Finding Number: 2022 001 Program: Emergency Solutions Grant Program (ESG) ALN #: 14.231 Federal Agency: Housing and Urban Development Federal Award Number: E 20 MC 25 005; E 20 MW 25 0005 Award Year: 7/1/2021 ? 6/30/2022 E 21 MC 25 0005 Suspension and Debarment Type of finding: Material Weakness Prior year finding: No Statistically valid sample: No Criteria The 2 CFR sections 180.215 and 180.220 provide the principles to be applied to ensure non federal entities are not contracting with or making subawards under covered transactions to parties that are suspended or debarred. Also, when a non federal entity enters into a covered transaction with an entity at a lower tier, the non federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. According to 2 CFR 200.303, the non Federal entity must Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition When establishing contracts for subrecipients under the Emergency Solutions Grant Program (ESG), the City required that standard contract language be included to address the applicable suspension and debarment requirements. During fiscal year 2022, the required contract language was not included within the subrecipient contracts executed for the ESG program. Additionally, the City did not verify that its subrecipients were not suspended or debarred through the System for Award Management (SAM). During our audit, we noted 5 of 5 subrecipients selected for testing were not checked for suspension and debarment as evidenced via review of the subrecipient contracts. During compliance testing for the subrecipients it was confirmed they were not suspended or debarred. Cause The City requires that standards contract language be included in all of their subrecipient contracts that addresses suspension and debarment requirements. The City was unaware that the required language was excluded from subrecipient contracts entered into for the ESG program as there was insufficient review of the contracts prior to execution to ensure all required elements were present. Effect Lack of formal review of subrecipient contracts and review of entities on SAM could result in the City entering into contracts with prohibited entities. Questioned Costs None Recommendation We recommend the City ensure that required language is included within all subrecipient contracts prior to execution. We also recommend that the City review that subrecipients are not included on the SAM website and retain documentation of that check and review prior to entering into contracts with subrecipients. Views of Responsible Officials and Corrective Actions The City will update the subrecipient contract template to ensure the required language is included in all newly executed contracts certifying that the agency, its officers, and employees are not suspended or debarred from doing business with the federal government. Prior to entering into contracts with subrecipients, the City will check that each subrecipient is not included on the SAM.gov Exclusion List, and will include a dated screenshot from the SAM.gov website documenting the review in each project file. Implementation Date Updates to the Emergency Solutions Grant subrecipient contracts will be implemented for all newly executed contracts for use in the FY24 ESG program year. All ESG subrecipients will be checked against the Sam.gov Exclusion List and determined to be in good standing prior to the contract being executed and this process will be documented. Responsible Officials Anthony Woods, Planner and Contract Manager; Liz Mengers Magargee, Planning and Development Manager
Finding Number: 2022 002 Program: Emergency Solutions Grant Program (ESG) ALN #: 14.231 Federal Agency: Housing and Urban Development Federal Award Number: E 20 MC 25 005; E 20 MW 25 0005 Award Year: 7/1/2021 ? 6/30/2022 E 21 MC 25 0005 Special Tests; Payments to Subrecipients Type of finding: Material Weakness and Material noncompliance Prior year finding: No Statistically valid sample: No Criteria According to 24 CFR section 576.203, a recipient must pay each subrecipient for allowable costs within 30 days after receiving the subrecipient?s complete payment request. According to 2 CFR 200.303, the non Federal entity must Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The City?s ESG Program has a control in place to ensure that invoice cover sheets (i.e. reimbursement requests) are reviewed in a timely manner so that the City can subsequently reimburse subrecipients within 30 days and remain in compliance with the requirement; however, the control to ensure timely payments to subrecipients was not operating effectively as there was a 8 to 110 day lag between the date the reimbursement request was received and the payment date. During our audit, we noted 14 of 21 subrecipient reimbursements selected for testing were not completed within 30 days of receiving the completed request for payment. Cause The City did not have effective controls in place to ensure subrecipients were paid for allowable costs within 30 days after receiving the subrecipient?s complete payment request. Effect Lack of effective controls resulted in the City not complying with 24 CFR section 576.203. Questioned Costs None Recommendation We recommend the City establish effective controls to ensure payment requests received from subrecipients are paid within 30 days of receipt. Views of Responsible Officials and Corrective Actions The City will establish the following procedures to ensure payment requests received from subrecipients are paid within 30 days of receipt of a complete request for reimbursement: 1. Department of Human Service Programs (DHSP) Contract Manager reviews invoices within 5 business days of receipt of request for reimbursement from subrecipient. a. If invoice is complete, original date of receipt is recorded. b. If invoice is incomplete, subrecipient is notified of items or documentation that is missing and receipt date is updated to reflect date of receipt of complete invoice. 2. Contract Manager approves payment request and submits to DHSP Fiscal staff for processing. 3. Fiscal staff processes and submits to Auditing Department as Priority payment. Implementation Date Implementation will begin April 15, 2023, when the FY23 3rd Quarter invoices are anticipated to be received by ESG subrecipients. Responsible Officials Anthony Woods, Planner and Contract Manager; Liz Mengers Magargee, DHSP Planning and Development Manager; Giovanna Alvarez, DHSP Fiscal Administrator; Janice Alger, Assistant Director of Administration, Human Services
