Audit 28869

Major Program Department of Housing and Urban Development Community Development Block Grants/ State?s Program and Non-Entitlement Grants in Hawaii Pass-through: Texas General Land Office (GLO) Disaster Recovery Program Infrastructure Projects ALN: 14.228 Criteria Per Section 4.4 Release of Funds - 4.4.4 Minimizing the Time Between Draw & Disbursement of the GLO CDBG-DR Implementation Manual, "Subrecipients should submit costs to the GLO for draw within 60 days of receipt of invoices to minimize the volume of individual draws that the GLO must review and approve" and "Subrecipients utilizing the cash advance method must minimize the time elapsing between the transfer of funds from the GLO and the disbursement by the subrecipient for eligible costs. This period must not exceed 3 business days from the date of receipt/deposit of funds, without specific, documented reasons for such a delay in very infrequent circumstances. Subrecipients must maintain written procedures for minimizing this time period." Statement of Condition The City submitted one invoice for reimbursement after the allotted 60 day period, and as such is not in compliance with the requirements documented above. Statement of Cause The GLO typically does not accept requests for payment that are under $2,500. As such, it is the City?s practice to group multiple GLO-eligible invoices together in order to exceed this threshold amount. In the case noted above, the City was attempting to group several small reimbursement requests that were individually less than $2,500 with a larger reimbursement request that was in excess of the $2,500 amount, and in doing so, allowed the larger reimbursement request to exceed the 60 day deadline. Statement of Effect or Potential Effect This significant deficiency in the City?s internal control could result in a compliance issue associated with receiving reimbursements for grant expenditures. Questioned Costs No questioned costs were identified in association with this finding. Perspective Information This finding appears to be an isolated incident and does not appear to be a systemic issue. Identification of Repeat Findings N/A Recommendation The City should continue to work with its Grant Administrators to track required reimbursement deadline dates and ensure that all reimbursement requests are in compliance with these guidelines. The City should avoid grouping smaller reimbursement requests with larger reimbursement requests if doing so will result in those requests exceeding the 60 day time frame.

Major Program Department of Housing and Urban Development Community Development Block Grants/ State?s Program and Non-Entitlement Grants in Hawaii Pass-through: Texas General Land Office (GLO) Mitigation Harvey Round 1 State Most Impacted and Distressed Competition Award ALN: 14.228 Criteria Per Section 3 of the Housing and Urban Development Act of 1968, ?Recipients must document actions taken to comply with the employment, training and contracting requirements of Section 3, the results of actions taken, and impediments encountered (if any). Recipients should maintain records of job vacancies, solicitation of bids or proposals, selection materials and contracting documents (including scope of work and contract amount), in accordance with Federal and State procurement laws and regulations. The documentation should demonstrate efforts taken towards the achievement of the Section 3 numerical goals.? These reports are due 10 days after the end of each quarter. Statement of Condition The City was late in the submission of the quarterly report covering the period of December 2021 through February 2022. Statement of Cause The City had thought that it had submitted the report for the period of December 2021 through February 2022 within the 10 day time frame, but when submitting the March 2022 through May 2022 report it was discovered that the December/February report was not included in the Texas Integrated Grant Reporting System. The City immediately resubmitted the December/February report on June 8, 2022. It is thought that the original report was not retained in the Texas Integrated Grant Reporting System due to a technical error in this system. However, the City did not have sufficient documentation to support the timing of the original submission or the existence of an error in the system. Statement of Effect or Potential Effect This significant deficiency in the City?s internal control could result in a compliance issue associated with receiving reimbursements for grant expenditures. Questioned Costs No questioned costs were identified in association with this finding. Perspective Information This finding appears to be an isolated incident and does not appear to be a systemic issue. Identification of Repeat Findings N/A Recommendation The City should continue to work with its Grant Administrators to manage reporting requirements, and should verify submissions to the Texas Integrated Grant Reporting system to ensure that all submissions go through successfully and are timely in nature.

