Finding Text
Finding - Item 2022-07
Major Federal Award Program Audit
Reporting under Government Auditing Standards
U.S. Department of Treasury
Coronavirus State and Local Fiscal Recovery Funds - ALN 21.027
U.S. Department of Housing & Urban Development Community Development Block Grants - ALN 14.218
U.S. Department of Justice
Equitable Sharing Program -ALN 16.922
Annual Audit
Statement of Condition: The required annual audit of the financial statements for the year ended June 30, 2022 was not completed and submitted to the federal and state governments within the time frames required by Federal Regulations and the State of Georgia.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance) require that grant recipients that expend $750,000 or more in federal awards in a fiscal year have a single audit conducted in accordance with 45 CFR Part 75, Subpart F and submit the related audit reports electronically to the Federal Audit Clearinghouse within the specified time frame. The Official Code of Georgia, Annotated §36-81-7 requires an annual audit of the financial affairs, transactions of all funds and activities of the local government for each fiscal year of the local government. The audit report must contain financial statements prepared in conformity with generally accepted governmental accounting principles. The annual audit report of the local government shall be completed and a copy forwarded to the state auditor within 180 days after the close of the local government's fiscal year end.
Cause of Condition: During the year in question, the City experienced disruption in normal business operations due to the COVID-19 pandemic and employee turnover in the Finance Department.
Regular meetings and communications were limited. During this time, the City did not have an assigned coordinator to insure that the audit contract was awarded, completed and submitted timely.
Effect of Condition: The City is not in compliance with federal and state reporting requirements.
Recommendation: We recommend that all financial reporting and submission requirements and deadlines required by federal and state regulation be adhered to for future periods.
Management's Response: The City concurs with the finding.
During the audit year in question, the City experienced a significant turnover in multiple key financial positions. The significant turnover severely hampered the City's ability to compile and complete the financial reports and submissions by the required federal and state deadlines. The City recently completed its audits of the financial statements and federal awards for the fiscal year ended June 30, 2022. While there are still key financial positions with vacancies, the City is confident that future reports will be submitted in a timely manner. The City has engaged a public accounting firm and plans to begin its audit for the fiscal year ended June 30, 2023, presently.