Finding Number: 2022 003 Program: Emergency Solutions Grant Program (ESG) ALN #: 14.231 Federal Agency: Housing and Urban Development Federal Award Number: E 20 MC 25 005; E 20 MW 25 0005 Award Year: 7/1/2021 ? 6/30/2022 E 21 MC 25 0005 Subrecipient Monitoring Type of finding: Material Weakness Prior year finding: No Statistically valid sample: No Criteria The 2 CFR sections 200.332(d) through (f) provide the principles to be applied to monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. According to 2 CFR 200.303, the non Federal entity must Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The City does not have properly designed controls and documented procedures in place to ensure compliance with the following requirements: ? Each subrecipients risk of noncompliance is appropriately evaluated ? Monitoring activities over subrecipients are performed on a timely basis ? Verification that subrecipients are audited as required when they are expected to exceed the threshold for having a single audit. During our audit, we noted that audited financial statements were obtained for 5 of the 5 subrecipients selected for testing, but there was no documentation to evidence consideration of the compliance requirements indicated above. Cause The City requires that audited financial statements are obtained for subrecipients, but there is no checklist or formal documentation required to indicate what should be reviewed when reviewing the audit reports to ensure compliance with subrecipient monitoring requirements. Effect Lack of effective controls could result in the City?s noncompliance with program requirements. Questioned Costs None Recommendation We recommend the City establish a checklist or formal documentation requirements that employees can complete when obtaining subrecipient audit reports to ensure required monitoring procedures are performed and well documented. Views of Responsible Officials and Corrective Actions The City has established an Audit Review Certification form that will be completed by employees to formally document review of subrecipient agencies? audit reports. Implementation Date The City will implement use of the Audit Review Certification form as part of the ESG subrecipient application process for the FY24 program year beginning July 1, 2023. Responsible Officials Anthony Woods, Planner and Contract Manager; Liz Mengers Magargee, Planning and Development Manager
Finding Number: 2022 001 Program: Emergency Solutions Grant Program (ESG) ALN #: 14.231 Federal Agency: Housing and Urban Development Federal Award Number: E 20 MC 25 005; E 20 MW 25 0005 Award Year: 7/1/2021 ? 6/30/2022 E 21 MC 25 0005 Suspension and Debarment Type of finding: Material Weakness Prior year finding: No Statistically valid sample: No Criteria The 2 CFR sections 180.215 and 180.220 provide the principles to be applied to ensure non federal entities are not contracting with or making subawards under covered transactions to parties that are suspended or debarred. Also, when a non federal entity enters into a covered transaction with an entity at a lower tier, the non federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. According to 2 CFR 200.303, the non Federal entity must Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition When establishing contracts for subrecipients under the Emergency Solutions Grant Program (ESG), the City required that standard contract language be included to address the applicable suspension and debarment requirements. During fiscal year 2022, the required contract language was not included within the subrecipient contracts executed for the ESG program. Additionally, the City did not verify that its subrecipients were not suspended or debarred through the System for Award Management (SAM). During our audit, we noted 5 of 5 subrecipients selected for testing were not checked for suspension and debarment as evidenced via review of the subrecipient contracts. During compliance testing for the subrecipients it was confirmed they were not suspended or debarred. Cause The City requires that standards contract language be included in all of their subrecipient contracts that addresses suspension and debarment requirements. The City was unaware that the required language was excluded from subrecipient contracts entered into for the ESG program as there was insufficient review of the contracts prior to execution to ensure all required elements were present. Effect Lack of formal review of subrecipient contracts and review of entities on SAM could result in the City entering into contracts with prohibited entities. Questioned Costs None Recommendation We recommend the City ensure that required language is included within all subrecipient contracts prior to execution. We also recommend that the City review that subrecipients are not included on the SAM website and retain documentation of that check and review prior to entering into contracts with subrecipients. Views of Responsible Officials and Corrective Actions The City will update the subrecipient contract template to ensure the required language is included in all newly executed contracts certifying that the agency, its officers, and employees are not suspended or debarred from doing business with the federal government. Prior to entering into contracts with subrecipients, the City will check that each subrecipient is not included on the SAM.gov Exclusion List, and will include a dated screenshot from the SAM.gov website documenting the review in each project file. Implementation Date Updates to the Emergency Solutions Grant subrecipient contracts will be implemented for all newly executed contracts for use in the FY24 ESG program year. All ESG subrecipients will be checked against the Sam.gov Exclusion List and determined to be in good standing prior to the contract being executed and this process will be documented. Responsible Officials Anthony Woods, Planner and Contract Manager; Liz Mengers Magargee, Planning and Development Manager
Finding Number: 2022 002 Program: Emergency Solutions Grant Program (ESG) ALN #: 14.231 Federal Agency: Housing and Urban Development Federal Award Number: E 20 MC 25 005; E 20 MW 25 0005 Award Year: 7/1/2021 ? 6/30/2022 E 21 MC 25 0005 Special Tests; Payments to Subrecipients Type of finding: Material Weakness and Material noncompliance Prior year finding: No Statistically valid sample: No Criteria According to 24 CFR section 576.203, a recipient must pay each subrecipient for allowable costs within 30 days after receiving the subrecipient?s complete payment request. According to 2 CFR 200.303, the non Federal entity must Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The City?s ESG Program has a control in place to ensure that invoice cover sheets (i.e. reimbursement requests) are reviewed in a timely manner so that the City can subsequently reimburse subrecipients within 30 days and remain in compliance with the requirement; however, the control to ensure timely payments to subrecipients was not operating effectively as there was a 8 to 110 day lag between the date the reimbursement request was received and the payment date. During our audit, we noted 14 of 21 subrecipient reimbursements selected for testing were not completed within 30 days of receiving the completed request for payment. Cause The City did not have effective controls in place to ensure subrecipients were paid for allowable costs within 30 days after receiving the subrecipient?s complete payment request. Effect Lack of effective controls resulted in the City not complying with 24 CFR section 576.203. Questioned Costs None Recommendation We recommend the City establish effective controls to ensure payment requests received from subrecipients are paid within 30 days of receipt. Views of Responsible Officials and Corrective Actions The City will establish the following procedures to ensure payment requests received from subrecipients are paid within 30 days of receipt of a complete request for reimbursement: 1. Department of Human Service Programs (DHSP) Contract Manager reviews invoices within 5 business days of receipt of request for reimbursement from subrecipient. a. If invoice is complete, original date of receipt is recorded. b. If invoice is incomplete, subrecipient is notified of items or documentation that is missing and receipt date is updated to reflect date of receipt of complete invoice. 2. Contract Manager approves payment request and submits to DHSP Fiscal staff for processing. 3. Fiscal staff processes and submits to Auditing Department as Priority payment. Implementation Date Implementation will begin April 15, 2023, when the FY23 3rd Quarter invoices are anticipated to be received by ESG subrecipients. Responsible Officials Anthony Woods, Planner and Contract Manager; Liz Mengers Magargee, DHSP Planning and Development Manager; Giovanna Alvarez, DHSP Fiscal Administrator; Janice Alger, Assistant Director of Administration, Human Services
