Finding Text
Criteria: 2 CFR Part 200 requires that non-federal entities establish and maintain effective internal control over federal awards to provide reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the specific award. The financial management system of each nonfederal entity must provide accurate, current, and complete disclosure of the financial results of each federal award in accordance with grant requirements. Condition: During our testing of the City’s compliance with the reporting requirements of the Substance Abuse and Mental Health Service (SAMHSA), we noted that the required annual Federal Financial Report (FFR), due on December 28, 2022, was not submitted by the City until January 8, 2023. Cause: The City’s internal controls over compliance were not sufficiently designed to prevent noncompliance with the terms of the SAMHSA grant. Effect: The City did not meet the reporting requirement of the SAMHSA grant because the required annual report was not filed timely. Recommendation: We recommend the City design controls to ensure an adequate process is in place to submit the required reports for federal grants by the deadlines set forth by the federal government. Auditee’s Response: We agree with the finding and will ensure controls are in place for timely reporting.