Finding Text
Finding 2025-002 – Significant Deficiency and Noncompliance – Federal Policies Criteria: Per 2 CFR Part 200 (Uniform Guidance), non-federal entities expending federal awards must establish and maintain written policies and procedures that comply with federal requirements, including procurement, allowable costs, cash management, and internal controls. Condition: The City does not have documented federal policies that comply with Uniform Guidance requirements. Existing policies are either incomplete or do not address key compliance areas such as procurement standards, subrecipient monitoring, and allowable cost principles. Questioned Costs: None identified at this time; however, the absence of compliant policies increases the risk of noncompliance with federal award requirements and potential questioned costs in the future. Cause and Effect: Management has not developed or updated written policies to align with Uniform Guidance requirements, possibly due to resource constraints or lack of awareness of the updated federal standards. Without UG-compliant policies, the entity is at risk of noncompliance with federal award requirements, increased likelihood of improper expenditures, and potential disallowance of costs and repayment of federal funds Recommendation: Develop and implement written policies and procedures that fully comply with Uniform Guidance (2 CFR Part 200). Views of Responsible Officials: Management agrees with the finding Corrective Action Plan: See attached corrective action plan.