Finding Text
Federal Agency: Department of Homeland Security - Federal Emergency Management Agency (FEMA) Federal Program Name: Staffing for Adequate Fire and Emergency Response (SAFER) Assistance Listing Number: 97.083 Federal Award Identification Number and Year: EMW-2022-FF-00875 Award Period: 3/13/2024 – 3/12/2027 Compliance Requirements Affected: Allowable Activities/Costs, Cash Management and Reporting Type of Finding: Material Weakness in Internal Control Over Compliance Criteria or specific requirement: Uniform Guidance requires nonfederal entities to establish and maintain effective internal control over the federal award that provides reasonable assurance that the entity is managing the award in compliance with federal statutes, regulations, and terms and conditions, safeguards assets, and for preventing, detecting, and correcting noncompliance. Condition: The audit team was notified prior to the beginning of testwork that internal controls were not operating effectively, and as a result it was determined the internal controls were not properly implemented. Based on supporting documentation tested, no noncompliance was noted; however, the absence of effective internal controls resulted in a material weakness in internal control and an overstatement of expenditures reported in the SEFA of $74,928 to bring total reported expenditures through 6/30/2025 to the amount approved by FEMA. Questioned costs: None noted. Context: CliftonLarsonAllen LLP (CLA) was notified by the City prior to the beginning of testwork that internal controls were not designed effectively, and that documentation supporting effective implementation of internal control would therefore not be available. Evidence that internal controls are designed effectively and implemented should be appropriately documented and maintained to allow for review during the audit process. Cause: Costs related to firefighter salaries must fall under specific criteria to be considered eligible costs allowable for reimbursement under the terms of the SAFER Grant and Uniform Guidance. The Grant Administrator for the grant was not sufficiently familiar with the compliance requirements of the SAFER Grant or Uniform Guidance to effectively determine or document eligible versus ineligible costs allowable for reimbursement, or to maintain sufficient and appropriate documentation of that determination. Effect: The City notified FEMA of the situation upon discovery and subsequently reperformed and resubmitted determinations and findings, including amounts of unallowable costs included in each reimbursement request and payroll periods to which those unallowable costs belonged, receiving a determination that there was no fraud, waste, abuse, or mismanagement related to the grant. While there were no instances of noncompliance identified during the audit, when internal controls are not designed and implemented effectively it could lead to noncompliance within the program which could result in loss of funding or liability to reimburse federal funds. Repeat Finding: No Recommendation: The City should provide training for the grant administrator and/or include an additional review by individual that has been fully trained on the compliance requirements of the grant. The internal control process should include a formal way to document the review and approval of Fire Safety salary costs charged to the grant to provide evidence that internal controls are effectively designed and implemented and functioning in a timely manner throughout the year. Views of responsible officials: There is no disagreement with the audit finding.