Finding 370314 (2023-002)

2023-002 U.S. Department of Treasury Passed Through State of Nevada Governor’s Finance Office COVID-19 Coronavirus State and Local Fiscal Recovery Funds, Federal Financial Assistance Listing 21.027 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: The OMB compliance supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by underlying accounting information or performance records, and are fairly presented in accordance with government requirements. The City of Fallon is required to submit the Project and Expenditure Report quarterly. The following are key line items on the Project and Expenditure report: current period obligation, cumulative obligation, current period expenditure, cumulative expenditure, subawards, and detailed information on loans issued. Condition: We noted the City incorrectly reported projected obligations and expenditures, however the amount shown in the total was amounts actually spent for this grant. Cause: The City did not have adequate internal controls for accurate reporting. Effect: Inaccurate information may be reported to the federal awarding agency. Questioned Costs: None reported. Context/Sampling: All reports submitted during the year were tested. Repeat Finding from Prior Year: No. Recommendation: We recommend City of Fallon enhance internal controls to ensure its reports are accurate and reviewed by someone other than the preparer prior to submission. Views of Responsible Officials: Management will closely review the Project and Expenditure Report User Guide to ensure future reports are in compliance and are properly reviewed prior to submission.