CITY OF FORT MORGANLocal Government

Criteria: 2 C.F.R., 200.303 states that the City, as a recipient of federal funds, must establish and maintain internal controls over compliance that are designed to allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance in a federal program on a timely basis. Condition: The City of Fort Morgan does not have an internal control structure with adequate segregation of duties to prevent or detect and correct noncompliance related to the submission of required reporting for the grant. Question Costs: None. Context: As part of our audit procedures, we evaluated the internal control structure surrounding the report submission process for the SF-425 Federal Financial Report that is required under the grant agreement. In addition, we reviewed the internal controls surrounding the requests for reimbursements submitted under the grant using Form SF-270 - Outlay Report and Request for Reimbursement for Construction Programs. Specifically, we noted that the preparation, review and submission of the reports are completed by the same individual. Effect: The City?s internal controls over the SF-425 Federal Financial Report filings and the cash management reimbursement requests SF-270 - Outlay Report and Request for Reimbursement for Construction Programs are not designed to prevent or detect and correct errors in reporting and submission. Cause: For expediency in submitting reports for the City, one individual has been preparing, reviewing , and submitting the SF-425 Federal Financial Reports and SF-270 ? Outlay Report and Request for Reimbursement for Construction Programs. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the City enforce their policies and procedures so that one individual will not prepare and submit the SF-425 Federal Financial Reports and SF-270 - Outlay Report and Request for Reimbursement for Construction Programs without separate review and approval of the reports. Views of Responsible Officials: The submission process for Federal grants is handled electronically. This is likely why the approval process is not clear cut. Our Public Works Director would electronically send the requests in to the FAA or CDOT. If there were any issues, they would send it back. Corrections were made, and it was resubmitted. Criteria: 2 C.F.R., 200.303 states that the City, as a recipient of federal funds, must establish and maintain internal controls over compliance that are designed to allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance in a federal program on a timely basis. Condition: The City of Fort Morgan does not have an internal control structure with adequate segregation of duties to prevent or detect and correct noncompliance related to the submission of required reporting for the grant. Question Costs: None. Context: As part of our audit procedures, we evaluated the internal control structure surrounding the report submission process for the SF-425 Federal Financial Report that is required under the grant agreement. In addition, we reviewed the internal controls surrounding the requests for reimbursements submitted under the grant using Form SF-270 - Outlay Report and Request for Reimbursement for Construction Programs. Specifically, we noted that the preparation, review and submission of the reports are completed by the same individual. Effect: The City?s internal controls over the SF-425 Federal Financial Report filings and the cash management reimbursement requests SF-270 - Outlay Report and Request for Reimbursement for Construction Programs are not designed to prevent or detect and correct errors in reporting and submission. Cause: For expediency in submitting reports for the City, one individual has been preparing, reviewing , and submitting the SF-425 Federal Financial Reports and SF-270 ? Outlay Report and Request for Reimbursement for Construction Programs. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the City enforce their policies and procedures so that one individual will not prepare and submit the SF-425 Federal Financial Reports and SF-270 - Outlay Report and Request for Reimbursement for Construction Programs without separate review and approval of the reports. Views of Responsible Officials: The submission process for Federal grants is handled electronically. This is likely why the approval process is not clear cut. Our Public Works Director would electronically send the requests in to the FAA or CDOT. If there were any issues, they would send it back. Corrections were made, and it was resubmitted. We have revised our process so that the submissions will be printed out before sent and reviewed and signed off on by our General Accounting Manager or Treasurer. This approved document will be saved in our document management and the submitter will go back in and send the request for payment. Payment requests will not be submitted without proper authorization.