Audit 377277

Condition: The Town did not adjust the financials to report on the proper amount of earned Coronavirus State and Local Fiscal Recovery Funds. Criteria: Accounting standard ASC 606 requires recognizing revenue when it is earned. Grant funds received in advance are recorded in "unearned revenue" and as the funds are earned, the amounts are moved to "earned grant revenue". Cause: The Town's procedures did not allow for the proper classification or timely reporting of information required for financial reporting. The Town's process did not allow for evidence to support internal controls in place over the preparation of the Schedule of Federal Expenditures. Effect: Adjustments were made to the financial statements in order to fairly present the amount of Coronavirus State and Local Fiscal Recovery Funds earned in the financial statements. Further, the internal control environment is weakened. Recommendation: We recommend the Town review its closing policiies and procedures in place to ensure amounts are properly captured, reconciled, classifed, and reported in a timely manner. Further, the Town should review its procedures over the preparation of the Schedule of Expenditures of Federal Awards to ensure there is a documented review and approval. or other appropriate internal controls.

Criteria: In accordance with 2 CFR 200.328 and 32 CFR section 35.4(c), the Grantee is required to submit Project and Expenditure Reports that are to include the Total Cumulative Expenditures and Total Current Period Expenditures. Condition: The Town of Oakland reported an incorrect amount of Total Cumulative Expenditures and Total Current Period Expenditures on the March 2024 Project and Expenditure Report and the Town of Oakland, Tennessee also reported an incorrect amount of Total Current Period Expenditures on the March 2025 Project and Expenditure Report. Questioned Costs: None. Context: We reviewed the annual Project and Expenditure Reports for March 2024 and March 2025. Effect: Overstatement of total cumulative expenditures and total current period expenditures on the March 2024 annual Project and Expenditure Report and overstatement of total current period expenditures on the March 2025 annual Project and Expenditure Report. Identification of a repeat finding: N/A – not a repeat finding. Cause: Human error in entering amounts. Also, the Town of Oakland, Tennessee, does not have any procedures in place to verify that the correct amounts are reported. Recommendation: Checks and balances should be in place for any numeric calculations used in the reporting on the annual Project and Expenditure Reports. Views of responsible officials and planned corrective actions: Management agrees. See separately issued Corrective Action Plan.

Criteria: In accordance with 2 CFR 200.512 Report Submission, the Auditee is required to submit the audit, the data collection form, and the reporting package within 30 calendar days after the auditee receives the auditor's report(s) or nine months after the end of the audit period (whichever is earlier). Condition: The Town of Oakland did not close out their books for June 30, 2024, year until July 29, 2025; therefore, the Town was unable to meet the filing deadline. Questioned Costs: None Context: Wickberg Accounting did not receive the trial balances to begin the audit until after the filing deadline of March 31, 2025. Effect: The Town of Oakland, Tennessee was in violation of 2 CFR 200.512. They were unable to file the audit, data collection form, and the reporting package within nine months after the end of the June 30, 2024, audit period. Identification of a repeat finding: N/A – not a repeat finding. Cause: The Town of Oakland, Tennessee did not have any procedures in place to ensure an audit could be conducted in a timely manner to meet the filing deadline. Views of responsible officials and planned corrective actions: Management agrees. See separately issued Corrective Action Plan.