City of Wausau

Federal Agency: U.S. Department of the Treasury Federal Program Name: State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Period: 3/3/2021 – 12/31/2026 Compliance Requirement: Procurement – Suspension and Debarment Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: 2 CFR Section 200.214 requires non-federal entities to follow suspension and debarment regulations outlined in 2 CFR part 180. When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal 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’s provided documentation that a search for suspension and debarment was performed and that none of the vendors for covered transactions were suspended or debarred from receiving federal funds. The City’s internal controls did not ensure that the date the search was performed was maintained to ensure that the City performed the search prior to procurement. Questioned Costs: None Context: While performing audit procedures, it was noted that City management did not maintain documentation of the date that the search for suspension and debarment was performed and that it was prior to finalizing the procurement. Cause: The City did not have a procedure in place to require documentation be maintained that the search for suspension and department associated with procurement transactions in excess of the $25,000 threshold had been performed prior to procurement. Effect: Certain vendors could be used that are considered suspended or debarred by the federal government resulting in noncompliance. Repeat Finding: 2023-003 Recommendation: We recommend that the City review its policies over suspension and debarment review to ensure they are maintaining compliance and controls over verifying or contracting with vendors that are allowable. Views of Responsible Officials: There is no disagreement with the audit finding

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Community Development Block Grants/Entitlement Grants Assistance Listing Number: 14.218 Federal Award Identification Number and Year: B-19-MC-55-0017, 2019; B-20-MC-55-0017, 2020; B-20-MW-55-0017, 2020; B-21-MC-55-0017, 2021; B-22MC-55-0017, 2022; B-23MC-55-0017, 2023 Award Period: 1/1/2019 – 9/1/2030 Compliance Requirements: Reporting Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires the City to implement and maintain a system of internal controls over federal grants. Condition: The City has not formally designated an individual to review and approve the reports nor clarify how the review and approval was to be documented, to ensure the compliance requirements are completed in accordance with the grant requirements. Questioned costs: None Context: The City did not have procedures requiring documentation of the review and approval by an individual other than the preparer of all required annual reports. Cause: The City had not performed a periodic evaluation of the internal controls surrounding the grant program to identify the lack of documentation indicating a review of the annual reporting and environmental review forms had been performed. Effect: Without documenting the review, there is a risk that the reports were not reviewed prior to submission by the City and could contain an error. Repeat Finding: Repeat of Finding 2022-001 Recommendation: We recommend the City review the various requirements of the CDBG grant program and identify individuals who can act as a reviewer and approver of the reporting process. We also recommend the City document these procedures and internal controls as required by Uniform Guidance. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of the Treasury Federal Program Name: State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Period: 3/3/2021 – 12/31/2026 Compliance Requirement: Procurement – Suspension and Debarment Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or Specific Requirement: 2 CFR Section 200.214 requires non-federal entities to follow suspension and debarment regulations outlined in 2 CFR part 180. When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal 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’s documentation of their search for suspension and debarment did not include the date the search was performed and therefore it was not possible to determine that the search was performed prior to the date of procurement. Questioned Costs: None Context: While performing audit procedures, it was noted that City management did not maintain documentation of the date that the search for suspension and debarment was performed and that it was prior to finalizing the procurement. Cause: The City did not have a procedure in place to require documentation be maintained that the search for suspension and department associated with procurement transactions in excess of the $25,000 threshold had been performed prior to procurement. Effect: Certain vendors could be used that are considered suspended or debarred by the federal government resulting in noncompliance. Repeat Finding: 2022-002 Recommendation: We recommend that the City review its policies over suspension and debarment review to ensure they are maintaining compliance and controls over verifying or contracting with vendors that are allowable. