Village of Northfield

Finding 2023-002: Control and Compliance over Reporting Assistance Listing Title: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Agency: U.S. Department of Treasury Pass-Through Entity: Illinois Department of Commerce and Economic Opportunity Criteria: According to the Uniform Guidance (2 CFR 200), entities are required to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. This includes timely and proper submission of required reports. The annual Coronavirus State and Local Fiscal Recovery Plan (CSLFRF) Project and Expenditure (P&E) report is due on April 30. Condition: The Village failed to document proper review of the CSLFRF P&E report by someone other than the original preparer. Additionally, the CSLFRF P&E report was not submitted until August 21, 2023. Cause: The cause of the condition appears to be a lack of adequate internal controls to ensure that required reports are properly reviewed and submitted in a timely manner. Effect or Potential Effect: The lack of a documented review and late submission of the report could result in non-compliance with the terms and conditions of the Federal award. This could potentially lead to questioned costs, or in severe cases, loss of funding. Questioned costs: None noted. Context: The annual CSLFRF P&E report was the only report required and tested. The sampling was a statistically valid sample. Recommendation: We recommend that the Village implement internal controls to ensure that required reports are properly reviewed by someone other than the preparer and submitted in a timely manner. This could include establishing a tracking system for report due dates and requiring sign-off by a secondary reviewer. Views of responsible officials: The Village is keenly aware of all the deadlines related to the ARPA funds and attempted to file the report on time, however due to change in staffing, the new finance director was locked out of the filing system and unable to file the report. Through numerous attempts at reaching help and support and even asking for help with other finance directors (who were also experiencing the same issue), the new finance director was eventually was able to login and file the report, but it took many attempts and a firm resolve to solve the problem. The former finance director had believed he had transitioned access to the account over to the new finance director last year after he had filed the prior report, but something was not working on the back end which needed to be fixed. So basically the sole reason why the report was not filed on time was that the system was not working as it should. Thank you.