2024-005 Improve Internal Controls Over Procurement Federal Program(s) Information Federal Agency: Department of the Treasury Award Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Year: 2024 Compliance Requirement: Procurement Type of Finding Compliance Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement 2 CFR 200.318–200.327 requires the City to follow documented procurement procedures consistent with applicable Federal statutes, regulations, and the terms and conditions of their Federal award. The City must maintain records sufficient to detail the history of procurement, including, but not limited to, the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition and Context During our testing of six procurement transactions under the SLFRF program, the City was unable to provide documentation supporting procurement policies and procedures were followed for one transaction. Specifically, the City did not provide evidence of procurement history, competitive selection, or justification for the selected vendor related to this expenditure. Invoices were provided to support the expenditure. Cause The City’s internal controls did not ensure that procurement documentation was adequately maintained and available to support all federally funded transactions as required by Uniform Guidance. Effect or Potential Effect Lack of supporting procurement documentation increases the risk of noncompliance with Federal procurement requirements. No questioned costs are reported, as the expenditure was below the questioned cost threshold. Recommendation We recommend that the City strengthen its controls to ensure all required procurement documentation is maintained and readily available for all federally funded transactions. The City should provide training to procurement and program staff on Federal documentation requirements and regularly review procurement files for completeness. Views of Responsible Official Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.
2024-006 Improve Internal Controls and Compliance Over Reporting Federal Program(s) Information Federal Agency: Department of Transportation Award Name: National Infrastructure Investments Assistance Listing Number: 20.933 Award Year: 2024 Compliance Requirement: Reporting Federal Agency: Department of Housing and Urban Development Award Name: Lead Hazard Reduction Demonstration Grant Program Assistance Listing Number: 14.905 Award Year: 2024 Compliance Requirement: Reporting Type of Finding Compliance Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement 2 CFR 200.303 requires non-Federal entities to establish and maintain effective internal control over Federal awards to provide reasonable assurance that the City is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the award. Further, per 2 CFR 200.328 and program instructions, recipients must submit accurate, complete, and timely financial reports (such as the SF-425 Federal Financial Report) that reconcile to supporting accounting records, including the general ledger and Schedule of Expenditures of Federal Awards (SEFA). Condition and Context During our testing of two quarterly SF-425 Federal Financial Reports for both the National Infrastructure Investments program and the Lead Hazard Reduction Demonstration Grant program, we noted that the amounts reported on the reports did not agree to the amounts per the general ledger and ultimately the SEFA. The discrepancies were the result of inaccurate recording of expenditures in the general ledger based on timing as discussed in finding 2024-001, which led to inconsistent reporting on the SF-425 reports. Cause The City’s internal controls over financial reporting were not sufficient to ensure that expenditures were recorded accurately and consistently in the general ledger and SEFA and that reported amounts on the SF-425 matched the underlying accounting records. Effect or Potential Effect Inaccurate reporting of expenditures increases the risk of noncompliance with Federal reporting requirements and impairs the reliability of financial information reported to Federal agencies. No questioned costs are reported as the requirement is procedural in nature and costs reported were ultimately deemed allowable. Recommendation The City should strengthen its controls over financial reporting for Federal awards to ensure all expenditures are recorded accurately in the general ledger and SEFA and reconciled to amounts reported on the SF-425. Management should implement procedures for timely and thorough review and reconciliation of accounting records prior to the submission of required Federal reports. Views of Responsible Official Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.
