Finding Text
Criteria: Management is responsible for the internal controls that address the assertions related to financial reporting and compliance requirements related to the City’s federal award programs. Management is responsible for designing and implementing a system of internal controls which include written policies and procedures for how various accounting transaction reporting will be performed and documented for federal award programs. Condition: Although the City appears to have a system of internal controls for federal award programs in place, the City does not have written policies and procedures that outline how accounting and transaction reporting will be performed and documented for federal award programs. This is a requirement of the Uniform Guidance. Cause: Due to the small size of the City, a complex system of internal controls for federal award programs has not appeared necessary. This has resulted in management not taking the time to document written policies and procedures over federal award programs. Effect: This situation could allow noncompliance with the Uniform Guidance and federal regulations to occur. Perspective: While we consider this finding to be a significant deficiency, we do not perceive it to negatively impact the audit opinions issued. This is a systemic problem caused by a lack of experience within the City related to the Uniform Guidance. The City is actively working to remedy the situation. Recommendation: We recommend that the City implement written policies and procedures over federal award programs. Response: The City acknowledges this situation and agrees that this recommendation would help strengthen internal controls. The Board of Trustees is working to implement written policies and procedures over federal award programs.