CITY OF BILLINGSLocal Government

Criteria: Program income is required to be included in the Schedule of Expenditures of Federal Awards (SEFA) for a complete presentation and for purposes of determining major programs. Condition: The City did not identify and include program income on the SEFA provided for audit. Effect: The SEFA was misstated, initial single audit procedures had to be reperformed, and expansion of major program testing was required. Cause: The City's compliance responsibility is decentralized among various departments. While personnel in the respective departments are skilled at managing the funds as required by the federal government, they often do not understand the full related reporting requirements for the CAFR and SEFA. Those responsibilities fall to personnel in the Finance department, who may not be familiar enough with program operations and how they affect reporting requirements. Recommendation: The City should implement specific federal funds training for all Finance staff involved in the reporting process in order to obtain a greater understanding of the reporting requirements. Management Response: The City agrees with the finding and will identify training for Finance staff to attend.