2024-006 Improve Internal Controls and Compliance Over Reporting Federal Program(s) Information Federal Agency: Department of Transportation Award Name: National Infrastructure Investments Assistance Listing Number: 20.933 Award Year: 2024 Compliance Requirement: Reporting Federal Agency: Department of Housing and Urban Development Award Name: Lead Hazard Reduction Demonstration Grant Program Assistance Listing Number: 14.905 Award Year: 2024 Compliance Requirement: Reporting Type of Finding Compliance Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement 2 CFR 200.303 requires non-Federal entities to establish and maintain effective internal control over Federal awards to provide reasonable assurance that the City is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the award. Further, per 2 CFR 200.328 and program instructions, recipients must submit accurate, complete, and timely financial reports (such as the SF-425 Federal Financial Report) that reconcile to supporting accounting records, including the general ledger and Schedule of Expenditures of Federal Awards (SEFA). Condition and Context During our testing of two quarterly SF-425 Federal Financial Reports for both the National Infrastructure Investments program and the Lead Hazard Reduction Demonstration Grant program, we noted that the amounts reported on the reports did not agree to the amounts per the general ledger and ultimately the SEFA. The discrepancies were the result of inaccurate recording of expenditures in the general ledger based on timing as discussed in finding 2024-001, which led to inconsistent reporting on the SF-425 reports. Cause The City’s internal controls over financial reporting were not sufficient to ensure that expenditures were recorded accurately and consistently in the general ledger and SEFA and that reported amounts on the SF-425 matched the underlying accounting records. Effect or Potential Effect Inaccurate reporting of expenditures increases the risk of noncompliance with Federal reporting requirements and impairs the reliability of financial information reported to Federal agencies. No questioned costs are reported as the requirement is procedural in nature and costs reported were ultimately deemed allowable. Recommendation The City should strengthen its controls over financial reporting for Federal awards to ensure all expenditures are recorded accurately in the general ledger and SEFA and reconciled to amounts reported on the SF-425. Management should implement procedures for timely and thorough review and reconciliation of accounting records prior to the submission of required Federal reports. Views of Responsible Official Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.
2024-007 Improve Internal Controls Over Reporting Federal Program(s) Information Federal Agency: Department of Justice Award Name: Public Safety Partnership and Community Policing Grants Assistance Listing Number: 16.710 Award Year: 2024 Compliance Requirement: Reporting Type of Finding Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement 2 CFR 200.303 requires non-Federal entities to establish and maintain effective internal controls over Federal awards to provide reasonable assurance of compliance with Federal statutes, regulations, and the terms and conditions of the award. Effective internal control includes appropriate segregation of duties to prevent and detect errors and irregularities in financial reporting, including the preparation and review of Federal Financial Reports (such as the SF-425). Condition and Context During our testing of two quarterly SF-425 Federal Financial Reports submitted under the Public Safety Partnership and Community Policing Grants program, we noted that although the amounts reported agreed to the general ledger, there was no segregation of duties between the individual who prepared the reports and the individual responsible for review and approval prior to submission. The same individual performed both preparation and submission duties without a documented independent review. Cause The City did not establish adequate internal control procedures to ensure that reports under the program are subject to independent review and approval prior to submission. Effect or Potential Effect The lack of segregation of duties increases the risk that errors or misstatements in the reports could go undetected. No questioned costs are reported as the requirement is procedural in nature. Recommendation The City should implement procedures to ensure appropriate segregation of duties in the preparation and review of all Federal reports. The process should include a documented, independent review and approval of reports prior to their submission to ensure accuracy and compliance with grant requirements. Views of Responsible Official Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.
2024-004 Improve Internal Controls Over the Preparation of the Schedule of Expenditures of Federal Awards (SEFA) Federal Program(s) Information Federal Agency: Department of Transportation Award Name: National Infrastructure Investments Assistance Listing Number: 20.933 Award Year: 2024 Federal Agency: Environmental Protection Agency Award Name: Clean Water State Revolving Fund Assistance Listing Number: 66.458 Award Year: 2024 Federal Agency: Department of Housing and Urban Development Award Name: Lead Hazard Reduction Demonstration Grant Assistance Listing Number: 14.905 Award Year: 2024 Type of Finding Compliance Internal Control Over Compliance – Material Weakness SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (CONTINUED) Criteria or Specific Requirement Per 2 CFR 200.510(b), auditees must prepare a complete and accurate Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements. The SEFA must accurately and completely report federal awards expended during the period, regardless of when reimbursements are received. The SEFA should reflect federal expenditures as incurred in accordance with program requirements and generally accepted accounting principles. Condition