Finding 1160189 (2024-015)

Material Weakness Repeat Finding
Requirement
C
Questioned Costs
$1
Year
2024
Accepted
2025-10-08
Audit: 370560
Organization: Town of Jonesboro (LA)

AI Summary

  • Core Issue: The Town delayed payments to the engineer and contractor after receiving federal funds, violating cash management requirements.
  • Impacted Requirements: Compliance with Uniform Guidance, which mandates minimizing the time between receiving and disbursing federal funds.
  • Recommended Follow-Up: Establish clear procedures and timelines for disbursement, and provide training for staff on cash management compliance.

Finding Text

2024-015 Noncompliance with Cash Management Requirements Grantor Environmental Protection Agency – Assistance Listing 66.458 Clear Water State Revolving Fund Passed through Louisiana Department of Environmental Quality – Number CS-221732.01 Grant Period – Year ended June 30, 2024 First reported 2024 Type Material Weakness, Noncompliance Condition The Town allowed an excessive number of days to lapse between the receipt of federal funds and the subsequent payment to the engineer and contractor. This delay in disbursement is not in compliance with the cash management requirements. During the year ended June 30, 2024, the Town received funds three times as follows: Criteria According to the Uniform Guidance, nonfederal entities must minimize the time elapsing between the transfer of funds from the U.S. Treasury or pass-through entity and the disbursement by the nonfederal entity for direct program or project costs and the proportionate share of allowable indirect costs. Cause The Town did not have adequate procedures in place to ensure timely disbursement of federal funds upon receipt. Effect The delay in disbursement could result in inefficient use of federal funds and potential noncompliance with federal cash management requirements, which may lead to financial penalties or interest liabilities. Questioned Costs $311,159 Recommendation It is recommended that the Town develop and implement procedures to ensure that federal funds are disbursed promptly upon receipt. This may include setting specific timelines for processing payments and monitoring compliance with these timelines. Additionally, training should be provided to staff responsible for cash management to ensure understanding and adherence to these requirements. Management Response See management’s corrective action plan.

Corrective Action Plan

The Town of Jonesboro respectfully disagrees with this finding as presented. While the audit notes delays between the receipt of federal funds and their disbursement, the Town asserts that it is not responsible for managing or operating the federal financial system that governs the authorization, disbursement, or scheduling of funds related to the referenced grant. The Louisiana Department of Environmental Quality (LDEQ) and other relevant governmental entities manage the disbursement platform used for this grant, and Town personnel do not have direct administrative control over its structure or scheduling capabilities. Furthermore, Town staff have not received adequate training or guidance from state or federal administrators regarding the procedural requirements or compliance timelines for the Clear Water State Revolving Fund (CWSRF) program. Despite these limitations, the Town remains fully committed to compliance with federal cash management standards and the Uniform Guidance (2 CFR § 200.305), which requires recipients to minimize the time elapsing between the receipt and disbursement of federal funds. To that end, the Town will take the following corrective actions: 1. Formal Communication with Program Administrators: The Town will engage the appropriate contacts at the Louisiana Department of Environmental Quality and relevant federal partners to clarify disbursement protocols, timelines, and responsibilities under the CWSRF program. 2. Staff Training and Coordination: The Town will coordinate with the LDEQ and/or EPA to request or arrange formal training for municipal staff involved in the administration of federal grant funds, with a focus on cash management and financial compliance procedures. 3. Procedure Development: Following training and clarification from the funding agencies, the Town will develop internal procedures and documentation protocols to ensure that federal funds are disbursed as promptly as administratively possible upon receipt. The Town of Jonesboro affirms its commitment to fiscal transparency, accountability, and compliance with all applicable state and federal grant management requirements. We look forward to working collaboratively with our state and federal partners to improve administrative performance in all future program years.

Categories

Questioned Costs Subrecipient Monitoring Cash Management Material Weakness

Other Findings in this Audit

  • 1160188 2024-014
    Material Weakness Repeat
  • 1160190 2024-016
    Material Weakness Repeat
  • 1160191 2024-017
    Material Weakness Repeat
  • 1160192 2024-018
    Material Weakness Repeat
  • 1160193 2024-019
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
66.458 Clean Water State Revolving Fund $304,399
21.027 Coronavirus State and Local Fiscal Recovery Funds $105,671
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $47,047
20.106 Airport Improvement Program, Infrastructure Investment and Jobs Act Programs, and Covid-19 Airports Programs $25,761
90.200 Delta Regional Authority $23,060