Finding Text
US DEPARTMENT OF THE TREASURY Coronavirus State and Local Fiscal Recovery Funds (ARPA) CFDA #21.027 Significant Deficiency 2022-007 Condition and criteria: The City is required to file and annual report for the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) program. As part of the reporting process, the City designates the portion allocable to revenue replacement to allow for the amount of expenditures that can be claimed as the broad general government services category. In addition, the City reports the amount of funds that were obligated and the amount that was actually expended. All the funds were obligated, but a significant amount had not been expended at the time of the report and the City reported the funds as fully expended. Cause: The City relied on their interpretation of the regulations based on training they received when preparing the report, which differs from the auditor?s interpretation. Auditor?s recommendation: We recommend that the City only report funds actually incurred as expenditures in future reports and investigate whether an amended report should be filed. Management?s response: The city sent accounting staff to training regarding grant reporting, and the city in turn followed the documented training provided. This training specific to grant reporting appears to be incomplete. By June 30, 2022, American Rescue Plan Act funds allocated to the general fund were spent for qualified uses. ARPA funds that were transferred to the Enterprise funds were not spent by June 30, 2022 and is recorded as unearned revenue in the financial statements. The city will only report funds actually spent as expenditures and will investigate the possibility of filing an amended report.