Finding 1215197 (2025-006)

Material Weakness Repeat Finding

Requirement

Questioned Costs

Year

2025

Accepted

2026-05-20

Audit: 401866

Organization: City Of Wakefield (MI)

Auditor: GABRIDGE & CO PLC

AI Summary

Core Issue: The City failed to prepare a complete and accurate Schedule of Expenditures of Federal Awards (SEFA) for the fiscal year ended June 30, 2025.
Impacted Requirements: This finding indicates a material weakness in internal controls over compliance with Uniform Guidance (2 CFR 200.302 and 2 CFR 200.510(b)).
Recommended Follow-Up: The City should establish procedures to effectively identify, track, and report Federal awards and expenditures to ensure compliance with reporting requirements.

Finding Text

2025-006 - Preparation of the Schedule of Expenditures of Federal Awards Finding Type: Material weakness in internal control over compliance. Criteria: The Uniform Guidance (2 CFR 200.302 and 2 CFR 200.510(b)) requires that non-Federal entities maintain records that adequately identify the source and application of Federal awards and prepare a Schedule of Expenditures of Federal Awards (SEFA) that is complete and accurate. Condition: The City did not prepare a Schedule of Expenditures of Federal Awards (SEFA) for the fiscal year ended June 30, 2025. A complete and accurate SEFA was prepared by the external auditor during the audit process. Cause: This condition is the result of the City’s lack of procedures and internal controls to identify, track, and report Federal award activity necessary to prepare the SEFA. Effect: As a result of this condition, the City did not maintain adequate internal control over compliance related to Federal reporting requirements and was not able to ensure that all Federal expenditures were identified and reported in accordance with Uniform Guidance. Recommendation: The City should implement procedures to identify and track Federal awards and expenditures and prepare a complete and accurate SEFA in accordance with Uniform Guidance requirements. Management Response: See Corrective Action Plan.

Corrective Action Plan

The City acknowledges the finding. The City will continue strengthening procedures to identify, track, reconcile, and report federal award activity throughout the fiscal year. Procedures will include maintaining documentation sufficient to identify the federal agency/ program, Assistance Listing number, award identifiers, expenditures, loan balances where applicable, subrecipient information, and required SEFA disclosures and notes. Management will also maintain centralized tracking records for federal award activity to support timely preparation of future SEFAs.

Other Findings in this Audit

1215182 2025-006

Material Weakness Repeat
1215183 2025-007

Material Weakness Repeat
1215184 2025-008

Material Weakness Repeat
1215185 2025-006

Material Weakness Repeat
1215186 2025-007

Material Weakness Repeat
1215187 2025-008

Material Weakness Repeat
1215188 2025-006

Material Weakness Repeat
1215189 2025-007

Material Weakness Repeat
1215190 2025-008

Material Weakness Repeat
1215191 2025-006

Material Weakness Repeat
1215192 2025-007

Material Weakness Repeat
1215193 2025-008

Material Weakness Repeat
1215194 2025-006

Material Weakness Repeat
1215195 2025-007

Material Weakness Repeat
1215196 2025-008

Material Weakness Repeat
1215198 2025-007

Material Weakness Repeat
1215199 2025-008

Material Weakness Repeat

Programs in Audit

ALN	Program Name	Expenditures
10.760	WATER AND WASTE DISPOSAL SYSTEMS FOR RURAL COMMUNITIES	$377,000
66.468	DRINKING WATER STATE REVOLVING FUND	$336,000
21.027	CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS	$4,000