Finding 1227276 (2023-001)

Material Weakness Repeat Finding
Requirement
ABI
Questioned Costs
-
Year
2023
Accepted
2026-08-18
Audit: 409376
Organization: COLTON CITY HALL (SD)

AI Summary

  • Core Issue: Internal control deficiencies were found in the CSLFRF program, affecting the accuracy of financial records.
  • Impacted Requirements: Errors included a missing check in the accounting software and double recording of federal receipts, leading to revenue overstatement.
  • Recommended Follow-Up: Review and strengthen internal controls to ensure accurate recording and reporting of financial activities.

Finding Text

Condition: During testing of the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) program, deficiencies in internal controls over the recording and review of grant-related financial activity were identified. Specifically: • One check covering two vouchers totaling $251,125.52 was properly associated with project costs on the cost ledger; however, it was not recorded in the accounting software/general ledger and was not included in the check register. • Federal reimbursement receipts totaling $347,823.27 were recorded twice in the general ledger, once in the Sewer Fund and again in the General Fund, resulting in an overstatement of federal revenue. The underlying project costs and reimbursements were otherwise identifiable and supported. Based on the procedures performed, these errors were financial reporting errors only and did not result in identified noncompliance with the applicable federal award requirements for Activities Allowed or Unallowed, Allowable Costs/Cost Principles, or Procurement, Suspension, and Debarment.

Corrective Action Plan

The City of Colton Mayor is the contact person responsible for the corrective action plan for this finding. Due to the size of the City of Colton, the municipality is unable to financially support additional staffing necessary to segregate duties in accordance with ideal internal control standards. The Mayor, City Council, and Finance Oficer are aware of these limitations and have been working on policies and controls that will help minimize future lapses. This will continue to be an ongoing process with future change of council members as the Council President is currently in place to review funding records and bank reconciliation reports.

Categories

Procurement, Suspension & Debarment Allowable Costs / Cost Principles

Programs in Audit

ALN Program Name Expenditures
21.027 CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS $1.03M