Audit 370747

Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Federal Agency: U.S. Department of the Treasury Federal Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), ALN No. 21.027, Award No. 23-0208-HITC ARPA Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Repeat Finding: No Condition: During our testing of two expenditures, we noted that management was unable to provide supporting documentation that review procedures were performed on invoices before the preparation of disbursement of funds. Questioned Costs: None Context: For both expenditures tested in the population of two, management was not able to provide the required support showing that the invoices were reviewed before preparation of disbursement. Criteria: 2 CFR part 200 section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award including proper authorization and approval for purchases. Cause: There was significant turnover within the finance department of the City and the grants administration process was missing supervision by key personnel. The finding indicates that there should be some process improvements in how grant expenditures are reviewed and approved before disbursement of funds to provide evidence the compliance requirement are being met. Effect: Unallowable costs or activities could be funded by the federal grant. Recommendation: We recommend the City implement procedures to ensure all disbursement of grant funds are reviewed and approved before disbursement as well as increase training efforts on disbursement policy requirements if there is future staffing turnover.

Type of Finding: Material Weakness in Internal Control Over Compliance, Other Matters Federal Agency: U.S. Department of the Treasury Federal Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), ALN No. 21.027, Award No. 23-0208-HITC ARPA Compliance Requirement: Suspension and Debarment Repeat Finding: No Condition: During our testing of one covered transaction, we noted that management was not able to provide supporting documentation that suspension and debarment procedures were performed before the start of the procurement activity. Questioned Costs: None Context: For the only transaction in the population, a beneficiary, tested for suspension and debarment, management was not able to provide the required supporting documentation showing that the suspension and debarment check was completed. Criteria: 2 CFR 180.300 prohibits entities from contracting under covered transactions to parties that are suspended or debarred from doing business with the federal government. A contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. In order to comply with federal suspension and debarment requirements, the City can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. Cause: There was significant turnover within the finance department of the City and grants administration was missing supervision by key personnel. The finding indicates that there should be some process improvements in how contracts are reviewed, documented and maintained to provide evidence the compliance requirements are being met. Effect: The City could enter into a federally-funded contract with a suspended or debarred party. Recommendation: We recommend that the City either obtain certifications from vendors stating their organization is not suspended, debarred, or otherwise excluded from participation in federal assistance programs or document the procedures performed to verify the vendor is not identified as suspended or debarred on the SAM website. We recommend that the City has proper procedures in place to ensure that all contractual documentation is maintained and able to be located.