Finding 403257 (2021-001)

Internal Control over Major Programs Finding 2021-001 Type: Material weakness Condition: There is a requirement for any advance in reimbursement to be fully expended within 30 days of it becoming available for use. Criteria: Cash management section of the 2 CFR section 200.305. Cause: A failure in the design of internal controls over compliance resulted in the City not abiding by this requirement. Effect: There were instances where the agreements made to purchase property and other associated costs were altered or not followed through with. The advance in reimbursement was not completely used within 30 days of it becoming available for use. Compliance Finding 2021-001 Type: Noncompliance Condition: The compliance requirement for the cash management 2 CFR section 200.305 states that any advanced reimbursement should be used within 30 days of receiving the payment. An advanced payment was received under the Hazard Mitigation Grant that was not completely expended within this period. Criteria: Cash management section of the 2 CFR section 200.305. Cause: The nature of these transactions cause timing discrepancies, which result in internal controls over compliance to be deficient, but were not considered to cause any material misstatements. Effect: There were instances where the agreements made to purchase property and other associated costs were altered or not followed through with. The advance in reimbursement was not completely used within 30 days of it becoming available for use. Recommendation: We recommend the Clerk work more closely with the award agencies to ensure the eligibility of all claims for reimbursement is understood by both parties.