Audit 351336

Finding 2024-007 – Reporting Federal Program: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number (ALN): 21.027 Federal Agency: U.S. Department of the Treasury Grant Year: 2023 Criteria In accordance with 2 CFR §200.303, the City is required to establish and maintain effective internal controls over federal awards to ensure accurate and timely reporting of expenditures in compliance with federal regulations. Additionally, 2 CFR §200.327 and the terms of the award require timely and accurate submission of required reports. Condition The City did not submit the required federal financial reports in a timely basis. Additionally, the amounts reported in the SLFRF Compliance Report – WY4581 – P&E Report – 2024 included encumbered amounts rather than actual expenditures incurred during the reporting period. Cause The City does not have adequate internal controls in place to ensure the timely preparation, reconciliation, review, and submission of required reports for federal awards. Additionally, turnover in key personnel during the reporting period contributed to these issues, as new staff did not have access to the proper login credentials or training necessary to prepare and submit reports timely and accurately. There was also no established process for reconciling reported expenditures to the City’s general ledger and supporting documentation prior to submission. Effect or Potential Effect As a result of the lack of internal controls and reconciliation procedures, the City submitted inaccurate and untimely financial reports. Reporting encumbrances instead of actual expenditures misrepresents program activity and may impact the City’s compliance with federal requirements. Continued inaccuracies could result in questioned costs, increased oversight by federal agencies, or delays in future funding. Questioned Costs None noted, as expenditures were ultimately supported by documentation; however, the reporting inaccuracies are considered a significant deficiency in internal control over compliance. Context The State and Local Fiscal Recovery Funds (SLFRF) program, established under the American Rescue Plan Act, provides significant funding to municipalities for pandemic recovery and infrastructure initiatives. Accurate and timely reporting of expenditures is not only a regulatory requirement but also essential for transparency, accountability, and continued eligibility for funding. Internal control deficiencies in reporting may compromise the City’s ability to demonstrate effective stewardship of federal funds and could trigger additional scrutiny, audits, or corrective action plans from federal agencies. Given the substantial financial and operational impact of SLFRF funds on the City’s budget and community initiatives, it is imperative that robust processes are in place to ensure reports reflect actual expenditures and are reconciled to the City’s general ledger. Strengthening these controls will protect the City from potential compliance risks, maintain public trust, and ensure uninterrupted access to federal resources critical for ongoing community projects. Identification as a Repeat Finding This is a new finding for the fiscal year ended June 30, 2024. Recommendation We recommend that the City develop and implement formal policies and procedures to ensure timely preparation, reconciliation, and submission of all federal reports. Management should assign clear oversight responsibility for federal reporting and establish a formal reconciliation process requiring that all reported amounts be reviewed and compared to the City’s accounting records and supporting documentation prior to submission. Additionally, procedures should be developed to ensure that login credentials and system access for federal reporting platforms are promptly updated and assigned during periods of staff turnover. Views of Responsible Officials The City concurs with the finding. The City will implement new internal control procedures by June 30, 2025, to ensure timely submission and reconciliation of federal reports and the Treasurer will review and approve all submissions prior to filing. See Corrective Action Plan.

Finding 2024-006 – Allowable Costs/Cost Principles Federal Program: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number (ALN): 21.027 Federal Agency: U.S. Department of the Treasury Pass-Through Grantor: Wyoming Office of State Lands and Investments (OSLI) Grant Year: 2024 Criteria In accordance with 2 CFR 200.403(a) and (f), federal expenditures must: • Be necessary, reasonable, and allocable to the specific federal award under which they are charged. • Not be included as an expenditure or used to meet cost-sharing requirements of another federally financed program in the current or prior period. Further, per 2 CFR 200.303 and the State and Local Fiscal Recovery Funds (SLFRF) Compliance and Reporting Guidance, recipients are required to: • Maintain accounting records that support accurate, compliant financial data. • Develop and implement internal controls to ensure that expenditures charged to SLFRF funding are eligible, properly documented, and not duplicated across funding sources. • Submit accurate Project and Expenditure Reports and ensure that funds passed through from other entities are properly identified and reported. These requirements collectively emphasize that expenditures must be tracked and reported separately by distinct grant award, even when received under the same Assistance Listing number, to prevent double reimbursement and misstatement of federal expenditures. Condition The City received two separate funding sources under Assistance Listing Number 21.027 (SLFRF): 1. A direct SLFRF award from the U.S. Department of the Treasury; and 2. A pass-through SLFRF award from the Wyoming State Lands and Investments (OSLI). During our testing of expenditures charged to the OSLI-administered SLFRF grant in fiscal year 2024, we identified one instance where the City submitted and received reimbursement for an expenditure of $50,744. The City previously had applied this same expenditure toward advance funding received under the direct SLFRF award from the U.S. Department of the Treasury in 2023. This resulted in a duplicate reimbursement of $50,744, constituting an unallowable cost under federal cost principles and SLFRF compliance requirements. Cause The duplication occurred due to turnover in key personnel and insufficient internal controls to reconcile prior advance-funded expenditures against current-year reimbursement requests. Additionally, the City does not have adequate procedures to track and allocate costs separately by individual SLFRF award or review SEFA preparation and grant reimbursement submissions for potential duplication of expenditures across funding sources under the same ALN. Effect or Potential Effect As a result of this deficiency, the City received duplicate reimbursement in the amount of $50,744, resulting in an unallowable cost that may require repayment or other