City of IsleLocal Government

Finding 2022-005 Internal Controls Over Compliance for Cash Management, Allowable Costs, and Procurement Federal Program: 10.760 Water and Waste Disposal Systems for Rural Communities 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 determining allowable costs, procurement procedures, and cash management. Criteria: 2 CFR ? 200.302(b) requires the City to have written procedures related to managing cash from federal awards, including determining the allowability of costs in accordance with 2 CFR 200 Subpart E ? Cost Principles. Additionally, 2 CFR ? 318(a) and (c), requires the City to formally document procedures used for procurements made within federal programs, to demonstrate compliance with Uniform Guidance, which includes written standards of conduct that cover conflicts of interest and govern the performance of individuals engaged in procurement. Cause: The City?s policies and procedures have not been formally drafted and updated in written form. Effect: 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 most federal grants. This was not identified via sampling procedures. Questioned Costs: None identified. Recommendation: We recommend that management adopt the referenced policies in order to comply with Uniform Guidance. Views of Responsible Officials And Planned Corrective Actions: Management agrees with the recommendation. See corresponding Corrective Action Plan.