DENALI BOROUGHLocal Government

Criteria: Internal controls and procedures should be established to ensure accurate and complete financial reporting of all federal award related expenditures within the Schedule of Expenditures of Federal Awards (SEFA) in accordance with Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Condition: Multiple federal grant awards were identified during the audit process which were not initially included in the Schedule of Expenditures of Federal Awards, as originally prepared. Cause: The Borough's Treasurer is new to her position after fiscal year end and did not have clear procedures to follow in order to draft the Schedule of Expenditures of Federal Awards. Because the Borough is relatively small, the number of federal awards normally received has historically been limited. The Borough's Treasurer had not previously acquired the experience of accounting for multiple federal grants including new grant awards made available to local governments as a result of the COVID-19 pandemic. Effect: Several corrections were necessary to ensure the completeness of the SEFA. Many of the adjustments were identified as a result of audit procedures performed for the basic financial statements. Recommendation: In order to ensure the accuracy and completeness of the SEFA it is important to identify the appropriate funding source of all grant awards received. This should be determined at the time the Borough makes an application for a new grant award or when grant funds are received by the Borough if no specific grant application is made. Views of responsible officials: See the corrective action plan.

Criteria: The Borough is required to submit the single audit report package and Form SFSAC within nine months of the fiscal year end. For the fiscal year ended June 30, 2022 the due date for timely submittal of the single audit reporting package and Form SF-FAC was March 31, 2023. Condition: The Form SF-SAC for the fiscal year ended June 30, 2022 was not filed on time. Cause: The audit was not completed in time to file the form. Due to turnover of Borough staff and third party accounting consultants there was a delay in the closing of the books and records. Effect: The Schedule of Expenditures of Federal Awards was not available in a timely manner in order to allow for timely submission of the Form SF-SAC. Questioned Costs: No questioned costs were identified. Context: The fiscal year 2022 Form SF-SAC was due by March 31, 2023. The June 30, 2022 Form SF-SAC has not yet been filed. Recommendation: We recommend the Form SF-SAC be filed timely in the future. Views of responsible officials and planned corrective actions: See the corrective action plan.