Finding Text
3. Federal Award Findings and Questioned Costs
Significant Deficiency, Nonmaterial Non-Compliance Reporting
U.S. Department of Treasury
Program name: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds
AL Number: 21.027
Finding 2024-004
Criteria: In accordance with 2 CFR 200, management should have an adequate system of internal
control procedures in place to ensure that federal funds expended are properly reported to grantor.
According to Part 2: Reporting Requirements of the U.S. Department of Treasury Compliance and
Reporting Guidance for State and Local Fiscal Recovery Funds, expenditures that are charged to the
program should be adequately reported.
Condition: Incurred expenditures were incorrectly reported at total budgeted costs for the program,
instead of actual expenditures incurred for reporting period. Payroll system generated expenditures
could not be verified. We noted three instances where an employees’ calculated pay could not be
substantiated.
Context: The annual report submitted incorrectly reported expenditures.
Effect: Expenditures incurred were reported incorrectly.
Cause: An error was made and the City reported expenditures incorrectly. City internal control
procedures did not catch the reporting error.
Identification of a Repeat Finding: This is a modified, repeat finding from the immediate previous
audit, 2023-006.
Questioned Costs: The City reported incorrect expenditures. Reporting will be updated with the next
report on or before the due date. This finding represents an internal control issue; therefore,
questioned costs are not applicable.
Recommendation: The City’s reporting should be reviewed and approved by management prior to
submission to ensure accuracy of information.
Name of Contact Person: Jared Pyles, Finance Director
Views of Responsible Officials and Planned Corrective Actions: The City agrees with this finding
and will adhere to the Corrective Action Plan in this audit report.