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HomeMy WebLinkAboutPR 24415: Single Audit Report 2024CITY OF PORT ARTHUR, TEXAS SINGLE AUDIT REPORT FOR THE YEAR ENDED SEPTEMBER 30, 2024 CITY OF PORT ARTHUR, TEXAS TABLE OF CONTENTS SEPTEMBER 30, 2024 Page Number Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ....................................................... 1 - 2 Independent Auditor’s Report on Compliance for Each Major Federal and State Program and Report on Internal Control Over Compliance in Accordance with the Uniform Guidance and State of Texas Grant Management Standards .................................................................................. 3 - 5 Schedule of Expenditures of Federal and State Awards ................................................... 6 - 8 Notes to Schedule of Expenditure of Federal and State Awards ........................................ 9 Schedule of Findings and Questioned Costs ................................................................... 10 - 12 Summary Schedule of Prior Audit Findings .................................................................... 13 Corrective Action Plan ................................................................................................ 14 THIS PAGE LEFT BLANK INTENTIONALLY INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Honorable Mayor and Members of City Council City of Port Arthur, Texas We have audited in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Port Arthur, Texas (the “City”) as of and for the year ended September 30, 2024, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated June 30, 2025. Report on Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that have not been identified. We did identify a certain deficiency in internal control, described in the accompanying schedule of findings and questioned costs as item 2024-001, that we consider to be a material weakness. 1 2 Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether the City’s financial statements are free of material misstatements, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. The City’s Response to Findings The City’s response to the findings identified in our audit is described in the accompanying corrective action plan. The City’s response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Waco, Texas June 30, 2025 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL AND STATE PROGRAM AND REPORT ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH THE UNIFORM GUIDANCE AND STATE OF TEXAS GRANT MANAGEMENT STANDARDS Honorable Mayor and Members of City Council City of Port Arthur, Texas Report on Compliance for Each Major Federal and State Program Opinion on Each Major Federal and State Program We have audited City of Port Arthur, Texas’ (the “City”) compliance with the types of compliance requirements identified as subject to audit in the (OMB) Compliance Supplement and the State of Texas Grant Management Standards (TxGMS) that could have a direct and material effect on each of City’s major federal and state programs for the year ended September 30, 2024. City’s major federal and state programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. In our opinion, the City complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major federal and state programs for the year ended September 30, 2024. Basis for Opinion on Each Major Federal and State Program We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards); 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), and TxGMS. Our responsibilities under those standards, the Uniform Guidance, and TxGMS are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal and state program. Our audit does not provide a legal determination of the City’s compliance with the compliance requirements referred to above. Responsibilities of Management for Compliance Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules and provisions of contracts or grant agreements applicable to the City’s federal and state programs. 3 4 Auditor’s Responsibilities for the Audit of Compliance Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on City’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, the Uniform Guidance, and TxGMS will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material, if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City’s compliance with the requirements of each major federal and state program as a whole. In performing an audit in accordance with GAAS, Government Auditing Standards, the Uniform Guidance, and TxGMS, we: • Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding City’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances. • Obtain an understanding of City’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control over compliance. Accordingly, no such opinion is expressed. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit. Report on Internal Control Over Compliance A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal or state program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal or state program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal or state program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified. Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance and TxGMS. Accordingly, this report is not suitable for any other purpose. 