Finding 1222664 (2025-003)

Department of Treasury, Passed through South Dakota Department of Agriculture and Natural Resources Federal Financial Assistance Listing No. 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Reporting Material Weakness in Internal Control over Compliance Criteria – A good system of internal accounting control contemplates an adequate system for ensuring that all reports are completed accurately and reviewed appropriately. Condition – During the course of our engagement, we noted that the annual project and expenditure report submitted during the year ended December 31, 2025, was not reviewed prior to submission and had amounts reported that did not agree to the general ledger system of the City. Cause – The City’s internal control procedures were not designed or operating effectively to require an independent review and reconciliation of the annual project and expenditure report to the City’s general ledger before submission. The amounts reported during 2025 were adjusted to correct cumulative project expenditure differences identified in the prior-year audit. Effect – The control deficiency could result in the City’s project and expenditure report not being completed accurately. Questioned Costs – None reported Context/Sampling – The entirety of the annual reporting requirement was tested. Repeat Finding from Prior Years – Yes, prior year finding 2024-003. Recommendation – Management should put procedures in place to ensure that the annual project and expenditure is reviewed for accuracy prior to submission. Views of Responsible officials – There is no disagreement with the audit finding.