Finding Number: 2022 003 Program: Emergency Solutions Grant Program (ESG) ALN #: 14.231 Federal Agency: Housing and Urban Development Federal Award Number: E 20 MC 25 005; E 20 MW 25 0005 Award Year: 7/1/2021 ? 6/30/2022 E 21 MC 25 0005 Subrecipient Monitoring Type of finding: Material Weakness Prior year finding: No Statistically valid sample: No Criteria The 2 CFR sections 200.332(d) through (f) provide the principles to be applied to monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. According to 2 CFR 200.303, the non Federal entity must Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The City does not have properly designed controls and documented procedures in place to ensure compliance with the following requirements: ? Each subrecipients risk of noncompliance is appropriately evaluated ? Monitoring activities over subrecipients are performed on a timely basis ? Verification that subrecipients are audited as required when they are expected to exceed the threshold for having a single audit. During our audit, we noted that audited financial statements were obtained for 5 of the 5 subrecipients selected for testing, but there was no documentation to evidence consideration of the compliance requirements indicated above. Cause The City requires that audited financial statements are obtained for subrecipients, but there is no checklist or formal documentation required to indicate what should be reviewed when reviewing the audit reports to ensure compliance with subrecipient monitoring requirements. Effect Lack of effective controls could result in the City?s noncompliance with program requirements. Questioned Costs None Recommendation We recommend the City establish a checklist or formal documentation requirements that employees can complete when obtaining subrecipient audit reports to ensure required monitoring procedures are performed and well documented. Views of Responsible Officials and Corrective Actions The City has established an Audit Review Certification form that will be completed by employees to formally document review of subrecipient agencies? audit reports. Implementation Date The City will implement use of the Audit Review Certification form as part of the ESG subrecipient application process for the FY24 program year beginning July 1, 2023. Responsible Officials Anthony Woods, Planner and Contract Manager; Liz Mengers Magargee, Planning and Development Manager
Finding Number: 2022 001 Program: Emergency Solutions Grant Program (ESG) ALN #: 14.231 Federal Agency: Housing and Urban Development Federal Award Number: E 20 MC 25 005; E 20 MW 25 0005 Award Year: 7/1/2021 ? 6/30/2022 E 21 MC 25 0005 Suspension and Debarment Type of finding: Material Weakness Prior year finding: No Statistically valid sample: No Criteria The 2 CFR sections 180.215 and 180.220 provide the principles to be applied to ensure non federal entities are not contracting with or making subawards under covered transactions to parties that are suspended or debarred. Also, when a non federal entity enters into a covered transaction with an entity at a lower tier, the non federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. According to 2 CFR 200.303, the non Federal entity must Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition When establishing contracts for subrecipients under the Emergency Solutions Grant Program (ESG), the City required that standard contract language be included to address the applicable suspension and debarment requirements. During fiscal year 2022, the required contract language was not included within the subrecipient contracts executed for the ESG program. Additionally, the City did not verify that its subrecipients were not suspended or debarred through the System for Award Management (SAM). During our audit, we noted 5 of 5 subrecipients selected for testing were not checked for suspension and debarment as evidenced via review of the subrecipient contracts. During compliance testing for the subrecipients it was confirmed they were not suspended or debarred. Cause The City requires that standards contract language be included in all of their subrecipient contracts that addresses suspension and debarment requirements. The City was unaware that the required language was excluded from subrecipient contracts entered into for the ESG program as there was insufficient review of the contracts prior to execution to ensure all required elements were present. Effect Lack of formal review of subrecipient contracts and review of entities on SAM could result in the City entering into contracts with prohibited entities. Questioned Costs None Recommendation We recommend the City ensure that required language is included within all subrecipient contracts prior to execution. We also recommend that the City review that subrecipients are not included on the SAM website and retain documentation of that check and review prior to entering into contracts with subrecipients. Views of Responsible Officials and Corrective Actions The City will update the subrecipient contract template to ensure the required language is included in all newly executed contracts certifying that the agency, its officers, and employees are not suspended or debarred from doing business with the federal government. Prior to entering into contracts with subrecipients, the City will check that each subrecipient is not included on the SAM.gov Exclusion List, and will include a dated screenshot from the SAM.gov website documenting the review in each project file. Implementation Date Updates to the Emergency Solutions Grant subrecipient contracts will be implemented for all newly executed contracts for use in the FY24 ESG program year. All ESG subrecipients will be checked against the Sam.gov Exclusion List and determined to be in good standing prior to the contract being executed and this process will be documented. Responsible Officials Anthony Woods, Planner and Contract Manager; Liz Mengers Magargee, Planning and Development Manager
