Finding Text
Finding 2022-001 Significant Deficiency in Internal Control Over Compliance ? U.S. Department of Treasury ? Coronavirus Relief Fund City Municipal Assistance ? (CFDA No. 21.019) ? Reporting Passed Through Commonwealth of Massachusetts Executive Office of Administration and Finance Criteria: The U. S. Department of Treasury Office of Inspector General requires recipients of the CARES Act Coronavirus Relief Fund dollars to file periodic reports that describe the uses of these funds. The Massachusetts Executive Office of Administration and Finance requires that sub-recipient municipal governments (cities, towns, and regional school districts) submit quarterly reports on expenditures of the Coronavirus Relief Fund to the State administering agency. The reports should reflect the amounts expended on the municipal general ledger accounting records. Condition: The City of Chicopee, Massachusetts, filed the required quarterly reports. However, the reports were not reconciled to the City?s general ledger. The Final Submission Report showed $1,450,148.36 more reported on the report than was posted to the general ledger CARES account. Cause: The City does not have procedures in place to reconcile reporting filed with the State administering agency to the activity in the City?s general ledger. The costs reported that were not charged to the CARES Act account are likely expenses that were charged to City departmental budgets and later determined to be eligible under the program but were not reclassified to the CARES Act account on the City?s general ledger. Effect: The City could misstate or include unallowed costs in its financial reporting of grant funds. Questioned Costs: None reported. Recommendation: The City personnel should reconcile the reports to the City?s general ledger. When expenses are reclassified from other accounts to the Coronavirus Relief Funds, a journal entry adjustment should be made to the general ledger and proper supporting documentation should be retained to have a proper audit trail. Views of Responsible Officials and Planned Corrective Action: See corrective action plan following on page 17.