Audit 16768

FY End
2022-09-30
Total Expended
$55.20M
Findings
2
Programs
35
Organization: City of Corpus Christi, Texas (TX)
Year: 2022 Accepted: 2023-04-26
Auditor: Weaver

Organization Exclusion Status:

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Findings

ID Ref Severity Repeat Requirement
12377 2022-001 Material Weakness - B
588819 2022-001 Material Weakness - B

Programs

ALN Program Spent Major Findings
21.023 Emergency Rental Assistance Program $15.60M Yes 0
20.106 Airport Improvement Program $14.16M Yes 0
21.027 Coronavirus State and Local Fiscal Recovery Funds $8.06M Yes 0
93.268 Immunization Cooperative Agreements $5.23M - 0
14.218 Community Development Block Grants/entitlement Grants $2.59M Yes 1
14.239 Home Investment Partnerships Program $1.16M - 0
93.045 Special Programs for the Aging_title Iii, Part C_nutrition Services $1.16M - 0
11.307 Economic Adjustment Assistance $1.02M - 0
10.557 Special Supplemental Nutrition Program for Women, Infants, and Children $820,299 - 0
14.231 Emergency Solutions Grant Program $551,446 - 0
94.016 Senior Companion Program $363,940 - 0
16.922 Equitable Sharing Program $242,985 - 0
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $236,718 Yes 0
93.069 Public Health Emergency Preparedness $203,519 - 0
14.228 Community Development Block Grants/entitlement Grants $197,395 - 0
20.600 State and Community Highway Safety $128,595 - 0
93.053 Nutrition Services Incentive Program $124,284 - 0
66.458 Capitalization Grants for Clean Water State Revolving Funds $108,605 - 0
93.556 Promoting Safe and Stable Families $95,078 - 0
16.575 Crime Victim Assistance $89,282 - 0
93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response $82,441 - 0
94.002 Retired and Senior Volunteer Program $78,687 - 0
93.991 Preventive Health and Health Services Block Grant $78,575 - 0
16.738 Edward Byrne Memorial Justice Assistance Grant Program $65,126 - 0
95.001 High Intensity Drug Trafficking Areas Program $44,539 - 0
16.034 Coronavirus Emergency Supplemental Funding Program $39,201 - 0
97.067 Homeland Security Grant Program $34,950 - 0
16.742 Paul Coverdell Forensic Sciences Improvement Grant Program $31,188 - 0
93.116 Project Grants and Cooperative Agreements for Tuberculosis Control Programs $27,645 - 0
16.588 Violence Against Women Formula Grants $27,578 - 0
93.558 Temporary Assistance for Needy Families $22,810 - 0
97.042 Emergency Management Performance Grants $8,561 - 0
66.472 Beach Monitoring and Notification Program Implementation Grants $219 - 0
10.558 Child and Adult Care Food Program $84 - 0
45.310 Grants to States $-261 - 0

Contacts

Name Title Type
XETBTPPKL895 Judy Sandroussi Auditee
3618263669 Laura Lambert Auditor
No contacts on file

Notes to SEFA

Title: Note 2. Summary of Significant Accounting Policies Accounting Policies: Note 1. Basis of Presentation - The accompanying schedule of expenditures of federal and state awards (the "Schedule") includes the federal and state award activity of the City of Corpus Christi, Texas (the City) under programs of the federal government and State of Texas for the year ended September 30, 2022. The information in this Schedule 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 the Texas Grant Management Standards (TxGMS). Because the Schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net position, or cash flows of the City. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Note 2. Summary of Significant Accounting Policies Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following, as applicable, the cost principles contained in the Uniform Guidance, or TxGMS, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years.
Title: Note 3. Relationship to Federal and State Financial Reports Accounting Policies: Note 1. Basis of Presentation - The accompanying schedule of expenditures of federal and state awards (the "Schedule") includes the federal and state award activity of the City of Corpus Christi, Texas (the City) under programs of the federal government and State of Texas for the year ended September 30, 2022. The information in this Schedule 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 the Texas Grant Management Standards (TxGMS). Because the Schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net position, or cash flows of the City. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Amounts reported in the Schedule may not agree with the amounts reported in the related Federal/State financial reports filed with grantor agencies because of accruals which would be included in the next report filed with the agencies.
Title: Note 5. Expenditures Incurred in a Prior Year Accounting Policies: Note 1. Basis of Presentation - The accompanying schedule of expenditures of federal and state awards (the "Schedule") includes the federal and state award activity of the City of Corpus Christi, Texas (the City) under programs of the federal government and State of Texas for the year ended September 30, 2022. The information in this Schedule 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 the Texas Grant Management Standards (TxGMS). Because the Schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net position, or cash flows of the City. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The City disclosed amounts in the Schedule for expenditures incurred in a prior year as follows: Description Amount Federal Program CFDA Number 97.036 - Texas Department of Emergency Management, Public Assistance Grant Packery Channel Restoration $295,444 Winter Weather Event 2021 236,718 State Program - Office of the Governor Defense Economic Adjustment Assistance Grant (DEAAG) 83,038 Total $615,200.
Title: Note 6. Loans Outstanding Accounting Policies: Note 1. Basis of Presentation - The accompanying schedule of expenditures of federal and state awards (the "Schedule") includes the federal and state award activity of the City of Corpus Christi, Texas (the City) under programs of the federal government and State of Texas for the year ended September 30, 2022. The information in this Schedule 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 the Texas Grant Management Standards (TxGMS). Because the Schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net position, or cash flows of the City. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The City had the following loan balance outstanding as of September 30, 2022 under the United States Environmental Protection Agency Capitalization Grants for Drinking Water State Revolving Funds program (passed through the Texas Water Development Board).Program Title - Capitalization Grants for Clean Water State Revolving Funds Assistance Listing - 66.48, Loan Balance September 30, 2021 - 0.00 Repayments - 0.00, Loan Balance September 30, 2022 - $3,561,000. Loans received under this program do not have continuing compliance requirements. There was $108,605 in Bond Issuance costs during Fiscal Year 2022. This grant also includes forgivable principal in the amount of $1,190,000.

