Corridor Metropolitan Planning Organization

Finding 2023-003 - Schedule of Expenditures of Federal Awards U.S. Department of Homeland Security Pass Through Entity: Iowa Homeland Security & Emergency Management Federal Program: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing Number: 97.036 Federal Award Number: FEMA-IA-DR4483 / FEMA-IA-DR4557 Federal Award Year 2023 Repeat Comment: No Type of Finding: Material Weakness Criteria: The Federal Emergency Management Agency (FEMA) requires that Nonfederal entities must record expenditures on the schedule of expenditures of federal awards (SEFA) when (1) FEMA has approved the nonfederal entity’s Project, and (2) the nonfederal entity has incurred the eligible expenditures. Federal awards expended in years subsequent to the fiscal year in which the Project is approved are to be recorded on the nonfederal entity’s SEFA in those subsequent years. Condition: The City previously recorded FEMA expenditures from Disaster Grants on their SEFA on the cash basis instead of the FEMA requirement of reporting the expenditures when the City has incurred an eligible expenditure and the project had been approved by FEMA. Cause: During a previous disaster the City experienced significant de-obligations from FEMA subsequent to project approval by FEMA. The City adopted a process of reflecting this grant on the financial statements and on the SEFA on the cash basis due to the uncertainty related to future de-obligations. Effect: The City increased the amount federal expenditures for this program on the SEFA by $12,515,044. This error could have also potentially impacted the City’s major federal program determination, however this change did not change any of the City’s major programs in fiscal year 2023. Questioned Costs: None. Prevalence: This issue is isolated to this FEMA program. Repeat Finding: No. Recommendation: We recommend management of the City continue to review all grants to ensure they are properly reflected on the SEFA. Views of Responsible Officials: Management agrees with the recommendation and made the adjustment once this issue was further discussed with management and the auditor.

Identifying Number: 2023-003 Finding: The City previously recorded FEMA expenditures from Disaster Grants on their SEFA on the cash basis instead of the FEMA requirement of reporting the expenditures when the City has incurred an eligible expenditure and the project had been approved by FEMA. Corrective action taken: Finance staff adjusted fiscal year 2023 accordingly and will review future Office of Management and Budget Compliance Supplements for the listing of changes each year. Anticipated completion date: June 30, 2024 Contact person: Andy Hoenig, General Accounting Manager