City of Kingsford

2024-004 Uniform Grant Guidance Implementation Federal Agency: Across all agencies Federal Program Name: Across all programs Federal Assistance Listing Number: Across all Federal Award Identification Number and Year: Across all Pass-Through Agency: Across all agencies Pass-Through Number(s): Across all Award Period: n/a Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: Uniform Guidance requires the City to maintain certain policies related to cash management, cost allowability, procurement, and conflict of interest provisions, along with appropriate financial management systems and internal controls over federal awards to safeguard federal funds. Condition: The City has various policies and procedures in place to safeguard its assets and establish related controls over receipts, disbursements, payroll transactions and general ledger maintenance. Federal awards received and disbursed by the City are managed through these city-wide policies and procedures; however, the policies and procedures had not been evaluated to ensure compliance with the requirements of Uniform Guidance as of year-end. Questioned Costs: None noted Context: During our audit, the City did not have various written entity wide policies as required by the Uniform Guidance, or written grant level policies. Cause: The City has begun but not finalized an assessment of its financial management system and related internal controls over federal awards, along with an evaluation of existing policies for compliance with Uniform Guidance by year-end. Effect: The City could become noncompliant with requirement of Uniform Guidance, resulting in future findings and questioned costs related to federal awards administered by the City. Repeat Finding: No Recommendation: We recommend the City continue the process in assessing its financial management systems and related internal controls over federal awards during the 2025 fiscal year. This assessment should include evaluating existing policies and procedures to determine where additional enhancements should be made or new policies created, a plan to communicate these policies to City employees, and procedures to periodically review and update, as considered necessary. View of Responsible Officials There is no disagreement with the audit finding.

2024-004 Uniform Grant Guidance Implementation Recommendation: CLA recommends the City continue the process in assessing its financial management systems and related internal controls over federal awards during the 2025 fiscal year. This assessment should include evaluating existing policies and procedures to determine where additional enhancements should be made or new policies created, a plan to communicate these policies to City employees, and procedures to periodically review and update, as considered necessary. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action planned/taken in response to finding: The City is still working on assessing its financial management system and related internal controls over federal awards and evaluating the existing policies for compliance with Uniform Guidance. The City is working to educate the employees on the policies in place and reviewing and updating as necessary. Name of the contact person responsible for corrective action: Michael Stelmaszek, City Manager Planned completion date for corrective action plan: June 30, 2025

2024-005 Suspension and Debarment Federal Agency: Environmental Protection Agency Federal Program Name: Drinking Water State Revolving Fund Federal Assistance Listing Number: 66.468 Federal Award Identification Number and Year: Unknown Award Period: March 03, 2021 – December 31, 2026 Type of Finding: Material Weakness in Internal Control over Compliance Criteria or Specific Requirement: 2 CFR 200.320 Methods of Procurement state that when a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: The City did not check suspension and debarment status was verified prior to entering into contract with vendors. Questioned Costs: None noted Context: While performing compliance procedures, it was noted that the City did not check vendors for suspension and debarment. Cause: The City does not have controls related to ensuring suspension and debarment are verified prior to entering into contract with vendors. Effect: The City may contract with a vendor that has been suspended or debarred from receiving federal funds. Repeat Finding: No Recommendation: We recommend the City continue the process in assessing its financial management systems and related internal controls over federal awards during the 2025 fiscal year. This assessment should include evaluating existing policies and procedures to determine where additional enhancements should be made or new policies created, a plan to communicate these policies to City employees, and procedures to periodically review and update, as considered necessary. View of Responsible Officials There is no disagreement with the audit finding.

2024-005 Suspension & Debarment Recommendation: CLA recommends the City continue the process in assessing its financial management systems and related internal controls over federal awards during the 2025 fiscal year. This assessment should include evaluating existing policies and procedures to determine where additional enhancements should be made or new policies created, a plan to communicate these policies to City employees, and procedures to periodically review and update, as considered necessary. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action planned/taken in response to finding: The City has implemented procedures to ensure vendors are being checked for suspension and debarment prior to entering into contracts. Name of the contact person responsible for corrective action: Michael Stelmaszek, City Manager Planned completion date for corrective action plan: June 30, 2025