Finding Text
Finding 2022-001 Reporting ? Internal Control and Compliance over Reporting Identification of the Federal Program: Assistance Listing Number: 20.106 Assistance Listing Title: Airport Improvement Program Federal Agency: U.S. Department of Transportation Federal Award Identification Number: 3-06-0181-056-2019, 3-06-0181-057-2019, 3-06-0181-058-2020 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Recipients must use the standard financial reporting forms or such other forms as may be authorized by OMB hen reporting to the federal awarding agency. Each recipient must report program outlays and program income on a cash or accrual basis, as prescribed by the federal awarding agency. The federal awarding agency may accept identical information from the recipient in machine-readable format, computer printouts, or electronic outputs in lieu of closed formats or on paper. The standard financial reporting forms for grants and cooperative agreements are as follows: 1) Request for Advance or Reimbursement (SF-270) (OMB No. 0348-0004). Recipients are required to use the SF-270 to request reimbursement payments under non-construction programs and may be required to use it to request advance payments. 2) Outlay Report and Request for Reimbursement for Construction Programs (SF-271) (OMB No. 0348-0002). Recipients use the SF-271 to request funds for construction projects unless they are paid in advance or the SF-270 is used. 3) Federal Financial Report (FFR) (SF-425/SF-425A) (OMB No. 0348-0061). Recipients use the FFR as a standardized format to report expenditures under federal awards, as well as, when applicable, cash status (Lines 10.a, 10.b, and 10c). References to this report include its applicability as both an expenditure and a cash status report unless otherwise indicated. 4) Operating and Financial Summary (FAA Form 5100-127) (OMB No. 21200569). Sponsors of commercial service airports are required to submit this report, which captures revenues and expenditures at the airport, including revenue surplus. 5) Financial Government Payment Report (FAA Form 5100-126) (OMB No. 2120-0569). This report captures amounts paid and services provided to other units of government. This reporting requirement technically applies to all sponsors of federally assisted airports who accepted grants with assurance no. 26(d)(I)(ii); however, FAA is currently requiring submission only from commercial service airports. Commercial service airports are the airports most likely to generate excess revenue that could be diverted to non-airport uses. The due dates of each report is noted below: Reporting Requirements/Report Type/Frequency/Due Date SF-425/Federal Financial Report/Annually*/September 30 FAA Form 5100-126/Financial Report/Annually/December 27 FAA Form 5100-127/Financial Report/Annually/December 27 SF-270/Request for Advance or Reimbursement/If projects exceeds 90% of drawdowns/30 days after reporting period SF-271/Request for Reimbursement for Construction Programs/For construction programs/30 days after reporting period * Palm Springs International Airport has chosen to submit report SF425 quarterly to better track its financial performance and ensure they are meeting their goals. Condition: During the audit, we noticed that the City did not prepare the forms FAA 5100-126 and FAA 5100-127. We further noticed that the City did not submit the forms SF-425 and SF-271 within the required timeframe. 1) SF-425 was submitted after the required due date or internally mandated due date 2) SF-271 was submitted 41 days after the reporting period During the audit, we noted the following reports were not filed timely: "See Schedule of Findings and Questioned Costs for chart/table" Cause: The City had some unexpected turnover that resulted in delays in gathering all necessary information to complete the reports on time. The City also implemented a new ERP system during the year while the account set up were modified. This further resulted in delay in completing the reporting timely. Effect or Potential Effect: The City was not in compliance with the program?s reporting requirements. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City develop policies and procedures to monitor timeliness of report filing. We also recommend the City creates a new mapping schedule based on new general ledger accounts in order to prepare the required Forms 5100-126 and 5100-127. Views of Responsible Officials: Management concurs the finding.