Finding 1094598 (2023-004)

Criteria: 2 CFR Part 200 requires that nonfederal entities establish and maintain effective internal control over federal awards to provide reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the specific award. The financial management system of each nonfederal entity must provide accurate, current, and complete disclosure of the financial results of each federal award in accordance with grant requirements. Condition: During our testing of the City’s compliance with the reporting requirements of the Coronavirus State and Local Fiscal Recovery Fund Program (CSLFRF), we noted that the required annual Project and Expenditure Report, due on April 30, 2023, was not submitted by the City until September 1, 2023. Cause: The City’s internal controls over compliance were not sufficiently designed to prevent noncompliance with the terms of the CSLFRF grant. Effect: The City did not meet the reporting requirement of the CSLFRF grant because the required annual report was not filed timely. Recommendation: We recommend the City design controls to ensure an adequate process is in place to submit the required reports for federal grants by the deadlines set forth by the federal government. Auditee’s Response: We concur with the finding. We will take the necessary steps to ensure that the reporting requirement of the CSLFRF grant will be submitted on time to prevent noncompliance with the terms of the CSLFRF grant.