Finding Text
Finding 2023-003 Reporting – Internal Control and Compliance over Reporting
Information on the Federal Program:
Assistance Listing Number: 21.027
Federal Program Name: Coronavirus State and Local Fiscal Recovery Fund
Federal Agency: Department of Treasury
Pass-Through Entity: N/A
Federal Award Number and Award Year: N/A - FY22-23
Criteria:
Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Performance and Financial Monitoring and Reporting. §200.328 – Financial Reporting (2 CFR 200.328):
Unless otherwise approved by OMB, the Federal awarding agency must solicit only the OMB-approved governmentwide data elements for collection of financial information (at time of publication the Federal Financial Report or such future, OMB-approved, governmentwide data elements available from the OMB-designated standards lead. This information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more frequently than quarterly except in unusual circumstances, for example where more frequent reporting is necessary for the effective monitoring of the Federal award or could significantly affect program outcomes, and preferably in coordination with performance reporting. The Federal awarding agency must use OMB-approved common information collections, as applicable, when providing financial and performance reporting information.
Title 31 – Money and Finance: Treasury. Subtitle A – Office of the Secretary of the Treasury. Part 35 – Pandemic Relief Programs. Subpart A – Coronavirus State and Local Fiscal Recovery Funds. § 35.4 Reservation of authority, reporting.
(c) Reporting and requests for other information. During the period of performance, recipients shall provide to the Secretary periodic reports providing detailed accounting of the uses of funds, modifications to a State or Territory’s tax revenue sources, and such other information as the Secretary may require for the administration of this section. In addition to regular reporting requirements, the Secretary may request other additional information as may be necessary or appropriate, including as may be necessary to prevent evasions of the requirements of this subpart. False statements or claims made to the Secretary may result in criminal, civil, or administrative sanctions, including fines, imprisonment, civil damages and penalties, debarment from participating in Federal awards or contracts, and/or any other remedy available by law.
Condition:
For the Coronavirus State and Local Fiscal Recovery Funds (SLFRF), the City did not submit the reports within the required deadline:
Report Type Report Type Period Date Due Date Submitted
Project and Expenditure Report Performance Report 1/1/23-3/31/23 4/30/2023 5/3/2023
Project and Expenditure Report Performance Report 4/1/23-6/30/23 7/31/2023 8/25/2023
Four (4) performance reports were tested and two (2) of the reports tested were not submitted by the required deadline. In addition, expenditure information reported on the Project and Expenditure Reports were not supported by the City’s accounting records and did not match expenditures reported on the SEFA. This was due to the City not reporting the Revenue Replacement project expenditures of $4,821,936.
Cause:
Due to the effects of grant staff turnover, the City’s procedures did not consistently ensure that the reports were submitted timely in accordance with the timelines in the Uniform Guidance, or properly reviewed and approved prior to submission. The County prepared the Project and Expenditure Reports as of a point in time, but internal controls did not allow for consistent reporting or expenditure recognition, to avoid variances.
Effect:
Failure to submit the Project and Expenditure Reports timely and accurately reporting expenditures results in noncompliance with the reporting requirements in the grant agreement.
Questioned Costs:
None noted.
Identification as a Repeat Finding, If Applicable:
No.
Recommendation:
We recommend that the City strengthen their report submission process and procedures to ensure all required reports are properly reviewed and approved and submitted timely. When a report cannot be submitted by the due date, the City should request an extension from the funding agency and maintain a record of the approval. We recommend the County enhance internal controls to ensure Project and Expenditure Reports are prepared in accordance with governing requirements, and updated timely if revisions are made by the County, to avoid material variances to the underlying expenditures reported on the SEFA.
Management’s View and Corrective Action Plan:
The City concurs with the auditors’ finding. The City will take steps to improve identification and monitoring of required grantor reporting deadlines.