City of Muskogee

Finding: 2019-001 ? Proper Design and Implementation of the Financial Reporting Close Process Criteria: The City should maintain a system of internal controls that ensures financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (?U.S. GAAP?) in a timely manner and that ensures the City complies with applicable laws, regulations, contracts, and grant agreements. Condition: The City was unable to produce financial statements for the year ended June 30, 2019 in accordance with U.S. GAAP in a timely manner. In addition, the City did not effectively monitor and ensure proper implementation of internal controls. Cause and Effect: During the year ended June 30, 2019, the City did not have the necessary personnel resources to maintain appropriate internal controls and processes to ensure accurate and timely financial reporting. In addition, the City did not maintain appropriate oversight of existing controls to prevent erroneous financial reporting. Refer to Note 7 of the Notes to the Basic Financial Statements. The City?s governing body and senior management should evaluate the City?s internal controls related to financial reporting to ensure that the finance department is producing not only timely and accurate financial reports, buts also monthly reports that can enable the governing body to exercise appropriate oversight of the City?s financial activities in a timely manner. Management Response and Corrective Action Plan: The City will evaluate internal controls related to producing timely and accurate financial reports as well as monthly reporting to city council.

Finding 2019-001 Condition The City was unable to produce financial statements for the year ended June 30, 2019 in accordance with U.S. GAAP in a timely manner. In addition, the City did not effectively monitor and ensure proper implementation of internal controls. Corrective Action Plan Corrective Action Planned: The City will evaluate internal controls related to producing timely and accurate financial reports as well as monthly reporting to city council. As part of that evaluation, the City is implementing a software package to more efficiently and accurately track and report on capital assets. Name of Contact Person Responsible for Corrective Action: Jean Kingston, Treasurer (918) 684-6290 Anticipated Completion Date: June 30, 2021

Finding: 2019-002 ?Filing of the State Auditor and Inspector Form 2643 with the State of Oklahoma Criteria: In order to report the financial statements in accordance with generally accepted accounting principles (GAAP), management needs to appropriately monitor the timing of the submission of the State Auditor and Inspector Form 2643, which should be filed within 180 days from the fiscal year end. Condition: Internal control processes were not adequately designed to ensure that the filing of the State Auditor and Inspector Form 2643 for fiscal year ending June 30, 2019 were filed within the required time frame as outlined by state statute, respectively. Cause and Effect: Internal control processes were not adequately designed to ensure the State Auditor and Inspector Form 2643 was filed with the state auditor within the required time frame. Recommendation: We recommend the internal controls for reporting with the state auditor be reviewed to ensure that future filings of the form are completed within the prescribed timeline. Management Response and Corrective Action Plan: The City will evaluate internal controls to ensure reporting to state auditor in future filings are completed in prescribed timeline.

Finding 2019-002 Condition Internal control processes were not adequately designed to ensure that the filing of the State Auditor and Inspector Form 2643 for fiscal year ending June 30, 2019 were filed within the required time frame as outlined by state statute, respectively. Corrective Action Plan Corrective Action Planned: The City will evaluate internal controls related to producing timely and accurate financial reports as well as monthly reporting to city council. Name of Contact Person Responsible for Corrective Action: Jean Kingston, Treasurer (918) 684-6290 Anticipated Completion Date: June 30, 2021

Finding: 2019-003 ? Filing of the Data Collection Form with the Federal Audit Clearinghouse Criteria: In order to report the Schedule of Expenditures of Federal Awards (the SEFA) in accordance with the Uniform Guidance, as well as the financial statements in accordance with generally accepted accounting principles (GAAP), management needs to appropriately monitor the timing of the submission of the data collection form within 30 days of the filing of the audit report or nine months after the end of the fiscal year. Condition: Internal control processes were not adequately designed to ensure that the filing of the data collection form for fiscal year ending June 30, 2019 were filed within the required time frame as outlined by the Uniform Guidance 2 CFR 200.512(a). Cause and Effect: Internal control processes were not adequately designed to ensure the data collection form was filed with federal audit clearinghouse within the required time frame. Recommendation: We recommend the internal controls for reporting with the federal audit clearinghouse be reviewed to ensure that future filings of the data collection form are completed within the prescribed timeline. Management Response: The City will review internal controls to ensure future filings of the data collection form are completed on time.

Finding 2019-003 Condition Internal control processes were not adequately designed to ensure that the filing of the data collection form for fiscal year ending June 30, 2019 were filed within the required time frame as outlined by the Uniform Guidance 2 CFR 200.512(a). Corrective Action Plan Corrective Action Planned: The City will evaluate internal controls related to producing timely and accurate financial reports as well as monthly reporting to city council. Name of Contact Person Responsible for Corrective Action: Jean Kingston, Treasurer (918) 684-6290 Anticipated Completion Date: June 30, 2021