Finding Number: 2022 002 Program: Emergency Solutions Grant Program (ESG) ALN #: 14.231 Federal Agency: Housing and Urban Development Federal Award Number: E 20 MC 25 005; E 20 MW 25 0005 Award Year: 7/1/2021 ? 6/30/2022 E 21 MC 25 0005 Special Tests; Payments to Subrecipients Type of finding: Material Weakness and Material noncompliance Prior year finding: No Statistically valid sample: No Criteria According to 24 CFR section 576.203, a recipient must pay each subrecipient for allowable costs within 30 days after receiving the subrecipient?s complete payment request. According to 2 CFR 200.303, the non Federal entity must Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The City?s ESG Program has a control in place to ensure that invoice cover sheets (i.e. reimbursement requests) are reviewed in a timely manner so that the City can subsequently reimburse subrecipients within 30 days and remain in compliance with the requirement; however, the control to ensure timely payments to subrecipients was not operating effectively as there was a 8 to 110 day lag between the date the reimbursement request was received and the payment date. During our audit, we noted 14 of 21 subrecipient reimbursements selected for testing were not completed within 30 days of receiving the completed request for payment. Cause The City did not have effective controls in place to ensure subrecipients were paid for allowable costs within 30 days after receiving the subrecipient?s complete payment request. Effect Lack of effective controls resulted in the City not complying with 24 CFR section 576.203. Questioned Costs None Recommendation We recommend the City establish effective controls to ensure payment requests received from subrecipients are paid within 30 days of receipt. Views of Responsible Officials and Corrective Actions The City will establish the following procedures to ensure payment requests received from subrecipients are paid within 30 days of receipt of a complete request for reimbursement: 1. Department of Human Service Programs (DHSP) Contract Manager reviews invoices within 5 business days of receipt of request for reimbursement from subrecipient. a. If invoice is complete, original date of receipt is recorded. b. If invoice is incomplete, subrecipient is notified of items or documentation that is missing and receipt date is updated to reflect date of receipt of complete invoice. 2. Contract Manager approves payment request and submits to DHSP Fiscal staff for processing. 3. Fiscal staff processes and submits to Auditing Department as Priority payment. Implementation Date Implementation will begin April 15, 2023, when the FY23 3rd Quarter invoices are anticipated to be received by ESG subrecipients. Responsible Officials Anthony Woods, Planner and Contract Manager; Liz Mengers Magargee, DHSP Planning and Development Manager; Giovanna Alvarez, DHSP Fiscal Administrator; Janice Alger, Assistant Director of Administration, Human Services
Finding Number: 2022 003 Program: Emergency Solutions Grant Program (ESG) ALN #: 14.231 Federal Agency: Housing and Urban Development Federal Award Number: E 20 MC 25 005; E 20 MW 25 0005 Award Year: 7/1/2021 ? 6/30/2022 E 21 MC 25 0005 Subrecipient Monitoring Type of finding: Material Weakness Prior year finding: No Statistically valid sample: No Criteria The 2 CFR sections 200.332(d) through (f) provide the principles to be applied to monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. According to 2 CFR 200.303, the non Federal entity must Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The City does not have properly designed controls and documented procedures in place to ensure compliance with the following requirements: ? Each subrecipients risk of noncompliance is appropriately evaluated ? Monitoring activities over subrecipients are performed on a timely basis ? Verification that subrecipients are audited as required when they are expected to exceed the threshold for having a single audit. During our audit, we noted that audited financial statements were obtained for 5 of the 5 subrecipients selected for testing, but there was no documentation to evidence consideration of the compliance requirements indicated above. Cause The City requires that audited financial statements are obtained for subrecipients, but there is no checklist or formal documentation required to indicate what should be reviewed when reviewing the audit reports to ensure compliance with subrecipient monitoring requirements. Effect Lack of effective controls could result in the City?s noncompliance with program requirements. Questioned Costs None Recommendation We recommend the City establish a checklist or formal documentation requirements that employees can complete when obtaining subrecipient audit reports to ensure required monitoring procedures are performed and well documented. Views of Responsible Officials and Corrective Actions The City has established an Audit Review Certification form that will be completed by employees to formally document review of subrecipient agencies? audit reports. Implementation Date The City will implement use of the Audit Review Certification form as part of the ESG subrecipient application process for the FY24 program year beginning July 1, 2023. Responsible Officials Anthony Woods, Planner and Contract Manager; Liz Mengers Magargee, Planning and Development Manager
Finding Number: 2022 004 Program: Coronavirus State and Local Fiscal Recovery Funds ALN #: 21.027 Federal Agency: U.S. Department of Treasury Federal Award Number: SLFRP1982 Award Year: 7/1/2021 ? 6/30/2022 Subrecipient Monitoring Type of finding: Material Weakness and Noncompliance Prior year finding: No Statistically valid sample: No Criteria The 2 CFR sections 200.332(d) through (f) provide the principles to be applied to monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. According to 2 CFR 200.303, the non Federal entity must Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The City does not have properly designed controls and documented procedures in place to ensure compliance with the following requirements: ? Each subrecipients risk of noncompliance is appropriately evaluated ? Monitoring activities over subrecipients are performed on a timely basis ? Verification that subrecipients are audited as required when they are expected to exceed the threshold for having a single audit. During our audit, we noted the City does not have formally documented policies and procedures related to subrecipient monitoring and risk assessment prior to entering into contracts with subrecipients. For 1 of our 2 subrecipients selected for testing, there was no evidence of risk assessment prior to entering into contract. We noted that audited financial statements were obtained for 2 of the 2 subrecipients selected for testing, but there was no documentation to evidence monitoring procedures performed over the reports obtained. Cause The City requires that audited financial statements are obtained for subrecipients, but there is no checklist or formally documented policies and procedures for subrecipient monitoring and risk assessment to ensure compliance with subrecipient monitoring requirements. Effect Lack of effective controls resulted in the City not complying with 2 CFR 200.303. Questioned Costs None Recommendation We recommend the City establish well documented policies and procedures over subrecipient monitoring including a checklist or formal documentation requirements that employees can complete when obtaining subrecipient audit reports and making determinations on subrecipients contracts to ensure required monitoring procedures are performed and well documented. Views of Responsible Officials and Corrective Actions The City has established an Audit Review Certification form that will be completed by employees to formally document the review of subrecipient agencies? audit reports. Implementation Date The checklist is completed, and the City will start using the form immediately as new subrecipients are awarded ARPA funds. Responsible Officials Betty Lyons, Federal Grants Manager
