EIN: 526000791
UEI: ZUJLAYF5REM3
Audited by: SB & Company, LLC
Oversight agency: 21 [Department of the Treasury]
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Data as of September 2, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on April 17, 2026. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by October 17, 2026 (44 days from today).
What is a management decision? →FAC accepted this audit on February 5, 2025 — management decision was due August 5, 2025.
FAC accepted this audit on January 31, 2024 — management decision was due July 31, 2024.
FAC accepted this audit on January 31, 2023 — management decision was due July 31, 2023.
Material adjustments were required in order for the financial statements to be fairly stated in all material respects. Context: During our preliminary analytical procedure testing on expenses, we noted a fixed asset that was not properly capitalized on the government-wide financial statements. Since the fixed asset was not properly capitalized, depreciation expense was also not recorded on the asset. During our testing of project reimbursement revenue, we noted revenue recognized in the current year that should have been recognized in the previous fiscal year. Effect: The government-wide financial statements could have been materially misstated in the current year because of the fixed asset omission. The financial statements from the prior year were materially misstated because revenue was not adequately accounted for. Cause: The City records all fixed asset additions initially as an expense and then later reclassifies them to fixed assets at year end. The entity does not have a control in place to ensure that all fixed asset additions are properly reclassified from expense. The finance department includes grant award amounts on its work in process schedules so the department knows the amount of grant funding available for a particular project. The grant amount for the CSO Phase IX-A project was originally entered with the correct total grant amount. A line was later added to the spreadsheet showing a revised MDE grant amount. The revised MDE grant amount was incorrect because it only included the construction portion of the available funding, not the total MDE grant amount which did not change. When the finance director recorded the revenue accrual, they only recorded it up to the incorrect revised MDE grant amount because they thought the available funding was used up. The reimbursement request submitted to MDE was not performed until towards the end of fiscal year ending June 30, 2022 so the discrepancy was not noted until after the audit was completed. Recommendation: We recommend the City record all fixed asset additions on their depreciation schedules as soon as the expenditure in incurred so that when the reclassification is done at year end, the trial balance amount should agree to the depreciation schedules. We also recommend a final review of the expenses in the trial balance for anything unusual during the year end closing process. We recommend the finance department work closely with the individual handling the funding requests for the City and that both individuals cross check each other?s records for discrepancies. We also recommend the City submit grant reimbursement requests as soon as possible so the City has an additional method to verify its revenue accruals for accuracy.
Show full finding ▾Hide full finding ▴Criteria: The City should have an accounting system in place that is designed to ensure the City?s financial statements are presented fairly, in all material respects, with generally accepted accounting principles. Condition: Material adjustments were required in order for the financial statements to be fairly stated in all material respects. Context: During our preliminary analytical procedure testing on expenses, we noted a fixed asset that was not properly capitalized on the government-wide financial statements. Since the fixed asset was not properly capitalized, depreciation expense was also not recorded on the asset. During our testing of project reimbursement revenue, we noted revenue recognized in the current year that should have been recognized in the previous fiscal year. Effect: The government-wide financial statements could have been materially misstated in the current year because of the fixed asset omission. The financial statements from the prior year were materially misstated because revenue was not adequately accounted for. Cause: The City records all fixed asset additions initially as an expense and then later reclassifies them to fixed assets at year end. The entity does not have a control in place to ensure that all fixed asset additions are properly reclassified from expense. The finance department includes grant award amounts on its work in process schedules so the department knows the amount of grant funding available for a particular project. The grant amount for the CSO Phase IX-A project was originally entered with the correct total grant amount. A line was later added to the spreadsheet showing a revised MDE grant amount. The revised MDE grant amount was incorrect because it only included the construction portion of the available funding, not the total MDE grant amount which did not change. When the finance director recorded the revenue accrual, they only recorded it up to the incorrect revised MDE grant amount because they thought the available funding was used up. The reimbursement request submitted to MDE was not performed until towards the end of fiscal year ending June 30, 2022 so the discrepancy was not noted until after the audit was completed. Recommendation: We recommend the City record all fixed asset additions on their depreciation schedules as soon as the expenditure in incurred so that when the reclassification is done at year end, the trial balance amount should agree to the depreciation schedules. We also recommend a final review of the expenses in the trial balance for anything unusual during the year end closing process. We recommend the finance department work closely with the individual handling the funding requests for the City and that both individuals cross check each other?s records for discrepancies. We also recommend the City submit grant reimbursement requests as soon as possible so the City has an additional method to verify its revenue accruals for accuracy.
The City currently has a process in place to scan copies of invoices for fixed asset additions as the disbursements are made through the biweekly accounts payable cycle to facilitate reclassification entries at year end. The City will begin to add these items to the fixed asset schedules as soon as the expenditures are incurred to ensure that the depreciation schedules agree with the trial balance at year end. Staffing changes in the personnel responsible for grant management during the year hindered the City?s ability to submit timely grant reimbursement requests. The City has subsequently redistributed the staff assignments for grant management and the finance department staff have been working closely with the newly assigned personnel to ensure accurate reporting going forward. All staff with responsibilities for grant management have access to shared documents on the server to cross check the departmental records to promptly identify and resolve any discrepancies.
FAC accepted this audit on December 14, 2017 — management decision was due June 14, 2018.
Data source: This information comes from the Federal Audit Clearinghouse, the official repository of Single Audit data. All data is public domain. Verify this organization's audit history at fac.gov.
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