Finding Text
Federal Program Information:
Federal Assistance Listing Number: 21.027
Federal Program Name: Coronavirus State and Local Fiscal
Recovery Funds (CSLFRF)
Federal Agency: U.S. Department of Treasury
Federal Award Number: None
Federal Award Year: March 3, 2021 to December 31, 2024
Criteria:
2 CFR 200.328, Financial Reporting, emphasizes the importance of submitting performance and
financial reports that are complete, accurate, and consistent with the accounting records.
Specifically:
Financial data must be derived from and consistent with the recipient's accounting
records.
Reports must include all financial information in accordance with federal
requirements.
Additionally, 2 CFR 200.303, Internal Controls, mandates the implementation of effective internal
controls, including proper segregation of duties, to maintain financial integrity and ensure
compliance with federal regulations.
Condition:
The City's Annual Project and Expenditure Report (P&E) did not properly report federal
expenditures for fiscal year 2023, as it does not align with the City's accounting records.
Specifically, $98,428 in eligible fiscal year 2024 expenditures were incorrectly reported as fiscal
year 2023 expenditures. While this amount is considered an eligible cost under the program, it
was not reported properly in the correct accounting and reporting period. Additionally, the lack
of segregation of duties, where the same personnel handled both preparation and review, raises
concerns about internal control deficiencies and the risk of reporting errors.
Questioned Cost:
None.
Cause and Effect:
The City Council authorized federal expenditures for the CSLFRF project as a lump sum,
resulting in the reporting of all eligible expenditures in a single reporting period, rather than
aligning them with the appropriate fiscal year. Additionally, since CSLFRF was newly established
in response to COVID-19 in 2021, the City had limited experience with managing and reporting
such grants. The lack of prior exposure, coupled with an insufficient number of qualified staff,
contributed to inaccuracies in financial reporting and deficiencies in internal controls.
Recommendation:
To ensure compliance with federal reporting requirements and strengthen internal controls, the
City should:
1. Establish a reconciliation procedure to ensure all reported expenditures in the Annual Project
and Expenditure Report (P&E) align with the City's accounting records.
2. Implement a structured review process that requires independent verification of financial
reports. Assign separate personnel for the preparation and review of reports to address
concerns regarding segregation of duties.
3. Conduct regular training sessions for finance and grant management staff to improve
understanding of federal grant reporting requirements and best practices, ensuring the
accuracy of future submissions.
Views of Responsible Personnel and Corrective Action Plan:
Management has instructed the department managers involved with grants to work with the
Finance Director and Senior Accountant for all future grant accounting and reporting to ensure
that grant expenditures are properly recorded and reported in the correct period. The Senior
Accountant will complete GFOA’s Generally Accepted Accounting Principles for Grants in
August 2026. As of the date of this letter, Management is working to identify other grants-related
training appropriate for the Senior Accountant, the Utility Manager, and the Director of
Development Services and Capital Projects, all of whom are involved in grant proposals,
management, expenditures, accounting and required reporting. Meetings with all three
department managers will be scheduled to coordinate administration and deadlines for the City’s
new and existing grants as grant reporting deadlines occur.
Responsible Personnel Name and Position: Jill Taura, Interim Finance Director
Expected Implementation Date of Corrective Action Plan: Fiscal year 2026