Finding Text
U.S. Department of the Treasury
COVID-19 – Coronavirus State and Local Fiscal Recovery Funds – CFDA 21.027
Criteria: The compliance supplement identifies four Key Line Items required to be reported to the federal awarding agency which include (1) current period obligation, (2) cumulative obligation, (3) current period expenditure and (4) cumulative expenditure. Per 2 CFR 200.1, an obligation is an order placed for property and services, contracts and subawards made, and similar transactions that require payment.
Condition: On the June 30, 2022 Project and Expenditure report the City reported $7,292,100 of obligations for expenditures that had yet to be specifically identified nor met the definition of an obligation.
Cause: The City did not have a clear understanding of the reporting requirements for obligations.
Effect: The City overstated the amounts obligated in the June 30, 2022 Project and Expenditure report.
Questioned Costs: None
Repeat Finding from Prior Year: No
Recommendation: The City should implement procedures to only report obligations on the Project and Expenditure reporting for items that meet the federal criteria for reporting as an obligation.
Views of Responsible Official: Management agrees with the finding.