Finding 544406 (2024-001)

Material Weakness
Requirement
P
Questioned Costs
-
Year
2024
Accepted
2025-03-31

AI Summary

  • Core Issue: YCIPTA failed to follow federal regulations for recording a bus purchase, leading to significant errors in financial reporting.
  • Impacted Requirements: Noncompliance with 2 CFR 200.510 and 2 CFR 200.303 regarding internal controls and accurate financial records.
  • Recommended Follow-Up: YCIPTA needs to enhance internal controls and ensure all relevant transactions are accurately reflected in the Schedule of Expenditures of Federal Awards (SEFA).

Finding Text

Finding Number: 2024-001 Repeat Finding: No Program Name/Assistance Listing Title: Formula Grants for Rural Areas and Tribal Transit Program Assistance Listing Number: 20.509 Federal Agency: Arizona Department of Transportation Federal Award Number: GRT-22-0008862-T Pass-Through Agency: Arizona Department of Transportation Questioned Costs: N/A Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Other Criteria Management is responsible for establishing and maintaining internal controls over its accounting records. Further, in accordance with 2 CFR 200.510, the entity is responsible for the design and implementation of controls over the preparation of the Schedule of Expenditures of Federal Awards (SEFA) each fiscal year. Additionally, 2 CFR 200.303 requires the entity to establish and maintain internal control over the federal awards that provides reasonable assurance that the entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of federal awards. Condition YCIPTA was awarded a match for the purchase of a new bus. YCIPTA did not follow federal regulations regarding federal revenue transactions to ensure all activities were properly recorded and processed. Cause YCIPTA has not implemented sufficient controls over accounting transactions. Effect YCIPTA was not in compliance with federal regulations and guidelines. The transaction was unique and not part of the normal federal program operations. It was not known that the transaction was subject to Single Audit. Audit adjustments were required to properly reflect the activity. Context YCIPTA received a federal match for the purchase of a new bus. The following errors were noted in the recording of the bus:  A bus valued at $120,488 was not recorded in the general ledger.  The corresponding depreciation expense (and accumulated depreciation) of $20,081 was not recorded in the general ledger.  Capital outlay of $12,753 was recorded in error in the general ledger  Federal revenue of $107,735 for the match was not recorded in the general ledger or on the SEFA for the fiscal year. The sample was not intended to be, and was not, a statistically valid sample. Recommendation YCIPTA should improve internal controls and adhere to federal regulations. All applicable transactions and activity should be included in the SEFA for the fiscal year in which the expenditures occurred. Views of Responsible Officials See Corrective Action Plan.

Corrective Action Plan

YCIPTA will make the proper journal entries within QuickBooks to reflect the bus purchase properly.

Categories

Reporting Procurement, Suspension & Debarment Material Weakness

Other Findings in this Audit

  • 544407 2024-002
    Material Weakness Repeat
  • 544408 2024-002
    Material Weakness Repeat
  • 544409 2024-002
    Material Weakness Repeat
  • 544410 2024-002
    Material Weakness Repeat
  • 544411 2024-002
    Material Weakness Repeat
  • 544412 2024-002
    Material Weakness Repeat
  • 544413 2024-002
    Material Weakness Repeat
  • 544414 2024-002
    Material Weakness Repeat
  • 544415 2024-002
    Material Weakness Repeat
  • 1120848 2024-001
    Material Weakness
  • 1120849 2024-002
    Material Weakness Repeat
  • 1120850 2024-002
    Material Weakness Repeat
  • 1120851 2024-002
    Material Weakness Repeat
  • 1120852 2024-002
    Material Weakness Repeat
  • 1120853 2024-002
    Material Weakness Repeat
  • 1120854 2024-002
    Material Weakness Repeat
  • 1120855 2024-002
    Material Weakness Repeat
  • 1120856 2024-002
    Material Weakness Repeat
  • 1120857 2024-002
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
20.507 Federal Transit Formula Grants $1.78M
20.509 Formula Grants for Rural Areas and Tribal Transit Program $1.20M
20.205 Highway Planning and Construction $142,784