Finding 577807 (2022-002)

Federal Agency: U.S. Department of Transportation Federal Program Name: Highway Planning and Construction Cluster Assistance Listing Number: 20.205 Award Period: July 1, 2021 through June 30, 2022 Type of Finding: Material Weakness in Internal Control over Compliance Criteria or specific requirement: The City is required to report federal expenditures based on when costs are incurred. Condition: During our testing, we noted inaccuracy in the schedule of federal expenditure awards. Questioned costs: None Context: During our compliance testing for SEFA completeness, we noted the City did not have any Highway Planning and Construction Cluster expenditures included in the preliminary SEFA. Upon further investigation by the City, $3,492,591 was added to the SEFA. Cause: Due to extraordinary turnover in the Finance Department, the program was missed on the preliminary SEFA. Effect: The City had to revise the schedule of federal expenditures which resulted in increasing the amount reported by $3,492,591. Repeat finding: Yes. Recommendation: The City should evaluate their controls over the Schedule of Expenditures of Federal Awards reporting process to determine whether additional controls can be implemented to provide assurance over the accuracy and completeness of the Schedule of Expenditures of Federal Awards. View of responsible officials and planned corrective actions: There is no disagreement with the audit finding. Management acknowledges that extraordinary turnover occurred in the Finance Department during the closing and subsequent preparation of the fiscal year end dated June 30, 2022. The vacant positions responsible for this work will be filled with trained, experienced accounting professionals and as a result the listed issues will be remedied. Additionally, an audit pre preparation plan is being developed to assure that the year-end audit process will continue to be a smooth process into the future.