Finding Number: 2022 001 Program: Emergency Solutions Grant Program (ESG) ALN #: 14.231 Federal Agency: Housing and Urban Development Federal Award Number: E 20 MC 25 005; E 20 MW 25 0005 Award Year: 7/1/2021 ? 6/30/2022 E 21 MC 25 0005 Suspension and Debarment Type of finding: Material Weakness Prior year finding: No Statistically valid sample: No Criteria The 2 CFR sections 180.215 and 180.220 provide the principles to be applied to ensure non federal entities are not contracting with or making subawards under covered transactions to parties that are suspended or debarred. Also, when a non federal entity enters into a covered transaction with an entity at a lower tier, the non federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. According to 2 CFR 200.303, the non Federal entity must Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition When establishing contracts for subrecipients under the Emergency Solutions Grant Program (ESG), the City required that standard contract language be included to address the applicable suspension and debarment requirements. During fiscal year 2022, the required contract language was not included within the subrecipient contracts executed for the ESG program. Additionally, the City did not verify that its subrecipients were not suspended or debarred through the System for Award Management (SAM). During our audit, we noted 5 of 5 subrecipients selected for testing were not checked for suspension and debarment as evidenced via review of the subrecipient contracts. During compliance testing for the subrecipients it was confirmed they were not suspended or debarred. Cause The City requires that standards contract language be included in all of their subrecipient contracts that addresses suspension and debarment requirements. The City was unaware that the required language was excluded from subrecipient contracts entered into for the ESG program as there was insufficient review of the contracts prior to execution to ensure all required elements were present. Effect Lack of formal review of subrecipient contracts and review of entities on SAM could result in the City entering into contracts with prohibited entities. Questioned Costs None Recommendation We recommend the City ensure that required language is included within all subrecipient contracts prior to execution. We also recommend that the City review that subrecipients are not included on the SAM website and retain documentation of that check and review prior to entering into contracts with subrecipients. Views of Responsible Officials and Corrective Actions The City will update the subrecipient contract template to ensure the required language is included in all newly executed contracts certifying that the agency, its officers, and employees are not suspended or debarred from doing business with the federal government. Prior to entering into contracts with subrecipients, the City will check that each subrecipient is not included on the SAM.gov Exclusion List, and will include a dated screenshot from the SAM.gov website documenting the review in each project file. Implementation Date Updates to the Emergency Solutions Grant subrecipient contracts will be implemented for all newly executed contracts for use in the FY24 ESG program year. All ESG subrecipients will be checked against the Sam.gov Exclusion List and determined to be in good standing prior to the contract being executed and this process will be documented. Responsible Officials Anthony Woods, Planner and Contract Manager; Liz Mengers Magargee, Planning and Development Manager
Finding Number: 2022 002 Program: Emergency Solutions Grant Program (ESG) ALN #: 14.231 Federal Agency: Housing and Urban Development Federal Award Number: E 20 MC 25 005; E 20 MW 25 0005 Award Year: 7/1/2021 ? 6/30/2022 E 21 MC 25 0005 Special Tests; Payments to Subrecipients Type of finding: Material Weakness and Material noncompliance Prior year finding: No Statistically valid sample: No Criteria According to 24 CFR section 576.203, a recipient must pay each subrecipient for allowable costs within 30 days after receiving the subrecipient?s complete payment request. According to 2 CFR 200.303, the non Federal entity must Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The City?s ESG Program has a control in place to ensure that invoice cover sheets (i.e. reimbursement requests) are reviewed in a timely manner so that the City can subsequently reimburse subrecipients within 30 days and remain in compliance with the requirement; however, the control to ensure timely payments to subrecipients was not operating effectively as there was a 8 to 110 day lag between the date the reimbursement request was received and the payment date. During our audit, we noted 14 of 21 subrecipient reimbursements selected for testing were not completed within 30 days of receiving the completed request for payment. Cause The City did not have effective controls in place to ensure subrecipients were paid for allowable costs within 30 days after receiving the subrecipient?s complete payment request. Effect Lack of effective controls resulted in the City not complying with 24 CFR section 576.203. Questioned Costs None Recommendation We recommend the City establish effective controls to ensure payment requests received from subrecipients are paid within 30 days of receipt. Views of Responsible Officials and Corrective Actions The City will establish the following procedures to ensure payment requests received from subrecipients are paid within 30 days of receipt of a complete request for reimbursement: 1. Department of Human Service Programs (DHSP) Contract Manager reviews invoices within 5 business days of receipt of request for reimbursement from subrecipient. a. If invoice is complete, original date of receipt is recorded. b. If invoice is incomplete, subrecipient is notified of items or documentation that is missing and receipt date is updated to reflect date of receipt of complete invoice. 2. Contract Manager approves payment request and submits to DHSP Fiscal staff for processing. 3. Fiscal staff processes and submits to Auditing Department as Priority payment. Implementation Date Implementation will begin April 15, 2023, when the FY23 3rd Quarter invoices are anticipated to be received by ESG subrecipients. Responsible Officials Anthony Woods, Planner and Contract Manager; Liz Mengers Magargee, DHSP Planning and Development Manager; Giovanna Alvarez, DHSP Fiscal Administrator; Janice Alger, Assistant Director of Administration, Human Services
