FAC Explorer

Audit 362557

FY End
2024-12-31
Total Expended
$9.10M
Findings
2
Programs
5
Organization: City of South Amboy (NJ)
Year: 2024 Accepted: 2025-07-18
Auditor: Pkf O'Connor Davies LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
571633 2024-001 Material Weakness - L
1148075 2024-001 Material Weakness - L

Programs

ALN Program Spent Major Findings
20.205 Highway Planning and Construction $4.40M Yes 0
14.218 Community Development Block Grants/entitlement Grants $61,719 - 0
21.027 Coronavirus State and Local Fiscal Recovery Funds $25,326 Yes 0
97.042 Emergency Management Performance Grants $10,000 - 0
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $70 - 0

Contacts

Name Title Type
JSHTM41Z6156 Dan Balka Auditee
7325255922 Gary W. Higgins Auditor
No contacts on file

Notes to SEFA

Title: GENERAL Accounting Policies: GENERAL: The accompanying schedules of expenditures of federal awards and state financial assistance present the activity of all federal and state award programs of the City of South Amboy. The City is defined in Note 1 of the financial statements. To the extent identified, the federal and state awards that passed through other governmental agencies is included on the schedules of expenditures of federal awards and state financial assistance. BASIS OF ACCOUNTING: The accompanying schedules are presented using the regulatory basis of accounting as prescribed or permitted for municipalities by the Division of Local Government Services, Department of Community Affairs, State of New Jersey which differ in certain respects from accounting principles generally accepted in the United States of America (GAAP) applicable to local government units. This basis of accounting is described in Note 1 to the City’s financial statements. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the ten percent de minimis indirect cost rate as allowed by the Uniform Guidance. The accompanying schedules of expenditures of federal awards and state financial assistance present the activity of all federal and state award programs of the City of South Amboy. The City is defined in Note 1 of the financial statements. To the extent identified, the federal and state awards that passed through other governmental agencies is included on the schedules of expenditures of federal awards and state financial assistance.
Title: BASIS OF ACCOUNTING Accounting Policies: GENERAL: The accompanying schedules of expenditures of federal awards and state financial assistance present the activity of all federal and state award programs of the City of South Amboy. The City is defined in Note 1 of the financial statements. To the extent identified, the federal and state awards that passed through other governmental agencies is included on the schedules of expenditures of federal awards and state financial assistance. BASIS OF ACCOUNTING: The accompanying schedules are presented using the regulatory basis of accounting as prescribed or permitted for municipalities by the Division of Local Government Services, Department of Community Affairs, State of New Jersey which differ in certain respects from accounting principles generally accepted in the United States of America (GAAP) applicable to local government units. This basis of accounting is described in Note 1 to the City’s financial statements. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the ten percent de minimis indirect cost rate as allowed by the Uniform Guidance. The accompanying schedules are presented using the regulatory basis of accounting as prescribed or permitted for municipalities by the Division of Local Government Services, Department of Community Affairs, State of New Jersey which differ in certain respects from accounting principles generally accepted in the United States of America (GAAP) applicable to local government units. This basis of accounting is described in Note 1 to the City’s financial statements.
Title: RELATIONSHIP TO FINANCIAL STATEMENTS Accounting Policies: GENERAL: The accompanying schedules of expenditures of federal awards and state financial assistance present the activity of all federal and state award programs of the City of South Amboy. The City is defined in Note 1 of the financial statements. To the extent identified, the federal and state awards that passed through other governmental agencies is included on the schedules of expenditures of federal awards and state financial assistance. BASIS OF ACCOUNTING: The accompanying schedules are presented using the regulatory basis of accounting as prescribed or permitted for municipalities by the Division of Local Government Services, Department of Community Affairs, State of New Jersey which differ in certain respects from accounting principles generally accepted in the United States of America (GAAP) applicable to local government units. This basis of accounting is described in Note 1 to the City’s financial statements. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the ten percent de minimis indirect cost rate as allowed by the Uniform Guidance. Amounts reported in the accompanying schedules agree with amounts reported in the City’s financial statements.
Title: RELATIONSHIP TO FEDERAL REPORTS Accounting Policies: GENERAL: The accompanying schedules of expenditures of federal awards and state financial assistance present the activity of all federal and state award programs of the City of South Amboy. The City is defined in Note 1 of the financial statements. To the extent identified, the federal and state awards that passed through other governmental agencies is included on the schedules of expenditures of federal awards and state financial assistance. BASIS OF ACCOUNTING: The accompanying schedules are presented using the regulatory basis of accounting as prescribed or permitted for municipalities by the Division of Local Government Services, Department of Community Affairs, State of New Jersey which differ in certain respects from accounting principles generally accepted in the United States of America (GAAP) applicable to local government units. This basis of accounting is described in Note 1 to the City’s financial statements. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the ten percent de minimis indirect cost rate as allowed by the Uniform Guidance. Amounts reported in the accompanying schedules of expenditures of federal awards and state financial assistance agree with the amounts reported in the related federal and state financial reports, where required.

