Finding Text
Criteria: Per the Single Audit Act and terms of the grant agreement, an annual audit is required if the City expended $750,000 or more in Federal financial assistance per fiscal year. The audit prepared by an independent licensed Certified Public Accountant or a State or Federal auditor, if allowed by the State, must be submitted within 9 months of the City’s fiscal year end.
Condition: For the fiscal year ending December 31, 2022, the City did not submit an annual single audit report within nine months of year-end.
Cause: Changing guidance from the awarding agency as to when FEMA expenditures are required to be reported on the schedule of federal awards has caused confusion as to when they should be reported. Initially, it was understood that they should be reported when they were both incurred, and when the Project Worksheets were approved. Subsequent guidelines by FEMA stated that the expenditures should be reported when the funds have been obligated and incurred.
Effect: Non-compliance with the Single Audit Act and agreement provisions could result in a delay in the single audit.
Questioned Costs: None noted
Recommendation: The City should work with the granting agency to clarify reporting requirements under the Single Audit when unique guidance is provided.
Management Response: The City reviewed the updated guidelines for FEMA projects and worked with its auditors and Wisconsin Emergency Management to clarify the reporting requirements and timeline. When it was determined that FEMA expenditures should be reported once the projects were obligated and costs incurred, the City proceeded to prepare and submit a 2022 single audit.