CITY OF CARLTON

SECTION III: FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS Finding 2019-004 Internal Controls Over Compliance With Allowable Costs and Procurement Federal Program: This finding pertains to all Federal Programs. Condition: The City does not have formally documented written controls to ensure compliance with the U.S. Office of Management and Budget?s (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), in regards to allowable costs and procurement procedures. Criteria: 2 CFR ? 200.302(b) requires the City to have written procedures for determining the allowability of costs in accordance with 2 CFR 200 Subpart E ? Cost Principles. Additionally, 2 CFR ? 318(a), requires the City to formally document procedures used for procurements made within federal programs, to demonstrate compliance with Uniform Guidance. Cause: The City?s policies and procedures had not been formally drafted and updated in written form. Effect: The failure to have written policies and procedures resulted in the City?s noncompliance with the requirements of the Uniform Guidance. Context: This is a general requirement that pertains to all federal grants. This was not identified via sampling procedures. Questioned Costs: None identified. Recommendation: We recommend the City review the Electronic Code of Federal Regulations, particularly the sections referenced above, to obtain a better understanding of the related requirements under Uniform Guidance. Based on this understanding, we recommend the City adopt written policies and procedures pertaining to determining the allowability of costs and procurement procedures for all federal programs. Views of Responsible Officials and Planned Corrective Actions: Management agrees with our recommendation. See corresponding Corrective Action Plan.