Finding Text
Finding No. SA 2025-004 – Inaccurate and Unreconciled Reporting of Project and Expenditure Reports Federal Assistance Listing Number: 21.027 Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of Treasury Award Period: Fiscal year 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria: Pursuant to 2 CFR §200.1, internal controls for non Federal entities are defined as processes designed and implemented to provide reasonable assurance regarding the achievement of objectives in the following categories: (1) effectiveness and efficiency of operations, (2) reliability of reporting for internal and external use, and (3) compliance with applicable laws and regulations. The Accounting Manager is responsible for reviewing the completeness and accuracy of the quarterly Project and Expenditure Reports (PERs) submitted to the U.S. Department of the Treasury and ensuring that reported amounts agree with the City’s financial records, including the Schedule of Expenditures of Federal Awards (SEFA). Condition: During our review of the quarterly reports, we identified unreconciled differences totaling $1,865 between amounts reported on the Schedule of Expenditures of Federal Awards (SEFA) and the quarterly Project and Expenditure Reports submitted to the U.S. Department of the Treasury. Cause: Incorrect adjustments were recorded during the preparation of the quarterly reports, and reconciliation procedures were not sufficient to identify and resolve these differences prior to submission. Effect: The Project and Expenditure Reports submitted to the U.S. Department of the Treasury were not fully accurate or complete. Inaccurate reporting may result in noncompliance with federal requirements and could lead to fines, penalties, or the suspension or termination of federal awards. Questioned Costs: $1,865 Repeat finding: No Recommendation: We recommend that the City enhance review and reconciliation procedures over the preparation of Project and Expenditure Reports to ensure amounts reported are accurate, complete, and fully reconciled to the City’s financial records, including the SEFA, prior to submission. Views of responsible officials and planned corrective actions: The Finance Staff will perform quarterly reconciliations of expenditures to ensure accurate reporting of amounts. Personnel responsible for implementation: Carmen Tsui, Grant Accountant Completion Date: June 30, 2026