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Auditor warns of federal single-audit requirements, recommends modified-cash reporting for water/sewer grants
Summary
Auditor Kevin Buckley told the Village of Kincaid trustees that IEPA grants pushed the village over the $1 million federal-expenditure threshold, triggering single-audit requirements and likely accrual-based reporting for grant accounting; he recommended a hybrid approach and flagged internal-control weaknesses and missing RV-lot rental documentation.
Kevin Buckley, the village's contracted auditor, told trustees the annual audit shows the village exceeded the federal-expenditure threshold tied to IEPA grants, meaning the village must comply with single-audit rules. "Everything in this report except our opinions is your information," Buckley said, and he warned that new rules may require some reporting on an accrual basis that could complicate budgeting for municipalities that operate on a cash or modified-cash basis.
Buckley walked trustees through key figures in the report: roughly $174,000 in fixed-asset purchases in the governmental fund and more than $2 million added to water and sewer assets because of project grants, but only about $597,000 in additional liabilities due to loan forgiveness. He said IEPA forgiveness accounted for a large share of the temporary cash inflow ("IEPA forgave over one million dollars in water loans, and three hundred and sixty-two with the sewer") and urged the board to consider producing a modified-cash report for general budgeting while preparing accrual adjustments only for water and sewer to satisfy grantors. He flagged internal-control weaknesses tied to limited staffing and the village's practice of having auditors prepare certain records, and noted the audit team could not verify RV-lot rental receipts because contracts and transaction records were missing: "we weren't able to audit the RV lot rentals, there were no contracts," he said.
Buckley recommended creating written contracts or tracking procedures for RV-lot reservations, tightening controls around municipal credit-card receipts (13 of 40 tested transactions lacked receipts), and adopting clear back-up and volunteer-supervision protocols for village-held data. He offered to consult on the proposed reporting approach before the next audit and said timing of expenditures (not just grant awards) can influence whether a federal audit threshold is exceeded.
