Finding 512307 (2022-004)

2022-004 – Lack of Reporting (SD, NC) Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds Federal Catalog Number: 21.027 Federal Agency: U.S. Department of Treasury Category of Finding: Reporting Criteria: Pursuant to the Office of Management and Budget (OMB) 2 CFR Part 200, Appendix XI, Compliance Supplement April 2022 Part 4 21.027 Coronavirus State and Local Fiscal Recovery Funds (page 4-21.027-7), the annual reporting requirement for Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) is through the submission of the initial Interim Report, quarterly Project and Expenditure Report, and the Recovery Plan Performance Report. The interim report is a one time report that provides an initial overview of status and use of funding. The Project and Expenditure Report details the financial data, projects funded, expenditures and contracts over $50,000. Condition: During our audit, the City was unable to provide evidence that any project and expenditure report for the period between July 2021 through June 2022 was submitted. Also, there was no evidence the interim report was submitted. The Recovery Plan Performance report is not a required report for the City due to their population size falling under the 250,000 requirement. Cause: Lack of appropriate control over reporting, mainly due to turn-over in City personnel. Effect or Potential Effect: Noncompliance may result in termination of the grants, reduction in future payments or funding amounts, repayment of federal funds already received and spent, imposed fines and penalties, reputational damage, special status for oversight and reviews, need for corrective action plan, and/or suspension or debarment. Questioned Cost: None. Context: According to the Assistant City Manager, reports for FY 2022 were neither drafted nor submitted, however they were prepared in FY 2023. Statistical Sampling Validity: Not applicable. No sampling was performed. Repeat of a Prior-Year Finding: No. Recommendation: The City should design and establish internal controls over reporting, which should include maintaining copies of reports submitted for audit. Management Response and Corrective Action Plan City's Response: The City concurs with the recommendation. Corrective Action Plan: The new grants policy will be reviewed and approved by the City Manager and implemented by March 2025. Planned Implementation Date: March 2025 Responsible Person(s): City Manager