Audit 4942

14.218 Community Development Block Grant – Entitlement Grants Cluster ACTIVITIES ALLOWED OR UNALLOWED; ALLOWABLE COSTS/COST PRINCIPLES; EQUIPMENT AND REAL PROPERTY MANAGEMENT; PERIOD OF PERFORMANCE; PROGRAM INCOME; REPORTING; SPECIAL TESTS AND PROVISIONS Criteria: The accounts of the City should include all transactions in the benefit period. Accounts and transactions should be adequately supported by source documentation, be allowable and a proper use of taxpayer funds. The City should follow Generally Accepted Accounting Principals, Federal and State laws and regulations, and standards issued by the Government Accounting Standards Board. The City should ensure proper internal controls are in place and are functioning. Condition: We were unable to obtain sufficient appropriate audit evidence on which to base an opinion on the Financial Statements. It appears that the City did not have adequate internal controls, oversite, and review procedures over financial processes. Cause: The City has experienced significant turnover in key accounting and management positions. It appears that internal controls were not effectively designed or functioning. Currently, there are pending investigations with state/federal agencies. Audited financial information from the River Valley Transit and the Williamsport Parking Authority is not available. Effect: The possible effects on the financial statements of undetected misstatements could be both material and pervasive. The finding includes a repeat of Findings 2018-001 and 2018-002 from the prior year. Questioned Costs: The amount of questioned costs, if any, is indeterminable. Recommendation: The City should implement strong internal controls over financial processes, ensure the financial activity follows appropriate regulations, and ensure the finance department is adequately staffed. Management's Response: During the audit period through 2022, there was a transition of fiscal and administrative personnel at the City of Williamsport (City). Due to the findings of an internal financial investigation, the City communicated with appropriate parties and a grand jury was convened. The City has been and continues to be under state and federal criminal investigations since February of 2020. Numerous financial records, extending over a 10-year period, have been provided to investigators. In June of 2022, the City hired a consultant to provide fiscal oversight on an ongoing basis and reconcile, to the extent possible, prior financial records. Since that time, the City has enhanced internal control and implemented policies to assure accurate financial reporting and compliance.

14.218 Community Development Block Grant – Entitlement Grants Cluster ACTIVITIES ALLOWED OR UNALLOWED; ALLOWABLE COSTS/COST PRINCIPLES; EQUIPMENT AND REAL PROPERTY MANAGEMENT; PERIOD OF PERFORMANCE; PROGRAM INCOME; REPORTING; SPECIAL TESTS AND PROVISIONS Criteria: The accounts of the City should include all transactions in the benefit period. Accounts and transactions should be adequately supported by source documentation, be allowable and a proper use of taxpayer funds. The City should follow Generally Accepted Accounting Principals, Federal and State laws and regulations, and standards issued by the Government Accounting Standards Board. The City should ensure proper internal controls are in place and are functioning. Condition: We were unable to obtain sufficient appropriate audit evidence on which to base an opinion on the Financial Statements. It appears that the City did not have adequate internal controls, oversite, and review procedures over financial processes. Cause: The City has experienced significant turnover in key accounting and management positions. It appears that internal controls were not effectively designed or functioning. Currently, there are pending investigations with state/federal agencies. Audited financial information from the River Valley Transit and the Williamsport Parking Authority is not available. Effect: The possible effects on the financial statements of undetected misstatements could be both material and pervasive. The finding includes a repeat of Findings 2018-001 and 2018-002 from the prior year. Questioned Costs: The amount of questioned costs, if any, is indeterminable. Recommendation: The City should implement strong internal controls over financial processes, ensure the financial activity follows appropriate regulations, and ensure the finance department is adequately staffed. Management's Response: During the audit period through 2022, there was a transition of fiscal and administrative personnel at the City of Williamsport (City). Due to the findings of an internal financial investigation, the City communicated with appropriate parties and a grand jury was convened. The City has been and continues to be under state and federal criminal investigations since February of 2020. Numerous financial records, extending over a 10-year period, have been provided to investigators. In June of 2022, the City hired a consultant to provide fiscal oversight on an ongoing basis and reconcile, to the extent possible, prior financial records. Since that time, the City has enhanced internal control and implemented policies to assure accurate financial reporting and compliance.