Audit 51491

FY End
2022-09-30
Total Expended
$2.49M
Findings
2
Programs
9
Organization: City of Ozark (AL)
Year: 2022 Accepted: 2023-05-18

Organization Exclusion Status:

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Contacts

Name Title Type
RF3WD62J1JX8 Chris Peters Auditee
3347745393 Brian Free Auditor
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Notes to SEFA

Title: RELATIONSHIP OF THE SEFA TO FINANCIAL REPORTS Accounting Policies: BASIS OF PRESENTATIONThe SEFA summarizes the federal expenditures of the City of Ozark, (the City) under programs of thefederal government for the year ended September 30, 2022. The amounts reported as federalexpenditures were obtained from the Citys general ledger. Because the SEFA presents only a selectedportion of the operations of the City, it is not intended to and does not present the financial positionand changes in net position of the City.For purposes of the SEFA, federal awards include all grants, contracts, and similar agreementsentered into directly with the federal government and other pass through entities. The City hasobtained Assistance Listing (AL) numbers to ensure that all programs have been identified in the SEFA.AL numbers have been appropriately listed by applicable programs. Federal programs with differentAL numbers that are closely related because they share common compliance requirements aredefined as a cluster by the Uniform Guidance. Three clusters are identified in the SEFA is thefollowing:Child Nutrition Cluster Includes awards that assist states in administering food services that providehealthful, nutritious meals to eligible children in public and nonprofit private schools, residentialchild care institutions and summer recreation programs; and encourages the domestic consumptionof nutritious agricultural commodities.Highway Planning and Construction Cluster Includes awards that assist states, tribal governmentsand Federal land management agencies in the planning and development of an integrated,interconnected transportation system important to interstate commerce and travel by constructing,rehabilitating and preserving the National Highway System, including Interstate highways and otherFederalaid highways, provide aid for report of Federalaid highways following disasters, foster safehighway design and improve bridge conditions, to support communitylevel transportationinfrastructure and to provide for other special purposes.Highway Safety Cluster Includes awards that assist cities in providing a coordinated nationalhighway safety program to reduce traffic accidents, death, injuries and property damage. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10% de minimums indirect cost rate for the fiscal year endedSeptember 30, 2022. The amounts reflected in the financial reports submitted to the awarding Federal, State and/or passthroughagencies and the SEFA may differ. Some of the factors that may account for any differenceinclude the following:? The Citys fiscal year end may differ from the program's year end.? Accruals recognized in the SEFA, because of yearend procedures, may not be reported in theprogram financial reports until the next program reporting period.? Fixed asset purchases and the resultant depreciation charges are recognized as fixed assetsin the City's financial statements and as expenditures in the program financial reports.
Title: BASIS OF ACCOUNTING Accounting Policies: BASIS OF PRESENTATIONThe SEFA summarizes the federal expenditures of the City of Ozark, (the City) under programs of thefederal government for the year ended September 30, 2022. The amounts reported as federalexpenditures were obtained from the Citys general ledger. Because the SEFA presents only a selectedportion of the operations of the City, it is not intended to and does not present the financial positionand changes in net position of the City.For purposes of the SEFA, federal awards include all grants, contracts, and similar agreementsentered into directly with the federal government and other pass through entities. The City hasobtained Assistance Listing (AL) numbers to ensure that all programs have been identified in the SEFA.AL numbers have been appropriately listed by applicable programs. Federal programs with differentAL numbers that are closely related because they share common compliance requirements aredefined as a cluster by the Uniform Guidance. Three clusters are identified in the SEFA is thefollowing:Child Nutrition Cluster Includes awards that assist states in administering food services that providehealthful, nutritious meals to eligible children in public and nonprofit private schools, residentialchild care institutions and summer recreation programs; and encourages the domestic consumptionof nutritious agricultural commodities.Highway Planning and Construction Cluster Includes awards that assist states, tribal governmentsand Federal land management agencies in the planning and development of an integrated,interconnected transportation system important to interstate commerce and travel by constructing,rehabilitating and preserving the National Highway System, including Interstate highways and otherFederalaid highways, provide aid for report of Federalaid highways following disasters, foster safehighway design and improve bridge conditions, to support communitylevel transportationinfrastructure and to provide for other special purposes.Highway Safety Cluster Includes awards that assist cities in providing a coordinated nationalhighway safety program to reduce traffic accidents, death, injuries and property damage. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10% de minimums indirect cost rate for the fiscal year endedSeptember 30, 2022. This Schedule was prepared on the modified accrual basis of accounting. The modified accrual basis differs from the full accrual basis of accounting in that expenditures for property and equipment are expensed when incurred, rather than being capitalized and depreciated over their useful lives, and expenditures for the principal portion of debt service are expensed when incurred, rather than being applied to reduce the outstanding principal portion of debt, which conforms to the basis of reporting to grantors for reimbursement under the terms of the Citys federal grants.
