Audit 46079

FY End
2022-12-31
Total Expended
$8.62M
Findings
14
Programs
17
Organization: City of Appleton (WI)
Year: 2022 Accepted: 2023-08-08

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
44156 2022-002 Material Weakness - L
44157 2022-002 Material Weakness - L
44158 2022-002 Material Weakness - L
44159 2022-001 Material Weakness - I
44160 2022-001 Material Weakness - I
44161 2022-001 Material Weakness - I
44162 2022-001 Material Weakness - I
620598 2022-002 Material Weakness - L
620599 2022-002 Material Weakness - L
620600 2022-002 Material Weakness - L
620601 2022-001 Material Weakness - I
620602 2022-001 Material Weakness - I
620603 2022-001 Material Weakness - I
620604 2022-001 Material Weakness - I

Contacts

Name Title Type
WLT8QFB9NFZ3 Jeri Ohman Auditee
9208326442 Leah Lasecki, CPA Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: Revenues and expenditures in the schedules are presented in accordance with the modified accrual basis of accounting and are generally in agreement with revenues and expenditures reported in the Citys 2022 fund financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance and the State Single Audit Guidelines with the exception of Assistance Listing Number 21.027, which follows criteria determined by the Department of Treasury for allowability of costs. Under these cost principles, certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. Accrued revenue at year-end consists of federal and state program expenditures scheduled for reimbursement to the City in the succeeding year while unearned revenue represents advances for federal and state programs that exceed recorded City expenditures. Because of subsequent program adjustments, these amounts may differ from the prior years ending balances. De Minimis Rate Used: Y Rate Explanation: The auditee used the de minimis cost rate of 10% of modified total costs. The accompanying schedules of expenditures of federal and state awards for the City are presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) and the State Single Audit Guidelines issued by the Wisconsin Department of Administration. The schedules of expenditures of federal and state awards include all federal and state awards of the City. Because the schedules present only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net position, or cash flows of the City.
Title: Oversight Agencies Accounting Policies: Revenues and expenditures in the schedules are presented in accordance with the modified accrual basis of accounting and are generally in agreement with revenues and expenditures reported in the Citys 2022 fund financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance and the State Single Audit Guidelines with the exception of Assistance Listing Number 21.027, which follows criteria determined by the Department of Treasury for allowability of costs. Under these cost principles, certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. Accrued revenue at year-end consists of federal and state program expenditures scheduled for reimbursement to the City in the succeeding year while unearned revenue represents advances for federal and state programs that exceed recorded City expenditures. Because of subsequent program adjustments, these amounts may differ from the prior years ending balances. De Minimis Rate Used: Y Rate Explanation: The auditee used the de minimis cost rate of 10% of modified total costs. The federal and state oversight agencies for the City are as follows: Federal U.S. Department of Transportation - Federal Transit Administration U.S. Department of Housing and Urban Development. StateWisconsin Department of Transportation Wisconsin Department of Natural Resources Wisconsin Department of Administration
Title: State of Wisconsin Community Aids Reporting System Accounting Policies: Revenues and expenditures in the schedules are presented in accordance with the modified accrual basis of accounting and are generally in agreement with revenues and expenditures reported in the Citys 2022 fund financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance and the State Single Audit Guidelines with the exception of Assistance Listing Number 21.027, which follows criteria determined by the Department of Treasury for allowability of costs. Under these cost principles, certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. Accrued revenue at year-end consists of federal and state program expenditures scheduled for reimbursement to the City in the succeeding year while unearned revenue represents advances for federal and state programs that exceed recorded City expenditures. Because of subsequent program adjustments, these amounts may differ from the prior years ending balances. De Minimis Rate Used: Y Rate Explanation: The auditee used the de minimis cost rate of 10% of modified total costs. The Wisconsin Departments of Health Services (DHS) and Children and Families (DCF) utilize the Community Aids Reporting System (CARS) and the System for Payments and Reports of Contracts (SPARC) for reimbursing the City for various federal and state program expenditures. The expenditures reported on the Schedules of Expenditures of Federal and State Awards for various DHS & DCF programs agree with the expenditures reported on the April 2023 CARS for the Human Services.

