Finding 1173817 (2024-002)

Material Weakness Repeat Finding
Requirement
L
Questioned Costs
-
Year
2024
Accepted
2026-02-17
Audit: 387479
Organization: City of Keene (NH)
Auditor: CBIZ CPAS PC

AI Summary

  • Core Issue: There is a significant deficiency in internal controls over compliance, specifically in the reporting process for federal funds.
  • Impacted Requirements: The City must ensure effective internal controls to prevent and detect noncompliance with federal program requirements.
  • Recommended Follow-Up: Implement formal policies for separation of duties, requiring a second individual to review reports before submission.

Finding Text

2024-002 Improve Controls Over Reporting (Significant Deficiency) Federal Agency: U.S. Department of the Treasury Program: Coronavirus State and Local Fiscal Recovery Funds (ARPA) AL Number: 21.027 Award Year: 2024 Type of Finding Internal Control over Compliance – Significant Deficiency Criteria Management of the City is responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context Reports required to be submitted to grantors do not have a separate preparer and reviewer. Cause Weaknesses in the design of internal controls. Effect or Potential Effect There are no questioned costs as a result of this finding as there are no costs directly associated with the finding. Recommendation The City should implement formal policies and procedures regarding separation of duties and the requirement of a second individual being involved in the reporting process. Views of Responsible Official and Planned Corrective Action Management’s views and Corrective Action Plan are included at the end of this report.

Corrective Action Plan

Corrective Action Plan - Finding 2024-002 Improve Controls Over Reporting Statement of Concurrence or Nonconcurrence We agree with the finding. Planned Corrective Action: The City will implement a formal grant verification process and assign roles and responsibilities which designates a primary staff responsible for preparing and submitting grant expenditure reports, as well as a secondary reviewer to verify submission and completeness. The designated report reviewer will review each grant expenditure report for accuracy, completeness, and compliance with grant requirements. Upon completion of the review, the reviewer will provide written confirmation via email stating that the report has been reviewed, is free of material inaccuracies, and is approved for submission. The confirmation email will be retained as part of the official grant file and will serve as evidence of review and authorization. Primary Responsibility: Senior Staff Accountant/Fund and Grants Manager Secondary Review: Department Representative (Department Head, Assistant Department Head, Engineer) Name of Contact Person: Kari Chamberlain, Finance Director/Treasurer Work phone: (603) 757-1877 Email: kchamberlain@keenenh.gov Anticipated Completion Date: March 31, 2026

Categories

Reporting Significant Deficiency Internal Control / Segregation of Duties

Programs in Audit

ALN Program Name Expenditures
15.916 OUTDOOR RECREATION ACQUISITION, DEVELOPMENT AND PLANNING $500,000
16.753 CONGRESSIONALLY RECOMMENDED AWARDS $415,000
21.026 HOMEOWNER ASSISTANCE FUND $224,185
20.205 HIGHWAY PLANNING AND CONSTRUCTION $131,233
20.939 SAFE STREETS AND ROADS FOR ALL $118,400
21.027 CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS $85,647
66.202 CONGRESSIONALLY MANDATED PROJECTS $77,639
20.106 AIRPORT IMPROVEMENT PROGRAM, INFRASTRUCTURE INVESTMENT AND JOBS ACT PROGRAMS, AND COVID-19 AIRPORTS PROGRAMS $46,499
66.468 DRINKING WATER STATE REVOLVING FUND $18,410
20.600 STATE AND COMMUNITY HIGHWAY SAFETY $8,546
21.016 EQUITABLE SHARING $6,851
14.228 COMMUNITY DEVELOPMENT BLOCK GRANTS/STATE'S PROGRAM AND NON-ENTITLEMENT GRANTS IN HAWAII $5,299
15.904 HISTORIC PRESERVATION FUND GRANTS-IN-AID $4,000
97.067 HOMELAND SECURITY GRANT PROGRAM $2,743
97.044 ASSISTANCE TO FIREFIGHTERS GRANT $1,537
16.738 EDWARD BYRNE MEMORIAL JUSTICE ASSISTANCE GRANT PROGRAM $1,499
16.607 BULLETPROOF VEST PARTNERSHIP PROGRAM $900