CITY OF WILLIAMSPORTLocal Government

Finding 2024-002 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Reporting Federal Agency: U.S. Department of Treasury Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds ALN# 21.027 Criteria: Quarterly reports are required to be accurate and include all activity of the reporting period, supported by the applicable accounting records and fairly presented in accordance with the U.S. Department of Treasury (Treasury) requirements. Condition: The City did not have an effective process implemented to reconcile amounts reported to the Treasury to the City’s accounting records prior to submission. Cause: Management has not fully corrected and implemented formal procedures to ensure that all financial information reported to the Treasury is reconciled to the underlying accounting records prior to submission. Effect: Without an effective reconciliation process, there is an increased risk that amounts reported to the Treasury may be inaccurate, incomplete, or not supported by the City’s accounting records. During the audit, additional effort was required by management to reconcile the quarterly reports submitted to Treasury to the City’s accounting records. Repeat Finding: This is a repeat finding of 2023-002. Questions Costs: None Recommendation: Upon discussion with management, the City has reviewed and adjusted its supporting documentation which has been reflected in subsequent reporting periods. However, we recommend the City implement procedures requiring that all reports submitted be formally reconciled to the general ledger and other supporting documentation prior to submission. View of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See attached corrective action plan.

Finding 2023-002 Reporting ALN 21.027 Coronavirus State and Local Recovery Funds Criteria: The City should ensure all respective reports submitted to the granting agency reflect accurate amounts in the period of benefit. Condition: During our testing of the 4th Quarter 2023 Project and Expenditure report, certain amounts were excluded for the report when tracing back to the City’s General Ledger. Cause: The City did not include all expenditures in the 4th Quarter Project and Expenditure Report. Effect: The City was not in compliance with the program’s Reporting requirements and controls were not operating effectively Questioned Costs: None. Recommendation: The City should implement internal control procedures to ensure the Project and Expenditure Report is properly reviewed prior to submission. Management’s Response: The City discovered and corrected the error during 2024, at which time additional reviews were implemented over report submission.

Finding 2022-001 OVERALL FINANCIAL STATEMENT FINDING/ACCOUNTING RECORDS 14.218 Community Development Block Grant – Entitlement Grants Cluster ACTIVITIES ALLOWED OR UNALLOWED; ALLOWABLE COSTS/COST PRINCIPLES; EQUIPMENT AND REAL PROPERTY MANAGEMENT; PERIOD OF PERFORMANCE; PROGRAM INCOME; REPORTING; SPECIAL TESTS AND PROVISIONS Criteria: The accounts of the City should include all transactions in the benefit period. Accounts and transactions should be adequately supported by source documentation, be allowable and a proper use of taxpayer funds. The City should follow Generally Accepted Accounting Principals, Federal and State laws and regulations, and standards issued by the Government Accounting Standards Board. The City should ensure proper internal controls are in place and are functioning. Condition: We were unable to obtain sufficient appropriate audit evidence on which to base an opinion on the Financial Statements. It appears that the City did not have adequate internal controls, oversite, and review procedures over financial processes. Cause:The City has experienced significant turnover in key accounting and management positions. It appears that internal controls were not effectively designed or functioning. Currently, there are pending investigations with state/federal agencies. Audited financial information from the River Valley Transit and the Williamsport Parking Authority is not available. Effect:The possible effects on the financial statements of undetected misstatements could be both material and pervasive. The finding includes a repeat of Findings 2018-001, 2018--02, 2019-001, 2020-001, and 2021-001 from the prior year(s). Questioned Costs: The amount of questioned costs, if any, is indeterminable. Recommendation:The City should implement strong internal controls over financial processes, ensure the financial activity follows appropriate regulations, and ensure the finance department is adequately staffed. Management’s Response: During the audit period through 2022, there was a transition of fiscal and administrative personnel at the City of Williamsport (City). Due to the findings of an internal financial investigation, the City communicated with appropriate parties and a grand jury was convened. The City has been and continues to be under state and federal criminal investigations since February of 2020. Numerous financial records, extending over a 10-year period, have been provided to investigators.

Finding 2021-001 OVERALL FINANCIAL STATEMENT FINDING/ACCOUNTING RECORDS 14.218 Community Development Block Grant – Entitlement Grants Cluster ACTIVITIES ALLOWED OR UNALLOWED; ALLOWABLE COSTS/COST PRINCIPLES; EQUIPMENT AND REAL PROPERTY MANAGEMENT; PERIOD OF PERFORMANCE; PROGRAM INCOME; REPORTING; SPECIAL TESTS AND PROVISIONS Criteria: The accounts of the City should include all transactions in the benefit period. Accounts and transactions should be adequately supported by source documentation, be allowable and a proper use of taxpayer funds. The City should follow Generally Accepted Accounting Principals, Federal and State laws and regulations, and standards issued by the Government Accounting Standards Board. The City should ensure proper internal controls are in place and are functioning. Condition: We were unable to obtain sufficient appropriate audit evidence on which to base an opinion on the Financial Statements. It appears that the City did not have adequate internal controls, oversite, and review procedures over financial processes. Cause:The City has experienced significant turnover in key accounting and management positions. It appears that internal controls were not effectively designed or functioning. Currently, there are pending investigations with state/federal agencies. Audited financial information from the River Valley Transit and the Williamsport Parking Authority is not available. Effect:The possible effects on the financial statements of undetected misstatements could be both material and pervasive. The finding includes a repeat of Findings 2018-001, 2018--02, 2019-001, and 2020-001 from the prior year(s). Questioned Costs: The amount of questioned costs, if any, is indeterminable. Recommendation:The City should implement strong internal controls over financial processes, ensure the financial activity follows appropriate regulations, and ensure the finance department is adequately staffed. Management’s Response: During the audit period through 2022, there was a transition of fiscal and administrative personnel at the City of Williamsport (City). Due to the findings of an internal financial investigation, the City communicated with appropriate parties and a grand jury was convened. The City has been and continues to be under state and federal criminal investigations since February of 2020. Numerous financial records, extending over a 10-year period, have been provided to investigators.