Finding Details

Section 3. Federal and State Award Findings and Questioned Costs Finding 2022-001 Information on Federal Program: Federal Program: CDBG Entitlement Grants Cluster Federal Agency: U.S. Department of Housing and Urban Development (HUD) Assistance Listing: 14.218 Compliance Requirements: Allowable Costs/Cost Principles Material Weakness in Internal Control over Compliance and Noncompliance (Questioned Costs over $25,000 for a Major Program) Criteria: 24 CFR 570.202 (c) ? 570.202 Code Enforcement, allows costs incurred for inspection for code violations and enforcement of codes (e.g., salaries and related expenses of code enforcement inspectors and legal proceedings, but not including the cost of correcting the violations) in deteriorating or deteriorated areas when such enforcement together with public or private improvements, rehabilitation, or services to be provided may be expected to arrest the decline of the area. Condition: A HUD review of the City?s FY2021 CDBG-funded activities on the CDBG Summary Activity Report showed the City funded two ineligible Code Enforcement activities. Both activities included the expenditure of funds to correct code enforcement violations. Cause: City staff did not correctly identify these code enforcement activities as ineligible under the CDBG regulations. Effect or Potential Effect: By not appropriately reviewing the CDBG regulations and guidance to determine whether activity eligibility requirements were met, the City has used federal funds for ineligible activities which has resulted in required repayment of funds from non-federal sources. Context: Of the approximately $3.3 million reported as grant expenditures in fiscal year 2021, $0.2 million were disallowed. Questioned Costs: $247,429 Recommendation: We recommend City officials work with HUD to determine the nature of demolition costs and ensure all demolition costs are being appropriately expended under the grant agreement and ensure costs reported through the Consolidated Annual Performance Evaluation Report have the correct IDIS numbers. Views of Responsible Official(s) and Planned Corrective Action: See corrective action plan
Section 3. Federal and State Award Findings and Questioned Costs Finding 2022-001 Information on Federal Program: Federal Program: CDBG Entitlement Grants Cluster Federal Agency: U.S. Department of Housing and Urban Development (HUD) Assistance Listing: 14.218 Compliance Requirements: Allowable Costs/Cost Principles Material Weakness in Internal Control over Compliance and Noncompliance (Questioned Costs over $25,000 for a Major Program) Criteria: 24 CFR 570.202 (c) ? 570.202 Code Enforcement, allows costs incurred for inspection for code violations and enforcement of codes (e.g., salaries and related expenses of code enforcement inspectors and legal proceedings, but not including the cost of correcting the violations) in deteriorating or deteriorated areas when such enforcement together with public or private improvements, rehabilitation, or services to be provided may be expected to arrest the decline of the area. Condition: A HUD review of the City?s FY2021 CDBG-funded activities on the CDBG Summary Activity Report showed the City funded two ineligible Code Enforcement activities. Both activities included the expenditure of funds to correct code enforcement violations. Cause: City staff did not correctly identify these code enforcement activities as ineligible under the CDBG regulations. Effect or Potential Effect: By not appropriately reviewing the CDBG regulations and guidance to determine whether activity eligibility requirements were met, the City has used federal funds for ineligible activities which has resulted in required repayment of funds from non-federal sources. Context: Of the approximately $3.3 million reported as grant expenditures in fiscal year 2021, $0.2 million were disallowed. Questioned Costs: $247,429 Recommendation: We recommend City officials work with HUD to determine the nature of demolition costs and ensure all demolition costs are being appropriately expended under the grant agreement and ensure costs reported through the Consolidated Annual Performance Evaluation Report have the correct IDIS numbers. Views of Responsible Official(s) and Planned Corrective Action: See corrective action plan