Audit 409787

Finding 2023-006: Late Reporting and Noncompliance with Reporting Requirements Federal Agency: U.S. Department of Transportation Pass through agency: None Federal Programs: Airport Improvement Program Assistance Listing Number: 20.106 Award Numbers: 30201910212022 and 30201910182021 Award Period: 2022 and 2021 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Condition and Context: The City did not adhere to the Uniform Guidance requirement of submitting the reporting package within the earlier of 30 days after receipt of the audit report, or nine months plus any extensions after the end of the audit period, (i.e. the FAC Report was not submitted timely.) Criteria: The Uniform Guidance requires that the reporting package be submitted within the earlier of nine months plus any extensions after year end or 30 days after the report issuance in accordance with the provisions of 2 CFR part 200, subpart F, section 200.512. Cause: Due to staff turnover the City was unable to complete the annual audit within the required timeframe. Effect: The City is not in compliance with Uniform Guidance requirements. Questioned Costs: None. Repeat Finding: This is a repeat of Finding number 2022-004. This appears to be a systemic issue. Recommendation: The City should implement policies and procedures to ensure timely financial reporting and completion of federal single audits within the required time frame. Management Response: Management concurs with this finding. See Corrective Action Plan.

Finding 2023-007: Lack of Internal Control And Noncompliance With Activities Allowed or Unallowed; Allowable Costs/Cost Principles Federal Agency: U.S. Department of Transportation Pass through agency: None Federal Programs: Airport Improvement Program Assistance Listing Number: 20.106 Award Numbers: 30201910212022 and 30201910182021 Award Period: 2022 and 2021 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Condition and Context: For three out of four transactions tested, the City did not maintain adequate documentation demonstrating that management approval was obtained prior to checks being cut. Specifically, the supporting documentation for these transactions did not include evidence such as an approved invoice, signed check request, documented electronic approval, purchase authorization, or other evidence indicating that an authorized member of management reviewed and approved the expenditure before payment was issued. Criteria: All recipients of federal funds must comply with 2 CFR 200.303 – Internal Controls and establish and maintain effective internal control over the federal awards that provides reasonable assurance that the City is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Such internal controls should align with recognized internal control frameworks, such as the Standards for Internal Control in the Federal Government or COSO. Cause: Inadequate internal controls over expenditures. Effect: Without adequate documentation of management approval prior to disbursement, the City cannot demonstrate that expenditures charged to the federal award were reviewed for allowability, allocability, reasonableness, and compliance with award terms before payment. This increases the risk that unallowable, unsupported, duplicate, unauthorized, or improperly coded expenditures may be charged to the federal award and not detected timely. Questioned Costs: No known questioned costs. Repeat Finding: This is a repeat of Finding 2022-005. This appears to be a systemic issue. Recommendation: The City should implement policies and procedures to ensure all expenditures have adequate documentation to substantiate management approval prior to disbursement. Management Response: Management concurs with this finding. See Corrective Action Plan.