Finding Number: 2022 003 Program: Emergency Solutions Grant Program (ESG) ALN #: 14.231 Federal Agency: Housing and Urban Development Federal Award Number: E 20 MC 25 005; E 20 MW 25 0005 Award Year: 7/1/2021 ? 6/30/2022 E 21 MC 25 0005 Subrecipient Monitoring Type of finding: Material Weakness Prior year finding: No Statistically valid sample: No Criteria The 2 CFR sections 200.332(d) through (f) provide the principles to be applied to monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. According to 2 CFR 200.303, the non Federal entity must Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The City does not have properly designed controls and documented procedures in place to ensure compliance with the following requirements: ? Each subrecipients risk of noncompliance is appropriately evaluated ? Monitoring activities over subrecipients are performed on a timely basis ? Verification that subrecipients are audited as required when they are expected to exceed the threshold for having a single audit. During our audit, we noted that audited financial statements were obtained for 5 of the 5 subrecipients selected for testing, but there was no documentation to evidence consideration of the compliance requirements indicated above. Cause The City requires that audited financial statements are obtained for subrecipients, but there is no checklist or formal documentation required to indicate what should be reviewed when reviewing the audit reports to ensure compliance with subrecipient monitoring requirements. Effect Lack of effective controls could result in the City?s noncompliance with program requirements. Questioned Costs None Recommendation We recommend the City establish a checklist or formal documentation requirements that employees can complete when obtaining subrecipient audit reports to ensure required monitoring procedures are performed and well documented. Views of Responsible Officials and Corrective Actions The City has established an Audit Review Certification form that will be completed by employees to formally document review of subrecipient agencies? audit reports. Implementation Date The City will implement use of the Audit Review Certification form as part of the ESG subrecipient application process for the FY24 program year beginning July 1, 2023. Responsible Officials Anthony Woods, Planner and Contract Manager; Liz Mengers Magargee, Planning and Development Manager
Finding Number: 2022 001 Program: Emergency Solutions Grant Program (ESG) ALN #: 14.231 Federal Agency: Housing and Urban Development Federal Award Number: E 20 MC 25 005; E 20 MW 25 0005 Award Year: 7/1/2021 ? 6/30/2022 E 21 MC 25 0005 Suspension and Debarment Type of finding: Material Weakness Prior year finding: No Statistically valid sample: No Criteria The 2 CFR sections 180.215 and 180.220 provide the principles to be applied to ensure non federal entities are not contracting with or making subawards under covered transactions to parties that are suspended or debarred. Also, when a non federal entity enters into a covered transaction with an entity at a lower tier, the non federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. According to 2 CFR 200.303, the non Federal entity must Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition When establishing contracts for subrecipients under the Emergency Solutions Grant Program (ESG), the City required that standard contract language be included to address the applicable suspension and debarment requirements. During fiscal year 2022, the required contract language was not included within the subrecipient contracts executed for the ESG program. Additionally, the City did not verify that its subrecipients were not suspended or debarred through the System for Award Management (SAM). During our audit, we noted 5 of 5 subrecipients selected for testing were not checked for suspension and debarment as evidenced via review of the subrecipient contracts. During compliance testing for the subrecipients it was confirmed they were not suspended or debarred. Cause The City requires that standards contract language be included in all of their subrecipient contracts that addresses suspension and debarment requirements. The City was unaware that the required language was excluded from subrecipient contracts entered into for the ESG program as there was insufficient review of the contracts prior to execution to ensure all required elements were present. Effect Lack of formal review of subrecipient contracts and review of entities on SAM could result in the City entering into contracts with prohibited entities. Questioned Costs None Recommendation We recommend the City ensure that required language is included within all subrecipient contracts prior to execution. We also recommend that the City review that subrecipients are not included on the SAM website and retain documentation of that check and review prior to entering into contracts with subrecipients. Views of Responsible Officials and Corrective Actions The City will update the subrecipient contract template to ensure the required language is included in all newly executed contracts certifying that the agency, its officers, and employees are not suspended or debarred from doing business with the federal government. Prior to entering into contracts with subrecipients, the City will check that each subrecipient is not included on the SAM.gov Exclusion List, and will include a dated screenshot from the SAM.gov website documenting the review in each project file. Implementation Date Updates to the Emergency Solutions Grant subrecipient contracts will be implemented for all newly executed contracts for use in the FY24 ESG program year. All ESG subrecipients will be checked against the Sam.gov Exclusion List and determined to be in good standing prior to the contract being executed and this process will be documented. Responsible Officials Anthony Woods, Planner and Contract Manager; Liz Mengers Magargee, Planning and Development Manager
Finding Number: 2022 002 Program: Emergency Solutions Grant Program (ESG) ALN #: 14.231 Federal Agency: Housing and Urban Development Federal Award Number: E 20 MC 25 005; E 20 MW 25 0005 Award Year: 7/1/2021 ? 6/30/2022 E 21 MC 25 0005 Special Tests; Payments to Subrecipients Type of finding: Material Weakness and Material noncompliance Prior year finding: No Statistically valid sample: No Criteria According to 24 CFR section 576.203, a recipient must pay each subrecipient for allowable costs within 30 days after receiving the subrecipient?s complete payment request. According to 2 CFR 200.303, the non Federal entity must Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The City?s ESG Program has a control in place to ensure that invoice cover sheets (i.e. reimbursement requests) are reviewed in a timely manner so that the City can subsequently reimburse subrecipients within 30 days and remain in compliance with the requirement; however, the control to ensure timely payments to subrecipients was not operating effectively as there was a 8 to 110 day lag between the date the reimbursement request was received and the payment date. During our audit, we noted 14 of 21 subrecipient reimbursements selected for testing were not completed within 30 days of receiving the completed request for payment. Cause The City did not have effective controls in place to ensure subrecipients were paid for allowable costs within 30 days after receiving the subrecipient?s complete payment request. Effect Lack of effective controls resulted in the City not complying with 24 CFR section 576.203. Questioned Costs None Recommendation We recommend the City establish effective controls to ensure payment requests received from subrecipients are paid within 30 days of receipt. Views of Responsible Officials and Corrective Actions The City will establish the following procedures to ensure payment requests received from subrecipients are paid within 30 days of receipt of a complete request for reimbursement: 1. Department of Human Service Programs (DHSP) Contract Manager reviews invoices within 5 business days of receipt of request for reimbursement from subrecipient. a. If invoice is complete, original date of receipt is recorded. b. If invoice is incomplete, subrecipient is notified of items or documentation that is missing and receipt date is updated to reflect date of receipt of complete invoice. 2. Contract Manager approves payment request and submits to DHSP Fiscal staff for processing. 3. Fiscal staff processes and submits to Auditing Department as Priority payment. Implementation Date Implementation will begin April 15, 2023, when the FY23 3rd Quarter invoices are anticipated to be received by ESG subrecipients. Responsible Officials Anthony Woods, Planner and Contract Manager; Liz Mengers Magargee, DHSP Planning and Development Manager; Giovanna Alvarez, DHSP Fiscal Administrator; Janice Alger, Assistant Director of Administration, Human Services
