FAC Explorer

Audit 365594

FY End
2025-02-28
Total Expended
$1.58M
Findings
6
Programs
3
Organization: Village of Shelby (MI)
Year: 2025 Accepted: 2025-09-04
Auditor: Brickley Delong PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
575601 2025-003 Significant Deficiency Yes F
575602 2025-004 Significant Deficiency - L
575603 2025-004 Significant Deficiency - L
1152043 2025-003 Significant Deficiency Yes F
1152044 2025-004 Significant Deficiency - L
1152045 2025-004 Significant Deficiency - L

Programs

ALN Program Spent Major Findings
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $420,362 - 1
15.916 Outdoor Recreation Acquisition, Development and Planning $300,000 - 0
21.027 Coronavirus State and Local Fiscal Recovery Funds $206,439 Yes 1

Contacts

Name Title Type
QNBEJERWZZ23 Phillip Morse Auditee
2318614401 Jennifer Wheeler Auditor
No contacts on file

Notes to SEFA

Title: 1 Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the “schedule”) includes the federal award activity of the Village under programs of the federal government for the year ended February 28, 2025. The information in this 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 selected portion of the operations of the Village, it is not intended to and does not present the financial position or change in net position of the Village. Please see the financial statement footnotes for the significant accounting policies used in preparing this schedule. 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. The Village is not using the tenpercent de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The Village is not using the ten-percent de minimis indirect cost rate as allowed under the Uniform Guidance. The accompanying Schedule of Expenditures of Federal Awards (the “schedule”) includes the federal award activity of the Village under programs of the federal government for the year ended February 28, 2025. The information in this 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 selected portion of the operations of the Village, it is not intended to and does not present the financial position or change in net position of the Village.
Title: 2 Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the “schedule”) includes the federal award activity of the Village under programs of the federal government for the year ended February 28, 2025. The information in this 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 selected portion of the operations of the Village, it is not intended to and does not present the financial position or change in net position of the Village. Please see the financial statement footnotes for the significant accounting policies used in preparing this schedule. 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. The Village is not using the tenpercent de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The Village is not using the ten-percent de minimis indirect cost rate as allowed under the Uniform Guidance. Please see the financial statement footnotes for the significant accounting policies used in preparing this schedule. 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. The Village is not using the ten-percent de minimis indirect cost rate as allowed under the Uniform Guidance.
Title: 3 Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the “schedule”) includes the federal award activity of the Village under programs of the federal government for the year ended February 28, 2025. The information in this 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 selected portion of the operations of the Village, it is not intended to and does not present the financial position or change in net position of the Village. Please see the financial statement footnotes for the significant accounting policies used in preparing this schedule. 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. The Village is not using the tenpercent de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The Village is not using the ten-percent de minimis indirect cost rate as allowed under the Uniform Guidance. The beginning unearned revenue for Coronavirus State and Local Fiscal Recovery Funds—COVID-19 American Rescue Plan Act was understated by $206,439 for funds received by the Village but not yet spent for allowable purposes as of February 29, 2024.
Title: 4 Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the “schedule”) includes the federal award activity of the Village under programs of the federal government for the year ended February 28, 2025. The information in this 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 selected portion of the operations of the Village, it is not intended to and does not present the financial position or change in net position of the Village. Please see the financial statement footnotes for the significant accounting policies used in preparing this schedule. 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. The Village is not using the tenpercent de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The Village is not using the ten-percent de minimis indirect cost rate as allowed under the Uniform Guidance. Reconciliation of revenues from federal sources per Governmental Funds financial statements and expenditures per single audit report Schedule of Expenditures of Federal Awards. See Notes to SEFA for related table.

