Finding 1237645 (2025-002)

Finding 2025-002 Assistance Listing Number: 21.027 Federal Program Title: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Grantor: U.S. Department of Treasury Award No.: 1505-0271 Criteria: The Uniform Guidance requires that local entities receiving federal awards establish and maintain internal control designed to reasonably ensure compliance with laws, regulations and program compliance requirements. The Uniform Guidance further requires auditors to obtain an understanding of the local entity's internal control over federal programs. To minimize the risk of errors, internal controls should be in place for all program compliance requirements, including the approval of expenditures by a knowledgeable individual. Condition/Context: The annual Project and Expenditure report was selected for testing. This report was not reviewed by an independent person before submission of the report. This sample was not statistically valid. Cause: The City did not have internal control procedures in place requiring an independent person to review the report before submission to ensure the report was accurately submitted. Effect: Reports could contain errors due to the lack of review. Questioned Costs: None noted. Recommendation: The City should review its internal control procedures to ensure there is proper review and approval over completeness and accuracy of reports before submissions. Management's Response: The Controller will prepare the annual project and expenditure report and then provide the report to the Finance Director for review prior to submission.