Finding 1057111 (2023-001)

Assistance Listing Number: 21.027 – Coronavirus State and Local Fiscal Recovery Funds Compliance Requirement: Reporting Type of Finding: Noncompliance and Internal Control Criteria: Program requirements state that recipients must submit a Project and Expenditure Report on an annual basis, which includes key line items. The Department of Treasury has identified current period expenditures as a key line item that contains critical information in the report. Condition: For the year ended December 31, 2023, current period expenditures reported on the Project and Expenditure Report did not match amounts reported in the Schedule of Expenditures of Federal Awards. Cause: The general ledger included non-federal expenditures which were incorrectly reported on the Project and Expenditure Report. Questioned Costs: None Context: The Project and Expenditure Report included approximately $970,000 of non-federal expenditures. On May 2, 2024, the City contacted the Department of Treasury to edit the report, however, the Department of Treasury indicated the report could not be re-opened after the reporting deadline passed. The Department of Treasury instructed the City to make any necessary adjustments in the next reporting period since the Project and Expenditure Report includes cumulative expenditures under the program. Effect: Expenditures, a key line item on the Project and Expenditure Report, were overstated. Recommendation: The City should separately track expenditures of the Coronavirus State and Local Fiscal Recovery Funds federal program in the general ledger. We also recommend that the Project and Expenditure Report be reviewed by someone other than the preparer prior to submission. Views of Responsible Official: The City will make any necessary adjustments in the next reporting period since the Project and Expenditure Report includes cumulative expenditures under the program. The Finance Director and Assistant Finance Director will both review the Project and Expenditure Report.