Finding 372082 (2022-001)

2022-001 Improve Controls and Documentation over Reporting Federal Agency: U.S. Department of Treasury Award Name: COVID-19 State and Local Fiscal Recovery Fund AL Number(s): 21.027 Award Year: 2022 Compliance Requirement Reporting Type of Finding Compliance Internal Control over Compliance - Significant Deficiency Criteria or Specific Requirement Grantees are required to file Project and Expenditure Reports - Report on financial data, projects funded, expenditures, and contracts and subawards over $50,000, and other information. Project and Expenditure Reports are due on a regular, recurring basis after the Interim Reports. The reporting frequency and deadlines vary by type of recipient and total allocation amount. Management of the City is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context The Project and Expenditure report submitted for 3/31/22 was not completed correctly. The report did not reflect actual expenditures to date for the grant. Cause Weaknesses in the design and operation of controls. Effect or Potential Effect Due to the weaknesses in internal controls noted above, there is a risk that amounts reported throughout the fiscal year on Project and Expenditure reports are incorrect. No questioned costs were reported because it was not quantifiable. Recommendation The City should address the weaknesses in internal controls noted above in order to comply with the federal requirements related to reporting. Views of Responsible Official Management agrees with the finding. Planned Corrective Action Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Audit Findings.