and Context While preparing its draft SEFA, the City did not include $1,183,881 in federal expenditures under the National Infrastructure Investment grant. In addition, expenditures reported under the Clean Water State Revolving Fund grant were understated by $30,921 and expenditures reported under the Lead Hazard Reduction Demonstration Grant Program were overstated by $391,414. As a result, an adjustment was required in order for the SEFA to be complete and accurate. Cause The City did not have adequate controls in place in order to ensure the complete and accurate preparation of the SEFA, including reconciling federal expenditures reported in the general ledger with the information included on the SEFA. Certain programs within the City reported expenditures on the SEFA based on when federal reimbursements were received, rather than when expenditures were incurred. Expenditures under the Lead Hazard Reduction Demonstration Grant initially included CDBG funds and the match that was not to be reported under the program on the SEFA. The misapplication of the reporting basis led to misstatement and omission of federal expenditures. Effect or Potential Effect Incomplete and inaccurate SEFA reporting increases the risk that federal agencies and oversight bodies receive misleading financial information. It may also result in improper determination of major programs for audit testing and affect audit risk assessments. Reporting federal expenditures by reimbursement rather than when incurred is not compliant with federal requirements and generally accepted accounting principles. No questioned costs are reported as the finding relates to completeness and accuracy of reporting, not the allowability of costs. Recommendation The City should strengthen its procedures and controls for preparing the SEFA to ensure all federal awards expended during the period are included and accurately reported based on expenditures incurred, not reimbursements received. The City should ensure that adequate procedures and controls are in place to ensure that the SEFA is complete and accurate. These controls should include controls requiring the reconciliation of federal expenditures to the appropriate supporting documentation (e.g., general ledger, grant reports, etc.). SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (CONTINUED) Views of Responsible Official Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.
2024-004 Improve Internal Controls Over the Preparation of the Schedule of Expenditures of Federal Awards (SEFA) Federal Program(s) Information Federal Agency: Department of Transportation Award Name: National Infrastructure Investments Assistance Listing Number: 20.933 Award Year: 2024 Federal Agency: Environmental Protection Agency Award Name: Clean Water State Revolving Fund Assistance Listing Number: 66.458 Award Year: 2024 Federal Agency: Department of Housing and Urban Development Award Name: Lead Hazard Reduction Demonstration Grant Assistance Listing Number: 14.905 Award Year: 2024 Type of Finding Compliance Internal Control Over Compliance – Material Weakness SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (CONTINUED) Criteria or Specific Requirement Per 2 CFR 200.510(b), auditees must prepare a complete and accurate Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements. The SEFA must accurately and completely report federal awards expended during the period, regardless of when reimbursements are received. The SEFA should reflect federal expenditures as incurred in accordance with program requirements and generally accepted accounting principles. Condition and Context While preparing its draft SEFA, the City did not include $1,183,881 in federal expenditures under the National Infrastructure Investment grant. In addition, expenditures reported under the Clean Water State Revolving Fund grant were understated by $30,921 and expenditures reported under the Lead Hazard Reduction Demonstration Grant Program were overstated by $391,414. As a result, an adjustment was required in order for the SEFA to be complete and accurate. Cause The City did not have adequate controls in place in order to ensure the complete and accurate preparation of the SEFA, including reconciling federal expenditures reported in the general ledger with the information included on the SEFA. Certain programs within the City reported expenditures on the SEFA based on when federal reimbursements were received, rather than when expenditures were incurred. Expenditures under the Lead Hazard Reduction Demonstration Grant initially included CDBG funds and the match that was not to be reported under the program on the SEFA. The misapplication of the reporting basis led to misstatement and omission of federal expenditures. Effect or Potential Effect Incomplete and inaccurate SEFA reporting increases the risk that federal agencies and oversight bodies receive misleading financial information. It may also result in improper determination of major programs for audit testing and affect audit risk assessments. Reporting federal expenditures by reimbursement rather than when incurred is not compliant with federal requirements and generally accepted accounting principles. No questioned costs are reported as the finding relates to completeness and accuracy of reporting, not the allowability of costs. Recommendation The City should strengthen its procedures and controls for preparing the SEFA to ensure all federal awards expended during the period are included and accurately reported based on expenditures incurred, not reimbursements received. The City should ensure that adequate procedures and controls are in place to ensure that the SEFA is complete and accurate. These controls should include controls requiring the reconciliation of federal expenditures to the appropriate supporting documentation (e.g., general ledger, grant reports, etc.). SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (CONTINUED) Views of Responsible Official Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.