Major Program Department of Housing and Urban Development Community Development Block Grants/ State?s Program and Non-Entitlement Grants in Hawaii Pass-through: Texas General Land Office (GLO) Disaster Recovery Program Infrastructure Projects ALN: 14.228 Criteria Per Section 4.4 Release of Funds - 4.4.4 Minimizing the Time Between Draw & Disbursement of the GLO CDBG-DR Implementation Manual, "Subrecipients should submit costs to the GLO for draw within 60 days of receipt of invoices to minimize the volume of individual draws that the GLO must review and approve" and "Subrecipients utilizing the cash advance method must minimize the time elapsing between the transfer of funds from the GLO and the disbursement by the subrecipient for eligible costs. This period must not exceed 3 business days from the date of receipt/deposit of funds, without specific, documented reasons for such a delay in very infrequent circumstances. Subrecipients must maintain written procedures for minimizing this time period." Statement of Condition The City submitted one invoice for reimbursement after the allotted 60 day period, and as such is not in compliance with the requirements documented above. Statement of Cause The GLO typically does not accept requests for payment that are under $2,500. As such, it is the City?s practice to group multiple GLO-eligible invoices together in order to exceed this threshold amount. In the case noted above, the City was attempting to group several small reimbursement requests that were individually less than $2,500 with a larger reimbursement request that was in excess of the $2,500 amount, and in doing so, allowed the larger reimbursement request to exceed the 60 day deadline. Statement of Effect or Potential Effect This significant deficiency in the City?s internal control could result in a compliance issue associated with receiving reimbursements for grant expenditures. Questioned Costs No questioned costs were identified in association with this finding. Perspective Information This finding appears to be an isolated incident and does not appear to be a systemic issue. Identification of Repeat Findings N/A Recommendation The City should continue to work with its Grant Administrators to track required reimbursement deadline dates and ensure that all reimbursement requests are in compliance with these guidelines. The City should avoid grouping smaller reimbursement requests with larger reimbursement requests if doing so will result in those requests exceeding the 60 day time frame.

Major Program Department of Housing and Urban Development Community Development Block Grants/ State?s Program and Non-Entitlement Grants in Hawaii Pass-through: Texas General Land Office (GLO) Mitigation Harvey Round 1 State Most Impacted and Distressed Competition Award ALN: 14.228 Criteria Per Section 3 of the Housing and Urban Development Act of 1968, ?Recipients must document actions taken to comply with the employment, training and contracting requirements of Section 3, the results of actions taken, and impediments encountered (if any). Recipients should maintain records of job vacancies, solicitation of bids or proposals, selection materials and contracting documents (including scope of work and contract amount), in accordance with Federal and State procurement laws and regulations. The documentation should demonstrate efforts taken towards the achievement of the Section 3 numerical goals.? These reports are due 10 days after the end of each quarter. Statement of Condition The City was late in the submission of the quarterly report covering the period of December 2021 through February 2022. Statement of Cause The City had thought that it had submitted the report for the period of December 2021 through February 2022 within the 10 day time frame, but when submitting the March 2022 through May 2022 report it was discovered that the December/February report was not included in the Texas Integrated Grant Reporting System. The City immediately resubmitted the December/February report on June 8, 2022. It is thought that the original report was not retained in the Texas Integrated Grant Reporting System due to a technical error in this system. However, the City did not have sufficient documentation to support the timing of the original submission or the existence of an error in the system. Statement of Effect or Potential Effect This significant deficiency in the City?s internal control could result in a compliance issue associated with receiving reimbursements for grant expenditures. Questioned Costs No questioned costs were identified in association with this finding. Perspective Information This finding appears to be an isolated incident and does not appear to be a systemic issue. Identification of Repeat Findings N/A Recommendation The City should continue to work with its Grant Administrators to manage reporting requirements, and should verify submissions to the Texas Integrated Grant Reporting system to ensure that all submissions go through successfully and are timely in nature.