Finding 35893 (2022-009)

- Repeat Finding
Requirement
ABFGLMN
Questioned Costs
-
Year
2022
Accepted
2023-09-18
Audit: 36742
Organization: City of Derby, Connecticut (CT)

AI Summary

  • Core Issue: The Finance Department failed to prepare required schedules for federal and state grant expenditures for the fiscal year ending June 30, 2022.
  • Impacted Requirements: These schedules are necessary for compliance with laws and regulations regarding federal and state financial assistance.
  • Recommended Follow-Up: The Finance Department and Board of Education should annually prepare these schedules to ensure proper oversight and compliance, allowing auditors to focus on their review and opinion.

Finding Text

*22-09 Federal and State Single Audit Schedules Finding: The Finance Department did not prepare a schedule of expenditures of federal awards and state financial assistance for the year ended June 30, 2022. These schedules are derived from federal and state grant awards received by the General Government and the Board of Education of the City. The Board of Education grant awards primarily are passed through the State Department of Education, while the City receives their grants primarily through the State Department of Housing and Urban Development, the State Department of Health and Human Resources, the State Department of Agriculture and the Office of Policy and Management. The preparation of these schedules of expenditures has, in the past, been made by the auditors, including decision making concerning the federal CFDA number, the pass-through entity number and the amount of federal and state expenditures incurred by the City for the fiscal year. The auditor then reports on the Schedules of Expenditures of Federal and State Financial Assistance and renders his opinion with respect to the compliance with laws, regulations, contracts and grants and with the City?s internal control over compliance with requirements of the laws, regulations, contracts and grants. Criteria: The schedules of federal awards and state financial assistance are required to be prepared by the City. Cause: Lack of a staff member assigned to identify and obtain grant revenue and prepare the appropriate federal and state financial schedules. Effect: The auditor is preparing these schedules and auditing them. Recommendation: We recommend that the Finance Department and/or the Board of Education annually prepare the Schedule of Expenditures of Federal Awards and State Financial Assistance to be presented to the auditor for audit. The auditor can then render an opinion with respect to compliance with and internal control over compliance with laws, regulations, contracts and grants. This will provide the proper segregation of responsibilities over the preparation of the schedules and the rendering of an opinion of these schedules. Management?s Response: The City will create a dedicated fund in the financial system to track grant revenues and expenditures. The BoE has established a grant account. Invoices are being paid out of the operating account. BoE is moving funds from the grant account to cover the grant expenses.

Corrective Action Plan

*22-09 Federal and State Single Audit Schedules Finding: The Finance Department did not prepare a schedule of expenditures of federal awards and state financial assistance for the year ended June 30, 2022. These schedules are derived from federal and state grant awards received by the General Government and the Board of Education of the City. The Board of Education grant awards primarily are passed through the State Department of Education, while the City receives their grants primarily through the State Department of Housing and Urban Development, the State Department of Health and Human Resources, the State Department of Agriculture and the Office of Policy and Management. The preparation of these schedules of expenditures has, in the past, been made by the auditors, including decision making concerning the federal CFDA number, the pass-through entity number and the amount of federal and state expenditures incurred by the City for the fiscal year. The auditor then reports on the Schedules of Expenditures of Federal and State Financial Assistance and renders his opinion with respect to the compliance with laws, regulations, contracts and grants and with the City?s internal control over compliance with requirements of the laws, regulations, contracts and grants. Statement of Concurrence or Nonconcurrence: The City agrees with the finding. Management?s Response: The city will create a dedicated fund in the financial system to track grant revenues and expenditures. The BoE has established a grant account. The BoE grant account is now setup to run accounts payable transactions. Name of Contact Person: Rob Trainor Projected Completion Date: August 4th, 2023

Categories

Subrecipient Monitoring Reporting Internal Control / Segregation of Duties

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
84.425 Education Stabilization Fund $967,373
10.553 School Breakfast Program $400,144
21.027 Coronavirus State and Local Fiscal Recovery Funds $113,034
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $80,086
84.027 Idea Part B Section 611 $76,965
84.010 Title I Grants -Opportunity District Essa Sig - Cohort 2 $61,671
84.010 Title I Grants to Local Educational Agencies $53,908
93.575 Smart Start for Recovery - Arpa-Discretionary $50,000
66.458 Capitalization Grants for Clean Water State Revolving Funds $44,779
16.738 Edward Byrne Memorial Justice Assistance Grant Program $42,000
21.019 Coronavirus Relief Fund $34,607
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $32,577
84.048 Career and Technical Education -- Basic Grants to States $32,325
10.558 Child and Adult Care Food Program $26,693
10.555 National School Lunch Program $26,412
84.027 Covid Relief Sped-Idea $20,000
84.027 Idea Part B Section 619 $15,379
84.424 Student Support and Academic Enrichment Program $6,620
84.365 English Language Acquisition State Grants $4,794
10.559 Summer Food Service Program for Children $3,336
84.367 Improving Teacher Quality State Grants $2,572
10.649 Pandemic Ebt Administrative Costs $2,456