Title: CONTINGENCIES Accounting Policies: BASIS OF PRESENTATIONThe SEFA summarizes the federal expenditures of the City of Ozark, (the City) under programs of thefederal government for the year ended September 30, 2022. The amounts reported as federalexpenditures were obtained from the Citys general ledger. Because the SEFA presents only a selectedportion of the operations of the City, it is not intended to and does not present the financial positionand changes in net position of the City.For purposes of the SEFA, federal awards include all grants, contracts, and similar agreementsentered into directly with the federal government and other pass through entities. The City hasobtained Assistance Listing (AL) numbers to ensure that all programs have been identified in the SEFA.AL numbers have been appropriately listed by applicable programs. Federal programs with differentAL numbers that are closely related because they share common compliance requirements aredefined as a cluster by the Uniform Guidance. Three clusters are identified in the SEFA is thefollowing:Child Nutrition Cluster Includes awards that assist states in administering food services that providehealthful, nutritious meals to eligible children in public and nonprofit private schools, residentialchild care institutions and summer recreation programs; and encourages the domestic consumptionof nutritious agricultural commodities.Highway Planning and Construction Cluster Includes awards that assist states, tribal governmentsand Federal land management agencies in the planning and development of an integrated,interconnected transportation system important to interstate commerce and travel by constructing,rehabilitating and preserving the National Highway System, including Interstate highways and otherFederalaid highways, provide aid for report of Federalaid highways following disasters, foster safehighway design and improve bridge conditions, to support communitylevel transportationinfrastructure and to provide for other special purposes.Highway Safety Cluster Includes awards that assist cities in providing a coordinated nationalhighway safety program to reduce traffic accidents, death, injuries and property damage. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10% de minimums indirect cost rate for the fiscal year endedSeptember 30, 2022. Grant monies received and disbursed by the City are for specific purposes and are subject to review by the grantor agencies. Such audits may result in requests for reimbursement due to disallowed expenditures. Based upon prior experience, management does not believe that such disallowance, if any, would have a material effect on the financial position of the City. As of September 30, 2022, there were no material questioned or disallowed costs as a result of grant audits in process or completed.
Title: NONCASH ASSISTANCE Accounting Policies: BASIS OF PRESENTATIONThe SEFA summarizes the federal expenditures of the City of Ozark, (the City) under programs of thefederal government for the year ended September 30, 2022. The amounts reported as federalexpenditures were obtained from the Citys general ledger. Because the SEFA presents only a selectedportion of the operations of the City, it is not intended to and does not present the financial positionand changes in net position of the City.For purposes of the SEFA, federal awards include all grants, contracts, and similar agreementsentered into directly with the federal government and other pass through entities. The City hasobtained Assistance Listing (AL) numbers to ensure that all programs have been identified in the SEFA.AL numbers have been appropriately listed by applicable programs. Federal programs with differentAL numbers that are closely related because they share common compliance requirements aredefined as a cluster by the Uniform Guidance. Three clusters are identified in the SEFA is thefollowing:Child Nutrition Cluster Includes awards that assist states in administering food services that providehealthful, nutritious meals to eligible children in public and nonprofit private schools, residentialchild care institutions and summer recreation programs; and encourages the domestic consumptionof nutritious agricultural commodities.Highway Planning and Construction Cluster Includes awards that assist states, tribal governmentsand Federal land management agencies in the planning and development of an integrated,interconnected transportation system important to interstate commerce and travel by constructing,rehabilitating and preserving the National Highway System, including Interstate highways and otherFederalaid highways, provide aid for report of Federalaid highways following disasters, foster safehighway design and improve bridge conditions, to support communitylevel transportationinfrastructure and to provide for other special purposes.Highway Safety Cluster Includes awards that assist cities in providing a coordinated nationalhighway safety program to reduce traffic accidents, death, injuries and property damage. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10% de minimums indirect cost rate for the fiscal year endedSeptember 30, 2022. The City did not receive any federal noncash assistance for the fiscal year ended September 30, 2022.
Title: SUBRECIPIENTS Accounting Policies: BASIS OF PRESENTATIONThe SEFA summarizes the federal expenditures of the City of Ozark, (the City) under programs of thefederal government for the year ended September 30, 2022. The amounts reported as federalexpenditures were obtained from the Citys general ledger. Because the SEFA presents only a selectedportion of the operations of the City, it is not intended to and does not present the financial positionand changes in net position of the City.For purposes of the SEFA, federal awards include all grants, contracts, and similar agreementsentered into directly with the federal government and other pass through entities. The City hasobtained Assistance Listing (AL) numbers to ensure that all programs have been identified in the SEFA.AL numbers have been appropriately listed by applicable programs. Federal programs with differentAL numbers that are closely related because they share common compliance requirements aredefined as a cluster by the Uniform Guidance. Three clusters are identified in the SEFA is thefollowing:Child Nutrition