Finding Details

Finding 2025-003
Finding 2025-003: Community Development Block Grants Equipment Procedures Type of Finding: Both Compliance and Control U.S. Department of Housing and Urban Development Pass-through Entity: Michigan Strategic Fund Assistance Listing Number: 14.228 Award Numbers: MSC 222003-PGS and MSC-221009-WRI Award Year Ends: November 30, 2024, and December 31, 2024 Specific Requirements: (F.) Equipment Criteria: Section 200.313(d) of the Cost Principles of the Title 2 U.S. Code of Federal Regulations Part 200—Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires a non-federal entity to (1) maintain property records that include a description of the property, a serial number or other identification number, the source of funding for the property, who holds the title, the acquisition date, cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property, (2) perform a physical inventory of the property and reconcile the results with the property records at least once every two years, (3) develop a control system to ensure adequate safeguards to prevent loss, damage, or theft of the property with any suspected loss, damage or theft investigated. Questioned Costs: None. Condition: The listing maintained by the Village for assets acquired with federal funds was lacking certain required elements. In addition, a physical inventory was not performed and documented, and the results were not reconciled with the property records as required. Context: The Village maintains a listing of fixed assets that it owns. We noted that the listing properly contained descriptions of the property, identification numbers, acquisition dates, and cost of the property. However, the fixed asset listing was lacking locations, federal funding sources, percentages of federal participation in the costs of fixed assets acquired under federal awards and the conditions of the property as required. In addition, the Village did not perform and document a physical inventory of the property and reconcile the results with the property records at least once every two years as required. The sample was not a statistically valid sample, and the matter appears to be a systemic condition. Effect: A control system has not been fully implemented to safeguard the fixed assets to prevent loss, damage or theft and promptly investigate missing items. Failure to maintain adequate detailed fixed asset records with all the required elements, failure to perform a physical inventory of the property, and failure to reconcile the inventory results with the property records could lead to the loss or misappropriation of these assets. Cause: The Village became aware of this requirement during the prior single audit but was unable to fully implement this corrective action in the current year. Repeat Finding: See Finding 2024-003 for a similar finding reported during the audit for the year ended February 29, 2024. Recommendation: The Village should establish procedures to require the maintenance of detailed fixed asset records that include all specified elements. In addition, the Village should perform a physical inventory of the property and reconcile the results with fixed asset records at least once every two years to help prevent loss, damage, or theft of the property. Views of Responsible Officials: The Village agrees with this finding.
Finding 2025-004
Finding 2025-004: Coronavirus State and Local Fiscal Recovery Funds Reporting Procedures Type of Finding: Control U.S. Department of Treasury Pass-through Entities: The Right Place, Inc. and Michigan Department of Treasury Assistance Listing Number: 21.027 Award Numbers: COVID-19 Revitalization and Placemaking Grant, COVID-19 American Rescue Plan Act Award Year End: June 30, 2026 and December 31, 2026 Specific Requirement: (L.) Reporting Criteria: Section 200.303 of the Cost Principles of the Title 2 U.S. Code of Federal Regulations Part 200—Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires a non-federal entity to establish and maintain effective internal control over the federal award that provides a 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 the specified guidance that requires proper segregation of duties by dividing key responsibilities among different people to reduce the risk of error or fraud. This should include separating the responsibilities for authorizing transactions, processing and recording them, reviewing the transactions, and handling any related assets. No one individual should control all key aspects of a transaction or event. In addition, this guidance also requires transactions and internal controls to be clearly documented, and the records should be properly maintained and readily available for examination. Questioned Costs: None. Condition: During our detailed testing of the area of reporting, we noted that certain reports were missing review and approval by an appropriate individual with adequate skills, knowledge, and experience. Context: For the Revitalization and Peacemaking (RAP) grant, the two quarterly reports and the annual performance report selected for testing were reviewed with documented approval. However, the American Rescue Plan Act (ARPA) annual performance report was missing documented review and approval. The sample was not a statistically valid sample, and the matter appears to be a systemic condition. Effect: Failure to properly review reports before they are submitted could result in inaccurate information being transmitted, resulting in a compliance finding. Cause: The Village was unaware of the requirement to have a documented review and approval over the area of reporting for ARPA grant awards in addition to the documented review and approval of the RAP grant awards. Repeat Finding: This is not a repeat finding. Recommendation: The Village should follow established procedures to require the documented review and approval of both RAP and ARPA grant reports by an individual with adequate skills, knowledge, and experience prior to submission. Views of Responsible Officials: The Village agrees with this finding.
