Federal Agency: U.S. Department of the Treasury Federal Program Title: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Assistance Listing No.: 21.027 Award Period: 2024 Pass-through Entity: n/a Questioned Costs: n/a Compliance Requirement: (L) - Reporting Criteria: Title 2 U.S. Code of Federal Regulations Part 200 requires recipients of Federal awards to comply with laws, regulations, and provisions of contract or grant agreements related to each of its Federal programs. Participants in the COVID-19 Coronavirus State and Local Fiscal Recovery Funds program are required to complete financial, performance, and compliance reporting as outlined in Part 2 of the SLFRF Compliance and Reporting Guide, issued by the U.S. Department of the Treasury. The City was required to appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. The City was also required to submit an annual Project and Expenditure Report. The current fiscal year's report was required to be submitted to the Treasury by April 30, 2024, and should have covered the City's projects and expenditures from April 1, 2023 - March 31, 2024. Condition: The City elected to utilize their awarded funds to pay for the waste management program for City residents. Specifically, the funds are being used to cover the expenditures incurred from the solid waste collection company, Republic Services. During our audit, we noted that the Project and Expenditure Report covering April 1, 2023 - March 31, 2024, contained errors. The amount reported as current period expenditures was $326,848, however, accounting records support current period of expenditures of $1,142,251, a difference of $815,403. The City's current internal controls over Schedule of Expenditures of Federal Awards reporting are not sufficient enough to ensure correct reporting. Cause: Management failed to follow reporting requirements related to the Schedule of Expenditures of Federal Awards. Effect: The Project and Expenditures Report due by April 30, 2024, which covered April 1, 2023 - March 31, 2024, was submitted with inaccurate expenditures. Current period expenditures reported for the covered period totaled $326,848, however, the City's underlying accounting records supported current period expenditures for the covered period of $1,142,251. Recommendation: We recommend that the City implement internal controls to ensure that the Project and Expenditure Reports completely and accurately state the cumulative expenditures and current period expenditures of funds expended under the COVID-19 Coronavirus State and Local Fiscal Recovery Funds including performing a reconciliation between the reporting to be submitted and the underlying accounting records. Additionally, the City should include the omitted expenditures in the next Project and Expenditure Report submission using the procedures reflected in the U.S. Department of Treasury Project and Expenditure Report Guide, as applicable to the covered period being submitted. Management's Response: The City’s management will implement internal controls to ensure that the Project and Expenditure Reports completely and accurately state the cumulative expenditures and current period expenditures of funds expended under the COVID-19 Coronavirus State and Local Fiscal Recovery Funds including performing a reconciliation between the reporting to be submitted and the underlying accounting records. Additionally, the City’s management will include the omitted expenditures in the next Project and Expenditure Report submission using the procedures reflected in the U.S. Department of Treasury Project and Expenditure Report Guide, as applicable to the covered period being submitted.