Finding Details

2022-002 Special Reporting for Federal Funding Accountability and Transparency Act Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Community Development Block Grant - Entitlement Assistance Listing Number: 14.228 Award Period: January 1, 2022 through December 31, 2022 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matter Criteria or Specific Requirement In accordance with 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and the Federal Funding Accountability and Transparency Act (FFATA) requires compliance with reporting requirements. The City should have internal controls designed to ensure compliance with those provisions. Condition During our audit testing, we noted that the City did not have adequate internal controls designed to ensure that reporting requirements related to FFATA were completed timely. Questioned Costs None. Context While performing audit procedures, it was noted that the City did not report subawards to subrecipients in excess of $30,000 as required by FFATA. Cause The City does not have a system of internal controls in place to ensure compliance over reporting requirements related to FFATA. Effect The City is not in compliance with reporting requirements. The City awarded one subaward in excess of $30,000 and did not complete the special reporting required by FFATA timely. Repeat Finding No. Recommendation We recommend the City design and implement internal controls designed to ensure compliance with reporting requirements under FFATA. View of Responsible Officials There is no disagreement with the finding. The City will continue to review and enhance policies and procedures to ensure compliance in future years.
2022-002 Special Reporting for Federal Funding Accountability and Transparency Act Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Community Development Block Grant - Entitlement Assistance Listing Number: 14.228 Award Period: January 1, 2022 through December 31, 2022 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matter Criteria or Specific Requirement In accordance with 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and the Federal Funding Accountability and Transparency Act (FFATA) requires compliance with reporting requirements. The City should have internal controls designed to ensure compliance with those provisions. Condition During our audit testing, we noted that the City did not have adequate internal controls designed to ensure that reporting requirements related to FFATA were completed timely. Questioned Costs None. Context While performing audit procedures, it was noted that the City did not report subawards to subrecipients in excess of $30,000 as required by FFATA. Cause The City does not have a system of internal controls in place to ensure compliance over reporting requirements related to FFATA. Effect The City is not in compliance with reporting requirements. The City awarded one subaward in excess of $30,000 and did not complete the special reporting required by FFATA timely. Repeat Finding No. Recommendation We recommend the City design and implement internal controls designed to ensure compliance with reporting requirements under FFATA. View of Responsible Officials There is no disagreement with the finding. The City will continue to review and enhance policies and procedures to ensure compliance in future years.
2022-002 Special Reporting for Federal Funding Accountability and Transparency Act Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Community Development Block Grant - Entitlement Assistance Listing Number: 14.228 Award Period: January 1, 2022 through December 31, 2022 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matter Criteria or Specific Requirement In accordance with 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and the Federal Funding Accountability and Transparency Act (FFATA) requires compliance with reporting requirements. The City should have internal controls designed to ensure compliance with those provisions. Condition During our audit testing, we noted that the City did not have adequate internal controls designed to ensure that reporting requirements related to FFATA were completed timely. Questioned Costs None. Context While performing audit procedures, it was noted that the City did not report subawards to subrecipients in excess of $30,000 as required by FFATA. Cause The City does not have a system of internal controls in place to ensure compliance over reporting requirements related to FFATA. Effect The City is not in compliance with reporting requirements. The City awarded one subaward in excess of $30,000 and did not complete the special reporting required by FFATA timely. Repeat Finding No. Recommendation We recommend the City design and implement internal controls designed to ensure compliance with reporting requirements under FFATA. View of Responsible Officials There is no disagreement with the finding. The City will continue to review and enhance policies and procedures to ensure compliance in future years.
2022-001 Procurement Federal Agency: U.S. Department of Treasury Federal Program Name: American Rescue Plan Act Assistance Listing Number: 21.027 Award Period: March 3, 2021 through December 31, 2024 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matter Criteria or Specific Requirement 2 CFR 200.320(a)(2)(ii) requires that "The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk and its documented procurement procedures which must not exceed the threshold established in the FAR. When applicable, a lower simplified acquisition threshold used by the non-Federal entity must be authorized or not prohibited under State, local, or tribal laws or regulations." When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition The City did not follow controls related to ensuring procurement policies were followed. Questioned Costs None. Context While performing compliance procedures, it was noted that the City did not follow adopted policies for procurement. Cause Items purchased through procurement transactions were individually insignificant thus City believed procurement was not applicable. However, when applying the micro purchase threshold, a nonfederal entity should note the threshold applies to the aggregate purchase amount rather than the cost of individual items. Effect The City is not in compliance with procurement requirements. Contracts for construction, non- construction related procurements, and those over the simplified acquisition threshold may not be in compliance with the Uniform Guidance. Repeat Finding No. Recommendation We recommend the City review and update procurement policies for the entire City to ensure they meet the minimum requirements of 2 CFR 200 for all federal grants. View of Responsible Officials There is no disagreement with the finding.
