Finding 963635 (2023-002)

General Services Administration Federal Financial Assistance Listing 39.003 Donation of Federal Surplus Personal Property (Donated Property) Preparation of Expenditures of Federal Awards Material Weakness in Internal Control Over Compliance Criteria: Title 2 Code of Federal Regulations Part 200.502 requires the City to prepare a Schedule of Expenditures of Federal Awards (SEFA) that includes all the federal awards expended during the year including the receipt of surplus property. Condition: The original SEFA provided to the auditors for major program determination did not include the Mine-Resistant Ambush Protected (MRAP) vehicle donation received under the Donated Property program. Cause: The City’s internal controls related to preparation of the SEFA did not determine that the donated MRAP should be included in the schedule of expenditures of federal awards. Effect: The SEFA did not include the donated property program. Questioned Costs: None reported. Context/Sampling: Not applicable, sampling was not used. Repeat Finding from Prior Year(s): No Recommendation: We recommend that the City enhance internal controls to ensure all program expenditures are appropriately included on the SEFA. Views of Responsible Officials: This was an unusual transaction and not a literal expenditure. We will continue to provide training on federal expenditures and items included in the SEFA and conduct in-depth research on unusual items as they happen.