Audit 382844

Identification of the Federal Program - Assistance Listing Number 21.027 - Coronavirus State and Local Fiscal Recovery Funds, United States Department of Treasure, Pass-Through Entity: Mississippi Department of Environmental Quality. Criteria - Uniform Guidance compliance requirement for allowable cost/cost principles states for costs to be allowable under federal awards they must not be included as a cost or used to meet cost-sharing or matching requirements of any other federally financed program in either the current or prior period. Condition - Invoices were submitted for reimbursement under two federally financed programs. Cause - Management was aware amounts could not be submitted for reimbursement under two separate programs but followed the inaccurate advice of an external party. Effect - Potential material noncompliance with federal award compliance requirements. Questioned Costs - There are no questioned costs associated with the finding. There were sufficient additional project expenditures that were eligible for submission for reimbursement under the federal program. Context - Management was provided incorrect guidance by contracted engineer assigned to oversee state federal award program. Repeat Finding - This is not a repeat finding. Recommendation - We recommend the City implement regular training for grant managers and financial staff on federal award requirements. Training should include principles of allowability of costs under federal awards, the importance of ensuring each expense is only reimbursed once, and processes fo reviewing and reconciling expenses across multiple federal awards to prevent overlap or duplicate reimbursement requests. View of Responsible Officials and Planned Corrective Actions - The City understands the need for this finding, however, the City was instructed by Horne (The State's Grant Administrator for the MCWI Grant) to upload all reciepts into their online portal. They did not provide a way on the website to differentiate invoices. The City knows it cannot submit reciepts for reimbursement from two Federal grants, but this is what the Grant Administrator for the State of Mississippi instructed city staff to do in order to receive the reimbursement from the MCWI Grant

Condition - Audit reports were not prepared and filed timely with the Federal Audit Clearinghouse (FAC) in accordance with Uniform Guidance. Criteria - Uniform Guidance requires the audit reports to be filed with the FAC within nine months after the end of the audit period (or by June 30). Cause - The City did not submit the audit reports to FAC within nine months. Effect - The City risks losing federal award funding. Questioned Costs - There are no questioned costs associated with the finding. Context - Issuance of prior year audit was delayed and contained material misstatements which caused delay in beginning current year audit and additional current year audit procedures. Repeat Finding - This is not a repeat finding. Recommendation - We recommend the City continue efforts to improve processes to ensure timely audit preparation and filings. View of Responsible Officials and Planned Corrective Actions - The City concurs with the finding and has provided a response in the Corrective Action Plan.

Identification of the Federal Program - Assistance Listing Number 21.027 - Coronavirus State and Local Fiscal Recovery Funds, United States Department of Treasury, Pass-Through Entity: Mississippi Department of Environmental Quality. Assistance Listing Number 97.036 - Disaster Grants - Presidentially Declared Disasters, United States Department of Homeland Security, Pass-Through Entity: Mississippi Emergency Management Agency. Criteria - Uniform Guidance requirements state that recipients must verify that a proposed contractor does not appear on the federal government's Excluded Parties List prior to executing an agreement or contract with that entity. Condition - Debarment and suspension status was not verified prior to contracting with vendor, in accordance with compliance requirements. Cause - The City did not include federal suspension and debarment wording in contracts in accordance with their documented policies. Effect - Potential material noncompliance with federal award compliance requirements. Questioned Costs - There are no questioned costs associated with the finding. Context - The City has established a procedure for including federal language in all contracts. This procedure was established subsequent to entering into the identified contracts. Subsequent inquiry determined the contractors were not suspended or debarred. Repeat Finding - This is not a repeat finding. Recommendation - The City should expand its current internal control procedures they have in place for its procurement process to include consideration of federal funding requirements. View of Responsible Officials and Planned Corrective Action - The City concurs with the finding and has provided a response in the Corrective Action Plan.