Finding Text
Finding 2023-002: Material Weakness, Late Issuance of the 2023 Single Audit Reporting
Criteria/Context:
Uniform Guidance 2 CFR 200.512(a) requires that each organization’s audit must be completed and the data collection form and reporting package should be submitted within the earlier of 30 days after receipt of the auditor’s report or nine months after the end of the audit period. Applicable to all assistance listing numbers (ALN’s) and federal agencies (and passthrough entities) included on the accompanying schedule of expenditures of federal awards.
Condition/Finding:
The Single Audit packages for the City’s fiscal years ended June 30, 2023, June 30, 2022 and June 30, 2021 should have been submitted to the Federal Audit Clearinghouse by March 31, 2024, March 31, 2023 and September 30, 2022, respectively. The City missed the filing deadlines, making the filings for 2023, 2022 and 2021 late.
Cause:
The cause is the lack of effective controls over financial reporting resulting in delays in both the Financial Statement Audit and Single Audit.
Effect or Potential Effect:
This can result in an inaccurate amount reported in the SEFA, SESA, or basic financial statements or the disallowance of expenditures / future awards by the grantor due to lack of proper reporting.
In addition, late filings result in noncompliance with the requirements of the Uniform Guidance and makes the City ineligible for consideration as a low risk auditee under Uniform Guidance, expanding the scope and cost of the single audit.
Recommendation:
We recommend the City evaluate the process and design of internal controls over financial reporting, including the SEFA and SESA, in order to ensure readiness for the audit and to avoid late filing of the data collection form.
Views of Responsible Officials: Management agrees with the finding.
Questioned Costs:
None
Context:
The June 30, 2023, 2022 and 2021 Single Audit packages.