Audit 404277

Reporting NONCOMPLIANCE Condition: Controls in place did not provide for the accuracy of the Project and Expenditure (P&E) reports submitted annually. Annual reports are not being prepared using the defined reporting period, in addition to other errors in the information reported. As a result, expenditure amounts reported were not accurate per Department’s Annual Project and Expenditure Report Timeline. Criteria: Effective controls over grants ensures allowable grant expenses are accurately captured and documented to support reporting requirements. Internal worksheets and other documents prepared for annual reporting should be reviewed for accuracy, prior to preparation and submission. Cause: The City lacked adequate procedures over the preparation and review of the P&E reports. Effect: The City prepared and submitted the annual P&E reports for 2025 for the calendar year ending December 31, 2024, versus the required 12 months ending March 31st. This resulted in inaccurate totals for the reporting period. For the 12 months ended March 31, 2025, the P&E report’s current expenditures were under-reported by $933,692 and should have been $6,725,932 for the period April 1, 2024 to March 31, 2025. As a result, the current expenditures for the reporting period March 31, 2026 were over-reported. Recommendation: Management should continue to evaluate procedures for preparing and reviewing grant reports prior to submission to Department of Treasury. Procedures should include verifying grant period reporting requirements, reconciling report information to general ledger activity, and additional oversight and monitoring over submission of reports. Grantee’s Response: Management concurs. Due to the fact that all remaining grant funds were expended during the current grant reporting period, all previously unreported balances were included in the current year annual year for reporting year ending March 31, 2026.

Reporting MATERIAL WEAKNESS Condition: Controls in place did not provide for the accuracy of the Project and Expenditure (P&E) reports submitted annually. Annual reports are not being prepared using the defined reporting period, in addition to other errors in the information reported. As a result, expenditure amounts reported were not accurate per Department’s Annual Project and Expenditure Report Timeline. Criteria: Effective controls over grants ensures allowable grant expenses are accurately captured and documented to support reporting requirements. Internal worksheets and other documents prepared for annual reporting should be reviewed for accuracy, prior to preparation and submission. Cause: The City lacked adequate procedures over the preparation and review of the P&E reports. Effect: The City prepared and submitted the annual P&E reports for 2025 for the calendar year ending December 31, 2024, versus the required 12 months ending March 31st. This resulted in inaccurate totals for the reporting period. For the 12 months ended March 31, 2025, the P&E report’s current expenditures were under-reported by $933,692 and should have been $6,725,932 for the period April 1, 2024 to March 31, 2025. As a result, the current expenditures for the reporting period March 31, 2026 were over-reported. Recommendation: Management should continue to evaluate procedures for preparing and reviewing grant reports prior to submission to Department of Treasury. Procedures should include verifying grant period reporting requirements, reconciling report information to general ledger activity, and additional oversight and monitoring over submission of reports. Grantee’s Response: Management concurs. Due to the fact that all remaining grant funds were expended during the current grant reporting period, all previously unreported balances were included in the current year annual year for reporting year ending March 31, 2026.