Audit 392951

Finding 2025-003: Reporting Compliance Federal Agency: U.S. Department of Transportation Passthrough Entity: Illinois Department of Transportation Assistance Listing Number and Federal Program: 20.106 – Airport Improvement Program Condition: During our compliance procedures, we noted that the City did not complete and submit in the proper time period the necessary annual reports to the granting agency outlined in the Compliance Requirements shown in Uniform Guidance (2 CFR Part 200) for the Airport Improvement Program. Criteria: A good system of internal controls should be put in place to reduce any risk of noncompliance with the outlined grant requirements. Specifically, reports should be completed and reviewed on time prior to submission and should be reconciled against the City’s grant ledger activity. Cause: The City’s personnel are not properly following the policies and procedures required by the granting agency and included in the Uniform Guidance (2 CFR Part 200). Effect: Without proper completion, review, and approval, the City is at risk of losing grant funding as a result of the necessary reports not being completed and submitted in a timely fashion. Recommendation: We recommend that the City Comptroller’s Office works with the Airport Department and Airport Director to review and approve the necessary Airport Improvement Program reports prior to their submission. Corrective Action Plan: The City Comptroller should meet with the Airport Director regularly to discuss the necessary reports required to be submitted in order to stay in compliance with the federal funding agency’s grant requirements. Prior to submission, the reports should be reviewed by the City Comptroller and submitted and filed by the Airport Director

Finding 2025-001: Material Restatement to Fund Balance, Net Position, and Capital Assets Condition: During audit fieldwork, our testing resulted in a material restatement of Fund Balance, Net Position, and Capital Assets. Criteria: A good system of internal controls would provide for accurate recording of accruals and deferrals on a regular basis to provide for accurate financial reporting. Cause: Year-end entries related to fund balance, net position and fixed asset balances were required to accurately present the City’s financial statements. Effect: Material adjustments to the City’s fund balance, net position, and fixed asset balances were required to properly state the City’s prior year end balances. Recommendation: We recommend that the City implement effective internal controls in order to provide an accurate assessment of reporting requirements for year-end balances. This implementation of improved controls would result in the appropriate recognition of financial reporting requirements. Corrective Action Plan: The City should implement internal controls to properly record and adjust necessary capital asset balances on a timely basis prior to audit fieldwork. Additionally, the City Comptroller should provide monthly reviews of the financial statements..

Finding 2025-002: Material Journal Entries Condition: During our current year-end audit fieldwork, our testing resulted in material journal entries to be posted to properly state the City’s financial statements. Criteria: A good system of internal controls would ensure accurate recording of necessary journal entries on a regular basis to provide for accurate financial reporting. Cause: Year-end accrual entries along with correcting entries to properly reclassify necessary revenues and expenses into the proper ledger accounts were required to accurately present the City’s financial statements. Effect: Material adjustments to the City’s ledger accounts were required to properly state the City’s financial statements as of fiscal year ended April 30, 2024. Recommendation: We recommend that the City implement effective internal controls in order to provide an accurate assessment of reporting requirements for year-end accruals and deferrals and necessary reclassification adjustments for proper classification in the City’s financial statements. Corrective Action Plan: The City Comptroller, along with staff, will review year-end adjustments as part of the audit preparation process and work to reduce the number of entries proposed by the auditors and prepare fully adjusted financial statements prior to audit fieldwork