Audit 401867

2024-006 - Preparation of the Schedule of Expenditures of Federal Awards Finding Type: Material weakness in internal control over compliance. Criteria: The Uniform Guidance (2 CFR 200.302 and 2 CFR 200.510(b)) requires that non-Federal entities maintain records that adequately identify the source and application of Federal awards and prepare a Schedule of Expenditures of Federal Awards (SEFA) that is complete and accurate. Condition: The City did not prepare a Schedule of Expenditures of Federal Awards (SEFA) for the fiscal year ended June 30, 2024. A complete and accurate SEFA was prepared by the external auditor during the audit process. Cause: This condition is the result of the City’s lack of procedures and internal controls to identify, track, and report Federal award activity necessary to prepare the SEFA. Effect: As a result of this condition, the City did not maintain adequate internal control over compliance related to Federal reporting requirements and was not able to ensure that all Federal expenditures were identified and reported in accordance with Uniform Guidance. Recommendation: The City should implement procedures to identify and track Federal awards and expenditures and prepare a complete and accurate SEFA in accordance with Uniform Guidance requirements. Management Response: See Corrective Action Plan.

2024-007 - Lack of Documented Federal Policies and Procedures Finding Type: Material weakness in internal control over compliance. Criteria: The Uniform Guidance (2 CFR 200.303) requires that non-Federal entities establish and maintain effective internal control over Federal awards to provide reasonable assurance that the awards are managed in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Federal internal control guidance also contemplates that such controls be documented and maintained. Condition: The City did not maintain documented policies and procedures over its Federal awards as of June 30, 2024. No formal documentation was available to evidence the design and implementation of internal controls over compliance. Cause: This condition is the result of the City’s lack of formal procedures to document and maintain internal controls over compliance for Federal awards. Effect: As a result of this condition, the City did not maintain adequate internal control over compliance to provide reasonable assurance that Federal awards were managed in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award. Recommendation: The City should establish, document, and implement formal policies and procedures over Federal awards to ensure compliance with Uniform Guidance requirements. Management Response: See Corrective Action Plan.

2024-008 - Late Submission of Single Audit Reporting Package and Data Collection Form Finding Type: Noncompliance. Criteria: The Uniform Guidance (2 CFR 200.512(a)(1)) requires that the audit, data collection form, and reporting package be submitted to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the auditor’s reports or nine months after the end of the audit period. For the fiscal year ended June 30, 2024, the required submission deadline was March 31, 2025. Condition: The City did not submit the data collection form and reporting package to the Federal Audit Clearinghouse by the required deadline of March 31, 2025. Cause: This condition is the result of delays in completing the audit and finalizing the reporting package for submission to the Federal Audit Clearinghouse. Effect: As a result of this condition, the City was not in compliance with Uniform Guidance reporting requirements. Continued noncompliance may result in increased Federal oversight. Recommendation: The City should implement procedures to ensure that the data collection form and reporting package are submitted to the Federal Audit Clearinghouse within the required timeframe. Management Response: See Corrective Action Plan.