Finding Text
Criteria or Specific Requirement: Under 2 CFR Part 200.502, the auditee must prepare the Schedule of Federal Awards to cover the appropriate audit period and to include all applicable federal expenditures expended during the audit period.
Condition: The City has not historically created or provided a Schedule of Federal Awards for audit purposes and did not include all federal expenditures as required under 2 CFR Part 200.502.
Context: The City did not have all federal expenditures recorded in their trial balance, and did not have accurate records of all expenditures spent during the audit period. In addition, they did not have all of the necessary information or training to create the Schedule of Federal Awards.
Questioned Costs: None
Effect: The City was unable to provide auditors with a complete Schedule of Federal Awards, and could not verify the completeness of expenditures recorded in their financial statements as provided for the audit.
Cause: The City does not have processes in place to track all grant spending.
Repeat: No
Auditor's Recommendation: We recommend that the City create processes and procedures that capture all federal funding received, and track applicable expenditures. This report should be reconciled regularly (at least monthly) when requests for reimbursement are made, and should include all applicable information necessary to identify the funding agency, assistance listing number, and any other pertinent passthrough information. With this process in place, the City will be better able to track and monitor grant funding, plan future projects or future funding needs, and prepare for the annual audit.
View of Responsible Officials: Management concurs with the Auditor’s recommendation and will review with the third-party North Central Illinois Council of Governments (NCICG) to establish appropriate City monitoring and review. City will also review with prior City Auditors to ensure proper overall procedures are in place to ensure all grants in the aggregate are monitored.