Finding Text
Finding Number: 2024-001
Repeat Finding: No
Program Name/Assistance Listing Title: Formula Grants for Rural Areas and Tribal Transit
Program
Assistance Listing Number: 20.509
Federal Agency: Arizona Department of Transportation
Federal Award Number: GRT-22-0008862-T
Pass-Through Agency: Arizona Department of Transportation
Questioned Costs: N/A
Type of Finding: Noncompliance, Material Weakness
Compliance Requirement: Other
Criteria
Management is responsible for establishing and maintaining internal controls over its accounting
records. Further, in accordance with 2 CFR 200.510, the entity is responsible for the design and
implementation of controls over the preparation of the Schedule of Expenditures of Federal
Awards (SEFA) each fiscal year. Additionally, 2 CFR 200.303 requires the entity to establish and
maintain internal control over the federal awards that provides reasonable assurance that the
entity is managing the federal awards in compliance with federal statutes, regulations, and the
terms and conditions of federal awards.
Condition
YCIPTA was awarded a match for the purchase of a new bus. YCIPTA did not follow federal
regulations regarding federal revenue transactions to ensure all activities were properly recorded
and processed.
Cause
YCIPTA has not implemented sufficient controls over accounting transactions.
Effect
YCIPTA was not in compliance with federal regulations and guidelines. The transaction was
unique and not part of the normal federal program operations. It was not known that the
transaction was subject to Single Audit. Audit adjustments were required to properly reflect the
activity.
Context
YCIPTA received a federal match for the purchase of a new bus. The following errors were noted
in the recording of the bus:
A bus valued at $120,488 was not recorded in the general ledger.
The corresponding depreciation expense (and accumulated depreciation) of $20,081 was
not recorded in the general ledger.
Capital outlay of $12,753 was recorded in error in the general ledger
Federal revenue of $107,735 for the match was not recorded in the general ledger or on
the SEFA for the fiscal year.
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation
YCIPTA should improve internal controls and adhere to federal regulations. All applicable
transactions and activity should be included in the SEFA for the fiscal year in which the
expenditures occurred.
Views of Responsible Officials
See Corrective Action Plan.