Finding Text
2023-008 U.S. Department of Treasury
COVID-19 – Coronavirus State and Local Fiscal Recovery Funds – ALN 21.027
Material Weakness in Internal Controls over Compliance and Compliance Finding
Criteria: Per 2 CFR section 200.328 of the Uniform Guidance, each recipient must report program outlays and program income on a cash or accrual basis, as prescribed by the federal agency.
The compliance supplement identified four Key Line Items required to be reported to the federal awarding agency which include (1) current period obligation, (2) cumulative obligation, (3) current period expenditure and (4) cumulative expenditure.
Condition: As of the March 31, 2023 reporting date, the Town’s Project and Expenditure report had reported cumulative expenditures that were approximately $134,000 more than what was recorded in the grant fund on the general ledger. In addition, obligations were overstated by approximately $85,000.
Cause: The Town did not reconcile the Project and Expenditure report with the Town’s general ledger before submitting. Additionally, the Town did not have a clear understanding of reporting requirements for obligations.
Effect: The Town did not properly report grant expenditures in the appropriate fund in the Town’s general ledger and obligations were overstated in the Project and Expenditure reporting.
Questioned Costs: None
Repeat Finding from Prior Year: No
Recommendation: The Town should implement procedures to reconcile the financial information in the Project and Expenditure reports to the Town’s general ledger and contract files before submission.
Views of Responsible Official: Management agrees with the finding.