Audit 397522

Reporting (Significant Deficiency/Compliance) ALN No. 16.922 – Equitable Sharing Program Criteria: The Equitable Sharing Program requires participating agencies to submit the Equitable Sharing Agreement and Certification (ESAC) report no later than November 30 following the end of the program year. Timely submission is necessary to demonstrate compliance with program requirements. Condition: During our testing of reporting requirements for the Equitable Sharing Program, we noted the City did not submit its ESAC report by the required deadline. The ESAC was due November 30, 2024, but was not submitted until December 26, 2024. Effect: Failure to submit the ESAC by the required deadline results in noncompliance with federal reporting requirements and may affect the City’s standing and continued eligibility in the Equitable Sharing Program. Cause: The City did not have adequate procedures in place to ensure that personnel responsible for program administration were aware of the ESAC reporting deadline or that the submission was monitored to ensure timely filing. Recommendation: We recommend the City implement procedures to ensure personnel are aware of program reporting deadlines and that required reports, such as the ESAC, are submitted timely. This should include assigning responsibility, establishing a reporting calendar with reminders, and implementing a secondary review to verify submission before the deadline. Repeat Finding from Prior Year(s): N/A Views of Responsible Officials: See management’s corrective action plan.

Equipment Management (Significant Deficiency/Compliance) ALN No. 16.922 – Equitable Sharing Program Criteria: The Equitable Sharing Guide requires participating agencies to maintain complete and accurate inventory records for all assets purchased with Equitable Sharing Program funds. The Guide specifies that all assets, not only high-dollar items, must be inventoried, and that records must include item-level detail sufficient to track each piece of equipment individually. Effective internal controls further require that inventory listings be accurate, complete, and periodically reviewed to ensure proper stewardship of program-funded assets. Condition: During our review of the City’s inventory records for the Equitable Sharing Program, we noted multiple errors and omissions within the equipment tracking spreadsheet maintained by the City. Specifically: - Costs for multiple assets purchased together were combined into a single total preventing the City from tracking each asset on an item by item basis. - The listing did not reflect all program related equipment, resulting in incomplete inventory records. - The listing contained data entry errors, including incorrectly placed decimals that overstated the value of certain assets. - The City inventoried only larger items rather than all assets required to be tracked under the Equitable Sharing Guide. These issues were brought to the attention of City personnel and were subsequently corrected during the audit. Effect: Incomplete or inaccurate inventory records increase the risk that program-funded assets may be misstated, lost, misused, or not properly safeguarded. Inaccurate data may also impair the City’s ability to demonstrate compliance with federal asset management requirements and may result in questioned costs. Cause: Internal controls over equipment tracking and inventory management were not adequately designed or implemented. The City did not maintain item-level detail for all assets purchased with Equitable Sharing funds and lacked a formal review process to ensure the accuracy and completeness of its inventory records. Recommendation: We recommend the City maintain a detailed, item by item inventory records for all assets purchased with Equitable Sharing Program funds, including descriptions, quantities, unit costs serial numbers (if applicable), and acquisition dates. We also recommend a periodic management review to verify that inventory records are accurate, complete, and properly valued. Repeat Finding from Prior Year(s): N/A Views of Responsible Officials: See management’s corrective action plan.

Procurement, Suspension and Debarment (Significant Deficiency/Compliance) ALN No. 21.027 – Coronavirus State and Local Fiscal Recovery Funds ALN No. 15.916 – Outdoor Recreation Acquisition, Development and Planning ALN No. 16.922 – Equitable Sharing Program Criteria: The federal awards suspension and debarment compliance requirements prohibit non-federal entities from contracting or making subawards to parties that are suspended, debarred, or otherwise excluded from participating in federally funded programs. Compliance with this requirement may be documented through one of the following: - A sam.gov verification printout; - A written certification from the vendor; or -A clause in the contract requiring the vendor to affirm it is not suspended or debarred. This must be performed prior to entering into covered transactions, including procurements of goods and services equal to or exceeding $25,000. Condition: During our testing of procurement transactions subject to suspension and debarment requirements, we noted the City did not consistently document verification that vendors had not been suspended, debarred or otherwise excluded from federal contracting eligibility. Specifically, we noted no evidence that a sam.gov exclusions check was conducted, that written vendor certification was obtained, or that the contract documents included the required suspension and debarment clauses. As a result, the City could not demonstrate compliance with suspension and debarment requirements. The following exceptions were noted in our testing: ALN No. 21.027 – For 15 of the 16 vendors tested that were subject to this requirement, evidence of the City verifying that vendors were not suspended or debarred could not be provided. ALN No. 15.916 – For 1 of the 2 vendors tested that were subject to this requirement, evidence of the City verifying that vendors were not suspended or debarred could not be provided. ALN No. 16.922 – For 2 of the 2 vendors tested that were subject to this requirement, evidence of the City verifying that vendors were not suspended or debarred could not be provided. Effect: Failure to verify and document suspension and debarment status increases the risk that federal funds could be expended with vendors who are suspended or debarred from participating in federally funded programs. Cause: The City did not have adequate internal controls in place to ensure suspension and debarment verification was performed and documented for all federally funded procurements. Recommendation: We recommend the City strengthen internal controls over procurement and vendor eligibility by implementing a formal procedure requiring staff to verify suspension and debarment status before entering into any covered transaction equal to or greater than $25,000. This verification should be conducted before entering into the transactions and evidence of such review should be retained to support compliance with the requirement. Repeat Finding from Prior Year(s): N/A Views of Responsible Officials: See management’s corrective action plan.

Cash Management and Reporting (Significant Deficiency) ALN No. 15.916 – Outdoor Recreation Acquisition, Development and Planning Criteria: Effective internal controls over cash management and reporting include a review and approval of reimbursement requests before they are submitted. This review and approval are important to ensure reports being submitted are accurate, include only costs that are allowable and eligible for reimbursement. The review and approval should be documented and retained as evidence the internal control occurred and being followed. Condition: The City did not have documented evidence to show that reports submitted for reimbursement were reviewed and approved before they were submitted. As a result, we were unable to verify whether the control was in place or was followed. Effect: The lack of a review and approval may result in errors on reports submitted. Cause: The City did not have a formal process in place to ensure reimbursement requests are reviewed and approved prior to being submitted. Recommendation: We recommend the City strengthen internal controls by implementing a process where all reports, including reimbursement requests, are reviewed and approved and that evidence of such review be documented with a signature and date and retained as part of the City’s records. Repeat Finding from Prior Year(s): N/A Views of Responsible Officials: See management’s corrective action plan.