Finding 1224340 (2024-010)

2024-010 - Quarterly Project and Expenditure Reports Finding Type. Immaterial Noncompliance/Significant Deficiency in Internal Control over Compliance (Reporting). Program. Coronavirus State and Local Fiscal Recovery Funds (CLSFRF); U.S. Department of Treasury; Assistance Listing Number 21.027; Direct award only. Criteria. CSLFRF direct recipientsare required to submit quarterly project and expenditure reports for each calendar quarter. Condition. Although the City did prepare all of the quarterly reports required for fiscal year 2025, we noted that while the City had supporting reports from the accounting system for the amounts reported, there were several inconsistencies between the supporing reports and the report submitted. In addition, there were large variances between what was reported quarterly and what was posted to the general ledger and ulimately the schedule of expenditures of federal awards. Lastly, our testing of AP expenditures noted two items of cost, out of 40 tested, that did not appear to be related to approved projects noted in the quarterly reporting. The items were allowable costs for the CSLFRF grant, but the reports were not updated to reflect the inclusion. Cause. The City does not have the proper internal controls in place to ensure that all required reporting is accurate and complete. Effect. The City is exposed to an increased risk that future noncompliance could occur and not be prevented or detected by the City's internal controls. Questioned Costs. No costs were required to be questioned as a result of this finding inasmuch as our tests of transactions did not indicate any unallowable costs. Recommendation. We recommend that the City implement necessary internal controls to ensure that all reporting of financial data is supported by the City's accounting records. View of Responsible Officials. The City will implement the necessary internal controls to ensure the policy for compliance is followed and documented.