Finding 567104 (2024-002)

Significant Deficiency
Requirement
L
Questioned Costs
-
Year
2024
Accepted
2025-06-26
Audit: 359968
Organization: Pittsfield Charter Township (MI)

AI Summary

  • Core Issue: The Township lacks an independent review and approval process for financial reports, increasing the risk of undetected errors.
  • Impacted Requirements: Compliance with federal reporting standards under 2 CFR 200, which mandates that reports be supported by accounting records and reviewed before submission.
  • Recommended Follow-Up: Implement procedures for independent review and approval of all reports, ensuring proper documentation of this process.

Finding Text

2024-002 - Lack of Independent Review and Approval of Reporting Finding Type. Significant Deficiency in Internal Controls over Compliance (Reporting). Federal program(s) U.S. Department of Homeland Security -  Assistance to Firefighters Grant (ALN 97.044); Direct award; All project numbers. Criteria. Recipients of federal awards are required to report periodically on financial information, as specified by the 2 CFR 200 Compliance Supplement or grant agreement. Reported information should be supported by the entity’s accounting records and subjected to an independent review and approval prior to submission in order to detect and correct any errors or omissions. Condition. During our audit procedures over the Township's reporting process, we noted that none of the semi-annual financial reports selected for testing included documentation that they were subjected to an independent review and approval prior to submission in order to detect and correct potential errors or omissions. Cause. This condition is the result of management not recognizing the importance of establishing such controls. Effect. As a result of this condition, the Township was exposed to an increased risk that the reports filed could contain errors and not be detected and corrected on a timely basis. Questioned Costs. No costs have been questioned as a result of this finding inasmuch as no unallowable costs were identified. Recommendation. We recommend that the Township establish procedures to ensure that all reports are subject to review and approval by an independent employee prior to submission, and that the review and approval is adequately documented. View of Responsible Officials. We acknowledge the finding of significant deficiency in internal controls over compliance. While the matter is not considered to be material to the overall compliance requirements, we recognize the importance of maintaining robust internal controls to ensure full adherence to applicable regulations and policies. The Township is in the process of ensuring relevant personnel are informed and adequately trained on updated compliance processes. We will also increase periodic reviews and monitoring activities to ensure sustained compliance and timely identification of potential issues. Responsible Officials. Finance Director Estimated Completion Date. December 31, 2025

Corrective Action Plan

2024-002 - Lack of Independent Review and Approval of Reporting Auditor Description of Condition and Effect: During our audit procedures over the Township's reporting process, we noted that none of the semi-annual financial reports selected for testing included documentation that they were subjected to an independent review and approval prior to submission in order to detect and correct potential errors or omissions. As a result of this condition, the Township was exposed to an increased risk that the reports filed could contain errors and not be detected and corrected on a timely basis. Auditor Recommendation: We recommend that the Township establish procedures to ensure that all reports are subject to review and approval by an independent employee prior to submission, and that the review and approval is adequately documented.   Corrective Action: We acknowledge the finding of significant deficiency in internal controls over compliance. While the matter is not considered to be material to the overall compliance requirements, we recognize the importance of maintaining robust internal controls to ensure full adherence to applicable regulations and policies. The Township is in the process of ensuring relevant personnel are informed and adequately trained on updated compliance processes. We will also increase periodic reviews and monitoring activities to ensure sustained compliance and timely identification of potential issues. Responsible Person: Tracy Watkins, Finance Director Anticipated Completion Date: December 31, 2025

Categories

Allowable Costs / Cost Principles Subrecipient Monitoring

Other Findings in this Audit

  • 567105 2024-003
    Significant Deficiency
  • 567106 2024-002
    Significant Deficiency
  • 567107 2024-003
    Significant Deficiency
  • 1143546 2024-002
    Significant Deficiency
  • 1143547 2024-003
    Significant Deficiency
  • 1143548 2024-002
    Significant Deficiency
  • 1143549 2024-003
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
66.458 Clean Water State Revolving Fund $667,028
21.027 Coronavirus State and Local Fiscal Recovery Funds $625,295
15.916 Outdoor Recreation Acquisition, Development and Planning $229,684
97.044 Assistance to Firefighters Grant $49,273
16.607 Bulletproof Vest Partnership Program $7,962