corrective action. Inaccurate reporting of federal expenditures on the Schedule of Expenditures of Federal Awards (SEFA) could lead to scrutiny from the federal grantor and require amendments or adjustments. This exposes the City to potential federal grantor review and the risk of losing eligibility for future federal funding if repeated noncompliance is identified or corrective actions are not implemented. Questioned Costs $50,744 Context During our testing of Allowable Costs/Cost Principles of expenditures charged to the SLFRF grant administered by the State Lands and Investments (OSLI), we identified one instance out of twenty-two tested, where the City submitted and received reimbursement for an expenditure that had already been previously applied to advance funding received under the direct SLFRF award from the U.S. Department of the Treasury in a prior period. Although both funding streams fall under Assistance Listing 21.027, they are separate awards with distinct reporting and compliance requirements. Federal regulations require that costs be tracked and reported by individual grant award to prevent duplication of reimbursements and improper reporting. Identification as a Repeat Finding This is a new finding for the fiscal year ended June 30, 2024. Recommendation We recommend that the City implement internal controls to prevent expenditures reimbursed under one grant from being resubmitted for reimbursement under a separate grant award. The City should establish and maintain separate tracking systems for each distinct grant award, including reconciliation of prior expenditures before submitting new reimbursement requests. A secondary review of all grant reimbursement requests and SEFA preparation should be required to ensure proper cost allocation and compliance with federal regulations. Furthermore, the City should consult with the State Lands and Investments to determine the necessary corrective action regarding the $50,744 questioned cost, including potential repayment. Finally, management should provide training to all personnel involved in federal grant administration to ensure understanding of cost principles, award-specific tracking requirements, and federal reporting expectations. Views of Responsible Officials Management concurs with the finding and acknowledges the deficiency in internal controls and cost allocation. The City will strengthen its internal reconciliation procedures, implement secondary reviews for all grant reimbursement submissions, and establish distinct tracking mechanisms for each SLFRF award. In addition, management will consult with the State Lands and Investments regarding the questioned cost and ensure any necessary corrective actions are taken. Staff training will be provided to improve awareness and compliance with federal grant requirements going forward. See Corrective Action Plan.

Finding 2024-007 – Reporting Federal Program: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number (ALN): 21.027 Federal Agency: U.S. Department of the Treasury Grant Year: 2023 Criteria In accordance with 2 CFR §200.303, the City is required to establish and maintain effective internal controls over federal awards to ensure accurate and timely reporting of expenditures in compliance with federal regulations. Additionally, 2 CFR §200.327 and the terms of the award require timely and accurate submission of required reports. Condition The City did not submit the required federal financial reports in a timely basis. Additionally, the amounts reported in the SLFRF Compliance Report – WY4581 – P&E Report – 2024 included encumbered amounts rather than actual expenditures incurred during the reporting period. Cause The City does not have adequate internal controls in place to ensure the timely preparation, reconciliation, review, and submission of required reports for federal awards. Additionally, turnover in key personnel during the reporting period contributed to these issues, as new staff did not have access to the proper login credentials or training necessary to prepare and submit reports timely and accurately. There was also no established process for reconciling reported expenditures to the City’s general ledger and supporting documentation prior to submission. Effect or Potential Effect As a result of the lack of internal controls and reconciliation procedures, the City submitted inaccurate and untimely financial reports. Reporting encumbrances instead of actual expenditures misrepresents program activity and may impact the City’s compliance with federal requirements. Continued inaccuracies could result in questioned costs, increased oversight by federal agencies, or delays in future funding. Questioned Costs None noted, as expenditures were ultimately supported by documentation; however, the reporting inaccuracies are considered a significant deficiency in internal control over compliance. Context The State and Local Fiscal Recovery Funds (SLFRF) program, established under the American Rescue Plan Act, provides significant funding to municipalities for pandemic recovery and infrastructure initiatives. Accurate and timely reporting of expenditures is not only a regulatory requirement but also essential for transparency, accountability, and continued eligibility for funding. Internal control deficiencies in reporting may compromise the City’s ability to demonstrate effective stewardship of federal funds and could trigger additional scrutiny, audits, or corrective action plans from federal agencies. Given the substantial financial and operational impact of SLFRF funds on the City’s budget and community initiatives, it is imperative that robust processes are in place to ensure reports reflect actual expenditures and are reconciled to the City’s general ledger. Strengthening these controls will protect the City from potential compliance risks, maintain public trust, and ensure uninterrupted access to federal resources critical for ongoing community projects. Identification as a Repeat Finding This is a new finding for the fiscal year ended June 30, 2024. Recommendation We recommend that the City develop and implement formal policies and procedures to ensure timely preparation, reconciliation, and submission of all federal reports. Management should assign clear oversight responsibility for federal reporting and establish a formal reconciliation process requiring that all reported amounts be reviewed and compared to the City’s accounting records and supporting documentation prior to submission. Additionally, procedures should be developed to ensure that login credentials and system access for federal reporting platforms are promptly updated and assigned during periods of staff turnover. Views of Responsible Officials The City concurs with the finding. The City will implement new internal control procedures by June 30, 2025, to ensure timely submission and reconciliation of federal reports and the Treasurer will review and approve all submissions prior to filing. See Corrective Action Plan.

