Audit 409318

Finding 2025-001: Untimely Submission of Required Quarterly Report Noncompliance and Significant Deficiency ARPA, AL 21.027 Criteria: In accordance with 2 CFR §200.328(b)(1) and the specific terms and conditions of the federal award agreement, recipients are required to submit performance and/or financial reports quarterly, no later than the 21st day of the following month after the end of each calendar quarter. Timely submission of these reports is essential for the federal awarding agency to monitor progress and compliance with program objectives. Condition: During our audit of the entity’s compliance with federal program requirements, we noted that the entity did not submit one required quarterly report by the date established in the grant agreement. Cause: The entity had the understanding that a fourth quarterly report was not necessary because construction on the projects funded by the program had been completed in the prior quarter, although billing for one project had not. The entity sought written clarification on reporting requirements from the grant administrator and was informed that a final report was necessary, but this was not requested until the due date. Effect: Failure to submit required reports on time constitutes noncompliance with federal grant requirements. Late submissions may impede the federal agency’s ability to monitor the project’s progress and may affect future funding decisions or lead to additional oversight. Identification as a Repeat Finding: This is a repeat finding, listed as 2024-001 in the prior year single audit report. Recommendation: We recommend that the entity enhance its procedures for identifying and monitoring all grant reporting requirements to ensure that required reports are submitted by the deadlines established in grant agreements. Views of Responsible Officials: See the attached Corrective Action Plan.

Finding 2025-002: Inaccurate Expense Reporting on Quarterly Report Significant Deficiency ARPA, AL 21.027 Criteria: In accordance with 2 CFR §200.328(b)(1), non-Federal entities are required to submit performance and/or financial reports on a regular basis as specified in the terms and conditions of the award. Effective internal controls, as outlined in 2 CFR §200.303, require that entities establish and maintain processes to ensure reliable reporting and compliance with federal requirements. Condition: During our review of the entity’s reporting procedures, we noted that one quarterly report submitted by the entity included incorrect expense information. Cause: The entity’s review process identified notes to correct on the quarterly report, however the report was submitted without corrections made. Effect: The submission of inaccurate expense information may result in reliance on incorrect financial data by the granting agency, and may affect future funding decisions or lead to additional oversight. Identification as a Repeat Finding: This is a new finding for fiscal year 2025. Recommendation: We recommend that the entity strengthen its controls over grant reporting to ensure that reviewed reports are reconciled to supporting records and that all identified discrepancies are resolved prior to submission. Views of Responsible Officials: See the attached Corrective Action Plan.