Finding 2025-004
Finding 2025-004: Coronavirus State and Local Fiscal Recovery Funds Reporting Procedures Type of Finding: Control U.S. Department of Treasury Pass-through Entities: The Right Place, Inc. and Michigan Department of Treasury Assistance Listing Number: 21.027 Award Numbers: COVID-19 Revitalization and Placemaking Grant, COVID-19 American Rescue Plan Act Award Year End: June 30, 2026 and December 31, 2026 Specific Requirement: (L.) Reporting Criteria: Section 200.303 of the Cost Principles of the Title 2 U.S. Code of Federal Regulations Part 200—Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires a non-federal entity to establish and maintain effective internal control over the federal award that provides a 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 the specified guidance that requires proper segregation of duties by dividing key responsibilities among different people to reduce the risk of error or fraud. This should include separating the responsibilities for authorizing transactions, processing and recording them, reviewing the transactions, and handling any related assets. No one individual should control all key aspects of a transaction or event. In addition, this guidance also requires transactions and internal controls to be clearly documented, and the records should be properly maintained and readily available for examination. Questioned Costs: None. Condition: During our detailed testing of the area of reporting, we noted that certain reports were missing review and approval by an appropriate individual with adequate skills, knowledge, and experience. Context: For the Revitalization and Peacemaking (RAP) grant, the two quarterly reports and the annual performance report selected for testing were reviewed with documented approval. However, the American Rescue Plan Act (ARPA) annual performance report was missing documented review and approval. The sample was not a statistically valid sample, and the matter appears to be a systemic condition. Effect: Failure to properly review reports before they are submitted could result in inaccurate information being transmitted, resulting in a compliance finding. Cause: The Village was unaware of the requirement to have a documented review and approval over the area of reporting for ARPA grant awards in addition to the documented review and approval of the RAP grant awards. Repeat Finding: This is not a repeat finding. Recommendation: The Village should follow established procedures to require the documented review and approval of both RAP and ARPA grant reports by an individual with adequate skills, knowledge, and experience prior to submission. Views of Responsible Officials: The Village agrees with this finding.
Finding 2025-003
Finding 2025-003: Community Development Block Grants Equipment Procedures Type of Finding: Both Compliance and Control U.S. Department of Housing and Urban Development Pass-through Entity: Michigan Strategic Fund Assistance Listing Number: 14.228 Award Numbers: MSC 222003-PGS and MSC-221009-WRI Award Year Ends: November 30, 2024, and December 31, 2024 Specific Requirements: (F.) Equipment Criteria: Section 200.313(d) of the Cost Principles of the Title 2 U.S. Code of Federal Regulations Part 200—Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires a non-federal entity to (1) maintain property records that include a description of the property, a serial number or other identification number, the source of funding for the property, who holds the title, the acquisition date, cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property, (2) perform a physical inventory of the property and reconcile the results with the property records at least once every two years, (3) develop a control system to ensure adequate safeguards to prevent loss, damage, or theft of the property with any suspected loss, damage or theft investigated. Questioned Costs: None. Condition: The listing maintained by the Village for assets acquired with federal funds was lacking certain required elements. In addition, a physical inventory was not performed and documented, and the results were not reconciled with the property records as required. Context: The Village maintains a listing of fixed assets that it owns. We noted that the listing properly contained descriptions of the property, identification numbers, acquisition dates, and cost of the property. However, the fixed asset listing was lacking locations, federal funding sources, percentages of federal participation in the costs of fixed assets acquired under federal awards and the conditions of the property as required. In addition, the Village did not perform and document a physical inventory of the property and reconcile the results with the property records at least once every two years as required. The sample was not a statistically valid sample, and the matter appears to be a systemic condition. Effect: A control system has not been fully implemented to safeguard the fixed assets to prevent loss, damage or theft and promptly investigate missing items. Failure to maintain adequate detailed fixed asset records with all the required elements, failure to perform a physical inventory of the property, and failure to reconcile the inventory results with the property records could lead to the loss or misappropriation of these assets. Cause: The Village became aware of this requirement during the prior single audit but was unable to fully implement this corrective action in the current year. Repeat Finding: See Finding 2024-003 for a similar finding reported during the audit for the year ended February 29, 2024. Recommendation: The Village should establish procedures to require the maintenance of detailed fixed asset records that include all specified elements. In addition, the Village should perform a physical inventory of the property and reconcile the results with fixed asset records at least once every two years to help prevent loss, damage, or theft of the property. Views of Responsible Officials: The Village agrees with this finding.
