Finding 513390 (2023-002)

Finding - 2023-002: Federal Reporting Federal Agency - U.S. Department of Housing and Urban Development Federal Program - Community Development Black Grants/State’s Program and Non-Entitlement Grants in Hawaii (14.228) Federal Award Year - 2023 State Agency - Not applicable Criteria - Management is responsible for establishing and maintaining effective internal controls and accounting policies to complete accounting records timely to allow correction of audited financial statements to facilitate timely filing of the Data Collection Form. Condition - The Data Collection Form for the year ended December 31, 2023 was not filed with the Federal Audit Clearinghouse within 30 calendar days after receipt of the audited financial statements in accordance with Uniform Guidance § 200.512(a)(1). Cause - The late filing resulted from not properly identifying Federal expenditures leading to late completion of the single audit and timely submission of the Data Collection Form with the Federal Audit Clearing House. Effect of Condition - The Data Collection Form for the year ended December 31, 2023 was not filed with the Federal Audit Clearinghouse within nine months after year end. Statistical Sampling - The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs - None identified. Recommendation - The Town should establish accounting procedures to complete the timely submission of the Data Collection Form. Views of Responsible Officials and Planned Corrective Actions - (2) Finding 2023-002 Management’s Response Upon the proper identification of the Federal expenditures, the Town commenced work assembling the information required to complete the report. Unfortunately on September 11, 2024, the Town suffered a cyber attack that destroyed all computer records. Since September 11, 2024 the Town has focused on recovering from the attack and was just only recently able to finish the assembly of the documents required to complete the audit. The Town will monitor all grants to ensure that all Federal expenditures are identified and that revenue is recognized in the appropriate period. Estimated Completion Date: September 30, 2025 Person Responsible for Implementation: James E. Quigly 3rd, CPA, Supervisor