Finding 587284 (2022-007)

Material Weakness
Requirement
AB
Questioned Costs
$1
Year
2022
Accepted
2024-01-30
Audit: 14498
Organization: City of Santa Fe (NM)

AI Summary

  • Core Issue: The City failed to obtain proper approvals and documentation for 14 out of 18 non-payroll transactions, risking compliance with federal regulations.
  • Impacted Requirements: Internal controls must ensure all costs are documented and approved as per Title 2 US Code of Federal Regulations, which was not met.
  • Recommended Follow-Up: Implement stricter approval processes and documentation practices to prevent questioned costs and potential repayment to the Grantor agency.

Finding Text

2022-007 – Activities allowed, Allowable Costs over Non-Payroll (Material Weakness over Internal Controls over Compliance, Other Noncompliance) Federal Program Information Federal Award Title and ALN: Airport Improvement Program, 20.106 Federal Awarding Agency: Department of Transportation, Federal Aviation Administration Federal Award ID Number: SAF-SWG-3-35-0037-052-2020; SAF-SWG-3-35-0037-053-2020; SAF-SWG-3-35-0037-054-2021 Federal Award Year: 2020, 2021 Condition: During our review of non-payroll related transactions, 14 out of 18 transactions tested did not include appropriate approval by the Airport Manager, 3 out of 18 transactions did not include a date of approval by the Airport Manager, and 1 out of 18 transactions did not include supporting documentation or purchase order information on the GL. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, non-federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entities is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per Title 2 US Code of Federal Regulations Part 200.403g, costs must be adequately documented to be allowable under Federal awards. Cause: The City is not following procedures to ensure the appropriate approvals are being conducted on all purchases or retaining the supporting documentation to ensure purchase is allowable. Questioned Cost: Known and likely questioned costs of $35,021 Effect: The City may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.

Categories

Questioned Costs Procurement, Suspension & Debarment Allowable Costs / Cost Principles Material Weakness Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

  • 10837 2022-006
    Material Weakness Repeat
  • 10838 2022-007
    Material Weakness
  • 10839 2022-006
    Material Weakness Repeat
  • 10840 2022-007
    Material Weakness
  • 10841 2022-006
    Material Weakness Repeat
  • 10842 2022-007
    Material Weakness
  • 10843 2022-008
    Significant Deficiency
  • 587279 2022-006
    Material Weakness Repeat
  • 587280 2022-007
    Material Weakness
  • 587281 2022-006
    Material Weakness Repeat
  • 587282 2022-007
    Material Weakness
  • 587283 2022-006
    Material Weakness Repeat
  • 587285 2022-008
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
20.106 Airport Improvement Program #52 $649,362
97.067 Homeland Security Grant Program $398,798
20.106 Airport Improvement Program #54 $392,629
14.218 Community Development Block Grants/entitlement Grants $299,484
20.505 Metropolitan Transportation Planning and State and Non-Metropolitan Planning and Research $267,514
20.106 Airport Improvement Program #53 $211,845
20.205 Highway Planning and Construction $176,895
93.053 Nutrition Services Incentive Program $109,484
93.045 Special Programs for the Aging_title Iii, Part C-1, Nutrition Services $96,279
93.788 Opioid Str $81,133
10.693 Watershed Restoration and Enhancement Agreement Authority $75,066
93.052 National Family Caregiver Support, Title Iii, Part E $74,432
93.044 Special Programs for the Aging_title Iii, Part B_grants for Supportive Services and Senior Centers $69,171
66.458 Capitalization Grants for Clean Water State Revolving Funds $62,936
20.703 Interagency Hazardous Materials Public Sector Training and Planning Grants $50,749
20.507 Federal Transit_formula Grants $45,230
94.002 Retired and Senior Volunteer Program $37,587
93.045 Special Programs for the Aging_title Iii, Part C-2, Nutrition Services $32,418
94.011 Foster Grandparent Program $32,326
20.608 Minimum Penalties for Repeat Offenders for Driving While Intoxicated $27,963
45.024 Promotion of the Arts_grants to Organizations and Individuals $15,000