Finding 2024-006 – Allowable Costs/Cost Principles Federal Program: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number (ALN): 21.027 Federal Agency: U.S. Department of the Treasury Pass-Through Grantor: Wyoming Office of State Lands and Investments (OSLI) Grant Year: 2024 Criteria In accordance with 2 CFR 200.403(a) and (f), federal expenditures must: • Be necessary, reasonable, and allocable to the specific federal award under which they are charged. • Not be included as an expenditure or used to meet cost-sharing requirements of another federally financed program in the current or prior period. Further, per 2 CFR 200.303 and the State and Local Fiscal Recovery Funds (SLFRF) Compliance and Reporting Guidance, recipients are required to: • Maintain accounting records that support accurate, compliant financial data. • Develop and implement internal controls to ensure that expenditures charged to SLFRF funding are eligible, properly documented, and not duplicated across funding sources. • Submit accurate Project and Expenditure Reports and ensure that funds passed through from other entities are properly identified and reported. These requirements collectively emphasize that expenditures must be tracked and reported separately by distinct grant award, even when received under the same Assistance Listing number, to prevent double reimbursement and misstatement of federal expenditures. Condition The City received two separate funding sources under Assistance Listing Number 21.027 (SLFRF): 1. A direct SLFRF award from the U.S. Department of the Treasury; and 2. A pass-through SLFRF award from the Wyoming State Lands and Investments (OSLI). During our testing of expenditures charged to the OSLI-administered SLFRF grant in fiscal year 2024, we identified one instance where the City submitted and received reimbursement for an expenditure of $50,744. The City previously had applied this same expenditure toward advance funding received under the direct SLFRF award from the U.S. Department of the Treasury in 2023. This resulted in a duplicate reimbursement of $50,744, constituting an unallowable cost under federal cost principles and SLFRF compliance requirements. Cause The duplication occurred due to turnover in key personnel and insufficient internal controls to reconcile prior advance-funded expenditures against current-year reimbursement requests. Additionally, the City does not have adequate procedures to track and allocate costs separately by individual SLFRF award or review SEFA preparation and grant reimbursement submissions for potential duplication of expenditures across funding sources under the same ALN. Effect or Potential Effect As a result of this deficiency, the City received duplicate reimbursement in the amount of $50,744, resulting in an unallowable cost that may require repayment or other corrective action. Inaccurate reporting of federal expenditures on the Schedule of Expenditures of Federal Awards (SEFA) could lead to scrutiny from the federal grantor and require amendments or adjustments. This exposes the City to potential federal grantor review and the risk of losing eligibility for future federal funding if repeated noncompliance is identified or corrective actions are not implemented. Questioned Costs $50,744 Context During our testing of Allowable Costs/Cost Principles of expenditures charged to the SLFRF grant administered by the State Lands and Investments (OSLI), we identified one instance out of twenty-two tested, where the City submitted and received reimbursement for an expenditure that had already been previously applied to advance funding received under the direct SLFRF award from the U.S. Department of the Treasury in a prior period. Although both funding streams fall under Assistance Listing 21.027, they are separate awards with distinct reporting and compliance requirements. Federal regulations require that costs be tracked and reported by individual grant award to prevent duplication of reimbursements and improper reporting. Identification as a Repeat Finding This is a new finding for the fiscal year ended June 30, 2024. Recommendation We recommend that the City implement internal controls to prevent expenditures reimbursed under one grant from being resubmitted for reimbursement under a separate grant award. The City should establish and maintain separate tracking systems for each distinct grant award, including reconciliation of prior expenditures before submitting new reimbursement requests. A secondary review of all grant reimbursement requests and SEFA preparation should be required to ensure proper cost allocation and compliance with federal regulations. Furthermore, the City should consult with the State Lands and Investments to determine the necessary corrective action regarding the $50,744 questioned cost, including potential repayment. Finally, management should provide training to all personnel involved in federal grant administration to ensure understanding of cost principles, award-specific tracking requirements, and federal reporting expectations. Views of Responsible Officials Management concurs with the finding and acknowledges the deficiency in internal controls and cost allocation. The City will strengthen its internal reconciliation procedures, implement secondary reviews for all grant reimbursement submissions, and establish distinct tracking mechanisms for each SLFRF award. In addition, management will consult with the State Lands and Investments regarding the questioned cost and ensure any necessary corrective actions are taken. Staff training will be provided to improve awareness and compliance with federal grant requirements going forward. See Corrective Action Plan.