2022-001 Procurement Federal Agency: U.S. Department of Treasury Federal Program Name: American Rescue Plan Act Assistance Listing Number: 21.027 Award Period: March 3, 2021 through December 31, 2024 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matter Criteria or Specific Requirement 2 CFR 200.320(a)(2)(ii) requires that "The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk and its documented procurement procedures which must not exceed the threshold established in the FAR. When applicable, a lower simplified acquisition threshold used by the non-Federal entity must be authorized or not prohibited under State, local, or tribal laws or regulations." When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition The City did not follow controls related to ensuring procurement policies were followed. Questioned Costs None. Context While performing compliance procedures, it was noted that the City did not follow adopted policies for procurement. Cause Items purchased through procurement transactions were individually insignificant thus City believed procurement was not applicable. However, when applying the micro purchase threshold, a nonfederal entity should note the threshold applies to the aggregate purchase amount rather than the cost of individual items. Effect The City is not in compliance with procurement requirements. Contracts for construction, non- construction related procurements, and those over the simplified acquisition threshold may not be in compliance with the Uniform Guidance. Repeat Finding No. Recommendation We recommend the City review and update procurement policies for the entire City to ensure they meet the minimum requirements of 2 CFR 200 for all federal grants. View of Responsible Officials There is no disagreement with the finding.
2022-001 Procurement Federal Agency: U.S. Department of Treasury Federal Program Name: American Rescue Plan Act Assistance Listing Number: 21.027 Award Period: March 3, 2021 through December 31, 2024 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matter Criteria or Specific Requirement 2 CFR 200.320(a)(2)(ii) requires that "The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk and its documented procurement procedures which must not exceed the threshold established in the FAR. When applicable, a lower simplified acquisition threshold used by the non-Federal entity must be authorized or not prohibited under State, local, or tribal laws or regulations." When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition The City did not follow controls related to ensuring procurement policies were followed. Questioned Costs None. Context While performing compliance procedures, it was noted that the City did not follow adopted policies for procurement. Cause Items purchased through procurement transactions were individually insignificant thus City believed procurement was not applicable. However, when applying the micro purchase threshold, a nonfederal entity should note the threshold applies to the aggregate purchase amount rather than the cost of individual items. Effect The City is not in compliance with procurement requirements. Contracts for construction, non- construction related procurements, and those over the simplified acquisition threshold may not be in compliance with the Uniform Guidance. Repeat Finding No. Recommendation We recommend the City review and update procurement policies for the entire City to ensure they meet the minimum requirements of 2 CFR 200 for all federal grants. View of Responsible Officials There is no disagreement with the finding.
2022-001 Procurement Federal Agency: U.S. Department of Treasury Federal Program Name: American Rescue Plan Act Assistance Listing Number: 21.027 Award Period: March 3, 2021 through December 31, 2024 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matter Criteria or Specific Requirement 2 CFR 200.320(a)(2)(ii) requires that "The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk and its documented procurement procedures which must not exceed the threshold established in the FAR. When applicable, a lower simplified acquisition threshold used by the non-Federal entity must be authorized or not prohibited under State, local, or tribal laws or regulations." When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition The City did not follow controls related to ensuring procurement policies were followed. Questioned Costs None. Context While performing compliance procedures, it was noted that the City did not follow adopted policies for procurement. Cause Items purchased through procurement transactions were individually insignificant thus City believed procurement was not applicable. However, when applying the micro purchase threshold, a nonfederal entity should note the threshold applies to the aggregate purchase amount rather than the cost of individual items. Effect The City is not in compliance with procurement requirements. Contracts for construction, non- construction related procurements, and those over the simplified acquisition threshold may not be in compliance with the Uniform Guidance. Repeat Finding No. Recommendation We recommend the City review and update procurement policies for the entire City to ensure they meet the minimum requirements of 2 CFR 200 for all federal grants. View of Responsible Officials There is no disagreement with the finding.