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Community Development Block Grants/Entitlement Grants Assistance Listing Number: 14.218 Federal Award Identification Number and Year: B-19-MC-55-0017, 2019; B-20-MC-55-0017, 2020; B- 20-MW-55-0017, 2020; B-21-MC-55-0017, 2021; B-22MC-55-0017, 2022; B-23MC-55-0017, 2023 Award Period: 1/1/2019 – 9/1/2030 Compliance Requirements: Reporting Type of Finding: * Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires the City to implement and maintain a system of internal controls over federal grants. Condition: The City has not formally designated an individual to review and approve the reports nor clarify how the review and approval was to be documented, to ensure the compliance requirements are completed in accordance with the grant requirements. Questioned costs: None Context: The City did not have procedures requiring documentation of the review and approval by an individual other than the preparer of all required annual reports. Cause: The City had not performed a periodic evaluation of the internal controls surrounding the grant program to identify the lack of documentation indicating a review of the annual reporting forms had been performed. Effect: Without documenting the review, there is a risk that the reports were not reviewed prior to submission by the City and could contain an error. Repeat Finding: Repeat of Finding 2022-001 Recommendation: We recommend the City review the various requirements of the CDBG grant program and identify individuals who can act as a reviewer and approver of the reporting process. We also recommend the City document these procedures and internal controls as required by Uniform Guidance. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Community Development Block Grants/Entitlement Grants Assistance Listing Number: 14.218 Federal Award Identification Number and Year: B-19-MC-55-0017, 2019; B-20-MC-55-0017, 2020; B-20-MW-55-0017, 2020; B-21-MC-55-0017, 2021; B-22MC-55-0017, 2022; B-23MC-55-0017, 2023 Award Period: 1/1/2019 – 9/1/2030 Compliance Requirements: Reporting Type of Finding: • Material Weakness in Internal Control over Compliance • Other Matters Criteria or specific requirement: Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System. In addition, 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires the City to implement and maintain a system of internal controls over federal grants. Condition: The City did not report any first tier subawards related to the CDBG grant program to the required federal reporting system for grant funds awarded during 2023. Questioned costs: None Context: The City did not report any of the subawards that required disclosure under the Federal Funding Accountability and Transparency Act. We noted that the City’s Community Development Department did not have procedures or documentation to ensure that this procedure was performed. Effect: The City failed to report first-tier subawards as required by federal law. Cause: The City had not performed a periodic evaluation of the requirements and internal controls surrounding the grant program to identify the requirement of the annual FFATA reporting requirement. Repeat Finding: No Recommendation: We recommend the City review the various grant requirements and laws surrounding the CDBG grant program and ensure that any written internal control or procedure manuals include all of the required compliance requirements. We also recommend that the City ensure multiple individuals are trained on the administration of the grant. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of the Treasury Federal Program Name: State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Period: 3/3/2021 – 12/31/2026 Compliance Requirement: Procurement – Suspension and Debarment Type of Finding: * Significant Deficiency in Internal Control over Compliance * Other Matters Criteria or Specific Requirement: 2 CFR Section 200.214 requires non-federal entities to follow suspension and debarment regulations outlined in 2 CFR part 180. When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal 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’s documentation of their search for suspension and debarment did not include the date the search was performed and therefore it was not possible to determine that the search was performed prior to the date of procurement. Questioned Costs: None Context: While performing audit procedures, it was noted that City management did not maintain documentation of the date that the search for suspension and debarment was performed and that it was prior to finalizing the procurement. Cause: The City did not have a procedure in place to require documentation be maintained that the search for suspension and department associated with procurement transactions in excess of the $25,000 threshold had been performed prior to procurement. Effect: Certain vendors could be used that are considered suspended or debarred by the federal government resulting in noncompliance. Repeat Finding: 2022-002 Recommendation: We recommend that the City review its policies over suspension and debarment review to ensure they are maintaining compliance and controls over verifying or contracting with vendors that are allowable. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Community Development Block Grants/Entitlement Grants Assistance Listing Number: 14.218 Federal Award Identification Number and Year: B-19-MC-55-0017, 2019; B-20-MC-55-0017, 2020; B-20-MW-55-0017, 2020; B-21-MC-55-0017, 2021; B-22MC-55-0017, 2022; B-23MC-55-0017, 2023 Award Period: 1/1/2019 – 9/1/2030 Compliance Requirements: Reporting Type of Finding: * Material Weakness in Internal Control over Compliance * Other Matters Criteria or specific requirement: Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System. In addition, 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires the City to implement and maintain a system of internal controls over federal grants. Condition: The City did not report any first tier subawards related to the CDBG grant program to the required federal reporting system for grant funds awarded during 2023. Questioned costs: None Context: The City did not report any of the subawards that required disclosure under the Federal Funding Accountability and Transparency Act. We noted that the City’s Community Development Department did not have procedures or documentation to ensure that this procedure was performed. Effect: The City failed to report first-tier subawards as required by federal law. Cause: The City had not performed a periodic evaluation of the requirements and internal controls surrounding the grant program to identify the requirement of the annual FFATA reporting requirement. Repeat Finding: No Recommendation: We recommend the City review the various grant requirements and laws surrounding the CDBG grant program and ensure that any written internal control or procedure manuals include all of the required compliance requirements. We also recommend that the City ensure multiple individuals are trained on the administration of the grant. