City of GridleyLocal Government

Criteria In accordance with CFR section 200.512 of the Uniform Guidance, the audit must be completed and the data collection form and reporting package must be submitted to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the auditor's report(s) or nine months after the end of the audit period. Condition The 2024 Single Audit reporting package and data collection form have not been submitted to the Federal Audit Clearinghouse by the deadline of March 31, 2025. Cause Management has continued to make significant progress toward the implementation of audit recommendations from prior audits. However, the timing of performing audits for multiple fiscal years has been a tedious and difficult process, leading to delays in the fiscal year 2024 audit. Management expects the fiscal year 2025 to be submitted timely. Effect The City will automatically be considered high risk which means that at least 40% of its expenditures of federal awards will be required to be tested instead of 20%. Based on the composition of the City’s schedule of expenditures of federal awards, we do not anticipate there will be a significant impact. Recommendation We recommend that the City continue to implement processes and procedures that will support a financial close by the end of October or November. The procedures should include specific timelines by phase and instructions for communicating with departments and what the department cut-offs will be. Corrective Action Plan Management has been diligently working toward the implementation of the auditor’s recommendations and has made significant progress. Management will continue to establish and update internal processes, including financial reporting and closing, and provide training to key staff.

Finding 2023-004 - Federal Grant Procedures Manual (Significant Deficiency - Repeat Finding) Criteria Office of Management and Budget (0MB), Title 2 U.S. Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), subpart D, sections 200.317 - 200.326. Condition The City has not updated their procurement policy in accordance with the Uniform Guidance standards. Cause Originally, management was unaware of the Uniform Guidance procurement requirements and implementation dates. Once management became aware of the requirements, the lack of time and resources led to the inability to create and implement a new policy in a timely manner. Effect The City's procurement policies and procedures are not in compliance with the Uniform Guidance. Recommendation We recommend the City review the Uniform Guidance procurement requirements and update their policy. Corrective Action Plan The City is in the process of updating its Federal Grant Procedures Manual.

Finding 2023-005 - Financial Reporting Timeliness (Significant Deficiency - Repeat Finding) Criteria In accordance with CFR section 200.512 of the Uniform Guidance, the audit must be completed, and the data collection form and reporting package must be submitted to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the auditor's report(s) or nine months after the end of the audit period. In accordance with 0MB Memo M-20-26, and due to the coronavirus, an extension of six months beyond the normal due date was granted for submission of the audit, data collection form, and reporting package. Condition The 2023 Single Audit reporting package and data collection form have not been submitted to the Federal Audit Clearinghouse by the deadline of March 31, 2024. Cause There were various issues which caused the delay of the fiscal year 2023 audit. The main issue was turnover. Effect The City will automatically be considered high risk which means that at least 40% of its expenditures of federal awards will be required to be tested instead of 20%. This could lead to additional audit fees as more major programs may need to be tested. Recommendation We recommend that the City implement closing procedures that require management to close the year no later than five months after the fiscal year ends. The procedures should include specific timelines by phase and instructions for communicating with departments and what the department cut-offs will be. Corrective Action Plan The City experienced significant staffing turnover and had recently transitioned to new financial software which was the primary focus of testing conversion data. The City has since hired staff and has been establishing an internal process to train newly appointed staff which encompasses internal routine financial close. Now that the City is fully staffed up, the City will continue to catch up on audits to bring them current. The City will also review and update the closing procedures and will develop a timeline.

Finding 2022-004 - Federal Grant Procedures Manual (Significant Deficiency - Repeat Finding) Criteria Office of Management and Budget (0MB), Title 2 U.S. Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), subpart D, sections 200.317 - 200.326. Condition The City has not updated their procurement policy in accordance with the Uniform Guidance standards. Cause Originally, management was unaware of the Uniform Guidance procurement requirements and implementation dates. Once management became aware of the requirements, the lack of time and resources led to the inability to create and implement a new policy in a timely manner. Effect The City's procurement policies and procedures are not in compliance with the Uniform Guidance. Recommendation We recommend the City review the Uniform Guidance procurement requirements and update their policy. Corrective Action Plan The City will in the future update Federal Grant Procedures Manual.