Finding Number: 2022 003 Program: Emergency Solutions Grant Program (ESG) ALN #: 14.231 Federal Agency: Housing and Urban Development Federal Award Number: E 20 MC 25 005; E 20 MW 25 0005 Award Year: 7/1/2021 ? 6/30/2022 E 21 MC 25 0005 Subrecipient Monitoring Type of finding: Material Weakness Prior year finding: No Statistically valid sample: No Criteria The 2 CFR sections 200.332(d) through (f) provide the principles to be applied to monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. According to 2 CFR 200.303, the non Federal entity must Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The City does not have properly designed controls and documented procedures in place to ensure compliance with the following requirements: ? Each subrecipients risk of noncompliance is appropriately evaluated ? Monitoring activities over subrecipients are performed on a timely basis ? Verification that subrecipients are audited as required when they are expected to exceed the threshold for having a single audit. During our audit, we noted that audited financial statements were obtained for 5 of the 5 subrecipients selected for testing, but there was no documentation to evidence consideration of the compliance requirements indicated above. Cause The City requires that audited financial statements are obtained for subrecipients, but there is no checklist or formal documentation required to indicate what should be reviewed when reviewing the audit reports to ensure compliance with subrecipient monitoring requirements. Effect Lack of effective controls could result in the City?s noncompliance with program requirements. Questioned Costs None Recommendation We recommend the City establish a checklist or formal documentation requirements that employees can complete when obtaining subrecipient audit reports to ensure required monitoring procedures are performed and well documented. Views of Responsible Officials and Corrective Actions The City has established an Audit Review Certification form that will be completed by employees to formally document review of subrecipient agencies? audit reports. Implementation Date The City will implement use of the Audit Review Certification form as part of the ESG subrecipient application process for the FY24 program year beginning July 1, 2023. Responsible Officials Anthony Woods, Planner and Contract Manager; Liz Mengers Magargee, Planning and Development Manager
Finding Number: 2022 001 Program: Emergency Solutions Grant Program (ESG) ALN #: 14.231 Federal Agency: Housing and Urban Development Federal Award Number: E 20 MC 25 005; E 20 MW 25 0005 Award Year: 7/1/2021 ? 6/30/2022 E 21 MC 25 0005 Suspension and Debarment Type of finding: Material Weakness Prior year finding: No Statistically valid sample: No Criteria The 2 CFR sections 180.215 and 180.220 provide the principles to be applied to ensure non federal entities are not contracting with or making subawards under covered transactions to parties that are suspended or debarred. Also, when a non federal entity enters into a covered transaction with an entity at a lower tier, the non federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. According to 2 CFR 200.303, the non Federal entity must Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition When establishing contracts for subrecipients under the Emergency Solutions Grant Program (ESG), the City required that standard contract language be included to address the applicable suspension and debarment requirements. During fiscal year 2022, the required contract language was not included within the subrecipient contracts executed for the ESG program. Additionally, the City did not verify that its subrecipients were not suspended or debarred through the System for Award Management (SAM). During our audit, we noted 5 of 5 subrecipients selected for testing were not checked for suspension and debarment as evidenced via review of the subrecipient contracts. During compliance testing for the subrecipients it was confirmed they were not suspended or debarred. Cause The City requires that standards contract language be included in all of their subrecipient contracts that addresses suspension and debarment requirements. The City was unaware that the required language was excluded from subrecipient contracts entered into for the ESG program as there was insufficient review of the contracts prior to execution to ensure all required elements were present. Effect Lack of formal review of subrecipient contracts and review of entities on SAM could result in the City entering into contracts with prohibited entities. Questioned Costs None Recommendation We recommend the City ensure that required language is included within all subrecipient contracts prior to execution. We also recommend that the City review that subrecipients are not included on the SAM website and retain documentation of that check and review prior to entering into contracts with subrecipients. Views of Responsible Officials and Corrective Actions The City will update the subrecipient contract template to ensure the required language is included in all newly executed contracts certifying that the agency, its officers, and employees are not suspended or debarred from doing business with the federal government. Prior to entering into contracts with subrecipients, the City will check that each subrecipient is not included on the SAM.gov Exclusion List, and will include a dated screenshot from the SAM.gov website documenting the review in each project file. Implementation Date Updates to the Emergency Solutions Grant subrecipient contracts will be implemented for all newly executed contracts for use in the FY24 ESG program year. All ESG subrecipients will be checked against the Sam.gov Exclusion List and determined to be in good standing prior to the contract being executed and this process will be documented. Responsible Officials Anthony Woods, Planner and Contract Manager; Liz Mengers Magargee, Planning and Development Manager