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Community Development Block Grants/Entitlement Grants Assistance Listing Number: 14.218 Federal Award Identification Number and Year: B-19-MC-55-0017, 2019; B-20-MC-55-0017, 2020; B-20-MW-55-0017, 2020; B-21-MC-55-0017, 2021; B-22MC-55-0017, 2022 Award Period: 1/1/2019 ? 9/1/2029 Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires the City to implement and maintain a system of internal controls over federal grants. Condition: The City has not formally designated an individual to review and approve the reports or the environmental reviews nor clarify how the review and approval was to be documented, to ensure the compliance requirements are completed in accordance with the grant requirements. Questioned costs: None Context: The City did not have procedures requiring documentation of the review and approval by an individual other than the preparer of all required annual reports and the environmental review determination form. Cause: The City had not performed a periodic evaluation of the internal controls surrounding the grant program to identify the lack of documentation indicating a review of the annual reporting and environmental review forms had been performed. Effect: Without documenting the review, there is a risk that the reports were not reviewed prior to submission by the City and could contain an error. Repeat Finding: Repeat of Finding 2021-002 Recommendation: We recommend the City review the various requirements of the CDBG grant program and identify individuals who can act as a reviewer and approver of the environmental review requirements. We also recommend the City document these procedures and internal controls as required by Uniform Guidance. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of the Treasury Federal Program Name: State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Period: 3/3/2021 ? 12/31/2026 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: 2 CFR Section 200.214 requires non-federal entities to follow suspension and debarment regulations outlined in 2 CFR part 180. When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal 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 maintain documentation to support that the required search for suspension and debarment was performed. Questioned Costs: None Context: While performing audit procedures, it was noted that City management did not maintain documentation that a search for suspension and debarment prior to finalizing the procurement was performed. Cause: The City did not have a procedure in place to require documentation be maintained that a search for suspension and department associated with procurement transactions in excess of the $25,000 threshold had been performed. Effect: Certain vendors could be used that are considered suspended or debarred by the federal government resulting in noncompliance. Repeat Finding: No Recommendation: We recommend that the City review its policies over suspension and debarment review to ensure they are maintaining compliance and controls over verifying or contracting with vendors that are allowable. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal Funding Accountability and Transparency Act- CDBG Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Community Development Block Grants/Entitlement Grants Assistance Listing Number: 14.218 Federal Award Identification Number and Year: B-19-MC-55-0017, 2019; B-20-MC-55-0017, 2020; B-20-MW-55-0017, 2020; B-21-MC-55-0017, 2021 Award Period: 7/12/2019 ? 9/1/2028 Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Criteria or specific requirement: Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System. In addition, 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires the City to implement and maintain a system of internal controls over federal grants. Condition: The City did not report any first tier subawards related to the CDBG grant program to the required federal reporting system. In addition, the CDBG grant requires periodic reports to be completed and filed with the federal government. The City did not have any documentation of approval of the report by someone other than the preparer prior to submission. Questioned costs: None Context: The City did not report the four subawards that required disclosure under the Federal Funding Accountability and Transparency Act. We noted that the City?s Community Development Department did not have procedures or documentation to ensure that someone other than the preparer reviewed and approved the required grant reports. Cause: The City personnel responsible for the grant administration were not aware of the reporting requirements of the Act. The City had not performed an evaluation of the internal controls surrounding the grant to identify the lack of a secondary reviewer for any periodic reporting. Repeat Finding: No Recommendation: We recommend the City review the various grant requirements and laws surrounding the CDBG grant program and ensure that any written internal control or procedure manuals include all of the required compliance requirements. We also recommend that the City ensure multiple individuals are trained on the administration of the grant. Views of responsible officials: There is no disagreement with the audit finding.

