City of WorthingtonLocal Government

2023-001 U.S. Department of Treasury Passed through State of Minnesota Coronavirus State and Local Fiscal Recovery Funds Reporting Deficiency in Internal Control over Compliance Condition: During the course of our engagement, we noted that the City did not perform control procedures over the reporting process. The Finance Director prepared and submitted required reports. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires internal control procedures to be performed over reporting. Cause: The City did not have processes in place to ensure reports were reviewed by someone other than the preparer. Effect: The reports submitted had an increased risk of not being accurate. Recommendation: We recommend the City establish a specific procedure to have someone review federally required reports other than the preparer. Management Response: The City will establish procedures to ensure future reports are reviewed.

2021-001 Untimely preparation of Schedule of Expenditures of Federal Awards resulted in late filing of the Single Audit Reporting Package to the Federal Audit Clearinghouse Condition: Because the City expended more than $750,000 of federal awards, Office of Management and Budget?s (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires a single audit of grant and loan activities to be performed. The City?s current accounting process does not track federal funds. A manual process is used. The amount of federal expenditures was not known in time to submit the Single Audit reporting package to the Federal Audit Clearinghouse by the federally required deadline. Criteria: OMB?s Uniform Guidance, Title 2, Part 200, Subpart F Audit Requirements, paragraph .512 requires the single audit to be completed and the data collection form and reporting package to be submitted within the earlier of 30 calendar days after receipt of the auditor?s report, or nine months after the end of the audit period. Effect: Due to deficiencies in internal control over federal awards, untimely preparation of the SEFA caused delays in planning the single audit and subsequent testing of the SEFA and major programs. As a result, the City did not submit the Single Audit reporting package to the Federal Audit Clearinghouse by the federally required deadline. Non-compliance with the reporting requirements is a violation of federal grants terms and conditions and could affect future funding. Cause: City departments that receive federal awards did not communicate the federal expenditures to the finance director. Untimely discovery of federal program expenditures led late preparation of the SEFA and submission of the Single Audit reporting package. Recommendations: We recommend policies are in place and enforced requiring the departments that receive federal funding keep track of federal expenditures and communicate with the finance director throughout the year to ensure accurate and timely preparation of the SEFA and submission to the Federal Audit Clearinghouse.