Finding 42263 (2022-003)

Significant Deficiency
Requirement
B
Questioned Costs
$1
Year
2022
Accepted
2023-03-08
Audit: 48309
Organization: City of Burbank (CA)

AI Summary

  • Core Issue: Expenditures were made outside the award period for Federal funds, leading to questioned costs of approximately $25,400.
  • Impacted Requirements: Compliance with 2 CFR Part 200 is necessary for accurate financial reporting of Federal awards.
  • Recommended Follow-Up: The City should enhance procedures for preparing and reviewing Federal grant reports, ensuring amounts match accounting records.

Finding Text

2022 ? 003 Federal agency: U.S. Department of Treasury Federal program title: Corona Virus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Pass-Through Agency: State of California Pass-Through Number(s): CAPP-PN-2021-06 / 68-0281986 Award Period: March 4, 2020 through June 15, 2021 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Post Federal Award Requirements requires that the financial management system of a non-Federal entity provide for accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with reporting requirements. Condition: Expenditures were incurred that were outside of the award period. Questioned costs: Known questions costs of $304. Based on the error rate of the population sampled, likely questioned costs are approximately $25,400. Context: 2 of 40 samples tested had questioned costs of Cause: Account balance changes took place between the time arrearage credits were calculated and the time they were posted. Effect: Credits were made to utility customer accounts on balances is excess of the balance that was in arrears during the program period. Repeat Finding: No. Recommendation: We recommend that the City review its procedures for the preparation and review of reporting for Federal grants, whereby amounts included on reports are reconciled to the City's accounting records.

Corrective Action Plan

Views of responsible officials and planned corrective actions: We agree with the auditor?s findings and recognize that some customers did received funding beyond the June 15, 2021 deadline. BWP calculated the daily average arrears for each customer with 60 plus days arrears during the program pandemic period and cross referenced it with the actual past due balances as of June 15, 2021 to ensure no arrears prior to March 4, 2020 were included. Prior to the pandemic, BWP did not have sufficient arrearage data to easily calculate the credits, hence BWP relied on a data search methodology that estimated qualified customer balances to apply funds. Since the pandemic, BWP has changed its reporting on customer arrearages. BWP will run a daily aging report that will be used to calculate customer arrearages incurred during a specific period. Before credits are authorized, BWP Customer Service will manually spot-check the data set to verify accuracy. With regards to review of Federal grants awarded, BWP holds a monthly meeting with key personnel and an outside grants administrator to get status updates of pursued and/or awarded grants, including any federally funded grants. The Financial Accounting Manager-BWP and Principal Utility Accounting Analyst now attend this meeting. The Principal Utility Accounting Analyst will be responsible for timely communication of all key Federal grants data to City Finance and will prepare an annual schedule for all grant funding received/spent through the general ledger. In addition, BWP?s Legislative Analyst and BWP Finance staff will cross check records to timely reconcile grant reporting/activity.

Categories

Questioned Costs Reporting Significant Deficiency Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

  • 618705 2022-003
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
21.027 Coronavirus State and Local Fiscal Recovery Funds $2.31M
14.218 Community Development Block Grants/entitlement Grants $459,604
14.871 Section 8 Housing Choice Vouchers $423,654
14.267 Continuum of Care Program $411,382
93.498 Provider Relief Fund $178,184
93.045 Special Programs for the Aging_title Iii, Part C_nutrition Services $135,030
17.258 Wia Adult Program $130,500
14.239 Home Investment Partnerships Program $126,308
97.067 Homeland Security Grant Program $104,559
20.608 Minimum Penalties for Repeat Offenders for Driving While Intoxicated $102,833
93.053 Nutrition Services Incentive Program $45,138
21.016 Equitable Sharing $28,415
16.738 Edward Byrne Memorial Justice Assistance Grant Program $26,162
21.019 Coronavirus Relief Fund $10,180
93.044 Special Programs for the Aging_title Iii, Part B_grants for Supportive Services and Senior Centers $1,000