Finding Number: 2022 002 Program: Emergency Solutions Grant Program (ESG) ALN #: 14.231 Federal Agency: Housing and Urban Development Federal Award Number: E 20 MC 25 005; E 20 MW 25 0005 Award Year: 7/1/2021 ? 6/30/2022 E 21 MC 25 0005 Special Tests; Payments to Subrecipients Type of finding: Material Weakness and Material noncompliance Prior year finding: No Statistically valid sample: No Criteria According to 24 CFR section 576.203, a recipient must pay each subrecipient for allowable costs within 30 days after receiving the subrecipient?s complete payment request. According to 2 CFR 200.303, the non Federal entity must Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The City?s ESG Program has a control in place to ensure that invoice cover sheets (i.e. reimbursement requests) are reviewed in a timely manner so that the City can subsequently reimburse subrecipients within 30 days and remain in compliance with the requirement; however, the control to ensure timely payments to subrecipients was not operating effectively as there was a 8 to 110 day lag between the date the reimbursement request was received and the payment date. During our audit, we noted 14 of 21 subrecipient reimbursements selected for testing were not completed within 30 days of receiving the completed request for payment. Cause The City did not have effective controls in place to ensure subrecipients were paid for allowable costs within 30 days after receiving the subrecipient?s complete payment request. Effect Lack of effective controls resulted in the City not complying with 24 CFR section 576.203. Questioned Costs None Recommendation We recommend the City establish effective controls to ensure payment requests received from subrecipients are paid within 30 days of receipt. Views of Responsible Officials and Corrective Actions The City will establish the following procedures to ensure payment requests received from subrecipients are paid within 30 days of receipt of a complete request for reimbursement: 1. Department of Human Service Programs (DHSP) Contract Manager reviews invoices within 5 business days of receipt of request for reimbursement from subrecipient. a. If invoice is complete, original date of receipt is recorded. b. If invoice is incomplete, subrecipient is notified of items or documentation that is missing and receipt date is updated to reflect date of receipt of complete invoice. 2. Contract Manager approves payment request and submits to DHSP Fiscal staff for processing. 3. Fiscal staff processes and submits to Auditing Department as Priority payment. Implementation Date Implementation will begin April 15, 2023, when the FY23 3rd Quarter invoices are anticipated to be received by ESG subrecipients. Responsible Officials Anthony Woods, Planner and Contract Manager; Liz Mengers Magargee, DHSP Planning and Development Manager; Giovanna Alvarez, DHSP Fiscal Administrator; Janice Alger, Assistant Director of Administration, Human Services
Finding Number: 2022 003 Program: Emergency Solutions Grant Program (ESG) ALN #: 14.231 Federal Agency: Housing and Urban Development Federal Award Number: E 20 MC 25 005; E 20 MW 25 0005 Award Year: 7/1/2021 ? 6/30/2022 E 21 MC 25 0005 Subrecipient Monitoring Type of finding: Material Weakness Prior year finding: No Statistically valid sample: No Criteria The 2 CFR sections 200.332(d) through (f) provide the principles to be applied to monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. According to 2 CFR 200.303, the non Federal entity must Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The City does not have properly designed controls and documented procedures in place to ensure compliance with the following requirements: ? Each subrecipients risk of noncompliance is appropriately evaluated ? Monitoring activities over subrecipients are performed on a timely basis ? Verification that subrecipients are audited as required when they are expected to exceed the threshold for having a single audit. During our audit, we noted that audited financial statements were obtained for 5 of the 5 subrecipients selected for testing, but there was no documentation to evidence consideration of the compliance requirements indicated above. Cause The City requires that audited financial statements are obtained for subrecipients, but there is no checklist or formal documentation required to indicate what should be reviewed when reviewing the audit reports to ensure compliance with subrecipient monitoring requirements. Effect Lack of effective controls could result in the City?s noncompliance with program requirements. Questioned Costs None Recommendation We recommend the City establish a checklist or formal documentation requirements that employees can complete when obtaining subrecipient audit reports to ensure required monitoring procedures are performed and well documented. Views of Responsible Officials and Corrective Actions The City has established an Audit Review Certification form that will be completed by employees to formally document review of subrecipient agencies? audit reports. Implementation Date The City will implement use of the Audit Review Certification form as part of the ESG subrecipient application process for the FY24 program year beginning July 1, 2023. Responsible Officials Anthony Woods, Planner and Contract Manager; Liz Mengers Magargee, Planning and Development Manager
Finding Number: 2022 004 Program: Coronavirus State and Local Fiscal Recovery Funds ALN #: 21.027 Federal Agency: U.S. Department of Treasury Federal Award Number: SLFRP1982 Award Year: 7/1/2021 ? 6/30/2022 Subrecipient Monitoring Type of finding: Material Weakness and Noncompliance Prior year finding: No Statistically valid sample: No Criteria The 2 CFR sections 200.332(d) through (f) provide the principles to be applied to monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. According to 2 CFR 200.303, the non Federal entity must Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The City does not have properly designed controls and documented procedures in place to ensure compliance with the following requirements: ? Each subrecipients risk of noncompliance is appropriately evaluated ? Monitoring activities over subrecipients are performed on a timely basis ? Verification that subrecipients are audited as required when they are expected to exceed the threshold for having a single audit. During our audit, we noted the City does not have formally documented policies and procedures related to subrecipient monitoring and risk assessment prior to entering into contracts with subrecipients. For 1 of our 2 subrecipients selected for testing, there was no evidence of risk assessment prior to entering into contract. We noted that audited financial statements were obtained for 2 of the 2 subrecipients selected for testing, but there was no documentation to evidence monitoring procedures performed over the reports obtained. Cause The City requires that audited financial statements are obtained for subrecipients, but there is no checklist or formally documented policies and procedures for subrecipient monitoring and risk assessment to ensure compliance with subrecipient monitoring requirements. Effect Lack of effective controls resulted in the City not complying with 2 CFR 200.303. Questioned Costs None Recommendation We recommend the City establish well documented policies and procedures over subrecipient monitoring including a checklist or formal documentation requirements that employees can complete when obtaining subrecipient audit reports and making determinations on subrecipients contracts to ensure required monitoring procedures are performed and well documented. Views of Responsible Officials and Corrective Actions The City has established an Audit Review Certification form that will be completed by employees to formally document the review of subrecipient agencies? audit reports. Implementation Date The checklist is completed, and the City will start using the form immediately as new subrecipients are awarded ARPA funds. Responsible Officials Betty Lyons, Federal Grants Manager