City of SapulpaLocal Government

Finding 2024-002 – Filing with the State Auditor and Federal Audit Clearinghouse (Repeat) Criteria: In order to comply with filing of reports with the Oklahoma State Auditor and Inspector (State Auditor), management needs to appropriately monitor the timing of the submission of the filing of the audit report within six months after the end of the fiscal year. Additionally, the Federal Audit Clearinghouse (FAC) submission should occur the earlier of nine months subsequent to year end or 30 days from report issuance referenced 2 CFR 200.512(a). Condition: The City did not submit its audit report to the State Auditor prior to the deadline of six months after the end of the fiscal year ending June 30, 2024. Additionally, the City did not submit its audit report to the FAC within nine months from year ending June 30, 2024. Cause and Effect: Due to delayed financial reporting close out of fiscal year 2024 the City was not in compliance with its required deadline to provide the State Auditor and the FAC with its issued audit report within the established deadlines. Recommendation: We recommend the internal controls for reporting be reviewed to allow for compliance. Management Response: Management recognizes the need to submit its single audit reports to the State Auditor and FAC in accordance with the required deadlines in order to remain compliant with requirements. Management has made Professional Services changes to ensure timely audit compliance moving forward.

Criteria: Federal funds expended throughout the City must be reported to the finance department for proper reporting on the schedule of expenditures of federal awards (“SEFA”). Condition: Funding related to the American Rescue Plan Act (“ARPA”) was omitted from the SEFA and was not reported to the finance department as part of the year end closing process related to the Sapulpa Basin 4 improvements and repairs to the wastewater treatment plant intake line. Cause and Effect: During FY23, projects approved for funding under ARPA were started by the City and were paid for using ARPA funding. However, the expenditures were not reported to the finance department as being funded by federal grant dollars and were not tracked against compliance requirements by the finance department to ensure allowability of costs. Additionally, since these expenditures were not properly reported to finance, the total amount spent on the ARPA grants was omitted from the original SEFA that was prepared by management and provided to the auditors. Recommendation: Management should implement processes and procedures to properly monitor federal awards expended in various departments of the City to ensure that they are properly reported to the finance department so that the expenditures are included on the SEFA each year.