Finding 1160387 (2023-001)

Material Weakness Repeat Finding
Requirement
I
Questioned Costs
-
Year
2023
Accepted
2025-10-14
Audit: 370803
Organization: Municipality of Madison (SD)

AI Summary

  • Answer: The Municipality lacked a written procurement policy, leading to inadequate internal controls.
  • Trend: This absence resulted in federal funds being spent without proper contractor selection and competition processes.
  • List: Follow up by developing a written procurement policy to ensure compliance with federal requirements and prevent conflicts of interest.

Finding Text

The Municipality did not have adequate internal controls, specifically including a written procurement policy in place during the audit period. As a result, federal funds were expended without documented procedures to guide the appropriate selection of contractors, competition requirements, or adequate safeguards against conflicts of interest required under federal award programs.

Corrective Action Plan

The City of Madison will finalize and adopt a formal, written procurement policy that complies with the Uniform Guidance (2CFR 200.318) and ensures consistency with federal, state, and local requirements. The plan will include: Procurement Policy Development: Implementation of a comprehensive written policy covering competitive bidding, conflict of interest standards, and documentation requirements. Staff Training: Provide training for all personnel responsible for federal award administration to ensure understanding and compliance with procurement and internal control expectations. Monitoring and Review: Establish a periodic review process to evaluate procurement practices and ensure ongoing compliance with federal regulations.

Categories

Procurement, Suspension & Debarment Internal Control / Segregation of Duties

Programs in Audit

ALN Program Name Expenditures
21.027 Coronavirus State and Local Fiscal Recovery Funds $2.38M
10.760 Water and Waste Disposal Systems for Rural Communities $1.98M
84.425 Education Stabilization Fund $50,703
20.106 Airport Improvement Program, Infrastructure Investment and Jobs Act Programs, and Covid-19 Airports Programs $45,000
21.019 Coronavirus Relief Fund $26,553
97.039 Hazard Mitigation Grant $11,284
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $6,256
20.600 State and Community Highway Safety $2,091
39.003 Donation of Federal Surplus Personal Property $1,120