Audit 370064

Major Federal Program – Economic Development Initiative, Community Project Funding, and Miscellaneous Grants; COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Compliance Requirements: Procurement, Suspension and Debarment Criteria: In accordance with the grant agreement and Uniform Guidance, effective internal controls must be in place to prevent and detect noncompliance. This requirement extends to ensuring procurement of vendors for costs to be requested under federal grants is done under allowable methods. Condition: (X) Compliance Finding (X) Significant Deficiency ( ) Material Weakness Context/Cause: Grant agreements and federal procurement requirements were not reviewed in enough detail to assess appropriateness of procurement of vendors under federal contracts. -COVID-19 - Coronavirus State and Local Fiscal Recovery Funds: Of the three vendors reviewed for appropriate procurement during testing, one vendor had not gone through the appropriate procurement process for purchases over the micro-purchase threshold. -Economic Development Initiative, Community Project Funding, and Miscellaneous Grants: Of the three vendors reviewed for appropriate procurement during testing, one vendor had not gone through the appropriate procurement process for purchases above the simplified acquisition threshold, including bidding. Effect and Questioned Costs: The absence of detailed review of procurement requirements related to federal grants increases the risk that misstatements due to error or fraud may occur and not be detected timely. Costs paid to these vendors that did not go through the appropriate procurement process are as follows: - COVID-19 - Coronavirus State and Local Fiscal Recovery Funds: $61,547 - Economic Development Initiative, Community Project Funding, and Miscellaneous Grants: $359,675 Other likely questioned costs are indeterminable. Recommendation: Management should reinforce the internal controls in place to ensure all vendors utilized for projects and agreements funded by federal grants are procured in accordance with federal guidelines. Responsible Official’s Response: See Corrective Action Plan

Major Federal Program – Economic Development Initiative, Community Project Funding, and Miscellaneous Grants Compliance Requirements: Reporting Criteria: In accordance with the grant agreement and Uniform Guidance, effective internal controls must be in place to prevent and detect noncompliance. This requirement extends to reporting requirements under federal grants, including the prevention of non-timely reporting and ensuring that all reports are reviewed by an appropriate party prior to submission. Condition: (X) Compliance Finding (X) Significant Deficiency ( ) Material Weakness Context/Cause: Audit procedures determined that the semi-annual reporting required by the grantor for July 1, 2024 through December 31, 2024 was submitted on September 3, 2025, after the original due date, due to the absence of timely review of reporting and reporting requirements for the grant. Effect and Questioned Costs: The absence of timely review related to reporting requirements significantly increases the risk that misstatements due to error or fraud may occur and not be detected timely. Likely questioned costs are indeterminable. Recommendation: Management should reinforce the internal controls in place to ensure all reporting is appropriately reviewed by someone other than the preparer and submitted prior to the required due date. Responsible Official’s Response: See Corrective Action Plan