Finding 1140853 (2024-002)

2024-002 – Internal Controls Over Reporting Federal Agency: Department of Transportation Program Name: Port Infrastructure Development Program Assistance Listing Number: ALN 20.823 Pass-through Entity: N/A Grant Number: 693JF72245018 Criteria: Per 2 CFR 200.303, the recipient must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should align with the 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). Condition: When preparing one of the quarterly reports the City erroneously included costs in the current quarter’s expenditures that were already included in a previous quarter’s expenditure amounts. Cause: The City’s Engineering department is performing services related to the grant including program management, construction management, along with engineering services. As a result, payroll costs are allocated to the grant. When preparing one of the Quarterly Progress Reports the wrong time range was used which resulted in duplication of some of the payroll expenditures. Effect: One of the Quarterly Progress Reports was over-stated. Cumulative expenditures on future Quarterly Progress Reports will be misstated. Questioned Costs: None. Identification of How Questioned Costs were Computed: N/A Perspective: Review of other quarterly reports submitted during the fiscal year did not result in any errors detected. Furthermore, review of the reimbursement requests did not reveal any errors which would have resulted in the City over or under-receiving federal reimbursements. When informed of the error, the City immediately reached out to the United States Department of Transportation Maritime Administration (MARAD) for guidance on how to proceeds with correcting the error. The City also reviewed, revised, and resubmitted any subsequent Quarterly Progress Reports that were impacted. Repeat Finding: No. Recommendation: Prior to submitting the Quarterly Progress Report a secondary review should be performed by someone other than the preparing to ensure the data properly reconciles to the City’s financial reporting system. Views of Responsible Officials: Management agrees with the finding.