Finding 367381 (2023-006)

3. Federal Award Findings and Questioned Costs Significant Deficiency, Nonmaterial Non-Compliance Reporting U.S. Department of Treasury Program name: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds AL Number: 21.027 Finding 2023-006 Criteria: In accordance with 2 CFR 200, management should have an adequate system of internal control procedures in place to ensure that federal funds expended are properly reported to grantor. According to Part 2: Reporting Requirements of the U.S. Department of Treasury Compliance and Reporting Guidance for State and Local Fiscal Recovery Funds, expenditures that are charged to the program should be adequately reported. Condition: Incurred expenditures were incorrectly reported at total budgeted costs for the program, instead of actual expenditures incurred for reporting period. Effect: Expenditures incurred were reported at total budgeted project cost, therefore reported expenditures were more than what was incurred by the City during reporting period. Cause: An error was made and the City reported budgeted costs for project. City internal control procedures did not catch the reporting error. Questioned Cost: The City reported more expenditures than were incurred. The reporting will be updated with the next report on or before the due date. This finding represents an internal control issue; therefore, questioned costs are not applicable. Recommendation: The City’s reporting should be reviewed and approved by management prior to submission to ensure accuracy of information. Name of Contact Person: Jared Pyles, Finance Director Views of Responsible Officials and Planned Corrective Actions: The City agrees with this finding and will adhere to the Corrective Action Plan in this audit report.