Finding Text
Finding 2022-001 Lack of Internal Control Over Cash Management Federal Agency: U.S. Department of the Treasury Federal Program: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Assistance Listing Number: 21.027 Award Numbers: SLFRP3171/4774 Award Year: 2021 Type of Finding: Material weakness in internal control over compliance and material noncompliance Criteria: The requirement for cash management as contained in 2 CFR 200.305, states advanced cash payments must be used only for applicable grant programs. Condition and Context: Procedures related to cash management were inadequate to ensure that funds drawn down were not used for other grant expenditures. The Village?s cash balances for all governmental funds amounted to $6,020,657 at September 30, 2022. The unearned revenues were $6,488,378 which resulted in a shortfall of $467,721. The unearned revenue for the CSLFRF was $6,281,497. Cause: Lack of internal controls over cash management. Effect: The Village requested and received advances for various federal programs to cover expenditures. Deposits were used to fund other programs of the Council. Repeat Finding: This is a repeat of Finding 2021-001, and since it is a repeat Finding we believe this to be a systemic issue. Recommendation: We recommend that the Village monitor grant budgets and drawdowns throughout the year and ensure that program funds are not being lent or borrowed between programs in an effort to ensure that unearned revenue balances do not exceed total cash and investments. Management?s Response: Management concurs with this finding. See corrective action plan. Questioned Costs: $467,721, which is the shortfall between cash and the unearned revenue balances across all government funds.