Finding Text
Finding: The City has insufficient procedures over the process for identifying federal expenditures for reporting on the City’s Schedule of Expenditures of Federal Awards.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Subpart F 200.510 states, “the audit must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements. The schedule must include the total Federal awards expended as determined in accordance with section 200.502.”
Condition: Hazard Mitigation Grant Program expenditures of approximately $1.1 million were omitted from the Schedule of Expenditures of Federal Awards presented for the audit.
Cause: Reimbursement for expenditures made under the federal grant had not yet been requested. The City prepared the Schedule of Expenditures of Federal Awards based on receipts rather than expenditures incurred. The expenditures are not coded to be specifically identified as federal.
Effect: The Schedule of Expenditures of Federal Awards presented for the audit was misstated.
Context: Federal expenditures of approximately $1.1 million were not included on the Schedule of Expenditures of Federal Awards presented for the audit.
Identification as a repeat finding: This is not a repeat finding.
Recommendation: We recommend the City determine a process to identify federal expenditures for reporting including those not yet reimbursed by the grantor. We recommend the City submit reimbursement requests to grantors on a timely basis.
Response and Corrective Action Plan: The City will review current processes and realign duties and processes to improve internal controls within the identification of federal award expenditures.