FAC Explorer

Audit 47974

FY End
2022-06-30
Total Expended
$18.00M
Findings
2
Programs
13
Organization: City of Covington, Kentucky (KY)
Year: 2022 Accepted: 2023-02-20
Auditor: Rfh PLLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
43579 2022-004 Significant Deficiency - L
620021 2022-004 Significant Deficiency - L

Programs

ALN Program Spent Major Findings
21.027 Coronavirus State and Local Fiscal Recovery Funds $6.58M Yes 1
14.239 Home Investment Partnerships Program $973,185 - 0
14.871 Section 8 Housing Choice Vouchers $598,667 - 0
14.218 Community Development Block Grants/entitlement Grants $469,634 Yes 0
21.019 Coronavirus Relief Fund $300,663 Yes 0
16.922 Equitable Sharing Program $254,003 - 0
97.056 Port Security Grant Program $248,796 - 0
20.205 Highway Planning and Construction $217,150 - 0
20.600 State and Community Highway Safety $20,225 - 0
15.904 Historic Preservation Fund Grants-in-Aid $16,140 - 0
16.607 Bulletproof Vest Partnership Program $15,128 - 0
16.738 Edward Byrne Memorial Justice Assistance Grant Program $13,160 - 0
14.900 Lead-Based Paint Hazard Control in Privately-Owned Housing $7,869 - 0

Contacts

Name Title Type
HEJDYFPJNSJ6 Steve Webb Auditee
8592922153 Heather R. Cochran, CPA Auditor
No contacts on file

Notes to SEFA

Title: Loan/loan guarantee outstanding balances Accounting Policies: The accompanying schedule of expenditures of federal awards includes the federal grant activity of the City of Covington, Kentucky and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in, or used in the preparation of, the basic financial statements may differ from those numbers. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. COMMUNITY DEVELOPMENT BLOCK GRANTS/ENTITLEMENT GRANTS (14.218) - Balances outstanding at the end of the audit period were 150000. HOME INVESTMENT PARTNERSHIPS PROGRAM (14.239) - Balances outstanding at the end of the audit period were 378717.
Title: Passthrough Entity Numbers Accounting Policies: The accompanying schedule of expenditures of federal awards includes the federal grant activity of the City of Covington, Kentucky and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in, or used in the preparation of, the basic financial statements may differ from those numbers. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Passthrough entity numbers were presented when available.
Title: Passthrough to Subrecipients Accounting Policies: The accompanying schedule of expenditures of federal awards includes the federal grant activity of the City of Covington, Kentucky and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in, or used in the preparation of, the basic financial statements may differ from those numbers. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The City passed through $277,445 of Community Development Block Grant (14.218) funds to subrecipients during the year ended June 30, 2022.

Finding Details

Finding 2022-004
Criteria: The City is required to file quarterly Project and Expenditure reports that detail financial data, projects funded, expenditures, and contracts and subawards over $50,000, that were paid with the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF). Condition: The Project and Expenditure report filed by the City for the quarter ended June 30, 2022, reported that there were no current or cumulative expenditures in the Replace Lost Revenue category. The City recognized $3,554,003 in expenditures to Replace Lost Revenue during the year ended June 30, 2022, and $2,547,800 in expenditures to Replace Lost Revenue during the year ended June 30, 2021. Cause: A deficiency in the operation of internal controls resulted in the City not reporting expenditures in the Replace Lost Revenue category on their Project and Expenditure report. Effect: As a result, total expenditures in the CSLFRF grant were understated on the June 30, 2022, Project and Expenditure report by approximately $6,102,000. Recommendation: We recommend that the City improve its process for completing and approving the Project and Expenditure reports. The total expenditures on the Project and Expenditure reports should be reconciled to current and cumulative expenditures reported by the City in the ARPA fund. Management?s Response: Management acknowledges that there have been deficiencies in processes. The City intends to enhance its internal controls over ARPA reporting. These efforts will be accomplished through improved internal communication and training of staff to ensure proper reporting of the Replace Lost Revenue category.
Finding 2022-004
Criteria: The City is required to file quarterly Project and Expenditure reports that detail financial data, projects funded, expenditures, and contracts and subawards over $50,000, that were paid with the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF). Condition: The Project and Expenditure report filed by the City for the quarter ended June 30, 2022, reported that there were no current or cumulative expenditures in the Replace Lost Revenue category. The City recognized $3,554,003 in expenditures to Replace Lost Revenue during the year ended June 30, 2022, and $2,547,800 in expenditures to Replace Lost Revenue during the year ended June 30, 2021. Cause: A deficiency in the operation of internal controls resulted in the City not reporting expenditures in the Replace Lost Revenue category on their Project and Expenditure report. Effect: As a result, total expenditures in the CSLFRF grant were understated on the June 30, 2022, Project and Expenditure report by approximately $6,102,000. Recommendation: We recommend that the City improve its process for completing and approving the Project and Expenditure reports. The total expenditures on the Project and Expenditure reports should be reconciled to current and cumulative expenditures reported by the City in the ARPA fund. Management?s Response: Management acknowledges that there have been deficiencies in processes. The City intends to enhance its internal controls over ARPA reporting. These efforts will be accomplished through improved internal communication and training of staff to ensure proper reporting of the Replace Lost Revenue category.