Finding 1143435 (2024-002)

Reporting MATERIAL WEAKNESS Condition: Controls in place did not provide for the accuracy of the Project and Expenditure (P&E) reports submitted annually. Annual reports are not being prepared using the defined reporting period, in addition to other errors in the information reported. As a result, expenditure amounts reported were not accurate per Department’s Annual Project and Expenditure Report Timeline. Criteria: Effective controls over grants ensures allowable grant expenses are accurately captured and documented to support reporting requirements. Internal worksheets and other documents prepared for annual reporting should be reviewed for accuracy, prior to preparation and submission. Cause: The City lacked adequate procedures over the preparation and review of the P&E reports. Effect: The City prepared and submitted the annual P&E reports for 2025 and 2024 for the calendar year ending December 31, 2024 and 2023, versus the required 12 months ending March 31st. This resulted in inaccurate totals for the reporting period. For the 12 months ended March 31, 2024, the P&E reports current expenditures were under-reported by $47,388 and should have been $793,388 for the period April 1, 2023 to March 31, 2024. For the 12 months ended March 31, 2025. The P&E report’s current expenditures were under-reported by $933,692 and should have been $6,725,932 for the period April 1, 2024 to March 31, 2025. Other identified errors included not accurately reporting the City’s total federal awards expended for the most recent fiscal year on both the 2025 and 2024 P&E reports. Project status and description was not updated for current period activity. Recommendation: Management should continue to evaluate procedures for preparing and reviewing grant reports prior to submission to Department of Treasury. Procedures should include verifying grant period reporting requirements, reconciling report information to general ledger activity, and additional oversight and monitoring over submission of reports. Grantee’s Response: Management concurs. The City will continue to evaluate their controls with respect to current federal awards and requirements to ensure accurate information captured and reported.