Finding 394255 (2023-002)

2023-002 Federal Agency: U.S. Department of the Treasury Program/Cluster: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Financial Assistance Listing Number: 21.027 Pass-through: N/A Award No. and Year: N/A, 2022 Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria: Per 2 CFR 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. This includes internal controls over maintaining records of the review of required reports. Condition: We identified 1 instance in which the City did not document the review of the annual Project and Expenditure Report prior to submission. Cause: The report submission portal does not require an approval by an individual other than the individual that entered the report data. The City’s procedures did not include documenting the review by an individual other than the preparer. Effect: Ineffective controls over this area of compliance could result in reports that are inaccurate or incomplete being submitted to the granting agency. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: 100% of the annual Project and Expenditure Reports were selected for testing. Repeat Finding from Prior Year(s): No. Recommendation: We recommend that the City revise its procedures to include evidence to document the individual who reviewed required reports prior to submission. Views of Responsible Officials and Planned Corrective Action: Management concurs with the finding. See separate corrective action plan.