The City acknowledges the internal control deficiencies related to the tracking, recording, and monitoring of grant receivables, related revenue and deferred revenue, and the timely preparation of reimbursement requests for federal and state grants. Management recognizes that the current process, wh...
The City acknowledges the internal control deficiencies related to the tracking, recording, and monitoring of grant receivables, related revenue and deferred revenue, and the timely preparation of reimbursement requests for federal and state grants. Management recognizes that the current process, which relies heavily on individual departments to initiate reimbursement activity, has resulted in delays and incomplete financial reporting. To address the issue, the City will implement the following corrective actions: 1. Centralized Grant Monitoring Process: The Accounting Department will assume responsibility for proactively identifying and recording grant receivables and associated revenue and deferred revenue at the time expenditures are incurred. This process will no longer be dependent solely on departmental requests for reimbursement. 2. Quarterly Review and Reconciliation: A new quarterly grant monitoring schedule will be established. As part of this process, the Accounting Department will review expenditure reports for all active grants, estimate receivable amounts, and ensure timely recognition of revenue in accordance with applicable accounting standards. 3. Formal Documentation and Workflow Procedures: The City will develop written procedures detailing the steps for monitoring grant expenditures, estimating receivables, reconciling recorded amounts to actual reimbursement submissions, and communicating with grant managing departments. 4. Departmental Training: The City will provide training to staff involved in grant management to ensure all departments understand the updated process and the importance of timely expenditure reporting. These corrective actions will strengthen internal controls, improve accuracy in financial reporting, and ensure compliance with federal grant reimbursement requirements. Anticipated Completion Date: Procedures will be drafted and implemented by June 30, 2026, with quarterly monitoring beginning immediately thereafter. Views of Responsible Officials: The City concurs with the auditors’ findings and recommendations.