FAC Explorer

Finding 1227127 (2025-012)

Material Weakness Repeat Finding
Requirement
L
Questioned Costs
-
Year
2025
Accepted
2026-08-18
Audit: 409307
Organization: City of Manchester, Nh (NH)
Auditor: CLA

AI Summary

  • Core Issue: The City failed to keep adequate documentation to support reported amounts in quarterly Project and Expenditure Reports, leading to inaccuracies.
  • Impacted Requirements: Compliance with federal reporting requirements under the Coronavirus State and Local Fiscal Recovery Funds was not met, risking incomplete or inaccurate submissions.
  • Recommended Follow-Up: Implement stronger internal controls by creating written procedures for reconciling reported amounts to accounting records and retaining necessary documentation for each report.

Finding Text

Reference Number: Prior Year Finding: 2025-012 N/A Federal Agency: U.S. Department of Treasury Federal Program: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Number and Year: ARP17SL1(5/23/2021 - 12/31/2026) Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Non-federal entities are required to submit Financial and Performance Measure Reports in accordance with the terms and conditions of the Federal award. Recipients of Coronavirus State and Local Fiscal Recovery Funds are required to submit complete and accurate Project and Expenditure Reports in accordance with the terms and conditions of the Federal award and applicable U.S. Department of the Treasury reporting guidance. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The City did not retain sufficient point-in-time documentation to support amounts reported in the quarterly Project and Expenditure Reports. As a result, certain cumulative expenditure amounts reported to the U.S. Department of the Treasury could not be reconciled to the underlying Expenditure and Obligation data maintained by the City at the time the reports were prepared and submitted. Context: Two of four quarterly reports were selected for testing. For two of the two quarterly reports selected, seven project line items could not be tied to underlying Expenditure and Obligation data supporting the cumulative expenditure amounts reported. Because the City did not maintain a point-in-time reporting support package or other documentation showing how the reported amounts were derived, management was unable to provide sufficient audit evidence to support the accuracy and completeness of those reported line items. Cause: The City’s policies and procedures were not designed or operating effectively to ensure that quarterly reporting amounts were supported by retained documentation that agreed to the City’s underlying accounting records. In addition, the City did not maintain a formal review and reconciliation process requiring personnel to preserve the source reports, reconciliations, and approvals used to support cumulative expenditure line items prior to report submission. CITY OF MANCHESTER, NEW HAMPSHIRE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) YEAR ENDED JUNE 30, 2025 (29) Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Effect: The City was unable to demonstrate compliance with the Reporting requirement for the selected quarterly reports. Without retained support that ties reported cumulative expenditures to the underlying records, there is an increased risk that amounts reported to the U.S. Department of the Treasury may be inaccurate, incomplete, or not supported by sufficient audit evidence. Questioned costs: None. Recommendation: We recommend that the City strengthen its internal controls over Federal Financial reporting by developing and implementing written procedures requiring all cumulative expenditure line items reported in the Project and Expenditure Reports to be reconciled to underlying accounting records prior to submission. The procedures should also require retention of a point-in-time support package for each report, including the source reports, reconciliations, explanations for adjustments, evidence of supervisory review, and documentation of report certification. Views of Responsible Officials: There is no disagreement with the finding.

Corrective Action Plan

2025-012 Coronavirus State and Local Fiscal Recovery Funds - Assistance Listing Number 21.027 Recommendation: We recommend that the City strengthen its internal controls over Federal Financial reporting by developing and implementing written procedures requiring all cumulative expenditure line items reported in the Project and Expenditure Reports to be reconciled to underlying accounting records prior to submission. The procedures should also require retention of a point-in-time support package for each report, including the source reports, reconciliations, explanations for adjustments, evidence of supervisory review, and documentation of report certification. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding:  CIP identified this deficiency in FY26. Since then, the Financial Analyst now saves all Project Reports in relation to the Quarterly Report in the appropriate reconciliation files when completing a reconciliation. This process is being followed as reconciliations are being completed monthly and quarterly, and being signed off on by all appropriate individuals. Name(s) of the contact person(s) responsible for corrective action:  Chelcie Pinsonneault, Community Grants Manager Planned completion date for corrective action plan:  Planning and Community Development has already completed this corrective action.