5 Report on Schedule of Expenditures of Federal and State Awards Required by the Uniform Guidance and TxGMS We have audited the financial statements of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City as of and for the year ended September 30, 2024, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements. We issued our report thereon, dated June 30, 2025, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal and state awards is presented for purposes of additional analysis as required by the Uniform Guidance and TxGMS and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit and certain additional procedures including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal and state awards is fairly stated in all material respects in relation to the basic financial statements as a whole. Waco, Texas June 30, 2025 Pass-through Assistance Total Federal Grantor/Pass-through Grantor's Listing Federal Grantor/Program or Cluster Title Number Number ExpendituresFederal Awards: U.S. Department of Agriculture Passed through the Health and Human Services Commission: Special Supplemental Nutrition Program for Women, Infants, and Children HHS000805800001 10.557 963,904$ Total Passed through the Health and Human Services Commission 963,904 Total U.S. Department of Agriculture 963,904 U.S. Department of Housing and Urban Development Direct Program: CDBG Entitlement Grant Cluster: Community Development Block Grant - Entitlement Grants B20-MC480005 14.218 881,305 Total CDBG Entitlement Grant Cluster 881,305 Home Investment Partnership M20-MC480217 14.239 471,809 Total Direct Program 471,809 Passed through Texas General Land Office: GLO CDBG - Disaster Recovery - Hurricane Harvey - Buyout 20-066-034-C232 14.228 826,742 Total Passed through the Texas General Land Office 826,742 Total U.S. Department of Housing and Urban Development 2,179,856 U.S. Department of Interior Passed through Texas Parks and Wildlife: Sport Fish Restoration N/A 15.605 276,552 Total Passed through the Texas Parks and Wildlife 276,552 Total U.S. Department of Interior 276,552 U.S. Department of Justice Passed through Office of the Governor: Project Safe Neighborhoods 4506802 16.609 98,104 Total Passed through the Office of the Governor 98,104 Total U.S. Department of Justice 98,104 U.S. Department of Transportation Direct Programs: Federal Transit Cluster: Section 5307 Urbanized Area Formula Grant TX-2018-022 20.507 274,597 Section 5307 Urbanized Area Formula Grant TX-2019-002 20.507 38,765 Section 5307 Urbanized Area Formula Grant TX-2019-095 20.507 332,440 Section 5307 Urbanized Area Formula Grant TX-2022-021 20.507 485,683 Buses and Bus Facilities Formula, Competitive, and Low or No Emissions Programs TX-2018-025 20.526 12,981 Buses and Bus Facilities Formula, Competitive, and Low or No Emissions Programs TX-2020-041 20.526 121,930 Buses and Bus Facilities Formula, Competitive, and Low or No Emissions Programs TX-2022-009 20.526 1,268 Total Federal Transit Cluster 1,267,664 Public Transportation Emergency Relief Program TX-2020-033 20.527 67,276 Total Direct Programs 1,334,940 Highway Safety Cluster: State and Community Highway Safety National Priority Safety Programs 2023-PORTARTHUR-CIOT-RFR-00014 20.616 148,541 Total Highway Safety Cluster 148,541 Total U.S. Department of Transportation 1,483,481 CITY OF PORT ARTHUR, TEXAS SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS FOR THE YEAR ENDED SEPTEMBER 30, 2024 6 Pass-through Assistance Total Federal Grantor/Pass-through Grantor's Listing Federal Grantor/Program or Cluster Title Number Number ExpendituresFederal Awards (continued): U.S. Department of the Treasury Direct Program: COVID-19 - American Rescue Plan Fiscal Funds - SLFRF Program SLFRP2680 21.027 5,842,651$ Total Direct Program 5,842,651 Total U.S. Department of Treasury 5,842,651 U.S. Environmental Protection Agency Passed through Texas Water Development Board: Clean Water State Revolving Fund L1001023 66.458 11,846,351 Total Passed through Texas Water Development Board 11,846,351 Total U.S. Environmental Protection Agency 11,846,351 U. S. Department of Health and Human Services Passed through the Health and Human Services Commission: CPS Hazards 537-18-0120-00001 93.069 99,578 Tuberculosis Control Programs HHS000686100022 93.116 16,874 Immunization Cooperative Agreements HHS001019500028 93.268 456,275 COVID-19 - Health Desparities COVID-LHD HHS001057600038 93.391 61,364 Families Transition Act 23 FFTA HHS000791900009 93.590 16,354 Preventative Health and Health Services Block Grant (TLSS LPHS)HHS000485600001 93.991 157,804 Healthy Texas Mothers and Babies Coalitions HHS000094000001 93.994 77,801 Total Passed through the Health and Human Services Commission 886,050 Passed through Texas Department of Family and Protective Services: Nurse Family Partnership Grant HHS000791900009 93.558 723,925 Total Passed through Texas Department of Family and Protective Services 723,925 Total U. S. Department of Health and Human Services 1,609,975 U. S. Department of Homeland Security Passed through Texas Department of Public Safety: Disaster Grants - Public Assistance - Hurricane Laura PA-06-TX-4572 97.036 46,520 Disaster Grants - Public Assistance - Hurricane Harvey PA-06-TX-4332 97.036 747,251 Total ALN 97.036 793,771 Hazard Mitigation Grant Program HMGP-06-TX-4332-PW-00034 97.039 396,996 Hazard