Finding Text
2025-007 - Lack of Documented Federal Policies and Procedures Finding Type: Material weakness in internal control over compliance. Criteria: The Uniform Guidance (2 CFR 200.303) requires that non-Federal entities establish and maintain effective internal control over Federal awards to provide reasonable assurance that the awards are managed in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Federal internal control guidance also contemplates that such controls be documented and maintained. Condition: The City did not maintain documented policies and procedures over its Federal awards as of June 30, 2025. No formal documentation was available to evidence the design and implementation of internal controls over compliance. Cause: This condition is the result of the City’s lack of formal procedures to document and maintain internal controls over compliance for Federal awards. Effect: As a result of this condition, the City did not maintain adequate internal control over compliance to provide reasonable assurance that Federal awards were managed in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award. Recommendation: The City should establish, document, and implement formal policies and procedures over Federal awards to ensure compliance with Uniform Guidance requirements. Management Response: See Corrective Action Plan.