CITY OF GALVA

2020-001 Submission of 2019 audit to the Federal Audit Clearinghouse Condition: The City submitted the 2019 audit to the Federal Audit Clearinghouse past the nine month due date. Criteria: Internal controls should be in place to ensure timeliness over submission. Cause: This was caused due to the late identification of needing a single audit for 2019. Effect: Compliance with the rules regarding submission of an audit in accordance with the Uniform Guidance was not met. Questioned Costs: None applicable. Perspective: Temporary notes (commercial source funding) were issued to fund this project. It was not clear to the City that the expenditure of these funds, under the terms of the project, were to be considered federal. They believed they were spending nonfederal sources. This caused a late determination of single audit requirements applicable to the 2019 year, which then in turn, caused the nine month deadline to be missed. Recommendation: Internal controls should be in place to ensure accuracy over the determination of single audit requirements and as a result, the filing deadlines. Views of Responsible Official and Planned Corrective Actions: Management will implement procedures to track understanding of when funds are considered federal for future projects and meet the filing deadlines.

U.S. DEPARTMENT OF AGRICULTURE Water and Waste Disposal Systems for Rural Communities CFDA number 10.760 The below is a repeat of the finding in Section 2 as it relates both to the financial statement as well as compliance. 2019-001 Preparation of Schedule of Expenditures of Federal Awards Condition: The City did not originally identify the Water and Waste Disposal System for Rural Communities as federal money spent in 2019. Criteria: Internal controls should be in place to ensure accuracy over the preparation of the Schedule of Expenditures of Federal Awards. Cause: This was caused in part, by human error, and in part by the lack of understanding of the program?s requirements that the expenditures of the commercial sources of funds was considered federal under this program. Effect: The December 31, 2019, audit did not originally include an audit in accordance with the Uniform Guidance, requiring the reissuance of the 2019 audit. Questioned Costs: None applicable. Perspective: Temporary notes (commercial source funding) were issued to fund this project. It was not clear to the City that the expenditure of these funds, under the terms of the project, were to be considered federal. They believed they were spending nonfederal sources. Recommendation: Internal controls should be in place to ensure accuracy over the preparation of the Schedule of Expenditures of Federal Awards. Views of Responsible Official and Planned Corrective Actions: Management will implement procedures to track understanding of when funds are considered federal for future projects.