Finding Text
Finding Reference: 2025-002 Type of Finding: Material Noncompliance Reporting and Material Weakness Responsible Official: Finance Director Condition: Preliminary Financial reports and programs financial information was prepared by external consultant and were available on June 3, 2025, to prepare the Single Audit Reporting Package. Criteria: 2 CFR part 75.512, the Uniform Guidance established the audit must be completed nine months after the end of audit period and the Single Audit Reporting package and Data Collection Form (SF-SAC) Federal Audit Clearing House, must be submitted within the earlier 30 calendar days after receipt of the auditor’s report, or nine months after the end audit period, whichever comes first. Cause: Control procedures were not established to provide on time finance information to prepare the Single Audit reporting package. Effect: The Municipality did not comply with the submission date required for the Data Collection Form and Reporting Package; this could affect the continuance and new approvals of federal funds. In addition, for the next two (2) fiscal years the Municipality cannot be considered by the auditor as a low-risk auditee. Questioned Cost: $0.00 (None) Recommendation: To prepare a calendar responsibility of Federal funds due dates financial statements to be prepared on time. Adequate training must be provided to finance personnel. The governing body must create an Audit and Finance Committee to revise monthly financial statements. Management response: The Municipality acknowledges the finding regarding the late submission of the Single Audit reporting package to the Federal Audit Clearinghouse. This delay was the direct result of extraordinary and unforeseeable circumstances. Midway through the engagement, the lead auditor unexpectedly passed away. This tragic event disrupted the audit process and necessitated the immediate termination and procurement process to engage a new independent public accounting firm to complete the Single Audit. Selecting, contracting, and onboarding the new audit firm alongside and re-evaluating financial documentation created a significant administrative and operational delay beyond the control of management. Municipal management remains fully committed to regulatory compliance and timely financial reporting. The engagement with the new audit firm is now fully operational, and the audit completion process is actively underway. Management has implemented internal monitoring controls and timeline tracking to ensure that all future Single Audit packages are completed and submitted to the Federal Audit Clearinghouse within the prescribed federal deadlines.