Finding 3031 (2022-002)

U.S. Department of the Treasury COVID-19 – Coronavirus State and Local Fiscal Recovery Funds – CFDA 21.027 Criteria: Per 2 CFR section 200.328 of the Uniform Guidance, each recipient must report program outlays and program income on a cash or accrual basis, as prescribed by the federal awarding agency. The compliance supplement identifies four Key Line Items required to be reported to the federal awarding agency which include (1) current period obligation, (2) cumulative obligation, (3) current period expenditure and (4) cumulative expenditure. Condition: As of the June 30, 2022 reporting date, the City’s Project and Expenditure Reports overstated expenditures by $274,713 and overstated obligations by $14,045,059. Cause: The City did not reconcile the Project and Expenditure report with the City’s general ledger before submitting and reported the unpaid balance of one contract as expended. The City also considered City departments as subrecipients which caused them to report departmental agreements as obligations. Effect: The City did not properly report grant expenditures and obligations in the Project and Expenditure reporting. Questioned Costs: None Repeat Finding from Prior Year: No Recommendation: The City should implement procedures to reconcile the financial information in the Project and Expenditure reports to the City’s general ledger and contract files before submission. Views of Responsible Official: Management agrees with the finding.