Audit 410815

Information on Federal Program United States Department of Homeland Security - Federal Emergency Management Agency (FEMA). Federal Assistance Listing Number 97.036 – Disaster Grants – Public Assistance. Compliance Requirements Activities Allowed or Unallowed / Allowable Costs and Cost Principles Criteria In accordance with 2 CFR §200.403, costs charged to a federal award must be necessary, reasonable, and allocable to the award. Additionally, costs must be adequately documented to be allowable under federal awards. Condition During our testing of activities and allowable costs for the year ended December 31, 2025, we identified four (4) instances in which invoices were submitted twice for reimbursement. Cause No cause could be determined. Effect The City received FEMA grant reimbursements for duplicated costs, potentially reducing available federal funds for future emergencies. Questioned Costs $71,629 Context Seventy-four (74) disbursements totaling $962,629 were selected for testing. Of the items tested, two (2) exceptions were identified in which invoices had been included in multiple reimbursement requests. Upon performing additional procedures, two (2) additional exceptions were noted, resulting in questioned costs. Recommendation We recommend the City review the identified transactions and consult with FEMA regarding resolution of the questioned costs. The City should also take steps to ensure that only allowable, adequately documented costs are submitted for reimbursement and that duplicate invoices are not included in future reimbursement requests. Management’s Response Responsible Official’s Response and Corrective Action Planned: Management has implemented a new process to include financial oversight and review of all documents prior to submission to FEMA for reimbursement going forward. Since the Finding last year, we have not had the opportunity to utilize this new process as the FEMA expenditures in question were prior to last year’s Finding. We will continue to meet with all leadership staff to discuss documentation requirements necessary for FEMA reimbursements. Lastly, Management will only sign off on reimbursed costs after all changes to FEMA requests have been adequately documented. Implementation Date: Immediate Person Responsible for Corrective Action Plan: Chief Financial Officer, Ashley Cason