Categories

Reporting Material Weakness Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 1227106 2025-007
    Material Weakness Repeat
  • 1227107 2025-008
    Material Weakness Repeat
  • 1227108 2025-009
    Material Weakness Repeat
  • 1227109 2025-009
    Material Weakness Repeat
  • 1227110 2025-009
    Material Weakness Repeat
  • 1227111 2025-009
    Material Weakness Repeat
  • 1227112 2025-009
    Material Weakness Repeat
  • 1227113 2025-009
    Material Weakness Repeat
  • 1227114 2025-009
    Material Weakness Repeat
  • 1227115 2025-009
    Material Weakness Repeat
  • 1227116 2025-009
    Material Weakness Repeat
  • 1227117 2025-009
    Material Weakness Repeat
  • 1227118 2025-009
    Material Weakness Repeat
  • 1227119 2025-009
    Material Weakness Repeat
  • 1227120 2025-009
    Material Weakness Repeat
  • 1227121 2025-010
    Material Weakness Repeat
  • 1227122 2025-011
    Material Weakness Repeat
  • 1227123 2025-012
    Material Weakness Repeat
  • 1227124 2025-013
    Material Weakness Repeat
  • 1227125 2025-010
    Material Weakness Repeat
  • 1227126 2025-011
    Material Weakness Repeat
  • 1227128 2025-013
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.239 HOME INVESTMENT PARTNERSHIPS PROGRAM $2.63M
93.224 HEALTH CENTER PROGRAM $1.82M
14.905 LEAD HAZARD REDUCTION DEMONSTRATION GRANT PROGRAM $1.80M
14.218 COMMUNITY DEVELOPMENT BLOCK GRANTS/ENTITLEMENT GRANTS $1.32M
20.933 NATIONAL INFRASTRUCTURE INVESTMENTS $1.01M
10.727 INFLATION REDUCTION ACT URBAN & COMMUNITY FORESTRY PROGRAM $516,063
14.913 HEALTHY HOMES PRODUCTION PROGRAM $416,078
21.027 CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS $370,515
97.083 STAFFING FOR ADEQUATE FIRE AND EMERGENCY RESPONSE (SAFER) $349,709
93.069 PUBLIC HEALTH EMERGENCY PREPAREDNESS $277,315
66.458 CLEAN WATER STATE REVOLVING FUND $227,334
16.738 EDWARD BYRNE MEMORIAL JUSTICE ASSISTANCE GRANT PROGRAM $218,088
93.354 PUBLIC HEALTH EMERGENCY RESPONSE: COOPERATIVE AGREEMENT FOR EMERGENCY RESPONSE: PUBLIC HEALTH CRISIS RESPONSE $191,940
16.922 EQUITABLE SHARING PROGRAM $184,027
20.930 PAYMENTS FOR SMALL COMMUNITY AIR SERVICE DEVELOPMENT $182,366
93.959 BLOCK GRANTS FOR PREVENTION AND TREATMENT OF SUBSTANCE ABUSE $169,830
16.839 STOP SCHOOL VIOLENCE $165,350
93.994 MATERNAL AND CHILD HEALTH SERVICES BLOCK GRANT TO THE STATES $161,963
93.940 HIV PREVENTION AND SURVEILLANCE ACTIVITIES-HEALTH DEPARTMENT BASED $114,560
93.268 IMMUNIZATION COOPERATIVE AGREEMENTS $103,506
16.588 VIOLENCE AGAINST WOMEN FORMULA GRANTS $91,212
20.106 AIRPORT IMPROVEMENT PROGRAM, INFRASTRUCTURE INVESTMENT AND JOBS ACT PROGRAMS, AND COVID-19 AIRPORTS PROGRAMS $84,815
93.366 STATE ACTIONS TO IMPROVE ORAL HEALTH OUTCOMES AND PARTNER ACTIONS TO IMPROVE ORAL HEALTH OUTCOMES $77,612
93.421 STRENGTHENING PUBLIC HEALTH SYSTEMS AND SERVICES THROUGH NATIONAL PARTNERSHIPS TO IMPROVE AND PROTECT THE NATION€™S HEALTH $63,320
20.941 STRENGTHENING MOBILITY AND REVOLUTIONIZING TRANSPORTATION (SMART) GRANTS PROGRAM $58,228
16.751 EDWARD BYRNE MEMORIAL COMPETITIVE GRANT PROGRAM $55,444
93.889 NATIONAL BIOTERRORISM HOSPITAL PREPAREDNESS PROGRAM $52,116
93.197 CHILDHOOD LEAD POISONING PREVENTION PROJECTS, STATE AND LOCAL CHILDHOOD LEAD POISONING PREVENTION AND SURVEILLANCE OF BLOOD LEAD LEVELS IN CHILDREN $41,029
21.016 EQUITABLE SHARING $37,486
14.251 ECONOMIC DEVELOPMENT INITIATIVE, COMMUNITY PROJECT FUNDING, AND MISCELLANEOUS GRANTS $30,027
16.609 PROJECT SAFE NEIGHBORHOODS $27,958
16.753 CONGRESSIONALLY RECOMMENDED AWARDS $26,640
66.468 DRINKING WATER STATE REVOLVING FUND $25,000
93.526 GRANTS FOR CAPITAL DEVELOPMENT IN HEALTH CENTERS $17,065
93.005 Project Grants for Health Status of Minority Populations $16,933
20.205 HIGHWAY PLANNING AND CONSTRUCTION $12,238
93.103 FOOD AND DRUG ADMINISTRATION RESEARCH $8,701
93.991 PREVENTIVE HEALTH AND HEALTH SERVICES BLOCK GRANT $5,115
16.034 CORONAVIRUS EMERGENCY SUPPLEMENTAL FUNDING PROGRAM $1,563
11.307 ECONOMIC ADJUSTMENT ASSISTANCE $500