2022-002 Special Reporting for Federal Funding Accountability and Transparency Act Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Community Development Block Grant - Entitlement Assistance Listing Number: 14.228 Award Period: January 1, 2022 through December 31, 2022 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matter Criteria or Specific Requirement In accordance with 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and the Federal Funding Accountability and Transparency Act (FFATA) requires compliance with reporting requirements. The City should have internal controls designed to ensure compliance with those provisions. Condition During our audit testing, we noted that the City did not have adequate internal controls designed to ensure that reporting requirements related to FFATA were completed timely. Questioned Costs None. Context While performing audit procedures, it was noted that the City did not report subawards to subrecipients in excess of $30,000 as required by FFATA. Cause The City does not have a system of internal controls in place to ensure compliance over reporting requirements related to FFATA. Effect The City is not in compliance with reporting requirements. The City awarded one subaward in excess of $30,000 and did not complete the special reporting required by FFATA timely. Repeat Finding No. Recommendation We recommend the City design and implement internal controls designed to ensure compliance with reporting requirements under FFATA. View of Responsible Officials There is no disagreement with the finding. The City will continue to review and enhance policies and procedures to ensure compliance in future years.
2022-002 Special Reporting for Federal Funding Accountability and Transparency Act Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Community Development Block Grant - Entitlement Assistance Listing Number: 14.228 Award Period: January 1, 2022 through December 31, 2022 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matter Criteria or Specific Requirement In accordance with 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and the Federal Funding Accountability and Transparency Act (FFATA) requires compliance with reporting requirements. The City should have internal controls designed to ensure compliance with those provisions. Condition During our audit testing, we noted that the City did not have adequate internal controls designed to ensure that reporting requirements related to FFATA were completed timely. Questioned Costs None. Context While performing audit procedures, it was noted that the City did not report subawards to subrecipients in excess of $30,000 as required by FFATA. Cause The City does not have a system of internal controls in place to ensure compliance over reporting requirements related to FFATA. Effect The City is not in compliance with reporting requirements. The City awarded one subaward in excess of $30,000 and did not complete the special reporting required by FFATA timely. Repeat Finding No. Recommendation We recommend the City design and implement internal controls designed to ensure compliance with reporting requirements under FFATA. View of Responsible Officials There is no disagreement with the finding. The City will continue to review and enhance policies and procedures to ensure compliance in future years.
2022-002 Special Reporting for Federal Funding Accountability and Transparency Act Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Community Development Block Grant - Entitlement Assistance Listing Number: 14.228 Award Period: January 1, 2022 through December 31, 2022 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matter Criteria or Specific Requirement In accordance with 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and the Federal Funding Accountability and Transparency Act (FFATA) requires compliance with reporting requirements. The City should have internal controls designed to ensure compliance with those provisions. Condition During our audit testing, we noted that the City did not have adequate internal controls designed to ensure that reporting requirements related to FFATA were completed timely. Questioned Costs None. Context While performing audit procedures, it was noted that the City did not report subawards to subrecipients in excess of $30,000 as required by FFATA. Cause The City does not have a system of internal controls in place to ensure compliance over reporting requirements related to FFATA. Effect The City is not in compliance with reporting requirements. The City awarded one subaward in excess of $30,000 and did not complete the special reporting required by FFATA timely. Repeat Finding No. Recommendation We recommend the City design and implement internal controls designed to ensure compliance with reporting requirements under FFATA. View of Responsible Officials There is no disagreement with the finding. The City will continue to review and enhance policies and procedures to ensure compliance in future years.
2022-001 Procurement Federal Agency: U.S. Department of Treasury Federal Program Name: American Rescue Plan Act Assistance Listing Number: 21.027 Award Period: March 3, 2021 through December 31, 2024 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matter Criteria or Specific Requirement 2 CFR 200.320(a)(2)(ii) requires that "The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk and its documented procurement procedures which must not exceed the threshold established in the FAR. When applicable, a lower simplified acquisition threshold used by the non-Federal entity must be authorized or not prohibited under State, local, or tribal laws or regulations." When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition The City did not follow controls related to ensuring procurement policies were followed. Questioned Costs None. Context While performing compliance procedures, it was noted that the City did not follow adopted policies for procurement. Cause Items purchased through procurement transactions were individually insignificant thus City believed procurement was not applicable. However, when applying the micro purchase threshold, a nonfederal entity should note the threshold applies to the aggregate purchase amount rather than the cost of individual items. Effect The City is not in compliance with procurement requirements. Contracts for construction, non- construction related procurements, and those over the simplified acquisition threshold may not be in compliance with the Uniform Guidance. Repeat Finding No. Recommendation We recommend the City review and update procurement policies for the entire City to ensure they meet the minimum requirements of 2 CFR 200 for all federal grants. View of Responsible Officials There is no disagreement with the finding.
