Finding 1148796 (2024-001)

Criteria: According to Uniform Guidance 2 CFR 200.303, the non-federal entity must establish and maintain effective internal controls over compliance for federal awards to provide reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition: As allowed under program requirements, the City determined its’ eligible actual revenue for the calendar year December 31, 2023. The calendar year approach has been consistently used since calendar year 2020. The amount of actual revenue for the calendar year ended December 31, 2023, was $900,087,916; however, when completing the Project & Expenditure Report for the calendar year ended December 31, 2023, the City only reported actual revenue of $795,459,017. The difference in calculation did not impact amounts claimed as lost revenue. Cause: The deficiency was a result of a misinterpretation of program requirements when reporting the amount of actual revenue on the Project & Expenditure report. The City should have reported the actual revenue used in the revenue loss calculation but only reported the General Fund portion of the actual revenue. Effect: Incorrect reporting can effect the administration of the program by the grantor. Questioned Costs: None. Context: The program instruction were misinterpreted. The revenues spanned multiple funds rather than just the general fund which led to the inaccurate reporting regarding this specific award. Recommendation: We recommend that the City enhance their internal controls over the requirements of this program to ensure those preparing and reviewing the reports have the appropriate understanding and information needed to ensure completeness and accuracy of information being reported.