CITY OF FORT MYERS

Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Fund Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP2722 2021 Award Period: March 3, 2021 through December 31, 2024 Type of Finding: Material Weakness in Internal Control over Compliance; Material NoncomplianceCriteria or specific requirement: When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by; (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov Home (click on Search Record, then click on Advanced Search-Exclusions) (Note: The OMB guidance at 2 CFR part 180 and agency implementing regulations still refer to the SAM Exclusions as the Excluded Parties List System (EPLS)); (2) collecting a certification from the entity, or; (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). The non-Federal entity must (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The City did not properly verify and document federal suspension and debarment status for one vendor prior to entering into a transaction with the vendor. Questioned costs: None Context: The City did not verify and document the review of suspension and debarment status for the only entity and transaction that grants funds were expended with. The entity was not suspended or debarred at the time of contract execution. Cause: The City did not follow their policies and procedures for documenting the suspension and debarment status for entities upon contract execution. Effect: The City is not in compliance with Federal suspension and debarment requirements. Repeat Finding: No Recommendation: We recommend the City implement a process to formally verify and document the suspension and debarment process for all entities that it enters into transaction with using federal funds.Views of responsible officials: Management agrees with the finding.

2020-001 Federal Agency: U.S. Department of Treasury Federal Program Title: COVID 19 ? Coronavirus Relief Fund Pass-Through Entity: Lee County, Florida CFDA Number: 21.019 Award Period: March 1, 2020 through December 31, 2021 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: The Committee of Sponsoring Organizations of the Treadway Commission (COSO) Internal Control Framework states that control activities are a component of internal control. Control activities are policies and procedures established to ensure that management directives are carried out, and consist of two elements, a policy that establishes what should be done and the procedure that implements the policy. COSO Framework states that control activities must be in place for there to be adequate internal control procedures over financial reporting. Internal control procedures affect the City?s ability to ensure financial transactions are authorized and accurate. City management is responsible for establishing and maintaining internal controls for the proper recording of all the City?s grant transactions in the proper period. Condition: The City reported program expenditures in 2020 that were eligible grant expenditures incurred subsequent to year-end that should have been reported as program expenditures in 2021. Questioned costs: $58,887 Context: 8 of 60 transactions tested were noted to be related to future year expenditures. Cause: The City?s internal controls did not detect or prevent the program expenditures from being recorded in the incorrect fiscal year. Effect: Total program expenditures on the 2020 SEFA were overstated. Repeat Finding: No Recommendation: We recommend that the City strengthen policies, procedures, and communication between the program personnel and finance personnel to ensure that the program is properly recording transactions in the general ledger and that the program follows the accounting policies of the City. Views of responsible officials: There is no disagreement with the audit finding.

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