2022-001 Procurement Federal Agency: U.S. Department of Treasury Federal Program Name: American Rescue Plan Act Assistance Listing Number: 21.027 Award Period: March 3, 2021 through December 31, 2024 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matter Criteria or Specific Requirement 2 CFR 200.320(a)(2)(ii) requires that "The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk and its documented procurement procedures which must not exceed the threshold established in the FAR. When applicable, a lower simplified acquisition threshold used by the non-Federal entity must be authorized or not prohibited under State, local, or tribal laws or regulations." When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition The City did not follow controls related to ensuring procurement policies were followed. Questioned Costs None. Context While performing compliance procedures, it was noted that the City did not follow adopted policies for procurement. Cause Items purchased through procurement transactions were individually insignificant thus City believed procurement was not applicable. However, when applying the micro purchase threshold, a nonfederal entity should note the threshold applies to the aggregate purchase amount rather than the cost of individual items. Effect The City is not in compliance with procurement requirements. Contracts for construction, non- construction related procurements, and those over the simplified acquisition threshold may not be in compliance with the Uniform Guidance. Repeat Finding No. Recommendation We recommend the City review and update procurement policies for the entire City to ensure they meet the minimum requirements of 2 CFR 200 for all federal grants. View of Responsible Officials There is no disagreement with the finding.
2022-001 Procurement Federal Agency: U.S. Department of Treasury Federal Program Name: American Rescue Plan Act Assistance Listing Number: 21.027 Award Period: March 3, 2021 through December 31, 2024 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matter Criteria or Specific Requirement 2 CFR 200.320(a)(2)(ii) requires that "The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk and its documented procurement procedures which must not exceed the threshold established in the FAR. When applicable, a lower simplified acquisition threshold used by the non-Federal entity must be authorized or not prohibited under State, local, or tribal laws or regulations." When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition The City did not follow controls related to ensuring procurement policies were followed. Questioned Costs None. Context While performing compliance procedures, it was noted that the City did not follow adopted policies for procurement. Cause Items purchased through procurement transactions were individually insignificant thus City believed procurement was not applicable. However, when applying the micro purchase threshold, a nonfederal entity should note the threshold applies to the aggregate purchase amount rather than the cost of individual items. Effect The City is not in compliance with procurement requirements. Contracts for construction, non- construction related procurements, and those over the simplified acquisition threshold may not be in compliance with the Uniform Guidance. Repeat Finding No. Recommendation We recommend the City review and update procurement policies for the entire City to ensure they meet the minimum requirements of 2 CFR 200 for all federal grants. View of Responsible Officials There is no disagreement with the finding.
2022-001 Procurement Federal Agency: U.S. Department of Treasury Federal Program Name: American Rescue Plan Act Assistance Listing Number: 21.027 Award Period: March 3, 2021 through December 31, 2024 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matter Criteria or Specific Requirement 2 CFR 200.320(a)(2)(ii) requires that "The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk and its documented procurement procedures which must not exceed the threshold established in the FAR. When applicable, a lower simplified acquisition threshold used by the non-Federal entity must be authorized or not prohibited under State, local, or tribal laws or regulations." When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition The City did not follow controls related to ensuring procurement policies were followed. Questioned Costs None. Context While performing compliance procedures, it was noted that the City did not follow adopted policies for procurement. Cause Items purchased through procurement transactions were individually insignificant thus City believed procurement was not applicable. However, when applying the micro purchase threshold, a nonfederal entity should note the threshold applies to the aggregate purchase amount rather than the cost of individual items. Effect The City is not in compliance with procurement requirements. Contracts for construction, non- construction related procurements, and those over the simplified acquisition threshold may not be in compliance with the Uniform Guidance. Repeat Finding No. Recommendation We recommend the City review and update procurement policies for the entire City to ensure they meet the minimum requirements of 2 CFR 200 for all federal grants. View of Responsible Officials There is no disagreement with the finding.