2024-004 Improve Internal Controls Over the Preparation of the Schedule of Expenditures of Federal Awards (SEFA) Federal Program(s) Information Federal Agency: Department of Transportation Award Name: National Infrastructure Investments Assistance Listing Number: 20.933 Award Year: 2024 Federal Agency: Environmental Protection Agency Award Name: Clean Water State Revolving Fund Assistance Listing Number: 66.458 Award Year: 2024 Federal Agency: Department of Housing and Urban Development Award Name: Lead Hazard Reduction Demonstration Grant Assistance Listing Number: 14.905 Award Year: 2024 Type of Finding Compliance Internal Control Over Compliance – Material Weakness SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (CONTINUED) Criteria or Specific Requirement Per 2 CFR 200.510(b), auditees must prepare a complete and accurate Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements. The SEFA must accurately and completely report federal awards expended during the period, regardless of when reimbursements are received. The SEFA should reflect federal expenditures as incurred in accordance with program requirements and generally accepted accounting principles. Condition and Context While preparing its draft SEFA, the City did not include $1,183,881 in federal expenditures under the National Infrastructure Investment grant. In addition, expenditures reported under the Clean Water State Revolving Fund grant were understated by $30,921 and expenditures reported under the Lead Hazard Reduction Demonstration Grant Program were overstated by $391,414. As a result, an adjustment was required in order for the SEFA to be complete and accurate. Cause The City did not have adequate controls in place in order to ensure the complete and accurate preparation of the SEFA, including reconciling federal expenditures reported in the general ledger with the information included on the SEFA. Certain programs within the City reported expenditures on the SEFA based on when federal reimbursements were received, rather than when expenditures were incurred. Expenditures under the Lead Hazard Reduction Demonstration Grant initially included CDBG funds and the match that was not to be reported under the program on the SEFA. The misapplication of the reporting basis led to misstatement and omission of federal expenditures. Effect or Potential Effect Incomplete and inaccurate SEFA reporting increases the risk that federal agencies and oversight bodies receive misleading financial information. It may also result in improper determination of major programs for audit testing and affect audit risk assessments. Reporting federal expenditures by reimbursement rather than when incurred is not compliant with federal requirements and generally accepted accounting principles. No questioned costs are reported as the finding relates to completeness and accuracy of reporting, not the allowability of costs. Recommendation The City should strengthen its procedures and controls for preparing the SEFA to ensure all federal awards expended during the period are included and accurately reported based on expenditures incurred, not reimbursements received. The City should ensure that adequate procedures and controls are in place to ensure that the SEFA is complete and accurate. These controls should include controls requiring the reconciliation of federal expenditures to the appropriate supporting documentation (e.g., general ledger, grant reports, etc.). SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (CONTINUED) Views of Responsible Official Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.
2024-004 Improve Internal Controls Over the Preparation of the Schedule of Expenditures of Federal Awards (SEFA) Federal Program(s) Information Federal Agency: Department of Transportation Award Name: National Infrastructure Investments Assistance Listing Number: 20.933 Award Year: 2024 Federal Agency: Environmental Protection Agency Award Name: Clean Water State Revolving Fund Assistance Listing Number: 66.458 Award Year: 2024 Federal Agency: Department of Housing and Urban Development Award Name: Lead Hazard Reduction Demonstration Grant Assistance Listing Number: 14.905 Award Year: 2024 Type of Finding Compliance Internal Control Over Compliance – Material Weakness SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (CONTINUED) Criteria or Specific Requirement Per 2 CFR 200.510(b), auditees must prepare a complete and accurate Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements. The SEFA must accurately and completely report federal awards expended during the period, regardless of when reimbursements are received. The SEFA should reflect federal expenditures as incurred in accordance with program requirements and generally accepted accounting principles. Condition and Context While preparing its draft SEFA, the City did not include $1,183,881 in federal expenditures under the National Infrastructure Investment grant. In addition, expenditures reported under the Clean Water State Revolving Fund grant were understated by $30,921 and expenditures reported under the Lead Hazard Reduction Demonstration Grant Program were overstated by $391,414. As a result, an adjustment was required in order for the SEFA to be complete and accurate. Cause The City did not have adequate controls in place in order to ensure the complete and accurate preparation of the SEFA, including reconciling