Cluster Includes awards that assist states in administering food services that providehealthful, nutritious meals to eligible children in public and nonprofit private schools, residentialchild care institutions and summer recreation programs; and encourages the domestic consumptionof nutritious agricultural commodities.Highway Planning and Construction Cluster Includes awards that assist states, tribal governmentsand Federal land management agencies in the planning and development of an integrated,interconnected transportation system important to interstate commerce and travel by constructing,rehabilitating and preserving the National Highway System, including Interstate highways and otherFederalaid highways, provide aid for report of Federalaid highways following disasters, foster safehighway design and improve bridge conditions, to support communitylevel transportationinfrastructure and to provide for other special purposes.Highway Safety Cluster Includes awards that assist cities in providing a coordinated nationalhighway safety program to reduce traffic accidents, death, injuries and property damage. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10% de minimums indirect cost rate for the fiscal year endedSeptember 30, 2022. The City did not provide federal funds to subrecipients for the fiscal year ending September 30, 2022.
Title: LOANS AND LOAN GUARANTEES Accounting Policies: BASIS OF PRESENTATIONThe SEFA summarizes the federal expenditures of the City of Ozark, (the City) under programs of thefederal government for the year ended September 30, 2022. The amounts reported as federalexpenditures were obtained from the Citys general ledger. Because the SEFA presents only a selectedportion of the operations of the City, it is not intended to and does not present the financial positionand changes in net position of the City.For purposes of the SEFA, federal awards include all grants, contracts, and similar agreementsentered into directly with the federal government and other pass through entities. The City hasobtained Assistance Listing (AL) numbers to ensure that all programs have been identified in the SEFA.AL numbers have been appropriately listed by applicable programs. Federal programs with differentAL numbers that are closely related because they share common compliance requirements aredefined as a cluster by the Uniform Guidance. Three clusters are identified in the SEFA is thefollowing:Child Nutrition Cluster Includes awards that assist states in administering food services that providehealthful, nutritious meals to eligible children in public and nonprofit private schools, residentialchild care institutions and summer recreation programs; and encourages the domestic consumptionof nutritious agricultural commodities.Highway Planning and Construction Cluster Includes awards that assist states, tribal governmentsand Federal land management agencies in the planning and development of an integrated,interconnected transportation system important to interstate commerce and travel by constructing,rehabilitating and preserving the National Highway System, including Interstate highways and otherFederalaid highways, provide aid for report of Federalaid highways following disasters, foster safehighway design and improve bridge conditions, to support communitylevel transportationinfrastructure and to provide for other special purposes.Highway Safety Cluster Includes awards that assist cities in providing a coordinated nationalhighway safety program to reduce traffic accidents, death, injuries and property damage. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10% de minimums indirect cost rate for the fiscal year endedSeptember 30, 2022. The City did not have any loans or loan guarantee programs required to be reported on the schedule for the fiscal year ended September 30, 2022.
Title: FEDERALLY FUNDED INSURANCE Accounting Policies: BASIS OF PRESENTATIONThe SEFA summarizes the federal expenditures of the City of Ozark, (the City) under programs of thefederal government for the year ended September 30, 2022. The amounts reported as federalexpenditures were obtained from the Citys general ledger. Because the SEFA presents only a selectedportion of the operations of the City, it is not intended to and does not present the financial positionand changes in net position of the City.For purposes of the SEFA, federal awards include all grants, contracts, and similar agreementsentered into directly with the federal government and other pass through entities. The City hasobtained Assistance Listing (AL) numbers to ensure that all programs have been identified in the SEFA.AL numbers have been appropriately listed by applicable programs. Federal programs with differentAL numbers that are closely related because they share common compliance requirements aredefined as a cluster by the Uniform Guidance. Three clusters are identified in the SEFA is thefollowing:Child Nutrition Cluster Includes awards that assist states in administering food services that providehealthful, nutritious meals to eligible children in public and nonprofit private schools, residentialchild care institutions and summer recreation programs; and encourages the domestic consumptionof nutritious agricultural commodities.Highway Planning and Construction Cluster Includes awards that assist states, tribal governmentsand Federal land management agencies in the planning and development of an integrated,interconnected transportation system important to interstate commerce and travel by constructing,rehabilitating and preserving the National Highway System, including Interstate highways and otherFederalaid highways, provide aid for report of Federalaid highways following disasters, foster safehighway design and improve bridge conditions, to support communitylevel transportationinfrastructure and to provide for other special purposes.Highway Safety Cluster Includes awards that assist cities in providing a coordinated nationalhighway safety program to reduce traffic accidents, death, injuries and property damage. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10% de minimums indirect cost rate for the fiscal year endedSeptember 30, 2022. The City did not have any federally funded insurance required to be reported on the SEFA for the fiscal year ending September 30, 2022.

