Finding 479702 (2021-002)

Material Weakness
Requirement
P
Questioned Costs
-
Year
2021
Accepted
2024-07-30
Audit: 316258
Organization: City of Pekin (IL)

AI Summary

  • Core Issue: The City lacks a centralized reporting system for grants and does not accurately track grant revenues and expenses.
  • Impacted Requirements: Grant administration procedures are not being followed, leading to potential compliance issues.
  • Recommended Follow-Up: Departments should submit original grant agreements to finance, and the City needs a regular reconciliation process for grant revenues and expenditures.

Finding Text

Condition: During audit fieldwork, it was noted the City does not have a centralized reporting system for all grants obtained by the City. In addition, it was noted the City does not have a process for accurately identifying grant revenues and expenses recorded in the City’s general ledger. Criteria: Grant administration procedures should be performed to verify all payments are properly received, all expenditures are eligible under the grant, and the grant compliance occurs. Cause: Lack of oversight by the City and inadequate controls over reconciliation of grant revenues and expenditures. Effect: Inaccurate reporting of grant revenues and expenditures. Recommendation: We recommend all departments provide the original grant agreements to the finance department. In addition, we recommend that the City adopt a policy and process for reconciling grant revenues and expenditures to the general ledger, grant agreements and financial reports submitted to the granting agencies. Such reconciliation should be done on a regular basis to ensure proper identification of all grant revenues and expenditures and to prevent inaccurate reporting or duplicate requests for reimbursements.

Corrective Action Plan

The Director of Finance, along with staff will prepare and review grant policy and procedures. The Finance Department will review all grant agreements on a timely basis and perform monthly reconciliations of grant revenues and expenses. The Finance Department will further utilize features and functions available within its accounting system that allows tracking of expenditures and revenues by projects by utilizing task codes in our Project Management module. The Finance Department will collaborate with Departments by utilizing grant report forms to be completed periodically.

Categories

Reporting Cash Management

Other Findings in this Audit

  • 479701 2021-001
    Material Weakness Repeat
  • 479703 2021-003
    Material Weakness
  • 479704 2021-004
    Significant Deficiency Repeat
  • 1056143 2021-001
    Material Weakness Repeat
  • 1056144 2021-002
    Material Weakness
  • 1056145 2021-003
    Material Weakness
  • 1056146 2021-004
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
21.019 Coronavirus Relief Fund $735,100
14.218 Community Development Block Grants/entitlement Grants $208,943
20.205 Highway Planning and Construction $99,314
20.106 Airport Improvement Program $35,048
16.922 Equitable Sharing Program $908