Finding Text
2 CFR 1000.10 provides that, except for the deviations set forth elsewhere in this Part, the Department of Treasury adopts the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards set forth at 2 CFR part 200. 2 CFR 200.302(b)(2) further states, in part, the financial management system of each non-Federal entity must provide for accurate, current, and complete disclosures of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. 31 CFR § 35.4(c) requires, in part, that during the period of performance, recipients shall provide periodic reports providing detailed accounting of the uses of funds. Additionally, the U.S. Department of the Treasury Coronavirus Local Fiscal Recovery Fund (SLFRF) Award Terms and Conditions, Section 3, provides that "Recipient agrees to comply with any reporting obligations established by Treasury as they relate to this award." The U.S. Department of the Treasury requires non-entitlement unit’s (NEU’s) that are allocated less than $10 million in SLRF Funding to submit an annual Project and Expenditure Report. This report is required to include project descriptions, obligations and expenditures including current period obligation, cumulative obligation, current period expenditure, and cumulative expenditure, and other information. Due to deficiencies in the City's internal controls over SLFRF reporting, the City understated current period obligations by $82,787 in the annual project and expenditure report for the period of April 1, 2024 to March 31, 2025. Additionally, the City overstated current period obligations by $1,399,323 and understated current period expenditures by $1,389,245 in the annual project and expenditure report for the period of April 1, 2025 to March 31, 2026. Failure to prepare and submit accurate reports for all required data elements, including obligation and expenditure amounts, could result in the Department of Treasury taking action against the City for failure to comply with programmatic requirements, such as eliminating or reducing future grant funding or imposing penalties. This noncompliance also resulted in the opinion over this major federal program being qualified. The City should establish and implement policies and procedures to review the reports prior to submission to ensure the reports are accurate, current and complete.