Finding Details

Item 2022-005 ? Suspension and Debarment Coronavirus State and Local Fiscal Recovery Funds ? ALN # 21.027 U.S. Department of Treasury Passed through the State of Alabama Federal Award Year - 2022 Criteria ? 2 CFR 200.303 requires the non-Federal entity to ?(a) establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal statutes, regulations, and the terms and conditions of the Federal award.? Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include those procurement contracts for goods and services awarded under a nonprocurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All nonprocurement transactions entered into by a recipient (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. Condition ? Adequate controls were not in place to provide for proper review of covered transactions for suspension and debarment. Covered transactions, over $25,000 paid with grant funding were not reviewed for suspension and debarment. Cause ? The City lacked sufficient controls to ensure evidence of compliance with suspension and debarment. Questioned Costs ? Not determinable Effect ? Failure to properly verify that a potential vendor has not been suspended or debarred could result in unallowable expenditures and disallowed costs. Recommendation ? We recommend that controls should be put into place to better monitor and document the compliance of vendors for suspension and debarment. Management?s Response ? The City will implement additional controls to ensure there is evidence of review of covered transactions over $25,000 for suspension and debarment prior to payment. City?s Financial Officer will be responsible for the corrective action and anticipates completion of corrective action will be taken before September 30, 2023.
Item 2022-005 ? Suspension and Debarment Coronavirus State and Local Fiscal Recovery Funds ? ALN # 21.027 U.S. Department of Treasury Passed through the State of Alabama Federal Award Year - 2022 Criteria ? 2 CFR 200.303 requires the non-Federal entity to ?(a) establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal statutes, regulations, and the terms and conditions of the Federal award.? Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include those procurement contracts for goods and services awarded under a nonprocurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All nonprocurement transactions entered into by a recipient (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. Condition ? Adequate controls were not in place to provide for proper review of covered transactions for suspension and debarment. Covered transactions, over $25,000 paid with grant funding were not reviewed for suspension and debarment. Cause ? The City lacked sufficient controls to ensure evidence of compliance with suspension and debarment. Questioned Costs ? Not determinable Effect ? Failure to properly verify that a potential vendor has not been suspended or debarred could result in unallowable expenditures and disallowed costs. Recommendation ? We recommend that controls should be put into place to better monitor and document the compliance of vendors for suspension and debarment. Management?s Response ? The City will implement additional controls to ensure there is evidence of review of covered transactions over $25,000 for suspension and debarment prior to payment. City?s Financial Officer will be responsible for the corrective action and anticipates completion of corrective action will be taken before September 30, 2023.