Mitigation Grant Program HMGP-06-TX-4332-PW-00033 97.039 3,018,048 Hazard Mitigation Grant Program HMGP-06-TX-4332-PW-00109 97.039 2,115,118 Total ALN 97.039 5,530,162 2021 State Homeland Security Program 3977301-2021 97.067 59,671 Total Passed through the Texas Department of Public Safety 6,383,604 Total U. S. Department of Homeland Security 6,383,604 Total Federal Awards 30,684,478$ SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS FOR THE YEAR ENDED SEPTEMBER 30, 2024 CITY OF PORT ARTHUR, TEXAS 7 Pass-through Total State Grantor/Pass-through Grantor's State Grantor/Program or Cluster Title Number ExpendituresState Awards: Texas Office of Attorney General Chapter 59 N/A 14,898$ Total Texas Office of Attorney General 14,898 Texas Department of Transportation Texas Mobility Fund Grant CSJ# 0920-38-289 1,805,476 Urban State Fund 51309022019 563,545 Total Texas Department of State Health Services 2,369,021 Texas Department of State Health Services Tuberculosis Control Programs HHS000484100002 34,315 Immunization Grants HHS000109900001 154,295 CPS Workforce HHS001076500001 151,455 Nurse-Family Partnership Program Grant HHS000791900009 77,236 Total Texas Department of State Health Services 417,301 Texas Health and Human Services Commission Primary Health Care HHS000697900024 60,446 Total Texas Health and Human Services Commission 60,446 Texas Department of Emergency Management Disaster Grants - Public Assistance - Hurricane Harvey PA-06-TX-4332 52,461 El Vista Drainage Improvements HMGP-06-TX-4332-PW-00034 99,249 Port Acres Drainage Improvements HMGP-06-TX-4332-PW-00033 754,512 Stonegate Drainage HMGP-06-TX-4332-PW-00109 528,780 Total Texas Department of Emergency Management 1,435,002 Total State Awards 4,296,668$ CITY OF PORT ARTHUR, TEXAS SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS FOR THE YEAR ENDED SEPTEMBER 30, 2024 8 9 CITY OF PORT ARTHUR, TEXAS NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS FOR THE YEAR ENDED SEPTEMBER 30, 2024 1. BASIS OF PRESENTATION The accompanying schedule of expenditures of federal and state awards (the SEFSA) includes the federal and state award activity of the City of Port Arthur, Texas (the City) under programs of the federal and state government for the fiscal year ended September 30, 2024. The information in the SEFSA is presented in accordance with the 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) and Texas Grant Management Standards. Federal and state awards received directly from federal and state agencies, as well as federal awards passed through other government agencies, are included on the SEFSA. All federal and state grants are subject to review by the grantor agencies. Any expenditures identified by the grantor agencies as disallowed could require reimbursement to the grantor agency from the City’s general fund. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the SEFSA are reported on the modified accrual basis of accounting. Such expenditures are recognized following, as applicable, the cost principles contained in the Uniform Guidance Texas Grant Management Standards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. 3. INDIRECT COSTS The City did not elect to use the de minimis indirect cost rate as allowed under the Uniform Guidance. 4. COMINGLED ASSISTANCE – FEDERAL TRANSIT – FORMULA GRANT The City’s Transit program is funded through a combination of federal and state awards, as well as local program income. The federal portion of the expenditures related to the program is not separately identifiable because of comingling assistance from State funding. 5. RELATIONSHIP TO FEDERAL FINANCIAL REPORTS Grant expenditures reports as of September 30, 2024, which have been submitted to grantor agencies will, in some cases, differ slightly from amounts disclosed herein. The reports prepared for grantor agencies are typically prepared at a later date and often reflect refined estimates of year-end accruals. The reports will agree at termination of the grant as the discrepancies noted are timing differences. 6. LOANS AND LOAN GUARANTEES The City is indebted to the Texas Water Development Board (TWDB) as a result of issuance of Combination Tax and Revenue Certificates of Obligations - Capitalization Grants for Clean Water State Revolving Loan Fund Series 2020B. The bonds were sold to provide financing for qualified water system improvements. The amounts reflected in the SEFSA represent expenditures incurred during the year ended September 30, 2024. The loan balance for Series 2020B is $54,755,000. Section 1. Summary of the Auditor's Results Financial Statements: Type of auditor's report issued:Unmodified Internal control over financial reporting: Material weakness(es) identified?Yes, 2024-001 Significant deficiency(ies) identified that are not considered a material weakness?None reported Noncompliance material to financial statements noted?No Federal Awards: Internal control over major programs: Material weakness(es) identified?No Significant deficiency(ies) identified that are not considered a material weakness?No Type of auditor's report issued on compliance for major federal programs Unmodified Any audit findings disclosed that are required to bereported in accordance with 2 CFR 200.516(a)?No Identification of major federal programs: Assistance Listing Number(s):Name of Federal Program or Cluster: 21.027 American Rescue Plan Fiscal Funds - SLFRF Program (COVID-19) 66.458 Clean Water State Revolving Fund 97.039 Hazard Mitigation Grant Program (HMGP) The dollar threshold used to distinguish betweentype A and type B federal programs.