City of NicholasvilleLocal Government

Condition: The annual compliance report included certain general fund expenditures. Criteria: The program requires an annual compliance report including a total of all current period ARPA expenditures. Cause: Accounting's records were not used as the data source for the report. Effect: The current expenditures in the annual compliance report were overstated. Context: Only an annual report is required under the program for the City. The auditor selected the annual report for testing. Recommendation: The annual compliance report should be reconciled to the general ledger and include all current period expenditures based on the date when goods and services were provided. Changes and revisions to previously filed annual reports will need to be reflected in the next annual report due April 30, 2026.

Criteria: The City is required under KRS 91A.040 to file the annual audit report to the Department for Local Government by no later than April 1 immediately following the fiscal year being audited. Condition: Deficiencies in the City’s internal controls prevented the timely completion and submission of the annual audit report to the Department for Local Government. Cause: The City failed to provide proper oversight over period-end financial reporting which resulted in delays in issuing the annual audit report for the year ended June 30, 2025. Effect: The City did not file the annual audit report for the fiscal year ended June 30, 2025, to the Department of Local Government by April 1, 2026. Recommendation: We recommend management review the period end financial reporting process and implement changes to allow for timely completion of accurate financial reports. This will allow them to be in compliance with KRS 91A.040. Response: The City agrees with the finding and recommendation. Management will review and strengthen the year-end financial reporting process to improve the timeliness of the audit and financial statement preparation. The City will work with its auditors to establish and monitor reporting deadlines and will evaluate staffing and training needs to help ensure compliance with the reporting requirements of KRS 91A.040 in future periods.

Criteria: The City is required under CFR 200.512(a) to file the annual audit, data collection form, and reporting package within nine months after the end of the audit period. Condition: Deficiencies in the City’s internal controls prevented the timely completion and submission of the annual audit, data collection form, and reporting package to the Federal Audit Clearinghouse. Cause: The City failed to provide proper oversight over period-end financial reporting which resulted in delays in issuing the annual audit report for the year ended June 30, 2025. Effect: The City did not file the annual audit, data collection form, and reporting package for the fiscal year ended June 30, 2025, to the Federal Audit Clearinghouse by March 31, 2026. Recommendation: We recommend management review the period end financial reporting process and implement changes to allow for timely completion of accurate financial reports. This will allow them to be in compliance with CFR 200.512(a). Response: The City agrees with the finding and recommendation. Management will review and strengthen the year-end financial reporting process to improve the timeliness of the audit and financial statement preparation. The City will work with its auditors to establish and monitor reporting deadlines and will evaluate staffing and training needs to help ensure compliance with the filing requirements of 2 CFR 200.512(a) in future periods.

Condition: The annual compliance report included certain general fund expenditures. Criteria: The program requires an annual compliance report including a total of all current period ARPA expenditures. Cause: Accounting's records were not used as the data source for the report. Effect: The current expenditures in the annual compliance report were overstated. Context: Only an annual report is required under the program for the City. The auditor selected the annual report for testing. Recommendation: The annual compliance report should be reconciled to the general ledger and include all current period expenditures based on the date when goods and services were provided. Changes and revisions to previously filed annual reports will need to be reflected in the next annual report due April 30, 2026.

Criteria: The City is required under KRS 91A.040 to file the annual audit report to the Department for Local Government by no later than April 1 immediately following the fiscal year being audited. Condition: Deficiencies in the City’s internal controls prevented the timely completion and submission of the annual audit report to the Department for Local Government. Cause: The City failed to provide proper oversight over period-end financial reporting which resulted in delays in issuing the annual audit report for the year ended June 30, 2025. Effect: The City did not file the annual audit report for the fiscal year ended June 30, 2025, to the Department of Local Government by April 1, 2026. Recommendation: We recommend management review the period end financial reporting process and implement changes to allow for timely completion of accurate financial reports. This will allow them to be in compliance with KRS 91A.040. Response: The City agrees with the finding and recommendation. Management will review and strengthen the year-end financial reporting process to improve the timeliness of the audit and financial statement preparation. The City will work with its auditors to establish and monitor reporting deadlines and will evaluate staffing and training needs to help ensure compliance with the reporting requirements of KRS 91A.040 in future periods.

Criteria: The City is required under CFR 200.512(a) to file the annual audit, data collection form, and reporting package within nine months after the end of the audit period. Condition: Deficiencies in the City’s internal controls prevented the timely completion and submission of the annual audit, data collection form, and reporting package to the Federal Audit Clearinghouse. Cause: The City failed to provide proper oversight over period-end financial reporting which resulted in delays in issuing the annual audit report for the year ended June 30, 2025. Effect: The City did not file the annual audit, data collection form, and reporting package for the fiscal year ended June 30, 2025, to the Federal Audit Clearinghouse by March 31, 2026. Recommendation: We recommend management review the period end financial reporting process and implement changes to allow for timely completion of accurate financial reports. This will allow them to be in compliance with CFR 200.512(a). Response: The City agrees with the finding and recommendation. Management will review and strengthen the year-end financial reporting process to improve the timeliness of the audit and financial statement preparation. The City will work with its auditors to establish and monitor reporting deadlines and will evaluate staffing and training needs to help ensure compliance with the filing requirements of 2 CFR 200.512(a) in future periods.