Environmental Reviews - CDBG Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Community Development Block Grants/Entitlement Grants Assistance Listing Number: 14.218 Federal Award Identification Number and Year: B-19-MC-55-0017, 2019; B-20-MC-55-0017, 2020; B-20-MW-55-0017, 2020; B-21-MC-55-0017, 2021 Award Period: 7/12/2019 ? 9/1/2028 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires the City to implement and maintain a system of internal controls over federal grants. Condition: The City has not designated an individual to review and approve the reports or the environmental reviews to ensure they are completed in accordance with the grant requirements. Questioned costs: None Context: The City did not have procedures requiring a review and approval of the environmental review determination form required by the grant. Cause: The City had not performed periodic evaluation of the internal controls surrounding the grant program to identify the lack of a secondary reviewer regarding and environmental review processes and requirements. Effect: The City did not have an adequate system of internal control that would have prevented and detected any errors. Repeat Finding: No Recommendation: We recommend the City review the various requirements of the CDBG grant program and identify individuals who can act as a reviewer and approver of the environmental review requirements. We also recommend the City document these procedures and internal controls as required by Uniform Guidance. Views of responsible officials: There is no disagreement with the audit finding.

Cash Management - Transit Federal Agency: U.S. Department of Transportation Federal Program Name: Federal Transit ? Formula Grants Assistance Listing Number: 20.507 Federal Award Identification Number and Year: WI-2022-007-00, 2021 Award Period: 1/1/2021 ? 12/31/2021 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: Grant claims filed by the City to the granting agencies must be accurate, reconcile to the City?s general ledger system, and for cost-reimbursement grants, represent costs incurred. Internal controls should be designed and implemented to prevent and detect errors in the data reported on the grant claims. Segregation of duties is an internal control intended to prevent or decrease the occurrence of errors or intentional fraud. Segregation of duties ensures that no single employee has control over all phases of a transaction. Condition: There was no review of the reports and claims for reimbursement by someone other than the preparer. Accordingly, this does not allow for a proper segregation of duties for internal control purposes over cash management compliance requirements Questioned Costs: None Context: While performing audit procedures, it was noted that management does not have internal controls in place to provide and document proper segregation of duties over grant reporting for the transit grant. Cause: The department and the positions responsible for preparing, reviewing, and approving the report are combined for one person resulting in the missed cash management control requirements. Effect: Information could be mis-keyed or potentially altered if there is no segregation of duties or review of reporting before being sent to the granting agency. Repeat Finding: No Recommendation: We recommend that the City review its internal controls and designate an individual other than the preparer to review and approve any grant claims. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal agency: U.S. Department of the Treasury Federal program title: Coronavirus Relief Funds Assistance Listing Number: 21.019 Pass-Through Agency: WI Department of Administration Pass-Through Number(s): N/A Award Period: 3/1/2020-12/31/2020 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of Activities Allowed or Unallowed and Allowable Costs/Cost Principles. The City should have internal controls designed to ensure compliance with those provisions. Condition: The City did not have an adequate system of reviewing and approving time worked within the police department during the year. Questioned costs: None Context: During our testing, we noted that the City?s police department implemented a new procedure related to the tracking of time worked due to the events surrounding the COVID Pandemic. This new procedure did not include adequate controls designed to ensure all time keeping was appropriately reviewed and approved while the Police department was not using the standard time keeping system. Manual procedures were used instead based on a schedule, but there was no specific review and approval over the new timekeeping process. Once the operations went back to normal, the control was put back into place. Cause: The City determined that using the automated timekeeping system would result in incorrect pay amounts due to hour differences. In order to ensure the same payroll amount was calculated, the City moved to a manual timekeeping system. With the new system, there was no documentation of final review or approval over the timesheets. Effect: The City did not have an adequate system of internal control that would have prevented and detected any errors. Repeat Finding: None Recommendation: We recommend the City review its current procedures to ensure that adequate documentation regarding review and approval exist and implement a review of new systems to ensure the related internal controls are properly designed. Views of responsible officials: There is no disagreement with the audit finding.