Finding 569142 (2024-002)

Criteria: The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards 2 CFR 200 (Uniform Guidance), requires auditees to prepare a Schedule of Expenditures of Federal Awards, (SEFA) for the period covered by the auditee’s financial statements. Condition and Context: For the year ended September 30, 2024, the City did not prepare a SEFA in a timely manner resulting in potential delays in completing the audit. Cause: The City’s finance department personnel has experienced significant turnover during and subsequent to the fiscal year under audit. Effect or Potential Effect: The delay in producing the SEFA may have a range of effects from the loss of “low-risk auditee status”, increased compliance costs to the loss of eligibility for future grant funding and potentially fines or the requirement to return federal funds. Recommendation: The governing body and management of the City should ensure that finance personnel have suitable skills, knowledge and experience (SKE) to be able to draft a complete and accurate SEFA in the early stages of planning and preparing for the audit. Additional training should be provided to finance personnel to insure that these SKE’s are not negatively impacted in the event of future turnover.