Audit 388587

Finding Number: 2024-001 Federal Program: Community Development Block Grant (CDBG) – Assistance Listing 14.218 Condition: The City’s original Schedule of Expenditures of Federal Awards (SEFA) and supporting audit documentation for the year ended October 31, 2024, did not include expenditures related to the Community Development Block Grant (CDBG) program. The omission was identified during the audit process and the SEFA was subsequently revised to include the CDBG program. Criteria: 2 CFR 200.510(b) requires the auditee to prepare a SEFA that lists individual federal programs by federal agency, including the Assistance Listing number, and to report total federal awards expended for each program. 2 CFR 200.508(b) requires the auditee to identify in its accounts all federal awards received and expended and the federal programs under which they were received. Cause: The omission occurred due to inadequate internal controls over the identification and reporting of all federal programs and related expenditures in the SEFA. Effect: As a result, the CDBG program was not initially subject to audit procedures required by the Uniform Guidance, increasing the risk that material noncompliance with federal requirements could go undetected. Recommendation: We recommend that the City strengthen its internal controls over the preparation of the SEFA to ensure that all federal programs and related expenditures are identified, recorded, and reported accurately and completely. This should include a review and reconciliation process involving all departments responsible for federal program administration. Management’s Response: Management concurs with the finding and has implemented additional review procedures to ensure all federal programs are identified and included in the SEFA in future years.