14.218 Community Development Block Grant – Entitlement Grants Cluster ACTIVITIES ALLOWED OR UNALLOWED; ALLOWABLE COSTS/COST PRINCIPLES; EQUIPMENT AND REAL PROPERTY MANAGEMENT; PERIOD OF PERFORMANCE; PROGRAM INCOME; REPORTING; SPECIAL TESTS AND PROVISIONSCriteria: The accounts of the City should include all transactions in the benefit period. Accounts and transactions should be adequately supported by source documentation, be allowable and a proper use of taxpayer funds. The City should follow Generally Accepted Accounting Principals, Federal and State laws and regulations, and standards issued by the Government Accounting Standards Board. The City should ensure proper internal controls are in place and are functioning. Condition: We were unable to obtain sufficient appropriate audit evidence on which to base an opinion on the Financial statements. It appears the City did not have adequate internal controls, oversite, and review procedures over financial processes. Cause: The City has experienced significan turnover in key accounting and management positions. It appears that internal controls were not effectively designed of functioning. Currently, there are pending investigations with state/federal agencies. Audited financial information from River Valley Transit and Williamsport Parking Authority is not available. Effect: The possibile effects on the financial statementsof undetected misstatements could be material and pervasive. The finding includes a repeat of finding 2018-001, 2018-002, and 2019-001 from the prior year(s). Questioned Costs: The amount of questioned costs, if any, is indeterminable. Recommnendation: The City should implement strong internal controls over financial processes, ensure the financial activity follows appropriate regualtions, and ensure the finance department is adequately staffed. Management’s Response: During the audit period through 2022, there was a transition of fiscal and administrative personnel at the City of Williamsport (City). Due to the findings of an internal financial investigation, the City communicated with appropriate parties and a grand jury was convened. The City has been and continues to be under state and federal criminal investigations since February of 2020. Numerous financial records, extending over a 10-year period, have been provided to investigators. In June of 2022, the City hired a consultant to provide fiscal oversight on an ongoing basis and reconcile, to the extent possible, prior financial records. Since that time, the City has enhanced internal control and implemented policies to assure accurate financial reporting and compliance.

14.218 Community Development Block Grant – Entitlement Grants Cluster ACTIVITIES ALLOWED OR UNALLOWED; ALLOWABLE COSTS/COST PRINCIPLES; EQUIPMENT AND REAL PROPERTY MANAGEMENT; PERIOD OF PERFORMANCE; PROGRAM INCOME; REPORTING; SPECIAL TESTS AND PROVISIONS Criteria: The accounts of the City should include all transactions in the benefit period. Accounts and transactions should be adequately supported by source documentation, be allowable and a proper use of taxpayer funds. The City should follow Generally Accepted Accounting Principals, Federal and State laws and regulations, and standards issued by the Government Accounting Standards Board. The City should ensure proper internal controls are in place and are functioning. Condition: We were unable to obtain sufficient appropriate audit evidence on which to base an opinion on the Financial Statements. It appears that the City did not have adequate internal controls, oversite, and review procedures over financial processes. Cause: The City has experienced significant turnover in key accounting and management positions. It appears that internal controls were not effectively designed or functioning. Currently, there are pending investigations with state/federal agencies. Audited financial information from the River Valley Transit and the Williamsport Parking Authority is not available. Effect: The possible effects on the financial statements of undetected misstatements could be both material and pervasive. The finding includes a repeat of Findings 2018-001 and 2018-002 from the prior year. Questioned Costs: The amount of questioned costs, if any, is indeterminable. Recommendation: The City should implement strong internal controls over financial processes, ensure the financial activity follows appropriate regulations, and ensure the finance department is adequately staffed. Management's Response: During the audit period through 2022, there was a transition of fiscal and administrative personnel at the City of Williamsport (City). Due to the findings of an internal financial investigation, the City communicated with appropriate parties and a grand jury was convened. The City has been and continues to be under state and federal criminal investigations since February of 2020. Numerous financial records, extending over a 10-year period, have been provided to investigators. In June of 2022, the City hired a consultant to provide fiscal oversight on an ongoing basis and reconcile, to the extent possible, prior financial records. Since that time, the City has enhanced internal control and implemented policies to assure accurate financial reporting and compliance.

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