CITY OF CAMBRIDGE

2 CFR Subpart F ? 200.510(b) requires the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the City?s financial statements which must include the total federal awards expended as determined in accordance with ? 200.502. At a minimum, the Schedule must: 1. List individual Federal programs by Federal agency. 2. For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. 3. Provide total Federal awards expended for each individual Federal program and the CFDA number or other identifying number when the CFDA information is not available. 4. Include the total amount provided to subrecipients from each Federal program. 5. For loan or loan guarantee programs described in ? 200.502 Basis for determining Federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. 6. Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in ? 200.414 Indirect (F&A) costs. The lack of effective controls over this compliance requirement resulted in the Schedule being misstated. The Schedule prepared by the City had the following errors: ? Assistance Listing #10.766, Community Facilities Loans and Grants, expenditures were overstated in the amount of $11,386; ? Assistance Listing #20.205, Highway Planning and Construction, expenditures were understated in the amount of $2,380,006. Adjustments, to which management have agreed, are reflected in the accompanying Schedule. Noncompliance with grant requirements as well as errors and omissions on the Schedule of Expenditures of Federal Awards could have an adverse effect on future grant awards by the awarding agency in addition to an inaccurate assessment of major federal programs that would be subjected to audit. City management should review all grant and loan award documents in order to execute policies and procedures which help ensure compliance with grant and loan requirements, including Schedule reporting requirements. The City should implement a system to track all federal expenditures and related information separately from other expenditures and report federal expenditures with proper support including, but not limited to, grant agreements, calculation of the expenditures, and any federal reporting requirements. This will help ensure the City is in compliance with grant and loan requirements, the Schedule is complete and accurate, and major federal programs are accurately identified for audit.