Finding Text
Compliance Findings
Finding 2021-02 Noncompliance with Federal and State Reporting Requirements
Assistance Listing Numbers 14.218 Community Development Block Grant Program
Federal Agencies U.S. Department of Justice
Award Number/Year 2021
Criteria
The Town has grant agreements from State of Illinois agencies with terms requiring compliance with financial reporting requirements in accordance with Uniform Guidance and the State of Illinois Grant Accountability and Transparency Act (GATA). As such, for the year ended December 31, 2021, the Town is required to submit audited financial statements, a schedule of expenditures of federal awards (SEFA) and single audit reports to the Federal Audit Clearinghouse and the same audit package plus a Consolidated Year End Financial Report (CYEFR) to the GATA portal. All items are required to be submitted within nine (9) months after the Town’s fiscal year-end. The Office of Management and Budget (OMB) issued a memorandum granting extensions to the due date for entities affected by the COVID-19 pandemic during 2020. The extended due date was March 31, 2022 for the Town. Illinois’ Grant Accountability and Transparency Act (GATA) has similar reporting deadlines to Uniform Guidance.
Condition
The Town did not submit its audited financial statements, SEFA and CYEFR and other required information as of and for the year ended December 31, 2021 to the Federal Audit Clearinghouse and GATA portal prior to the extended due date of March 31, 2022. This finding also occurred in 2020 (2020-02), 2019 (2019-005) and 2017 (2017‐002).
Cause
The Town experienced a shortage of personnel in the Department of Financial Affairs during 2020. In response to the personnel shortage, the Town outsourced most of its financial accounting functions to a CPA firm, including preparing the Town’s financial statements, SEFA, CYEFR and other supplementary reports, and this transition required time to complete.
Effect
The effect is that controls over the financial reporting process were significantly weakened thereby increasing the risk that material misstatements could be included in the financial statements, SEFA, CYEFR and other supplementary schedules without management being aware. Additionally, noncompliance with financial reporting deadlines could