Marion

Schedule of Findings and Questioned Costs # SECTION I – SUMMARY OF AUDITOR'S RESULTS ### Page 93 City of Marion Schedule of Findings and Questioned Costs # SECTION II – BASIC FINANCIAL STATEMENT FINDINGS Instances of Noncompliance There were no reported instances of noncompliance. Internal Control Deficiencies Current Internal Control Deficiency 2025-001 Material Audit Adjustments and Prior Period Restatements Criteria: Internal control that supports the City's ability to initiate, record, process and report financial data requires controls to ensure all required adjustments to the financial statements are properly recorded. Condition: During the course of our audit, we proposed material audit adjustments and error corrections resulting in prior period restatements that would not have been identified as a result of the City's internal controls, and therefore, could have resulted in a material misstatement of the City's financial statements. In order to ensure financial statements were free from material misstatement, audit adjustments were required to adjust payables and capital assets. It was also determined that the that pooled investments and deferred grants were not reported properly in the prior period which resulted in prior period restatements. Context: This finding impacts the internal control over financial reporting. Cause: There are a limited number of office employees to identify all necessary adjustments. Effect or Potential Effect: Internal controls that fail to identify necessary adjustments could result in material misstatements to the financial statements. Recommendation: Review City activity and ensure all necessary adjustments to financial data are recorded. Views of Responsible Official's: The City will thoroughly review activity throughout the year and ensure all necessary adjustments to financial data are recorded. ### Page 94 City of Marion Schedule of Findings and Questioned Costs Part III: FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS: Instances of Noncompliance There were no matters reported. Internal Control Deficiencies There were no matters reported. Part IV: FINDINGS RELATED TO STATUTORY REPORTING: 25-IV-A - Certified Budget Disbursements during the year ended June 30, 2025 did not exceed the amounts in the amended budget. 25-IV-B - Questionable Disbursements We noted no material expenditures which did not appear to meet the requirements of public purpose as defined in an Attorney General's opinion dated April 25, 1979. 25-IV-C - Travel Expense No disbursements of the City of Marion's money for travel expenses of spouses of City officials or employees were noted. 25-IV-D - Business Transactions No business transactions between the City and City officials were noted. 25-IV-E - Restricted Donor Activity No transactions were noted between the City, City officials or City employees and restricted donors in compliance with Chapter 68B of the Code of Iowa (Government Ethics and Lobbying Act). 25-IV-F - Bond Coverage Surety bond coverage of the City of Marion officials and employees is in accordance with statutory provisions and was reviewed and updated during the year. We recommend that the amount of coverage continue to be reviewed annually to ensure that the coverage is adequate for current operations. 25-IV-G - Council Minutes No transactions were found that we believe should have been approved in the Council minutes but were not. 25-IV-H - Deposits and Investments We noted no instances of noncompliance with the deposit and investment provisions of Chapter 12B and 12C of the Code of Iowa and the City's investment policy. 25-IV-I - Revenue Bonds The City has complied with the provisions of the revenue bond indentures and with the provisions of the tax increment revenue bond issues. ### Page 95 City of Marion Schedule of Findings and Questioned Costs Part IV: FINDINGS RELATED TO STATUTORY REPORTING (CONTINUED) 25-IV-J - Tax Increment Financing The Special Revenue, Tax Increment Financing (TIF) Fund properly disbursed payments for TIF loans and rebates. Also, the City of Marion properly completed the Tax Increment Debt Certificate Forms to request TIF properly taxes. 25-IV-K - Annual Urban Renewal Report The Annual Urban Renewal Report was properly approved and certified to the Iowa Department of Management on or before December 1 as required by Chapter 384.22(2)(a) of the Code of Iowa and no exceptions were noted.