$920,534 Auditee qualified as low-risk auditee?No CITY OF PORT ARTHUR, TEXAS SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED SEPTEMBER 30, 2024 10 State Awards: Internal control over major programs: Material weakness(es) identified?No Significant deficiency(ies) identified that are not considered a material weakness?None reported Type of auditor's report issued on compliance for major state programs Unmodified Any audit findings disclosed that are required to be reported in accordance with Texas Grant Management Standards?No Identification of major state programs: Program Name:Grant Number: Texas Mobility Fund Grant CSJ# 0920-38-289 El Vista Drainage Improvements HMGP-06-TX-4332-PW-00034 Port Acres Drainage Improvements HMGP-06-TX-4332-PW-00033 Stonegate Drainage HMGP-06-TX-4332-PW-00109 The dollar threshold used to distinguish between type A and type B state programs.$750,000 FOR THE YEAR ENDED SEPTEMBER 30, 2024 (continued) CITY OF PORT ARTHUR, TEXAS SCHEDULE OF FINDINGS AND QUESTIONED COSTS 11 12 CITY OF PORT ARTHUR, TEXAS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (continued) FOR THE YEAR ENDED SEPTEMBER 30, 2024 Section 2. Financial Statement Findings Finding: 2024-001: Financial Statement Adjustments Type of Finding: Material Weakness in Internal Control over Financial Reporting Criteria Management is responsible for the accuracy and completeness of all financial records and related information, as well as for establishing and maintaining effective internal control over financial reporting. The existence of a material misstatement of an entity’s financial statements is an indication of a material weakness in internal control. Condition The financial information for the year ended September 30, 2024, contained material errors that were identified and corrected during our audit. Specific issues related to cut-off of expenditures/expenses, lack of balance sheet reconciliation review, untimely bank reconciliations, improper grant revenue recognition, and discrepancies between the accounting records and supporting documents. Cause These errors were not detected before the information was provided for the audit. There is an indication that closing procedures, specifically the monitoring and review of financial information, are not being effectively performed. Effect or Potential Effect Material misstatements of the City’s financial statements were not prevented, or detected and corrected, by the City’s system of internal control system, requiring numerous audit adjustments to correct the misstatement identified during the audit. Failure to establish effective monitoring and closing procedures will allow possible irregularities to exist and continue without notice. Recommendation We recommend the City establish effective monitoring and closing policies and procedures as a customary part of the accounting process, including a requirement that all the balance sheet accounts be reconciled to supporting statements and schedules. Views of Responsible Official(s) and Planned Corrective Actions See corrective action plan. Section 3. Federal Award Findings and Questioned Costs None 13 SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS FOR THE YEAR ENDED SEPTEMBER 30, 2024 Finding: 2023-001: Financial Statement Adjustments Type of Finding: Material Weakness in Internal Control over Financial Reporting Fiscal year in which the finding initially occurred: 2019 Status: Not resolved. See finding 2024-001 Finding 2023-002: Untimely and Inaccurate Reporting ALN# 25.507, 20.526 – Federal Transit Cluster Federal Agency: U.S. Department of Transportation Type of Finding: Significant Deficiency in Internal Control over Noncompliance and Noncompliance Finding Fiscal year in which the finding initially occurred: 2021 Status: Resolved. 14 CORRECTIVE ACTION PLAN FOR THE YEAR ENDED SEPTEMBER 30, 2024 Finding: 2024-001: Financial Statement Adjustments Corrective Action Plan There continues to be high turnover in the Finance department in 2023 and 2024 that leaves the department short-staffed. The department also underwent significant software changes that involved the use of two systems simultaneously. The Finance department has since grown their team and returned to a single reporting system. Going forward, all accounting procedures will be reviewed and updated, if necessary, to ensure that effective monitoring and closing policies and procedures are in place and that the procedures require all balance sheet accounts to be reconciled to supporting statements and schedules in a timely fashion. The City Manager and executive staff have taken note of the impact of staffing deficits; in addition to direct help, the City has readily supported use of interim professionals and contract professional accountants to under guard department of finance needs and functions. Person(s) Responsible Director of Finance – Lynda “Lyn” Boswell Anticipated Completion Date An updated policy manual was approved by the City Council on January 17, 2023. New policies and procedures are expected to be fully implemented by September 30, 2025.