CITY OF THOMASVILLE, GEORIGALocal Government

2025-001 – Incomplete and Inaccurate Schedule of Expenditures of Federal Awards (SEFA) Criteria In accordance with 2 CFR § 200.508(b), the auditee must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements. The SEFA must be prepared in accordance with the requirements of 2 CFR § 200.510(b), which includes reporting total federal awards expended for each federal program during the audit period, regardless of whether a reimbursement has been requested. Condition During our audit of the SEFA, we noted that the reported expenditures for the Economic Development Cluster only included those amounts for which reimbursement requests had been submitted as of year-end. Expenditures that had been incurred but not yet submitted for reimbursement were omitted. In addition, other grants were inadvertently excluded from the SEFA schedule. This resulted in an incomplete and inaccurate presentation of total federal expenditures for the fiscal year. Cause The cause of this condition was a misunderstanding by management regarding the proper basis for reporting federal expenditures. Management relied solely on reimbursement activity, rather than on total expenditures incurred during the audit period, when preparing the SEFA. In addition, management should review all federal funding/expenditures activity to verify all grants are captured on the SEFA. Effect Failure to report all federal expenditures incurred during the reporting period resulted in a misstatement of total federal awards expended. This can impact the determination of major programs, the risk assessment process, and federal oversight. Additionally, it results in noncompliance with federal regulations governing SEFA preparation. Recommendation We recommend that management implement procedures to ensure the SEFA includes all federal expenditures incurred during the reporting period, regardless of whether reimbursement has been requested. This should include reconciling SEFA amounts to the underlying accounting records and grant activity, as well as training responsible personnel on Uniform Guidance requirements for SEFA reporting. Management’s Response Responsible Official’s Response and Corrective Action Planned: We have implemented procedures to ensure that the SEFA includes all federal expenditures incurred during the reporting period, regardless of whether reimbursement has been requested. Reconciliation of the SEFA amounts are completed monthly. Management will also offer and require training to all personnel responsible on the Uniform Guidance requirements for SEFA reporting. Implementation Date: Immediate Person Responsible for Corrective Action Plan: Chief Financial Officer, Ashley Cason

2025-002 – Questioned or Unsupported Costs Information on Federal Program United States Department of Homeland Security - Federal Emergency Management Agency (FEMA). Federal Assistance Listing Number 97.036 – Disaster Grants – Public Assistance. Compliance Requirements Activities Allowed or Unallowed / Allowable Costs and Cost Principles Criteria In accordance with 2 CFR §200.403, costs charged to a federal award must be necessary, reasonable, and allocable to the award. Additionally, costs must be adequately documented to be allowable under federal awards. Condition During our testing of activities and allowable costs for the year ended December 31, 2024, we identified seven (7) instances where the amounts requested for reimbursement were not allowed. Cause No cause could be determined. Effect The City received FEMA grant reimbursements for unallowable or unsupported costs, potentially reducing available federal funds for future emergencies. The City may also be at risk of noncompliance with FEMA cost-sharing (matching) requirements. Questioned Costs $54,366 (Federal share $40,775). Context Forty-two (42) disbursements totaling $410,854 were randomly selected for testing. We identified seven (7) exceptions. These exceptions included unsupported equipment and labor charges, duplicate payroll, duplicate material costs, and unsupported payroll. Recommendation We recommend the City review the identified transactions and consult with FEMA regarding resolution of the questioned costs. The City should also take steps to ensure that only allowable, adequately documented costs are submitted for reimbursement in the future. Management’s Response Responsible Official’s Response and Corrective Action Planned: We have reached out to FEMA and was provided this summarized response: “The project was obligated as a small project. FEMA does not adjust the funding amount unless specific conditions are met. If the applicant was stating that the actual cost for the small project was more than FEMA obligated, we would have to request what is called a New Small Project Overrun Appeal Request. But in this case, the actual cost resulted in an underrun based on the small project obligated amount. FEMA only asks for the applicants to apply the underrun amount back into the community." Management has also implemented a process to include financial oversight and review of all documents prior to submission to FEMA for reimbursement going forward. We will meet with all leadership staff to discuss documentation requirements necessary for FEMA reimbursements. Lastly, Management will only sign off on reimbursed costs after all changes to FEMA requests have been adequately documented. Implementation Date: Immediate Person Responsible for Corrective Action Plan: Chief Financial Officer, Ashley Cason