City of Little Falls

Finding 2024-005 Internal Controls Over Compliance for Subrecipient Monitoring Federal Program: 14.251 Economic Development Initiative, Community Project Funding, and Miscellaneous Grants 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 Requirement, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), in regard to determining subrecipient monitoring. Criteria: 2 CFR § 200.302(b) requires the City to have written procedures related to managing subrecipient monitoring in accordance with 2 CFR 200 Subpart D – Subrecipient Monitoring. Cause: The City’s policies and procedures have 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 many 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 subrecipient monitoring for all applicable federal programs. Views of Responsible Officials and Planned Corrective Actions: Management agrees with our recommendation. See corresponding Corrective Action Plan.

"SECTION III: FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS Finding 2019-003 Internal Controls Over Compliance for Allowable Costs, Procurement, and Conflicts of Interest Federal Program: This finding pertains to most 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, procurement procedures, and conflicts of interest. 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, 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 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 most 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, procurement procedures, and related conflicts of interest for all federal programs. Views of Responsible Officials and Planned Corrective Actions: Management agrees with our recommendation. See corresponding Corrective Action Plan. "

SECTION III: FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS Finding 2019-003 Internal Controls Over Compliance for Allowable Costs, Procurement, and Conflicts of Interest 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, procurement procedures, and conflicts of interest. 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, 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 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, procurement procedures, and related conflicts of interest for all federal programs. Views of Responsible Officials and Planned Corrective Actions: Management agrees with our recommendation. See corresponding Corrective Action Plan.