City of North Richland Hills, Texas

Finding: Reporting Federal Program: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing No.: 21.027 Federal Agency: Department of Treasury Criteria or Specific Requirement: In accordance with 2 CFR 200.328 and 31 CFR section 35.4(c), recipients must adhere to the Treasury’s Recipient Compliance and Reporting Responsibilities, which require accurate completion of the annual Project and Expenditure Report. Required reporting elements include current period obligation, cumulative obligation, current period expenditure, and cumulative expenditure. Management is responsible for establishing and maintaining effective internal control to ensure compliance with these reporting requirements. Condition: The current period obligation and current period expenditures reported in the annual Project and Expenditure Report were inaccurate and did not reflect the underlying supporting documentation. Cause: The City’s internal controls and supervisory review procedures over the preparation of the Project and Expenditure Report were not operating effectively, resulting in incorrect amounts being reported. Effect or Potential Effect: Inaccurate reporting may impair the Department of Treasury’s oversight and monitoring efforts and could result in the City being viewed as noncompliant with federal reporting requirements. Questioned Costs: None reported. Context: During our testing, we recalculated the current period obligation and current period expenditure amounts and identified discrepancies when compared to the amounts submitted in the annual Project and Expenditure Report to the Department of Treasury. Identification as a Repeat Finding: N/A Recommendation: Management should strengthen existing policies and procedures to ensure accurate calculation and reporting of key line items within the Project and Expenditure Report. This should include enhanced supervisory review to verify the accuracy and completeness of the report prior to submission. Views of Responsible Officials: We agree with the finding. See separate report for planned corrective action plan.