Finding Text
Federal Program - COVID-19 Coronavirus State and Local Fiscal Recovery Funds (AL #21.027); Activities Allowed/Unallowed and Allowable Costs/Cost Principles; Cash Management; Criteria - 2 CFR Part 200, Subpart E (Cost Principles), expenses charged to federal awards should be free of improper payments, including payments that should have been made or that were made in incorrect amounts (including overpayments and underpayments). Furthermore, reimbursement requests need to be for allowable expenses incurred. Condition - The City overpaid a contractor $124,367 because the contractor had an error in the "Pay Estimate." The construction project has several different funding sources, and this draw was 60% State and 40% Federal. The City submitted and received reimbursement of $74,621 from the State and $49,746 from the Coronavirus State and Local Fiscal Recovery Funds program (Al. #21.027). Questioned Costs - $49,746; Context - In 2023, the total amount paid to contractors for construction was $3,254,540. During our reconciliation of the 2023 construction expenses of $3,254,540 to the amount eligible on the "Pay Estimate," we identified an overpayment of $124,367. Cause - Management Oversight. Effect - The error occurred in the first half of the construction project and all parties were notified of the error in 2024. Repeat Finding - No. Recommendation - The City should contact the Contractor to determine if the amount that was overpaid will be refunded or adjusted on the next "Pay Estimate." The City will also need to contact the Grantor to determine if the reimbursed dollars should be returned or adjusted on the next draw. To mitigate the risk of overpayment in the future, the City should reconcile construction payments to the "Pay Estimates." View of Responsible Officials - The City agrees with the recommendation and will implement December 1, 2024.