Finding 10837 (2022-006)

Material Weakness Repeat Finding
Requirement
GL
Questioned Costs
-
Year
2022
Accepted
2024-01-30
Audit: 14498
Organization: City of Santa Fe (NM)

AI Summary

  • Core Issue: The City submitted 9 financial reports without proper approval from the Airport Manager and lacked supporting documentation for 3 of them.
  • Impacted Requirements: The City failed to meet internal control standards as outlined in federal regulations, which require effective management of federal awards.
  • Recommended Follow-Up: Implement stronger review processes to ensure all financial reports are approved and backed by necessary documentation before submission.

Finding Text

2022-006 (originally 2021-009) – Matching and Financial Reporting (Material Weakness in Internal Controls over Compliance) (repeated/modified) Federal Program Information Federal Award Title and ALN: Airport Improvement Program, 20.106 Federal Awarding Agency: Department of Transportation, Federal Aviation Administration Federal Award ID Number: SAF-SWG-3-35-0037-052-2020; SAF-SWG-3-35-0037-053-2020; SAF-SWG-3-35-0037-054-2021 Federal Award Year: 2020, 2021 Condition: The City submitted 9 financial reports not approved by the Airport Manager and did not provide supporting backup documentation to test accuracy on 3 of the financial reports. Management’s Progress on Repeat Findings: The 2021 audit was completed in June of 2023. As such, the City was unable to take corrective action during fiscal year 2022 that would result in progress towards resolving this finding. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, non-federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entities is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per Title 2 US Code of Federal Regulations Part 200.508(d), the Auditee must provide the auditor with access to books, records, supporting documentation, and other information as needed for the auditor to perform the audit required by grant agreements and part 200.306(b), for all federal awards, any matching funds, must be accepted as part of the non-Federal entities matching when the following criteria is met (1) Are verifiable from the non-Federal entities records. Cause: The City did not have sufficient controls in place to review and approve reports ensuring accuracy of reports to the grantor agency. Questioned Cost: None Effect: Lack of proper review for accuracy of reports can result in improper reporting which could lead to disallowed costs. However, our audit disclosed no instances of unallowable costs.

Corrective Action Plan

Recommendation: We recommend the City strengthen the controls in place to provide assurance Federal Financial Reports are submitted accurately to the grantor agency and retain backup documentation to support amounts reported. Action Taken: The City agrees with this finding. In November 2022 the City hired a new Airport Manager with substantial experience managing municipal airports and federal funding for airports. Prior to the hire, the Airport Operations Manager was the acting Manager, but that position was vacated in FY23. In FY24 the Finance Director and the Grants Manager will continue to work with the Airport staff to implement controls and to provide assurance that Federal Financial Reports have adequate supporting documentation and are reviewed and approved prior to submission the grantor agency. Anticipated Completion Date: June 30, 2024 Responsible Official: Emily Oster-Finance Director, James Harries-Airport Manager, Cheryl James-Grants Manager

Categories

Matching / Level of Effort / Earmarking Allowable Costs / Cost Principles

Other Findings in this Audit

  • 10838 2022-007
    Material Weakness
  • 10839 2022-006
    Material Weakness Repeat
  • 10840 2022-007
    Material Weakness
  • 10841 2022-006
    Material Weakness Repeat
  • 10842 2022-007
    Material Weakness
  • 10843 2022-008
    Significant Deficiency
  • 587279 2022-006
    Material Weakness Repeat
  • 587280 2022-007
    Material Weakness
  • 587281 2022-006
    Material Weakness Repeat
  • 587282 2022-007
    Material Weakness
  • 587283 2022-006
    Material Weakness Repeat
  • 587284 2022-007
    Material Weakness
  • 587285 2022-008
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
20.106 Airport Improvement Program #52 $649,362
97.067 Homeland Security Grant Program $398,798
20.106 Airport Improvement Program #54 $392,629
14.218 Community Development Block Grants/entitlement Grants $299,484
20.505 Metropolitan Transportation Planning and State and Non-Metropolitan Planning and Research $267,514
20.106 Airport Improvement Program #53 $211,845
20.205 Highway Planning and Construction $176,895
93.053 Nutrition Services Incentive Program $109,484
93.045 Special Programs for the Aging_title Iii, Part C-1, Nutrition Services $96,279
93.788 Opioid Str $81,133
10.693 Watershed Restoration and Enhancement Agreement Authority $75,066
93.052 National Family Caregiver Support, Title Iii, Part E $74,432
93.044 Special Programs for the Aging_title Iii, Part B_grants for Supportive Services and Senior Centers $69,171
66.458 Capitalization Grants for Clean Water State Revolving Funds $62,936
20.703 Interagency Hazardous Materials Public Sector Training and Planning Grants $50,749
20.507 Federal Transit_formula Grants $45,230
94.002 Retired and Senior Volunteer Program $37,587
93.045 Special Programs for the Aging_title Iii, Part C-2, Nutrition Services $32,418
94.011 Foster Grandparent Program $32,326
20.608 Minimum Penalties for Repeat Offenders for Driving While Intoxicated $27,963
45.024 Promotion of the Arts_grants to Organizations and Individuals $15,000