Finding 1153516 (2024-007)

2024-007 Improve Internal Controls Over Reporting Federal Program(s) Information Federal Agency: Department of Justice Award Name: Public Safety Partnership and Community Policing Grants Assistance Listing Number: 16.710 Award Year: 2024 Compliance Requirement: Reporting Type of Finding Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement 2 CFR 200.303 requires non-Federal entities to establish and maintain effective internal controls over Federal awards to provide reasonable assurance of compliance with Federal statutes, regulations, and the terms and conditions of the award. Effective internal control includes appropriate segregation of duties to prevent and detect errors and irregularities in financial reporting, including the preparation and review of Federal Financial Reports (such as the SF-425). Condition and Context During our testing of two quarterly SF-425 Federal Financial Reports submitted under the Public Safety Partnership and Community Policing Grants program, we noted that although the amounts reported agreed to the general ledger, there was no segregation of duties between the individual who prepared the reports and the individual responsible for review and approval prior to submission. The same individual performed both preparation and submission duties without a documented independent review. Cause The City did not establish adequate internal control procedures to ensure that reports under the program are subject to independent review and approval prior to submission. Effect or Potential Effect The lack of segregation of duties increases the risk that errors or misstatements in the reports could go undetected. No questioned costs are reported as the requirement is procedural in nature. Recommendation The City should implement procedures to ensure appropriate segregation of duties in the preparation and review of all Federal reports. The process should include a documented, independent review and approval of reports prior to their submission to ensure accuracy and compliance with grant requirements. Views of Responsible Official Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.