Finding Text
Information on the federal program: Federal Agency: Department of the Treasury – Internal Controls Pass-Through Entity: N/A – Direct Grant Federal Program: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Assistance Listing Number: 21.027 Compliance Requirement: Reporting Audit Findings: Significant Deficiency Criteria: The US Department of Treasury’s Compliance and Reporting Guidance for State and Local Fiscal Recovery Funds requires NEUs allocated less than $10 million in SLFRF funding to submit annual project expenditure reports to be completed with the key line items: 1) Obligations and Expenditures 2) Subawards 3) Detailed information of any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the recipient that are greater than $50,000. For amounts less than $50,000, the recipient must report in the aggregate for these same categories of loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the recipient. Condition: The Town of North Liberty completed annual performance reporting. However, the report incorrectly classified a construction contractor a subrecipient of relief funding from the Town. Cause: The Town does not have an effective system of internal controls in place to effectively review CSLFRF reporting data prior to submission to the US Department of Treasury. Effect: Report contained incorrect information related to subrecipients. Questioned costs: There are no questioned costs. Context: During our testing procedures over CSLFRF reporting, we noted that segregation of duties is not present in the Federal reporting process. The Clerk Treasurer prepared and submitted the reports without a secondary review taking place. As a result, the report contained inaccurate information as it incorrectly identified a subrecipient. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that the Town implement a consistent multi-stage review process for federal data reports, which includes a proper segregation of duties. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.