Audits

On September 21, we issued a quality control review report on a single audit performed by Clifton Gunderson on the City of Phoenix’s (the City) use of DOT grants for the fiscal year ending June 30, 2008. During this period, the City received about $200 million of grants from FTA, FHWA, FAA, and NHTSA. Clifton Gunderson rendered an unqualified (clean) opinion on the City’s financial statements and did not question any costs concerning DOT grant programs. However, it identified a significant deficiency in internal control over compliance with the FHWA program–the City did not prepare the Schedule of Expenditures of Federal Awards on an accrual accounting basis. We determined that Clifton Gunderson’s work generally met the requirements of Generally Accepted Government Auditing Standards, the Single Audit Act of 1984, as amended, and the Office of Management and Budget Circular A–133. We found nothing to indicate that Clifton Gunderson’s opinion on the financial statements or reports on internal control and compliance were inappropriate or unreliable. However, we identified several documentation deficiencies in Clifton Gunderson’s workpapers. Based on the explanations and additional information provided by Clifton Gunderson, we determined that these documentation deficiencies did not affect the overall audit results. However, they should be corrected in future audits to adequately support the audit conclusion. Clifton Gunderson concurred with our recommendation and agreed to provide its FY 2009 audit workpapers for our follow–up review.