FAC Explorer

Audit 372529

FY End
2025-03-31
Total Expended
$2.74M
Findings
4
Programs
2
Organization: Village of Hesperia (MI)
Year: 2025 Accepted: 2025-11-24
Auditor: H&S COMPANIES PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
1162873 2025-002 Material Weakness Yes BI
1162874 2025-002 Material Weakness Yes BI
1162875 2025-002 Material Weakness Yes BI
1162876 2025-002 Material Weakness Yes BI

Programs

ALN Program Spent Major Findings
66.468 DRINKING WATER STATE REVOLVING FUND $518,432 Yes 1
21.027 CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS $37,980 Yes 1

Contacts

Name Title Type
KEJMLLYJ6PQ6 Vicki Burrell Auditee
2318546205 Corinna Kay Hervey Auditor
No contacts on file

Notes to SEFA

The accompanying schedule of expenditures of federal awards (the “Schedule”) includes the federal grant activity of the Village of Hesperia (the “Village”) under programs of the federal government for the year ended March 31, 2025. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the schedule presents only a selected portion of the operations of the Village, it is not intended to and does not present the financial position, changes in net position or cash flows of the Village.
For purposes of charging indirect costs to federal awards, the Village has not elected to use the de minimis cost rate as permitted by §200.414 of the Uniform Guidance.
The Village received certain federal grants as subawards from non-federal entities. Pass-through entities, where applicable, have been identified in the Schedule with an abbreviation, defined as follows:
The Village received a loan commitment under the U.S. Environmental Protection Agency’s Drinking Water State Revolving Fund (Assistance Listing 66.468) totaling $5,639,050, of which $3,245,085 is expected to be forgiven under the terms of the agreement. As of March 31, 2025, the Village has drawn $518,432 on the loan. The outstanding loan balance at year-end is $518,432, which is subject to repayment unless otherwise forgiven. The remaining undrawn balance of $5,120,618 includes the anticipated forgiveness portion. The loan is administered by the Michigan Department of Environment, Great Lakes, and Energy.

Finding Details

Finding 2025-002
2025-002 - Lack of Written Federal Program Policies. Type: Material Weakness. Condition: The Village does not have documented policies and procedures specific to the administration of the Coronavirus State and Local Fiscal Recovery Funds program. This includes the absence of written guidance on key compliance areas such as payments, procurement, allowability of costs charged to federal programs, compensation, and travel costs under Uniform Guidance. Criteria: Per 2 CFR 200.303 and 200.331 of the Uniform Guidance, non-federal entities are required to establish and maintain effective internal controls and written policies to ensure compliance with federal statutes, regulations, and the terms and conditions of federal awards. These policies should be tailored to the specific requirements of each federal program. Cause: The entity has not developed formal written policies and procedures for the Coronavirus State and Local Fiscal Recovery Funds program, possibly due to reliance on informal practices or general administrative policies that do not address federal-specific requirements. Effect: Without documented policies, there is an increased risk of noncompliance with federal requirements, inconsistent program administration, and lack of accountability. This may result in questioned costs, audit findings, or potential repayment of federal funds. Recommendation: We recommend that the Village develop and implement written policies and procedures specific to the Coronavirus State and Local Fiscal Recovery Funds program. These should include: - Payments in accordance with §200.302 (6), - Procurement in accordance with §200.318, - Allowability of costs charged to federal programs in accordance with §200.302 (7), - Compensation in accordance with §200.430 and §200.431, - Travel costs in accordance with §200.474. Training should also be provided to staff responsible for administering the program to ensure consistent application of these policies. Views of Responsible Officials: Management acknowledges the auditor’s finding regarding the absence of formally documented federal program policies. We recognize the importance of maintaining written procedures to ensure consistent compliance with Uniform Guidance requirements and to strengthen internal controls over federal awards. While informal practices have historically guided our federal program administration, we agree that formalizing these policies will enhance transparency, accountability, and operational efficiency. Management is currently in the process of developing written policies covering key areas such as procurement, allowable costs, subrecipient monitoring, and cash management. We anticipate completing this documentation and implementing the policies by February 28, 2026. We are committed to continuous improvement and appreciate the auditor’s recommendations as part of our efforts to maintain strong compliance and stewardship of federal funds.