Finding Text
Finding 2023-003: Grant Reporting, Reconciliation, and Monitoring
Condition: During audit fieldwork, we noted that the City does not reconcile grants throughout the fiscal
year, thus requiring many journal entries to properly adjust revenues and record grant accruals and
deferrals at year-end.
Criteria: A good system of internal controls would provide for accurate representation of grant activity for
all City accounts prior to audit fieldwork.
Cause: Year-end preparation of grant lead sheets and detailed schedules were required to be completed by
the auditors to correctly and accurately reflect the City’s grant activity for the fiscal year.
Effect: The City’s financial statements were not correctly reconciled and adjusted prior to fieldwork as a
result of the unreconciled grant activity.
Recommendation: A vital process of effective internal controls is to review grant activity throughout the
fiscal year and adjust as necessary for any receivables that are outstanding and to include any payable for
invoices incurred during the year but paid after fiscal year end in order to properly state the City’s grant
expenditures and revenue activity for the fiscal year.
Corrective Action Plan: We recommend that the City Comptroller’s Office and the Treasurer’s Office act
together as a central location for grant activity. As it stands currently, each department is responsible for
the grant application, authorization, and reporting of grant activity. This has led to a breakdown in
communication between the departments and the Treasurer and Comptroller’s Offices, where information
was recorded to the ledger, but reconciliations were not being performed throughout the year to properly
display the City’s grant expenditure and revenue activity. While Departments may manage their own
grants, it is important that a consistent reconciliation is completed monthly and is reviewed by the
Comptroller and Treasurer’s Office for use in preparation of monthly and year-end financial statements.