Finding Text
Finding 2023-001: Internal Controls over Compliance and Other Matters
Identification of Federal Funds for Purposes of Assembling the Schedule of Expenditures of Federal
Awards – Other
U.S. DEPARTMENT OF TRANSPORTATION
Highway Planning and Construction (Federal-Aid Highway Program) – ALN 20.205
U.S. DEPARTMENT OF TREASURY
COVID-19 - Coronavirus State and Local Fiscal Recovery Funds – ALN 21.027
Criteria: Per 2 CFR 200.510(b) Schedule of expenditures of Federal awards, “the auditee must prepare a
schedule of expenditures of federal awards for the period covered by the auditee’s financial statements which
must include the total federal awards expended as determined in accordance with 2 CFR 200.502, Basis for
determining Federal awards expended.
Condition: Prior to correction, certain federal expenditures were not properly identified on the schedule of
expenditures of federal awards (SEFA). During our audit, it was determined total federal expenditures for the
Highway Planning and Construction program were overstated by approximately $481,000 and federal
expenditures for the Coronavirus State and Local Fiscal Recovery Funds program were understated by
approximately $340,000 on the SEFA.
Cause: Internal controls were not in place to ensure program related revenues (which are used to prepare the
federal expenditures for the SEFA) were properly recorded for the Highway Planning and Construction program
and that calculations for the Coronavirus State and Local Fiscal Recovery Funds program were reviewed for
accuracy.
Effect: By not having proper controls over SEFA preparation, there is a risk that the SEFA will not accurately
reflect the total amount of federal dollars expended during a particular year.
Context: The SEFA was originally overstated by $481,000 for the Highway Planning and Construction
program due to reporting $377,000 of expenditures as federal instead of local, reporting $120,000 of remaining
encumbrances as 2023 expenditures, and excluding $16,000 of expenditures incurred as a result of recording
retainage on a project. The Coronavirus State and Local Fiscal Recovery Funds program expenditures were
originally understated on the SEFA by $340,000 due to a formula error relating to the calculation of total
federal expenditures for the program.
Questioned Costs: $0
Identification of Repeat Finding: Not a repeat finding.
Recommendation: We recommend staff review procedures related to revenue recognition of its highway
construction programs to ensure amounts are properly reported on the SEFA, and that federal expenditure
calculations are reviewed for accuracy.
Views of Responsible Officials and Corrective Action Plan: Management agrees with this finding and is in the
process of developing internal controls to ensure timely and appropriate actions are made on the deficiency
noted. Additional details can be found in the City of Bloomington’s Corrective Action Plan.