Finding Text
Single Audit Process Criteria – Under 2 CFR §§200.508 and 200.510, the City is responsible for preparing a complete and accurate Schedule of Expenditures of Federal Awards (SEFA). Under 2 CFR §200.501, a nonfederal entity that expends $1,000,000 or more in federal awards during its fiscal year must obtain a single audit or program-specific audit. Condition – The City did not maintain a complete listing of federal awards expended during the year ended June 30, 2026. As a result, the initial information provided for the audit did not accurately identify total federal expenditures. Cause – The City had not established a formal process to identify and track expenditures by federal award throughout the year or to reconcile those expenditures to its accounting records when preparing the SEFA. Effect – Without a complete and accurate record of federal expenditures, the City may not identify its single audit requirement on a timely basis, and federal programs may be omitted or misstated on the SEFA. No questioned costs were identified as a result of this finding. Recommendation – The City should establish procedures to identify each federal award, record its Assistance Listing number and award information, and track related expenditures throughout the year. At year-end, the City should reconcile those records to its accounting records, prepare the SEFA, and determine whether the single audit threshold has been met before audit planning begins. Response and Corrective Action Planned – The City will work on a formal process for tracking all federal grants. Conclusion – Response accepted.