Finding Text
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program: 14.218 Entitlement Grants Cluster: Community Development Block
Grants/Entitlement Grants
Identification Number: B-15-MC-42-0018; B-16-MC-42-0018; B-17-MC-42-0018; B-18-MC-42-0018; B-19-
MC-42-0018
Requirement: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Period of
Performance; Reporting; Special Tests and Provisions
Type of Finding: Material weakness in internal control over major program; Noncompliance
Criteria: Auditing standards applicable to financial audits contained in Government Auditing Standards, issued
by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal
Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
Federal Awards (Uniform Guidance), require auditors to obtain sufficient and appropriate audit evidence needed
to perform the audit.
Condition: The City of York was not able to provide sufficient and appropriate audit evidence for balances and
disclosures reported in the SEFA.
Cause: Due to various factors, all subsequent to year end, including turnover of all key personnel, the destruction
of the City’s servers and the conversion to a new accounting system leaving the old accounting system widely
unused and unsupported, the completeness and availability of all records, management has been unable to
produce records to support the following: material balances stated in the accompanying financial statements,
compliance with laws and regulations; the identification and disclosure of all laws, regulations, and provisions of
contracts and grant agreements directly and materially affecting the determination of financial statement amounts
and; the presence or absence of fraud involving management or employees with significant roles in internal
control; compliance with laws, regulations, and provisions of contracts and grant agreements, including budget
laws, compliance with any debt covenants, identification of subsequent events, commitments and contingencies,
the identification of all Federal assistance programs and compliance with Federal grant requirements.
Additionally, the amount of time which has passed since the year end under audit has further exacerbated these
issues. We were unable to satisfy ourselves by other audit procedures concerning these balances and
disclosures.
Effect or Potential Effect: The inability to appropriately support balances and disclosures leaves the City unable
to verify whether any adjustments may be necessary. This impact is material.
Context: Support for virtually all balances and disclosures was not able to be provided to verify balances and
disclosures reported in the City’s SEFA
Recommendation: We recommend that the City retains all support for transactions and account balances as well
as performs reconciliations at month and year ends to verify if any adjustments are necessary.