating existing policies and procedures to determine where additional enhancements should be made or new policies created, a plan to communicate these policies to City employees, and procedures to periodically review and update, as considered necessary. View of Responsible Officials There is no disagreement with the audit finding.
Finding 2024-004
2024-004 Uniform Grant Guidance Implementation Federal Agency: Across all agencies Federal Program Name: Across all programs Federal Assistance Listing Number: Across all Federal Award Identification Number and Year: Across all Pass-Through Agency: Across all agencies Pass-Through Number(s): Across all Award Period: n/a Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: Uniform Guidance requires the City to maintain certain policies related to cash management, cost allowability, procurement, and conflict of interest provisions, along with appropriate financial management systems and internal controls over federal awards to safeguard federal funds. Condition: The City has various policies and procedures in place to safeguard its assets and establish related controls over receipts, disbursements, payroll transactions and general ledger maintenance. Federal awards received and disbursed by the City are managed through these city-wide policies and procedures; however, the policies and procedures had not been evaluated to ensure compliance with the requirements of Uniform Guidance as of year-end. Questioned Costs: None noted Context: During our audit, the City did not have various written entity wide policies as required by the Uniform Guidance, or written grant level policies. Cause: The City has begun but not finalized an assessment of its financial management system and related internal controls over federal awards, along with an evaluation of existing policies for compliance with Uniform Guidance by year-end. Effect: The City could become noncompliant with requirement of Uniform Guidance, resulting in future findings and questioned costs related to federal awards administered by the City. Repeat Finding: No Recommendation: We recommend the City continue the process in assessing its financial management systems and related internal controls over federal awards during the 2025 fiscal year. This assessment should include evaluating existing policies and procedures to determine where additional enhancements should be made or new policies created, a plan to communicate these policies to City employees, and procedures to periodically review and update, as considered necessary. View of Responsible Officials There is no disagreement with the audit finding.
Finding 2024-004
2024-004 Uniform Grant Guidance Implementation Federal Agency: Across all agencies Federal Program Name: Across all programs Federal Assistance Listing Number: Across all Federal Award Identification Number and Year: Across all Pass-Through Agency: Across all agencies Pass-Through Number(s): Across all Award Period: n/a Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: Uniform Guidance requires the City to maintain certain policies related to cash management, cost allowability, procurement, and conflict of interest provisions, along with appropriate financial management systems and internal controls over federal awards to safeguard federal funds. Condition: The City has various policies and procedures in place to safeguard its assets and establish related controls over receipts, disbursements, payroll transactions and general ledger maintenance. Federal awards received and disbursed by the City are managed through these city-wide policies and procedures; however, the policies and procedures had not been evaluated to ensure compliance with the requirements of Uniform Guidance as of year-end. Questioned Costs: None noted Context: During our audit, the City did not have various written entity wide policies as required by the Uniform Guidance, or written grant level policies. Cause: The City has begun but not finalized an assessment of its financial management system and related internal controls over federal awards, along with an evaluation of existing policies for compliance with Uniform Guidance by year-end. Effect: The City could become noncompliant with requirement of Uniform Guidance, resulting in future findings and questioned costs related to federal awards administered by the City. Repeat Finding: No Recommendation: We recommend the City continue the process in assessing its financial management systems and related internal controls over federal awards during the 2025 fiscal year. This assessment should include evaluating existing policies and procedures to determine where additional enhancements should be made or new policies created, a plan to communicate these policies to City employees, and procedures to periodically review and update, as considered necessary. View of Responsible Officials There is no disagreement with the audit finding.
Finding 2024-004
2024-004 Uniform Grant Guidance Implementation Federal Agency: Across all agencies Federal Program Name: Across all programs Federal Assistance Listing Number: Across all Federal Award Identification Number and Year: Across all Pass-Through Agency: Across all agencies Pass-Through Number(s): Across all Award Period: n/a Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: Uniform Guidance requires the City to maintain certain policies related to cash management, cost allowability, procurement, and conflict of interest provisions, along with appropriate financial management systems and internal controls over federal awards to safeguard federal funds. Condition: The City has various policies and procedures in place to safeguard its assets and establish related controls over receipts, disbursements, payroll transactions and general ledger maintenance. Federal awards received and disbursed by the City are managed through these city-wide policies and procedures; however, the policies and procedures had not been evaluated to ensure compliance with the requirements of Uniform Guidance as of year-end. Questioned Costs: None noted Context: During our audit, the City did not have various written entity wide policies as required by the Uniform Guidance, or written grant level policies. Cause: The City has begun but not finalized an assessment of its financial management system and related internal controls over federal awards, along with an evaluation of existing policies for compliance with Uniform Guidance by year-end. Effect: The City could become noncompliant with requirement of Uniform Guidance, resulting in future findings and questioned costs related to federal awards administered by the City. Repeat Finding: No Recommendation: We recommend the City continue the process in assessing its financial management systems and related internal controls over federal awards during the 2025 fiscal year. This assessment should include evaluating existing policies and procedures to determine where additional enhancements should be made or new policies created, a plan to communicate these policies to City employees, and procedures to periodically review and update, as considered necessary. View of Responsible Officials There is no disagreement with the audit finding.
Finding 2024-005
2024-005 Suspension and Debarment Federal Agency: Environmental Protection Agency Federal Program Name: Drinking Water State Revolving Fund Federal Assistance Listing Number: 66.468 Federal Award Identification Number and Year: Unknown Award Period: March 03, 2021 – December 31, 2026 Type of Finding: Material Weakness in Internal Control over Compliance Criteria or Specific Requirement: 2 CFR 200.320 Methods of Procurement state that when a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: The City did not check suspension and debarment status was verified prior to entering into contract with vendors. Questioned Costs: None noted Context: While performing compliance procedures, it was noted that the City did not check vendors for suspension and debarment. Cause: The City does not have controls related to ensuring suspension and debarment are verified prior to entering into contract with vendors. Effect: The City may contract with a vendor that has been suspended or debarred from receiving federal funds. Repeat Finding: No Recommendation: We recommend the City continue the process in assessing its financial management systems and related internal controls over federal awards during the 2025 fiscal year. This assessment should include evaluating existing policies and procedures to determine where additional enhancements should be made or new policies created, a plan to communicate these policies to City employees, and procedures to periodically review and update, as considered necessary. View of Responsible Officials There is no disagreement with the audit finding.