Finding 504857 (2023-003)

Highway Planning and Construction Cluster, Assistance Listing Number 20.205 Criteria or specific requirement (including statutory, regulatory, or other citation): Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), requires the auditee to prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statement. It is the responsibility of City management to design and implement internal controls that provide reasonable assurance over the completeness and accuracy of the SEFA. The SEFA is the basis for the auditor’s identification of major programs. Condition and context: The City’s SEFA required adjustments to properly report federal expenditures related to the Highway Planning and Construction Cluster, Assistance Listing Number 20.205. The required adjustments for the SEFA were identified during audit fieldwork. Cause: Internal controls not operating as designed whereby the City was unable to ensure that the issued SEFA was complete and accurate. Effect or potential effect: A Uniform Guidance compliance audit is based on the premise that management must comply with federal statutes, regulations, and the terms and conditions of the federal awards it receives. As a result of the error, an adjustment was required to the City’s SEFA. Questioned costs: None. Identification as a repeat finding, if applicable: Not applicable. Recommendation: Policies and procedures should be implemented by management of the City to verify the completeness and accuracy of the SEFA. Views of responsible officials: As detailed in the Corrective Action Plan, management has agreed to the findings and recommendations noted above.