City of Johnson City

2019-002: Significant Deficiency ? Federal Transit Cluster (20.507) Over Claimed Reimbursements Criteria: Funding under this grant requires that expenses be made in advance of the reimbursement request and only for eligible expenses as outlined in the grant agreement. Condition: Reimbursement requests under Federal Transit Formula Grants #TN-2018-046-00 were submitted in excess of the eligible operating expenses for the fiscal year. Effect: Grant funding of $50,496 was received for which the City was not eligible. Cause: Spreadsheets used to track and calculate grant eligible expenses contained formula errors that were undetected by management. While the total grant award amount had not been exceeded, the eligible expenses were overstated for the final quarter of fiscal year 2019. Recommendation: Per auditor recommendation upon discovery, management did take appropriate action to repay the $50,496 to the federal government. It is further recommended that the process used to calculate grant reimbursement totals be updated to eliminate the over reliance on multiple excel spreadsheets that are prone to formula and keying errors and include a second level of review prior to submission. It would also benefit management to develop a set schedule of requesting funds, such as quarterly, to reduce the risk of improperly including or excluding expenses since the previous request.

Anticipated Completion Date January 1, 2020 2019-001 Tracking of General Fixed Assets Corrective Action Planned Turnover in the professional accounting staff, a ransomware attack in the midst of the construction in process (CIP) and fixed asset reconciliation process and late notification to the Finance Director of challenges with the general fixed assets resulted in a delay in the provision of accurate governmental fund type fixed asset records to the auditors for inclusion in the government-wide financials. Accurate records were produced and provided by the Finance Director after notification of the issue. Pending future cyberattacks, this issue has been resolved. Re-training is being provided to the new staff accountant charged with tracking fixed assets. Further, monthly reconciliation of additions, disposals and adjustments has been implemented and will be monitored for governmental fund fixed assets, including construction in process. Supporting documentation is already maintained, as is the separate tracking of capital project related expenditures not meeting the capitalization threshold. 2019-002 Federal Transit Cluster (20.507) Over Claimed Reimbursements Corrective Action Planned Turnover in the mass transit staff contributed to the excess reimbursement request being submitted. Transit management will provide increased oversight and administer additional training to the employee responsible for calculating and submitting reimbursement requests.