Finding 2025-004
Finding 2025-004: Coronavirus State and Local Fiscal Recovery Funds Reporting Procedures Type of Finding: Control U.S. Department of Treasury Pass-through Entities: The Right Place, Inc. and Michigan Department of Treasury Assistance Listing Number: 21.027 Award Numbers: COVID-19 Revitalization and Placemaking Grant, COVID-19 American Rescue Plan Act Award Year End: June 30, 2026 and December 31, 2026 Specific Requirement: (L.) Reporting Criteria: Section 200.303 of the Cost Principles of the Title 2 U.S. Code of Federal Regulations Part 200—Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires a non-federal entity to establish and maintain effective internal control over the federal award that provides a 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 the specified guidance that requires proper segregation of duties by dividing key responsibilities among different people to reduce the risk of error or fraud. This should include separating the responsibilities for authorizing transactions, processing and recording them, reviewing the transactions, and handling any related assets. No one individual should control all key aspects of a transaction or event. In addition, this guidance also requires transactions and internal controls to be clearly documented, and the records should be properly maintained and readily available for examination. Questioned Costs: None. Condition: During our detailed testing of the area of reporting, we noted that certain reports were missing review and approval by an appropriate individual with adequate skills, knowledge, and experience. Context: For the Revitalization and Peacemaking (RAP) grant, the two quarterly reports and the annual performance report selected for testing were reviewed with documented approval. However, the American Rescue Plan Act (ARPA) annual performance report was missing documented review and approval. The sample was not a statistically valid sample, and the matter appears to be a systemic condition. Effect: Failure to properly review reports before they are submitted could result in inaccurate information being transmitted, resulting in a compliance finding. Cause: The Village was unaware of the requirement to have a documented review and approval over the area of reporting for ARPA grant awards in addition to the documented review and approval of the RAP grant awards. Repeat Finding: This is not a repeat finding. Recommendation: The Village should follow established procedures to require the documented review and approval of both RAP and ARPA grant reports by an individual with adequate skills, knowledge, and experience prior to submission. Views of Responsible Officials: The Village agrees with this finding.
Finding 2025-004
Finding 2025-004: Coronavirus State and Local Fiscal Recovery Funds Reporting Procedures Type of Finding: Control U.S. Department of Treasury Pass-through Entities: The Right Place, Inc. and Michigan Department of Treasury Assistance Listing Number: 21.027 Award Numbers: COVID-19 Revitalization and Placemaking Grant, COVID-19 American Rescue Plan Act Award Year End: June 30, 2026 and December 31, 2026 Specific Requirement: (L.) Reporting Criteria: Section 200.303 of the Cost Principles of the Title 2 U.S. Code of Federal Regulations Part 200—Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires a non-federal entity to establish and maintain effective internal control over the federal award that provides a 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 the specified guidance that requires proper segregation of duties by dividing key responsibilities among different people to reduce the risk of error or fraud. This should include separating the responsibilities for authorizing transactions, processing and recording them, reviewing the transactions, and handling any related assets. No one individual should control all key aspects of a transaction or event. In addition, this guidance also requires transactions and internal controls to be clearly documented, and the records should be properly maintained and readily available for examination. Questioned Costs: None. Condition: During our detailed testing of the area of reporting, we noted that certain reports were missing review and approval by an appropriate individual with adequate skills, knowledge, and experience. Context: For the Revitalization and Peacemaking (RAP) grant, the two quarterly reports and the annual performance report selected for testing were reviewed with documented approval. However, the American Rescue Plan Act (ARPA) annual performance report was missing documented review and approval. The sample was not a statistically valid sample, and the matter appears to be a systemic condition. Effect: Failure to properly review reports before they are submitted could result in inaccurate information being transmitted, resulting in a compliance finding. Cause: The Village was unaware of the requirement to have a documented review and approval over the area of reporting for ARPA grant awards in addition to the documented review and approval of the RAP grant awards. Repeat Finding: This is not a repeat finding. Recommendation: The Village should follow established procedures to require the documented review and approval of both RAP and ARPA grant reports by an individual with adequate skills, knowledge, and experience prior to submission. Views of Responsible Officials: The Village agrees with this finding.