Condition: The annual compliance report excluded certain current period expenditures. Criteria: The program requires an annual compliance report including a total of all current period expenditures. Cause: Accounting’s records were not used as the data source for the report. Effect: The current expenditures in the annual compliance report were understated. Context: Only an annual report is required under the program for the City. The auditor selected the annual report for testing. Recommendation: The annual compliance report should be reconciled to the general ledger and include all current period expenditures based on the date when goods and services were provided. Changes and revisions to the previously filed annual report will need to be reflected in the next annual report due April 30, 2024.

Condition: The annual compliance report excluded certain current period expenditures. Criteria: The program requires an annual compliance report including a total of all current period expenditures. Cause: Accounting’s records were not used as the data source for the report. Effect: The current expenditures in the annual compliance report were understated. Context: Only an annual report is required under the program for the City. The auditor selected the annual report for testing. Recommendation: The annual compliance report should be reconciled to the general ledger and include all current period expenditures based on the date when goods and services were provided. Changes and revisions to the previously filed annual report will need to be reflected in the next annual report due April 30, 2024.

Condition: The annual compliance report was not reviewed and approved by someone with sufficient knowledge to correct any errors. Criteria: The annual report should be reviewed by someone prior to submission to correct any errors. Cause: The control was not in place during the fiscal year ended June 30, 2023. Effect: Errors in the annual report submitted during the year ended June 30, 2023, were undetected prior to submission. Context: Only an annual report is required under the program for the City. The auditor selected the annual report for testing. Recommendation: The annual report should be reviewed and approved by someone who can ensure that the report has been accurately prepared. Evidence of review and approval should be documented.

Condition: The annual compliance report was not reviewed and approved by someone with sufficient knowledge to correct any errors. Criteria: The annual report should be reviewed by someone prior to submission to correct any errors. Cause: The control was not in place during the fiscal year ended June 30, 2023. Effect: Errors in the annual report submitted during the year ended June 30, 2023, were undetected prior to submission. Context: Only an annual report is required under the program for the City. The auditor selected the annual report for testing. Recommendation: The annual report should be reviewed and approved by someone who can ensure that the report has been accurately prepared. Evidence of review and approval should be documented.

Condition: The annual compliance report excluded certain current period expenditures. Criteria: The program requires an annual compliance report including a total of all current period expenditures. Cause: Accounting’s records were not used as the data source for the report. Effect: The current expenditures in the annual compliance report were understated. Context: Only an annual report is required under the program for the City. The auditor selected the annual report for testing. Recommendation: The annual compliance report should be reconciled to the general ledger and include all current period expenditures based on the date when goods and services were provided. Changes and revisions to the previously filed annual report will need to be reflected in the next annual report due April 30, 2024.

Condition: The annual compliance report excluded certain current period expenditures. Criteria: The program requires an annual compliance report including a total of all current period expenditures. Cause: Accounting’s records were not used as the data source for the report. Effect: The current expenditures in the annual compliance report were understated. Context: Only an annual report is required under the program for the City. The auditor selected the annual report for testing. Recommendation: The annual compliance report should be reconciled to the general ledger and include all current period expenditures based on the date when goods and services were provided. Changes and revisions to the previously filed annual report will need to be reflected in the next annual report due April 30, 2024.

Condition: The annual compliance report was not reviewed and approved by someone with sufficient knowledge to correct any errors. Criteria: The annual report should be reviewed by someone prior to submission to correct any errors. Cause: The control was not in place during the fiscal year ended June 30, 2023. Effect: Errors in the annual report submitted during the year ended June 30, 2023, were undetected prior to submission. Context: Only an annual report is required under the program for the City. The auditor selected the annual report for testing. Recommendation: The annual report should be reviewed and approved by someone who can ensure that the report has been accurately prepared. Evidence of review and approval should be documented.

Condition: The annual compliance report was not reviewed and approved by someone with sufficient knowledge to correct any errors. Criteria: The annual report should be reviewed by someone prior to submission to correct any errors. Cause: The control was not in place during the fiscal year ended June 30, 2023. Effect: Errors in the annual report submitted during the year ended June 30, 2023, were undetected prior to submission. Context: Only an annual report is required under the program for the City. The auditor selected the annual report for testing. Recommendation: The annual report should be reviewed and approved by someone who can ensure that the report has been accurately prepared. Evidence of review and approval should be documented.