Finding Details

Finding 2024-001
Finding 2024-001: MATERIAL WEAKNESS IN INTERNAL CONTROL AND COMPLIANCE REPORTING CRITERIA In accordance with the Federal Uniform Guidance, the City is required to submit quarterly and annual reports that are in agreement with the amounts reflected in the City’s financial statements. CONDITION: Our audit disclosed that the City filed for and received reimbursements for the City’s ferry terminal site improvements project utilizing the same vendor invoices under both the Coronavirus State and Local Fiscal Recovery Funds grant and/or State of New Jersey Department of Transportation federal and state transportation grants. QUESTIONED COSTS : None through December 31, 2024 for the actual expenditures in the amount of $4,541,234. Documentation for costs incurred for the balance of the grant drawdowns in advance in the amount of $10,358,766 will be submitted to the grantor agency as costs are incurred. These costs will be subject to audit in the years ended December 31, 2025 and 2026. CONTEXT: Reimbursements were filed and received in advance from the Coronavirus State and Local Fiscal Recovery Funds in the amount $10,358,766 as a result of the same vendor invoices being provided to two grantor agencies. The City did reflect these invoices as expended against the respective New Jersey Department of Transportation federal and state awarded grants CAUSE: Both the City's consulting engineer and the City's administrator requested grant reimbursements utilizing the same vendor invoices. EFFECT: The City has multiple federal and state grants to fully fund the construction of ferry terminal site improvements. The City filed for and received reimbursements for the same expenditures under three different grants administered by two different agencies. The City is eligible to receive the reimbursements under the Coronavirus State and Local Fiscal Recovery Funds grant for subsequent expenditures made by the City for additional eligible expenses and certain costs eligible for reimbursement under the federal and/or state transportation grants. Therefore, eventually allowable costs must be submitted under the Coronavirus State and Local Fiscal Recovery Funds grant in 2025 to support the advanced reimbursements. RECOMMENDATION: The City should develop and implement internal controls over grant reimbursement requests to ensure that grant funded expenditures are reported and reimbursements are requested for only the appropriate grant. MANAGEMENT'S RESPONSE: Management has reviewed this finding and has indicated that corrective action will be taken.
Finding 2024-001
Finding 2024-001: MATERIAL WEAKNESS IN INTERNAL CONTROL AND COMPLIANCE REPORTING CRITERIA In accordance with the Federal Uniform Guidance, the City is required to submit quarterly and annual reports that are in agreement with the amounts reflected in the City’s financial statements. CONDITION: Our audit disclosed that the City filed for and received reimbursements for the City’s ferry terminal site improvements project utilizing the same vendor invoices under both the Coronavirus State and Local Fiscal Recovery Funds grant and/or State of New Jersey Department of Transportation federal and state transportation grants. QUESTIONED COSTS : None through December 31, 2024 for the actual expenditures in the amount of $4,541,234. Documentation for costs incurred for the balance of the grant drawdowns in advance in the amount of $10,358,766 will be submitted to the grantor agency as costs are incurred. These costs will be subject to audit in the years ended December 31, 2025 and 2026. CONTEXT: Reimbursements were filed and received in advance from the Coronavirus State and Local Fiscal Recovery Funds in the amount $10,358,766 as a result of the same vendor invoices being provided to two grantor agencies. The City did reflect these invoices as expended against the respective New Jersey Department of Transportation federal and state awarded grants CAUSE: Both the City's consulting engineer and the City's administrator requested grant reimbursements utilizing the same vendor invoices. EFFECT: The City has multiple federal and state grants to fully fund the construction of ferry terminal site improvements. The City filed for and received reimbursements for the same expenditures under three different grants administered by two different agencies. The City is eligible to receive the reimbursements under the Coronavirus State and Local Fiscal Recovery Funds grant for subsequent expenditures made by the City for additional eligible expenses and certain costs eligible for reimbursement under the federal and/or state transportation grants. Therefore, eventually allowable costs must be submitted under the Coronavirus State and Local Fiscal Recovery Funds grant in 2025 to support the advanced reimbursements. RECOMMENDATION: The City should develop and implement internal controls over grant reimbursement requests to ensure that grant funded expenditures are reported and reimbursements are requested for only the appropriate grant. MANAGEMENT'S RESPONSE: Management has reviewed this finding and has indicated that corrective action will be taken.