Finding 586799 (2020-001)

Material Weakness
Requirement
L
Questioned Costs
-
Year
2020
Accepted
2024-01-26
Audit: 14010
Organization: City of Antelope (OR)

AI Summary

  • Core Issue: The City of Antelope's internal controls are inadequate, leading to misallocation of funds between loans and grants.
  • Impacted Requirements: Funds received under contracts S19008 and Y20001 were not allocated according to contract guidelines, resulting in an overstatement of revenue by $343,870.
  • Recommended Follow-Up: The City should hire a consultant to help manage complex financial transactions and improve internal controls.

Finding Text

Criteria: The internal controls of the City of Antelope are insufficient to identify and correct material differences. Condition: The City of Antelope did not properly split the amount of funds received between loans and grants. Context: The testing of cash receipts identified that the allocation of funds received between loans and revenue wasnt performed according to the contract guidelines . The finding is specifically for funds received on contracts S19008 and Y20001. The amount of the adjustment during the fiscal year was $343,870. Cause: The City of Antelope received funds through agreements that included terms that 50% be allocated to grants/forgivable loans and the other 50% to the non-forgivable loan. City of Antelope indicentally mis-allocated the amounts received. Effect or potential effect: The effect of the finding was that revenue had been overstated by $343,870 and loand were underreported by the same amount. The difference was corrected through the audit process , instead of City of Antelope identifying and correcting. Recommendation: City of Antelope should contract with a consultant to review or assist incomplex transactions that are beyond the ability of City of Antelope volunteers.

Categories

Allowable Costs / Cost Principles Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $881,091
66.468 Capitalization Grants for Drinking Water State Revolving Funds $448,745