CORRECTIVE ACTION PLANS Oversight Agency for Audit: U.S. Department of the Treasury The City of Haverhill, Massachusetts respectfully submits the following corrective action plans for the year ended June 30, 2024. Name and address of the independent public accounting firm: CBIZ CPAs P.C. 9 Executive...
CORRECTIVE ACTION PLANS Oversight Agency for Audit: U.S. Department of the Treasury The City of Haverhill, Massachusetts respectfully submits the following corrective action plans for the year ended June 30, 2024. Name and address of the independent public accounting firm: CBIZ CPAs P.C. 9 Executive Park Drive, Suite 100 Merrimack, NH 03054 Audit Period: July 1, 2023, through June 30, 2024 The findings from the June 30, 2024, schedule of findings and responses are discussed below. The findings are numbered consistently with the number assigned in the schedule. Finding 2024-003: Improve Controls and Documentation Over Reporting Federal Program Information Federal Agency: U.S. Department of the Treasury Award Name(s): Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number(s): 21.027 Award Year: 2024 Compliance Requirement: Reporting Type of Finding: Compliance Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement: Per 2 CFR 200.303, the City is required to establish and maintain effective internal controls over Federal awards that provide reasonable assurance of compliance with Federal statutes, regulations, and the terms and conditions of the award. SLFRF program guidance requires project and expenditure reports to be submitted by the required deadlines, and reported expenditures must be supported by underlying accounting records. Since the City is a Metropolitan City with a population below 250,000 residents that was allocated more than $10.0 million in funding, the City is required to submit a project and expenditure report 30 days after the end of each quarter. Condition and Context: During our audit, we tested a sample of two quarterly reports to determine that they were submitted timely and were supported by underlying documentation. As a result of our testing, it was identified that the City did not submit the quarterly SLFRF project and expenditure report for the quarter ended 3/31/2024 by the required deadline of 4/30/2024. Furthermore, current period and cumulative expenditures reported for the quarters ended 9/30/2023 and 3/31/2024 did not agree to the amounts recorded in the City’s general ledger. The City did not provide the auditor with documentation to support the discrepancies. Cause: The City did not have adequate controls in place to ensure timely submission of required reports or reconciliation of current period and cumulative reported expenditures to the general ledger prior to submission. Effect or Potential Effect: Due to the weakness in internal controls and compliance finding noted above, the City did not comply with the requirements of the Uniform Guidance and SLFRF program regarding timely and accurate reporting of quarterly project and expenditure reports. No questioned costs are reported as expenditures were tested for allowability during the audit, however, reporting inaccuracies were noted. Recommendation: The City should enhance internal controls over the reporting process for SLFRF funds, including timely preparation and submission of the reports and reconciliation of reported expenditures to the general ledger prior to report submission. Views of Responsible Official: the report was submitted at 11:13 AM Eastern Standard Time on May 1, 2024. The reason for the 11-hour delay was that the city was collaborating with its ARPA consultants to resolve a reporting discrepancy prior to submitting the report to Treasury. The finding further states that, “current period and cumulative expenditures reported for the quarters ended 9/30/23 and 3/31/24 did not agree with the amounts recorded in the City’s general ledger. The city did not provide the auditor with documentation to support the discrepancies.” The City acknowledges the discrepancies in reporting found in these two reports. It has been determined that the City’s ARPA Project Manager inadvertently submitted invoices to the City’s ARPA consultants that were either outside the reporting period or included costs that were split between ARPA projects and other capital project funds. The ARPA Project Manager was terminated for performance-related issues in April 2025. Moving forward, the city’s auditing office, rather than the ARPA Project Manager, will reconcile the general ledger with ARPA consultants before submitting the quarterly report. Contrary to the audit finding, these discrepancies were communicated to the auditor in multiple emails in June 2025.