Finding 453787 (2022-002)

Reference Number: 2022-002Prior Year Finding: NAFederal Agency: U.S. TreasuryFederal Program: Coronavirus State and Local Recovery Funds (CSLRF)Assistance Listing Number: 21.027Federal IdentificationAward Number and Year:None, March 3, 2021- December 31, 2024Compliance Requirement:Allowable ActivitiesAward YearJuly 1, 2021-June 30, 2022Type of FindingSignificant Deficiency in Internal Control Over ComplianceCriteria or specific requirement:Internal Control: Per 2 CFR section 200.303(a), a 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 theterms 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:The City purchased 4,429 $100 gift cards for the Senior and ALICE programs. The gift card distribution records did contain all the required eligibility information but was not reconciled to the total gift card population as of June 30, 2022. The distribution record was completed and reconciled as of March 1, 2023; however, this was not timely for the fiscal year 2022 federal program audit.Context:None, the finding relates to the maintenance of records.Questioned costs:None noted.Cause:The City?s initial response was to provide immediate financial assistance to the City?s residents. As a result, the time to establish adequate internal controls that prevent and/or detect errors and irregularities was decreased.Effect:The City may be unable to support the allowability of activity supported by the gift cards.Recommendation:We recommend that the City review and evaluate procedures to ensure that the procedures over safeguarding assets, maintenance of records, and reconciliation of activity are consistently performed.Views of responsible officials:The City agrees with the finding, see corrective action plan.