Audit 38401

FY End

2022-12-31

Total Expended

$1.95M

Findings

2

Programs

2

Organization: City of Andover (MN)

Year: 2022 Accepted: 2023-09-05

Auditor: Redpath and Company LTD

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
42196	2022-001	Significant Deficiency	-	L
618638	2022-001	Significant Deficiency	-	L

ALN	Program	Spent	Major	Findings
21.027	Covid-19 - Coronavirus State and Local Fiscal Recovery Funds	$1.83M	Yes	1
20.205	Covid-19 - Highway Planning and Construction	$119,090	-	0

Contacts

Name	Title	Type
N14ZR13QES45	Lee Brezinka	Auditee
7637675115	Andy Hering	Auditor
No contacts on file

Notes to SEFA

Title: Note B - Summary of Significant Accounting Policies Accounting Policies: Note A - Basis of Presentation The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of the City of Andover, Minnesota (City) for the year ended December 31, 2022. 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). Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the presentation of, the financial statements. De Minimis Rate Used: N Rate Explanation: Note C - Indirect Costs The City of Andover, Minnesota did not elect to use the 10% de minimis cost rate as allowed under the Uniform Guidance. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.

Title: Note D - Subrecipients Accounting Policies: Note A - Basis of Presentation The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of the City of Andover, Minnesota (City) for the year ended December 31, 2022. 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). Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the presentation of, the financial statements. De Minimis Rate Used: N Rate Explanation: Note C - Indirect Costs The City of Andover, Minnesota did not elect to use the 10% de minimis cost rate as allowed under the Uniform Guidance. The City of Andover, Minnesota did not pass any federal funds to subrecipients during 2022.

Finding Details

Finding 2022-001

2022-001 Significant Deficiency in Internal Controls over Compliance and Noncompliance with Reporting Requirements; U.S. Department of Treasury; COVID-19 Coronavirus State and Local Fiscal Recovery Funds - Assistance Listing No. 21.027; Grant period - Year ended December 31, 2022. Criteria: The major program requires the City of Andover, Minnesota to provide a Project and Expenditure Report on an annual basis, reporting on financial data, projects funded, expenditures, and other information. Condition: During our audit, we noted that the City did not have sufficient controls in place to ensure proper reporting of total expenditures incurred by project through December 31, 2022. Questioned Costs: $0 Context: Total reported expenditures for 2022 were understated by approximately $49,000. This understatement does not result in any questioned costs related to the program. Repeat Finding: No Cause: This reporting error was caused by the significant deficiency in internal controls over reporting by not having controls in place to validate the accuracy of reported amounts. Effect: The amounts reported by project were incorrect for the year ending December 31, 2022. Recommendation: We recommend that the City continue efforts to review the accuracy of its ARPA reporting before submission. City Response: The City concurs with the finding and the recommendation.

Finding 2022-001

2022-001 Significant Deficiency in Internal Controls over Compliance and Noncompliance with Reporting Requirements; U.S. Department of Treasury; COVID-19 Coronavirus State and Local Fiscal Recovery Funds - Assistance Listing No. 21.027; Grant period - Year ended December 31, 2022. Criteria: The major program requires the City of Andover, Minnesota to provide a Project and Expenditure Report on an annual basis, reporting on financial data, projects funded, expenditures, and other information. Condition: During our audit, we noted that the City did not have sufficient controls in place to ensure proper reporting of total expenditures incurred by project through December 31, 2022. Questioned Costs: $0 Context: Total reported expenditures for 2022 were understated by approximately $49,000. This understatement does not result in any questioned costs related to the program. Repeat Finding: No Cause: This reporting error was caused by the significant deficiency in internal controls over reporting by not having controls in place to validate the accuracy of reported amounts. Effect: The amounts reported by project were incorrect for the year ending December 31, 2022. Recommendation: We recommend that the City continue efforts to review the accuracy of its ARPA reporting before submission. City Response: The City concurs with the finding and the recommendation.