federal expenditures reported in the general ledger with the information included on the SEFA. Certain programs within the City reported expenditures on the SEFA based on when federal reimbursements were received, rather than when expenditures were incurred. Expenditures under the Lead Hazard Reduction Demonstration Grant initially included CDBG funds and the match that was not to be reported under the program on the SEFA. The misapplication of the reporting basis led to misstatement and omission of federal expenditures. Effect or Potential Effect Incomplete and inaccurate SEFA reporting increases the risk that federal agencies and oversight bodies receive misleading financial information. It may also result in improper determination of major programs for audit testing and affect audit risk assessments. Reporting federal expenditures by reimbursement rather than when incurred is not compliant with federal requirements and generally accepted accounting principles. No questioned costs are reported as the finding relates to completeness and accuracy of reporting, not the allowability of costs. Recommendation The City should strengthen its procedures and controls for preparing the SEFA to ensure all federal awards expended during the period are included and accurately reported based on expenditures incurred, not reimbursements received. The City should ensure that adequate procedures and controls are in place to ensure that the SEFA is complete and accurate. These controls should include controls requiring the reconciliation of federal expenditures to the appropriate supporting documentation (e.g., general ledger, grant reports, etc.). SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (CONTINUED) Views of Responsible Official Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.
2024-004 Improve Internal Controls Over the Preparation of the Schedule of Expenditures of Federal Awards (SEFA) Federal Program(s) Information Federal Agency: Department of Transportation Award Name: National Infrastructure Investments Assistance Listing Number: 20.933 Award Year: 2024 Federal Agency: Environmental Protection Agency Award Name: Clean Water State Revolving Fund Assistance Listing Number: 66.458 Award Year: 2024 Federal Agency: Department of Housing and Urban Development Award Name: Lead Hazard Reduction Demonstration Grant Assistance Listing Number: 14.905 Award Year: 2024 Type of Finding Compliance Internal Control Over Compliance – Material Weakness SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (CONTINUED) Criteria or Specific Requirement Per 2 CFR 200.510(b), auditees must prepare a complete and accurate Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements. The SEFA must accurately and completely report federal awards expended during the period, regardless of when reimbursements are received. The SEFA should reflect federal expenditures as incurred in accordance with program requirements and generally accepted accounting principles. Condition and Context While preparing its draft SEFA, the City did not include $1,183,881 in federal expenditures under the National Infrastructure Investment grant. In addition, expenditures reported under the Clean Water State Revolving Fund grant were understated by $30,921 and expenditures reported under the Lead Hazard Reduction Demonstration Grant Program were overstated by $391,414. As a result, an adjustment was required in order for the SEFA to be complete and accurate. Cause The City did not have adequate controls in place in order to ensure the complete and accurate preparation of the SEFA, including reconciling federal expenditures reported in the general ledger with the information included on the SEFA. Certain programs within the City reported expenditures on the SEFA based on when federal reimbursements were received, rather than when expenditures were incurred. Expenditures under the Lead Hazard Reduction Demonstration Grant initially included CDBG funds and the match that was not to be reported under the program on the SEFA. The misapplication of the reporting basis led to misstatement and omission of federal expenditures. Effect or Potential Effect Incomplete and inaccurate SEFA reporting increases the risk that federal agencies and oversight bodies receive misleading financial information. It may also result in improper determination of major programs for audit testing and affect audit risk assessments. Reporting federal expenditures by reimbursement rather than when incurred is not compliant with federal requirements and generally accepted accounting principles. No questioned costs are reported as the finding relates to completeness and accuracy of reporting, not the allowability of costs. Recommendation The City should strengthen its procedures and controls for preparing the SEFA to ensure all federal awards expended during the period are included and accurately reported based on expenditures incurred, not reimbursements received. The City should ensure that adequate procedures and controls are in place to ensure that the SEFA is complete and accurate. These controls should include controls requiring the reconciliation of federal expenditures to the appropriate supporting documentation (e.g., general ledger, grant reports, etc.). SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (CONTINUED) Views of Responsible Official Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.