Background: One repeat finding from the 2022 fiscal year audit was identified on the Schedule of Expenditures and Federal Awards during 2023 fiscal year end audit conducted by Aldrich CPAs + Advisors LLP (Aldrich). For fiscal year 2022, Aldrich performed an audit on the major program Disaster Grants – Public Assistance (Presidentially Declared Disasters) for the monies received from the Department of Homeland Security passed through the Oregon Office of Emergency Management awarded to the City for the February 2021 Ice Storm. Management recognizes the importance of adequate procedures and internal control oversight and has rectified this finding. Management’s response and corrective plan of action for the finding follows.
Finding 2023-001: 21.027 Coronavirus State and Local Fiscal Recovery Funds
Criteria:
2 CFR Part 200.302(b)(7) requires the financial management system to include written procedures for determining the allowability of costs.
Condition:
City of Oregon City has not developed written procedures for determining the allowability of costs.
Cause:
Administration did not have written procedures for determining the allowability of costs.
Effect:
Unallowable costs could be charged to the program.
Questioned Costs:
None
Perspective:
Written procedures for determining the allowability of costs is integral to the proper design of internal controls. However, the results of audit procedures did not detect any costs which are not allowable charged to the program.
Recommendations:
Management should develop written procedures as required by 2 CFR Part 200.302(b)(7).
Responsible Official:
Matt Zook, Finance Director
Views of Responsible Officials:
Management understands the requirement for written procedures for determining the allowability of costs. A formal policy and procedure was approved and adopted August 22, 2023. The opportunity to identify this finding arose due to new management staff and a new audit firm engage with the June 30, 2022 audit, and we appreciate the opportunity to improve compliance.