CITY OF WOLF POINTLocal Government

NONCOMPLIANCE WITH GRANT TERMS AND CONDITIONS; COMMUNITY DEVELOPMENT BLOCK GRANTS/STATES PROGRAM AND NON-ENTITLEMENT GRANTS IN HAWAII, AL No. 14.228, GRANT No. MT-CDBG-CV-22-13, YEAR ENDED JUNE 30, 2025 Criteria: Per section 27 of the grant contract, the city is required to ensure that neither it, nor its principals, contractors, subcontractors, or subrecipient entities are debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation in the contract by any governmental department or agency or otherwise ineligible for participation in Federal assistance programs under Executive Order 12549, “Debarment and Suspension”. Condition: The city did not verify that all program recipients/participants were not suspended, debarred, or otherwise excluded from participation in the program in accordance with Executive Order 12549. Cause: The county does not have a system in place that allows for full compliance with all grant terms and conditions. Effect: Non-compliance with program terms and conditions. Recommendation: Management should develop procedures that will provide reasonable assurance that procurement of goods and services are made in compliance with applicable federal regulations and other procurement requirements specific to a federal award or subaward. The city should obtain the required certifications in order to verify that program recipients/participants are not suspended, debarred, or otherwise excluded from participation in the program. Views of responsible officials and planned corrective actions: The government agrees with this finding and will adhere to the attached corrective action plan.

AUDITOR PREPARED FINANCIAL STATEMENTS Criteria: As part of its internal control structure, it is the government?s responsibility to prepare its financial statements in accordance with generally accepted accounting principles (GAAP). Condition: The government does not have the expertise to prepare or evaluate the selection and application of accounting principles and resulting disclosures and presentations within the auditor prepared financial statements. Cause: The government is a small organization with limited resources. Effect: It is common for a small organization to rely on the audit firm to prepare the financial statements; however, an audit firm cannot be considered part of the government?s internal control by professional standards currently in effect. Since some presentations and disclosures may be material to the financial statements, this weakness in internal control would be classified as material. Recommendation: While it may not be cost effective to do so, we recommend the government consider hiring a qualified person to evaluate the auditor prepared financial statements. Views of responsible officials and planned corrective actions: The government agrees with this finding and will adhere to the attached corrective action plan.

GSA_MIGRATION