City of Hopkins

2023-001 Uniform Guidance written policies and procedures Condition: During our audit, we discovered the City did not develop written procedures as required by the Uniform Guidance for the following: • Determination of Allowable of Costs - §200.302(b)(7) • Time and Effort - §200.430(a) • Cash Management of Federal Funds - §200.302(b)(6) • Conflict of Interest - §200.318(c)(1-2) • The City must also ensure that existing written procedures are in compliance with: • General Procurement Standards - §200.318-.326 • Equipment Management Requirements - §200.313 Criteria: The City “must” establish and maintain effective internal control over Federal awards that provides reasonable assurance that the City is managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. Cause: The City did not have these written policies and procedures in place sufficient to comply with the Uniform Guidance requirements. Effect: The City was out of compliance with this requirement. Recommendation: The City should implement written policies and procedures to adhere to the above mentioned Uniform Guidance requirements. Management response: The City will establish written policies and procedures to ensure future compliance with the Uniform Guidance requirements.

2022-001 Uniform Guidance written policies and procedures Condition: During our audit, we discovered the City did not develop written procedures as required by the Uniform Guidance for the following: • Determination of Allowable of Costs - §200.302(b)(7) • Time and Effort - §200.430(a) • Cash Management of Federal Funds - §200.302(b)(6) • Conflict of Interest - §200.318(c)(1-2) • The City must also ensure that existing written procedures are in compliance with: • General Procurement Standards - §200.318-.326 • Equipment Management Requirements - §200.313 Criteria: The City “must” establish and maintain effective internal control over Federal awards that provides reasonable assurance that the City is managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. Cause: The City did not have these written policies and procedures in place sufficient to comply with the Uniform Guidance requirements. Effect: The City was out of compliance with this requirement. Recommendation: The City should implement written policies and procedures to adhere to the above mentioned Uniform Guidance requirements. Management response: The City will establish written policies and procedures to ensure future compliance with the Uniform Guidance requirements.

2022-002 Incomplete Schedule of Expenditures of Federal Awards Condition: During our audit, we discovered the City did not accurately prepare the Schedule of Expenditures of Federal Awards to include all federal awards. Criteria: The City “must” establish and maintain effective internal control over Federal awards that provides reasonable assurance that the City is managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. Cause: The City did not have these written policies and procedures in place sufficient to comply with the Uniform Guidance requirements. Effect: The City was out of compliance with this requirement. Recommendation: The City should implement procedures to ensure federal awards are accurately identified and reported on the Schedule of Expenditures of Federal Awards. Management response: The City will establish procedures to ensure future schedule of expenditures of federal awards includes all federal expenditures.

2020-002U.S. Department of the TreasuryCoronavirus Relief FundCFDA Number: 20.019CPassed Through Minnesota Department of RevenuePass Through Number: SLT0016Award Period: 3/1/2020 ? 11/15/2020Type of Finding: Material Weakness over Compliance: Subrecipient MonitoringCriteria: Uniform Guidance 2 CFR 200.331 dictates that the City needs to monitor the subrecipient toprovide reasonable assurance that the subrecipient used the subaward for authorized purposes incompliance with Federal statutes, regulations and the terms and conditions of the subaward. It alsorequires that specific items be included in the subrecipient agreements.Condition and Context: The City did not obtain proper support for expenditures from subrecipientsand also did not have necessary components within the subrecipient agreements such assubrecipient?s DUNS number, federal award date to the city , name of the federal awarding agency,CFDA number, and indirect cost rate information.Possible Effect: Not receiving the appropriate support for expenditures could result in the subrecipientnot spending the funds on award related expenditures. Not providing the appropriate award informationcould result in the subrecipient not being successful in the administration of the award funds.Questioned Costs: NoneRepeat Finding: NoCause: The federal funding was new to the City in 2020 and they were not aware of all of the requiredaward agreement language and requirements for subrecipient monitoring.Recommendation: We recommend that the City put in place internal controls whenever working with asubrecipient of federal funding to ensure that all expenditures are properly supported bydocumentation, that the documentation is provided to the City on regular intervals as the expendituresare incurred by the subrecipient, and that the information is reviewed and approved by the City anddocumentation of this process is maintained and ensure they included all required components forsubrecipient agreements prior to signing and execution of agreementClient?s Response to the finding: The City will ensure that subrecipient agreements have all requiredaspects necessary and that they receive, approve, and retain such documentation when working withsubrecipient.

2020-003U.S. Department of the TreasuryCoronavirus Relief FundCFDA Number: 20.019CPassed Through Minnesota Department of RevenuePass Through Number: SLT0016Award Period: 3/1/2020 ? 11/15/2020Type of Finding: Material Weakness in Internal Control Over Compliance: ReportingCriteria: The Coronavirus Relief Fund, as administered in the State of Minnesota, required eachmunicipality utilizing the grant dollars to submit reports at regular intervals throughout the grant period.The Uniform Guidance requires that internal controls be maintained and documented over compliancefor all federal grants.Condition and Context: The City was preparing the reports required by the State of Minnesota andsubmitting them timely. However, the City was not having someone other than the preparer of thereport, review the report prior to submission. The City had filed 5 reports and none of them had anydocumentation that someone other than the preparer had reviewed them for accuracy.Possible Effect: It would be possible for something to have been incorrect in one of the reports and forthat report to have been filed with the State of Minnesota. The error could go unnoticed by the City inthat instance as no one was reviewing the reports other than the person preparing them.Questioned Costs: NoneRepeat Finding: NoCause: The federal funding was new to the City in 2020 and they were not aware that they needed tohave someone reviewing the reports prior to submission to have proper controls over reporting.Recommendation: We recommend that the City ensure that if they need to prepare any reports forfederal programs that someone review and approve that report, other than the preparer, prior tosubmitting it for the grant. That review and approval of the report should be properly documented so itcan be reviewed.Client?s Response to the finding: The City will ensure that they implement a review system for thesereports in the future and ensure that the review is documented.