Audit 389039

#2025-005: Grant Tracking Federal Program Affected: Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027 Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Questioned Costs: None following audit adjustments. Condition and Cause: Due to an error when reconciling expenditures when preparing drawdown requests, the above noted program was over-drawn by $228,613 of duplicate expenditures. Criteria and Effect: The current internal control structure did not identify the errors in drawdown request for reimbursement-based federal programs during the year. This could have resulted in material noncompliance. Repeat Finding from Prior Year: No. Recommendation: The City should agree actual expenditures reporting from the general ledger to reports used to prepare drawdown requests prior to requesting reimbursement. Response/Corrective Action Plan: The City agrees with the above finding. See Corrective Action Plan.

#2025-001: Preparation of Financial Statements and Schedule of Expenditures of Federal Awards Federal Program Affected: All Compliance Requirement: Reporting Questioned Costs: None. Condition and Cause: As a matter of practicality and efficiency, we have assisted in drafting the financial statements as applicable and schedule of expenditures of federal awards, in both form and content, based on information provided by management during the audit. Criteria and Effect: Management and those charged with governance are ultimately responsible for preparing and presenting the financial statements in accordance with the applicable financial reporting framework. The auditor’s responsibility for the financial statements is to express an opinion on them based on the audit evidence obtained. Repeat Finding from Prior Year: Yes, prior year finding #2024-001. Recommendation: Management, and if applicable, governance, should review the financial statements for accuracy of account balances and context of note disclosures. Management and governance should inquire of the auditors about any balances or disclosures which management does not understand or cannot reconcile to internal records prior to signing the management representation letter. Response/Corrective Action Plan: The City agrees with the above finding. See Corrective Action Plan

#2025-002: Audit Adjustments Federal Program Affected: All Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Reporting Questioned Costs: None. Condition and Cause: During the course of our engagement, we proposed material audit adjustments resulting in an increase in fund balance of approximately $779,000. Additionally, we annually calculate and record the City’s portion of pension activity from the Wyoming Retirement System and the compensated absence liability as part of the audit process. Criteria and Effect: These adjustments would not have been identified as a result of the City’s existing internal controls, and therefore, could have resulted in a material misstatement of the City’s financial statements. Repeat Finding from Prior Year: Yes, prior year finding #2024-003. Recommendation: We recommend the following: • Items exceeding the $5,000 capitalization policy and having a useful life of more than one year should be capitalized, including construction projects. General fund additions should be coded to capital outlay. • Debt payments within enterprise funds should be posted against the corresponding debt liability, rather than within expenses. • Adjust compensated absences, including taxes and benefits, to agree to their corresponding funds in the general ledger. • Record revenue received in appropriate fund and account, such as grant receipts and sales taxes. • Prepaid expenses should be recorded for amounts paid prior to the fiscal year they pertain to. • Adjust unbilled utility receivables to encompass all of the last month of the fiscal year. • Interest income earned on certificates of deposit should be recorded at least annually. • Revenues received, but not yet spent, should be considered unearned revenue. • Federal grants received and spent should be considered revenue. Response/Corrective Action Plan: See Corrective Action Plan

#2025-006: Written Uniform Guidance Policies Federal Program Affected: All Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Procurement and Suspension and Debarment Questioned Costs: None Condition and Cause: The City does not have formal written UG policies related to allowable cost/activities allowed, procurement, and suspension and debarment. Additionally, the City did not obtain price quotes from a reasonable number of sources prior to contracting preliminary engineering work for the Duff Avenue and 7th Avenue projects. Internal policy is to obtain bids for projects in excess of $35,000, however this was not achieved for the engineering work. Criteria and Effect: The Uniform Guidance specifically requires written policies related to allowable costs/cost principles, procurement, and suspension and debarment. Not properly maintaining such policies leads to noncompliance with the Uniform Guidance. Additionally, for any contracted services that exceed the micro-purchase amount ($10,000) but does not exceed the simplified acquisition threshold ($250,000), price or rate quotations must be obtained from an adequate number of qualified sources; this includes engineering contracts. Repeat Finding from Prior Year: Yes, prior year finding #2024-005. Recommendation: We recommend the City develop written policies in accordance with the Uniform Guidance and obtain quotes from a reasonable number of vendors prior to purchasing when the acquisition exceeds $10,000. Response/Corrective Action Plan: The City agrees with the above finding. See Corrective Action Plan.