Finding 584288 (2023-005)

2023-005: U.S. Department of the Treasury COVID-19: Coronavirus State and Local Fiscal Recovery Funds, Assistance Listing #21.027 Reporting Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under Assistance Listing 21.027 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by applicable accounting or performance records, and are fairly presented in accordance with governing requirements. The City of Henderson (the City) must submit quarterly Project and Expenditure Reports that contain costs incurred during the covered period. Certain critical information includes: o Obligations and Expenditures  Current period obligation  Cumulative obligation  Current period expenditure  Cumulative expenditure Condition: Obligation information was reported inaccurately. Cause: The City of Henderson did not have adequate internal controls to ensure Project and Expenditure Reports were prepared in accordance with governing requirements as estimated obligations, rather than actual, were reported. Effect: Inaccurate information was reported to the federal awarding agency. Questioned Costs: None Context/Sampling: A nonstatistical sample of two out of a population of four Project and Expenditure Reports submitted during the year was selected for testing. The cumulative impact is as follows: Period Ended September 30, 2022 Originally Reported Actual Obligations and Expenditures: Cumulative obligation $25,414,500 $25,021,569 Period Ended March 31, 2023 Originally Reported Actual Obligations and Expenditures: Cumulative obligation $26,664,517 $26,563,907 Repeat Finding from Prior Year: No Recommendation: We recommend the City enhance internal controls to ensure Project and Expenditure Reports are prepared in accordance with governing requirements through using actual obligations, rather than estimated. Views of Responsible Officials: The City of Henderson agrees with this finding.