CITY OF SIMONTON, TEXASLocal Government

Finding # 2022 C.1 – Failure to comply with financial reporting requirements. Community Development Block Grant/State’s Program and Non-Entitlement Grants in Hawaii – ALN# 14.228 Material weakness and noncompliance material to major federal award programs. Condition: The City has not complied with financial reporting requirements by failing to engage an independent auditor on an annual basis to conduct and submit audited financial statements to the reporting agencies. Criteria or Specific Requirement: The City is required to submit timely audited financial information electronically to the Federal Audit Clearinghouse (FAC) within 9 months of the City’s fiscal year end for those fiscal years when the City expends more than $750,000 of federal funds. Questioned Costs: No questioned costs Effect: Failure to report the annual financial statements within the time parameters can result in the City being unable to apply or qualify for additional federal funding. Cause: The City did not contract with an independent auditor to conduct an audit of the financial statements in a timely manner. Recommendation: The City needs to engage an independent auditor on an annual basis and ensure that the audited financial statements are submitted to FAC within the allotted time frame. Response: Subsequent to the year end the City engaged in a service contract with an independent auditor.