Finding 2022-005 - Financial Reporting Timeliness (Significant Deficiency - Repeat Finding) Criteria In accordance with CFR section 200.512 of the Uniform Guidance, the audit must be completed and the data collection form and reporting package must be submitted to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the auditor's report(s) or nine months after the end of the audit period. In accordance with 0MB Memo M-20-26, and due to the coronavirus, an extension of six months beyond the normal due date was granted for submission of the audit, data collection form, and reporting package. Condition The 2022 Single Audit reporting package and data collection form have not been submitted to the Federal Audit Clearinghouse by the deadline of March 31, 2023. Cause There were various issues which caused the delay of the fiscal year 2022 audit. The main issue was turnover. Effect The City will automatically be considered high risk which means that at least 40% of its expenditures of federal awards will be required to be tested instead of 20%. This could lead to additional audit fees as more major programs may need to be tested. Recommendation We recommend that the City implement closing procedures that requires management to close the year no later then five months after the fiscal year ends. The procedures should include specific timelines by phase and instructions for communicating with departments and what the department cut-offs will be. Corrective Action Plan The City experienced significant staffing turnover and had recently transitioned to new financial software which was the primary focus of testing conversion data. The City has since hired staff and has been establishing an internal process to train newly appointed staff which encompasses internal routine financial close. Now that the City is fully staffed up, the City will continue to catch up on audits to bring them current. The City will also review and update the closing procedures and will develop a timeline.

Finding 2020-004 Federal Grant Procedures Manual (Uniform Guidance Compliance - Repeat Finding) Criteria Office of Management and Budget (OMB), Title 2 U.S. Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), subpart D, sections 200.317 - 200.326. Condition The City has not updated their procurement policy in accordance with the Uniform Guidance standards. Cause City management was unaware of the Uniform Guidance procurement requirements and implementation dates. Effect The City's procurement policies and procedures are not in compliance with the Uniform Guidance. Recommendation We recommend the City review the Uniform Guidance procurement requirements and update their policy. Views of Responsible Officials Management agrees. Management is currently working on updating the City's procurement policy to reflect changes that are associated with the Uniform Guidance.

Finding 2020-005 Financial Reporting Timeliness (Uniform Guidance Compliance) Criteria In accordance with CFR section 200.512 of the Uniform Guidance, the audit must be completed and the data collection form and reporting package must be submitted to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the auditor's report(s) or nine months after the end of the audit period. In accordance with OMB Memo M-20-26, and due to the coronavirus, an extension of six months beyond the normal due date was granted for submission of the audit, data collection form, and reporting package. Condition The 2020 Single Audit reporting package and data collection form have not been submitted to the Federal Audit Clearinghouse by the original deadline of March 31, 2021, nor the extended deadline of November 30, 2021. Cause There were various issues which caused delays in the completion of the 2020 annual audit. Effect The filing of the Single Audit Reporting package and data collection form is past the due date. Recommendation As noted in recommendation 2020-001, we recommend the City strive to close the year-end with properly prepared reconciliations within 3 - 4 months after year-end in order to complete the annual financial audit timely. Views of Responsible Officials Management agrees. The City now has sufficient staff and support from outside accountants in order to facilitate a more timely close.

Criteria Office of Management and Budget (OMB), Title 2 of the U.S. Code of Federal Regulations, Part 200, Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), subpart D, sections 200.317 - 200.326. Condition The City has not updated their procurement policy in accordance with the Uniform Guidance standards. Cause City management was unaware of the Uniform Guidance procurement requirements and implementation dates. Effect The City's procurement policies and procedures are not in compliance with the Uniform Guidance. Recommendation We recommend the City review the Uniform Guidance procurement requirements and update their policy.