Audit 407924

Finding Number: 2025-003 Federal Program: Airport Improvement Program Federal Award Identification Number and Year: All Airport Improvement Program awards, 2025 Assistance Listing Number (ALN): 20.106 Federal Awarding Agency: U.S. Department of Transportation Pass-through Entity: None Repeat Finding: No Significant Deficiency and Noncompliance – Matching Criteria: The Airport Improvement Program grant agreement requires the recipient to provide the required non-federal matching share for eligible project costs in accordance with the approved grant agreement and applicable federal requirements. Under 2 CFR 200.306, non-federal entities must meet applicable cost sharing or matching requirements. Matching contributions must be verifiable from the recipient’s records, not included as contributions for any other federal award, necessary and reasonable for the accomplishment of project objectives, allowable under the cost principles, and provided for in the approved budget when required. Additionally, 2 CFR 200.303 requires non-federal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: During testing, we noted the Airport did not properly ensure that the required local matching contribution was provided and documented in accordance with the grant agreement. Specifically, the grant agreement required a non-federal/local match of five percent. However, the Airport’s accounting records and supporting documentation reflected a local match of ten percent, resulting in a match overstatement of $18,244 in 2025. The Airport did not have a formal review process in place to verify compliance with the required matching percentage before reimbursement requests were submitted. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Cause and Effect: The Airport did not have adequate internal controls to ensure that the required local match was calculated, tracked, reviewed, and documented throughout the grant period. Management relied on project expenditure records and reimbursement activity; however, it did not reconcile total eligible project costs to the required federal and non-federal cost-share percentages. Additionally, responsibilities for monitoring the matching requirement were not clearly assigned, and there was no documented supervisory review of match calculations. As a result, the Airport was not in compliance with the matching requirements of the Airport Improvement Program grant agreement. The federal match was understated, therefore no questioned costs identified. Recommendation: The Airport should establish and implement internal controls over federal grant matching requirements. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.

Finding Number: 2025-004 Federal Program: Airport Improvement Program Federal Award Identification Number and Year: All Airport Improvement Program awards, 2024, 2023 Assistance Listing Number (ALN): 20.106 Federal Awarding Agency: U.S. Department of Transportation Pass-through Entity: None Repeat Finding: No Material Weakness and Noncompliance – Allowability Criteria: Under 2 CFR 200.403, costs charged to federal awards must be allowable, meaning they are necessary, reasonable, allocable, adequately documented, and comply with the terms and conditions of the federal award. Additionally, 2 CFR 200.302(b)(7) requires financial management systems to include effective internal controls over accountability of expenditures, including proper review and approval. Per 2 CFR 200.303, the Entity must establish and maintain effective internal control over federal awards to provide reasonable assurance that expenditures are allowable and in compliance. Condition: During testing of expenditures charged to the Airport Improvement Program, we identified that the Airport did not consistently follow its established invoice approval procedures. Specially, two of five checks tested, invoices totaling $1,469,973, lacked documented evidence of CEO and Vice President of Landside, Planning & Infrastructure’s approval prior to payment. The invoices were approved for payment by the Vice President of Finance and Administration. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Cause and Effect: The CEO and Vice President of Landside, Planning & Infrastructure did not sign off on invoices for Airport Improvement Program expenditures as an indication of their approval and allowability. There is an increased risk of expenditures not being allowable if the control process is not properly followed. Recommendation: The Airport should ensure that all purchasing controls are followed when incurring expenditures of federal funds and that purchases are properly approved prior to payment. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.