Finding 2023-010 – Material Weakness and Material Noncompliance, Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Period of Performance Assistance Listing Program Title and Number- Disaster Grants- Public Assistance (Presidentially Declared Disasters) 97.036 Federal Agency- Department of Homeland Security Pass-through Entity- N/A Award year: 2023 Criteria or specific requirement: Recipients must follow 2 CFR section 200.302 and the Public Assistance Program and Policy Guide which require documentation must be maintained for all costs claimed by the recipient regarding internal controls, allowable activities and eligible costs and recipients must incur such costs by the period of performance deadline of May 11, 2023. Condition: The City could not provide records related to the claimed costs within the force account labor and materials populations for the COVID-19 program portion of ALN 97.036. Cause: There has been turnover in grants department personnel and lack of policies and procedures to ensure the required level of documentation was maintained. Additionally, there was a change in general ledger systems during the fiscal year that attributed to a disconnect in the audit trail. Effect: The City can not demonstrate they complied with federal grant requirements over activities allowed or unallowed, allowable costs/cost principles and period of performance. Lack of support could result in actions taken by oversight agencies to claw back funding, or to reduce future funding. Context: The City could not provide support for 36 out of 40 force account labor selections, totaling $54,767 and $56,963, respectively. The City could not provide complete support for six out of 40 materials selections, totaling $53,421 and $186,993, respectively. Total Force Account Labor and Materials expenditures for this ALN were $1,840,561 out of the total expenditures of $4,208,353 reported on the SEFA. The samples were not statistically valid samples. Questioned Costs: Known questioned costs totaling $108,188 based on 36 unsupported payroll items within a sample size of 40 and 6 unsupported invoices with a sample size of 40 in the Force Account labor and materials populations, respectively. Repeating Finding: No. Recommendation We recommend that the City develop processes and procedures to ensure proper tracking of force account labor at the employee level as well as maintain copies of all supporting invoices or other support for non-payroll expenditures as required. Views of Responsible Officials: Management agrees with the finding.
Finding 2023-011 – Significant Deficiency and Noncompliance, Late Issuance of the 2024, 2023 and 2022 Single Audit Reporting Packages Applicable to all assistance listing numbers (ALN’s) and federal agencies (and passthrough entities) included on the schedules of expenditures of federal awards for the years ended June 30, 2024, June 30, 2023 and June 30, 2022. Criteria/Context: Uniform Guidance 2 CFR 200.512(a) requires that each organization’s audit must be completed and the data collection form and reporting package should be submitted within the earlier of 30 days after receipt of the auditor’s report or nine months after the end of the audit period. Condition/Finding: The Single Audit packages for the City’s fiscal year ended June 30, 2024, June 30, 2023 and June 30, 2022, should have been submitted to the Federal Audit Clearinghouse by March 31, 2025, March 31, 2024 and March 31, 2023, respectfully. The City missed the filing deadlines, making the filings for 2024, 2023 and 2022 late. Context: The Single Audit Reporting Package and the data collection form for fiscal year 2022 were submitted to the single audit clearing house on January 30, 2024. The fiscal 2023 Single Audit Reporting Package and data collection form will likely submitted after August 29, 2025. The fiscal 2024 Single Audit Reporting Package and data collection form will likely be submitted after October 31, 2025. Cause: The cause is the lack of effective controls over financial reporting which resulted in delays in issuing both the Financial Statement Audit and Single Audit. Effect or Potential Effect: This can result in errors reported in the SEFA or basic financial statements or the disallowance of expenditures / future awards by the grantor due to lack of proper reporting. In addition, late filings result in noncompliance with the requirements of the Uniform Guidance and makes the City ineligible for consideration as a low risk auditee under Uniform Guidance, expanding the scope and cost of the single audit. Questioned Costs: None Repeat Finding: 2022-004 Recommendation: We recommend the City evaluate the process and design of internal controls over financial reporting, including the SEFA, in order to ensure readiness for the audit and to avoid late filing of the single audit reporting package and data collection form. Views of Responsible Officials: Management agrees with the finding and recommendation.
2023-009 – Material Weakness and Noncompliance- Completeness and Accuracy of the Schedule of Expenditures of Federal Awards Grantor: Department of Homeland Security, Department of Transportation, Department of Justice, and Department of Housing and Urban Development Program Name: Disaster Grants- Public Assistance, Highway Planning and Construction, Highway Safety Cluster, Alcohol Open Container Requirements, Criminal and Juvenile Justice and Mental Health Collaboration Program, and Community Development Block Grants/Entitlement Grants Pass- through Entity: State of Connecticut Department of Emergency Services and Public Protection(97.036) and Department of Transportation (20.205, 20.600, 20.607, 20.616) Assistance Listing Numbers: 97.036, 20.205, 20.600, 20.607, 20.616, 16.745, 14.218 Criteria: Committee of Sponsoring Organizations (COSO) Framework – control activities: Proper review of the schedule of expenditures of federal awards (SEFA) and schedule of expenditure of state awards (SESA) should ensure the accuracy and completeness of the schedules. Condition and Context: We identified several errors in the SEFA as originally provided by the City including omitted programs, programs on the wrong schedule, incorrect amounts and errors in grant numbers and grant names. The SEFA balances are required to be reconciled to the basic financial statements prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP). The City’s internal controls did not include such a reconciliation. Effect or Potential Effect: This can result in inaccurate amounts reported in the SEFA or the disallowance of expenditures / future awards by the grantor due to lack of proper reporting. Additionally, misstatements in the SEFA can lead to the inaccurate identification of major federal programs and audit inefficiencies. Repeat Finding: 2022-003 Questioned Costs: None See Section II - Finding 2023-002: Completeness and Accuracy of Schedule of Expenditures of Federal Awards