Audit 371676

Finding Number: 2024‐001 Repeat Finding: No Program Name/Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Agency: U.S. Department of Treasury Federal Award Number: WC2‐099‐2023 Pass‐Through Agency: Water Infrastructure Finance Authority of Arizona Questioned Costs: N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Reporting Criteria In accordance with 2 CFR Part 200.303, the District is responsible for the establishing and maintaining effective internal control over the Federal award that provides reasonable assurance that the non‐ Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the term and conditions of the Federal award. Condition The District did not have adequate internal controls in place to ensure eligible expenditures for the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) were reported on the Schedule of Expenditures of Federal Awards (SEFA). Cause The District was unaware the grant was federal in nature although it was stated so in the final grant agreement. Effect The District did not ensure the grant expenditures were properly reported on the Schedule of Expenditures of Federal Awards, resulting in the need for the single audit report to be reissued. Context The District recorded the CSLFRF revenues and expenditures in a state grant fund. As a result the expenditures were not reported on the SEFA and the single audit had to be reissued. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should provide training for those with grant management responsibilities. The District should also have more consistent and timely oversight of grants by higher level management to confirm all Federal awards have been recorded appropriately in the District’s financial records system. Views of Responsible Officials See Corrective Action Plan.