Finding Text
Reference Number
2024-007 – Delays in Financial Reporting
Evaluation of Finding
Material Weakness and Noncompliance
Criteria
Management is responsible for providing timely and accurate financial information. Because the City has expended over $750,000 in federal awards, Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance), requires
non-federal entities to submit their financial statements and single audit reports to the Federal Audit Clearinghouse (FAC) within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period.
Condition
The City did not submit its financial statements and single audit reports to the FAC within the required timeframe for the fiscal year ended June 30, 2024. The financial statements and single audit reports were submitted after the deadline of March 31, 2025.
Cause of Condition
The City has experienced turnover in key personnel in the City’s finance department in the past year. Absent robust accounting policies and procedures, when vacancies occur, information can be lost and as individuals are getting up to speed, some processes may not be fully executed if they are manual and not fully embedded into an automated system. This turnover has resulted in delayed audit completion.
Effect or Potential Effect of Condition
The late submission of the financial statements and single audit reports impairs the ability of the federal awarding agencies and pass-through entities to monitor the City’s compliance with federal requirements and to make informed decisions regarding the continuation or modification of federal awards. The late submission also results in noncompliance with the Uniform Guidance, and increases the risk of fraud, waste, and abuse of federal funds.
Context
The City’s financial statements and single audit reports are used by the federal awarding agencies and pass-through entities to assess the non-federal entity's financial condition, internal controls, and compliance with federal requirements. Before the 2024 fiscal year, the City regularly presented the Single Audit Reporting Package on time as mandated.
Repeat Finding
No.
Recommendation
The Finance Department should look at increasing the amount of experienced finance staff to help facilitate
year-end closing procedures and the preparation of its basic financial statements. Because the basic financial statements are the responsibility of the City, it is in its best interest to closely monitor the accounting process to ensure that financial position and operating results are accurately and timely reported.
Management Response
Management agrees with the finding. The City has filled all of its vacant positions in Accounting and anticipates a timely completion of the 2024/25 Audit.
Reference Number
2024-007 – Delays in Financial Reporting
Material Weakness and Noncompliance
Assistance Listing Number: All Federal Programs reported on the SEFA
Criteria
Refer to finding 2024-007 in section II above.
Condition
Refer to finding 2024-007 in section II above.
Cause of Condition
Refer to finding 2024-007 in section II above.
Effect or Potential Effect of Condition
Refer to finding 2024-007 in section II above.
Questioned costs
None.
Context
Refer to finding 2024-007 in section II above.
Repeat Finding
Refer to finding 2024-007 in section II above.
Recommendation
Refer to finding 2024-007 in section II above.
Management Response
Refer to finding 2024-007 in section II above.