Corrective Action Plan
Financial Statement Finding: 2021-004 Noncompliance with Uniform Guidance Late Filing of Single Audit Reporting Package
Criteria: Under the Single Audit Act of 1996 and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principl...
Corrective Action Plan
Financial Statement Finding: 2021-004 Noncompliance with Uniform Guidance Late Filing of Single Audit Reporting Package
Criteria: Under the Single Audit Act of 1996 and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), §200.512, Report Submission, the Single audit reporting package is required to be filed within the earlier of 30 calendar days after receipt of the auditors' report, or 9 months after the end of the audit period.
Cause/Condition: The City experienced significant turnover within key positions of the Finance and Administration departments, which has caused delays in financial reporting. This deadline was not met on a timely basis for the year ended December 31, 2021.
Effect: The entity is not incompliance with §200.512 of the Uniform Guidance.
Recommendation: We recommend the requirements of §200.512 of the Uniform guidance be adhered to by striving to have all information required for the audit available on a timely basis. This will help to ensure timely audit report issuance and compliance with the filing deadline.
Questioned Costs: None.
Context: This year's Single Audit reporting package was filed on September 28, 2023, approximately 12 months after the required filing date. This compares with the prior year, when the Single audit reporting package was filed on November 22, 2021, approximately 2 months after the required filing date.
Response: The City experienced substantial turnover in 2021 including the departure of both the Finance Director and Deputy Director, followed by additional retirements over the next fiscal year. With the multiple vacancies and limited succession planning, it made it challenging for new staff to meet the demands of current operations with vacancies and learn prior practices and financial systems in order to prepare timely information for the auditor. Prior practices relied heavily on institutional knowledge, year-end adjustments and audit journal entries to identify federal grant expenditures. In addition, there remains a lack of centralized grant and contract awards which contributed to the lack of detailed tracking of information and timely reporting of information requested by the auditor, in order to complete financial statements for submission deadlines outlined in Uniform Guidance, §200.512.
Corrective Action Plan: Management strives to complete timelier year-end close and audit preparation. This will only be successful as Management updates practices to prepare month-end close tasks instead of waiting until post-end of fiscal year to close and reconcile the system of record. The goal will be to utilize a three-month) accrual period for 2023 (end of March 31, 2024 and utilize the month of April to prepare for pre-audit field work. The City has had a difficult time closing the year prior by April or May which inevitably delays the timing of the audit engagement. Closing months and the year sooner, with more accuracy, will allow the City engage the contracted auditor earlier and ensure timely reporting of financial information to Common Council and the public. Many of this issues will continue to exist for 2023’s audit as additional vacancies occurred and full staffing is not anticipated on or after October 2023. Management will draft and implement a year-end purchasing schedule to ensure there is sufficient time for Finance staff to appropriately close out the year.
Anticipated Completed Date: April 15, 2024.
Responsible Contact Person:
Lisa Henty, Director of Administration & Finance
City of Cortland, 25 Court Street, Cortland, NY 13045
(607) 758-8373