Finding Text
Program: Coronavirus State and Local Fiscal Recovery Funds
ALN #: 21.027
Federal Agency: U.S. Department of Treasury
Federal Award Number: SLFRP1982
Award Year: July 1, 2022–June 30, 2023
Reporting
Type of finding: Material weakness and noncompliance
Prior-year finding: No
Statistically valid sample: No
Criteria
The 2 CFR 200.328 and 31 CFR section 35.4 require quarterly and annual reporting of the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) grant. The report focuses on the following key line items: current-period obligation, cumulative obligation, current-period expenditure, and cumulative expenditures.
According to 2 CFR 200.303, the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition
During our audit, we selected the December 31, 2022 and June 30, 2023 report for testing. We noted that the current-period obligations, cumulative obligations, current-period expenditures, and cumulative expenditures contained on these reports could not be reconciled to the City’s books and records. As such, the engagement team was unable to determine if the amounts included in these key line items were complete and accurate.
Cause
PeopleSoft reports that were used to prepare the CSLFRF reports were not retained by the City. As PeopleSoft continuously updates, the detail used to prepare these reports could not be reproduced by the City.
Effect
Lack of document retention and reconciliation from the general ledger system to the CSLFRF could result in inaccurate reporting to the US Department of Treasury.
Questioned Costs
None
Recommendation
We recommend the City ensures proper document retention and complete reconciliations for how quarterly and annual reports are compiled.
Views of Responsible Officials and Corrective Actions
The Finance department will document the reconciliation of the City’s GL ARPA expenditures and obligations to the Department of Treasury ARPA reporting portal report both quarterly and annually. All reconciling adjustments and GL report documentation will be properly retained.
Implementation Date
7/1/2023
Responsible Officials
Michele Kincaid, Assistant Finance Director, and Sharon Pu, Grants Management