Audit 301866

Condition The Department of Housing and Urban Development (“HUD”) notified the City, via letter dated May 31, 2023, that the City was not in compliance with the 60 day timeliness test conducted May 2, 2023, as the City had a line-of-credit balance 1.66 times its annual grant. Criteria 24 CFR Section 570.902 of the CDBG regulations states that a grantee is in compliance with timely expenditure requirements if, 60 days prior to the end of its program year, there is no more than 1.5 times its annual grant remaining in the line of credit, including any program income on hand. Effect Failure to meet the timeliness standard results in noncompliance with the period of performance requirement and could result in sanctions and reduction of future grant funds. However, HUD granted the City an exception to the timeliness requirements for the FY2023 grant year due to the lingering impacts of the COVID 19 pandemic. Cause The failure to meet the timeliness requirement was primarily due to the impact of the COVID‐19 pandemic compounded by supply chain issues. Recommendation We recommend that the City establish procedures to ensure that it complies with the CDBG timeliness standard specified in 24 CFR Section 570.902. In addition, we recommend that the City ensures that it adheres to the workout plan it submitted to HUD.

Condition The Department of Housing and Urban Development (“HUD”) notified the City, via letter dated May 31, 2023, that the City was not in compliance with the 60 day timeliness test conducted May 2, 2023, as the City had a line-of-credit balance 1.66 times its annual grant. Criteria 24 CFR Section 570.902 of the CDBG regulations states that a grantee is in compliance with timely expenditure requirements if, 60 days prior to the end of its program year, there is no more than 1.5 times its annual grant remaining in the line of credit, including any program income on hand. Effect Failure to meet the timeliness standard results in noncompliance with the period of performance requirement and could result in sanctions and reduction of future grant funds. However, HUD granted the City an exception to the timeliness requirements for the FY2023 grant year due to the lingering impacts of the COVID 19 pandemic. Cause The failure to meet the timeliness requirement was primarily due to the impact of the COVID‐19 pandemic compounded by supply chain issues. Recommendation We recommend that the City establish procedures to ensure that it complies with the CDBG timeliness standard specified in 24 CFR Section 570.902. In addition, we recommend that the City ensures that it adheres to the workout plan it submitted to HUD.

Condition During our audit, we examined a non statistical sample of two subawards and found that the required subaward information was not reported in the Federal Funding Accountability and Transparency Act Subaward Reporting System (“FSRS”) as required under the Federal Funding Accountability and Transparency Act (“FFATA”). The two subawards not reported to FSRS totaled approximately $3,793,000. Criteria Under FFATA, which is codified in 2 CFR §170, recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to FSRS, including the following subaward information: • Subawardee name • Subawardee DUNS number • Amount of subaward • Subaward obligation/action date • Subaward number • Subaward project description Effect Failure to fully report required subaward information in FSRS may result in noncompliance with FFATA reporting requirements and limits the transparency of the use of federal funds awarded. Cause The failure to meet the FFATA requirements was due to a lack of communication and staff turnover with the responsible personnel at the City. Recommendation We recommend that the City establish procedures to ensure that subawards are uploaded to the FSRS system on a timely basis.

Condition During our audit, we examined a non statistical sample of two subawards and found that the required subaward information was not reported in the Federal Funding Accountability and Transparency Act Subaward Reporting System (“FSRS”) as required under the Federal Funding Accountability and Transparency Act (“FFATA”). The two subawards not reported to FSRS totaled approximately $3,793,000. Criteria Under FFATA, which is codified in 2 CFR §170, recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to FSRS, including the following subaward information: • Subawardee name • Subawardee DUNS number • Amount of subaward • Subaward obligation/action date • Subaward number • Subaward project description Effect Failure to fully report required subaward information in FSRS may result in noncompliance with FFATA reporting requirements and limits the transparency of the use of federal funds awarded. Cause The failure to meet the FFATA requirements was due to a lack of communication and staff turnover with the responsible personnel at the City. Recommendation We recommend that the City establish procedures to ensure that subawards are uploaded to the FSRS system on a timely basis.

Condition During our audit, we examined 15 haphazardly selected program exit forms to test if proper controls were being followed for participants exiting the program. We identified for all samples selected, there was no evidence of review of the program exit forms. Criteria 20 CFR Section 677 provides certain requirements for reporting and determining participants who exit the program. Effect A lack of review on exited participants could result in improper reporting and untimely exits from the program. Cause Although the City has policies and procedures in place to ensure proper exit reviews, program personnel were not diligent in maintaining evidence of compliance with the policies and procedures. Recommendation We recommend the City be more diligent in following its policies and procedures for tracking, documenting and performing its exit processes.

Condition During our audit, we examined 15 haphazardly selected program exit forms to test if proper controls were being followed for participants exiting the program. We identified for all samples selected, there was no evidence of review of the program exit forms. Criteria 20 CFR Section 677 provides certain requirements for reporting and determining participants who exit the program. Effect A lack of review on exited participants could result in improper reporting and untimely exits from the program. Cause Although the City has policies and procedures in place to ensure proper exit reviews, program personnel were not diligent in maintaining evidence of compliance with the policies and procedures. Recommendation We recommend the City be more diligent in following its policies and procedures for tracking, documenting and performing its exit processes.

Condition During our audit, we examined 15 haphazardly selected program exit forms to test if proper controls were being followed for participants exiting the program. We identified for all samples selected, there was no evidence of review of the program exit forms. Criteria 20 CFR Section 677 provides certain requirements for reporting and determining participants who exit the program. Effect A lack of review on exited participants could result in improper reporting and untimely exits from the program. Cause Although the City has policies and procedures in place to ensure proper exit reviews, program personnel were not diligent in maintaining evidence of compliance with the policies and procedures. Recommendation We recommend the City be more diligent in following its policies and procedures for tracking, documenting and performing its exit processes.

Condition During our audit, we examined a non statistical sample of four ERA quarterly compliance reports. We identified inaccurate information submitted for one of the reports examined. Also, for two reports examined, we were unable to complete our testing due to incomplete reports being provided. Criteria 2 CFR Sections 200.328 and 200.329 provide certain requirements for accurate financial and performance reporting. Effect Inaccurate reporting affects the accuracy and transparency of the program funds used and reported to the Department of Treasury. Cause Although the City has policies and procedures in place to ensure proper reporting, City personnel were not diligent in following procedures to ensure accurate reporting. Also due to system limitations at the Department of Treasury and a lack of retention policies, the City was unable to provide completed quarterly reports. Recommendation We recommend the City be more diligent in following its policies and procedures for submitting quarterly information to the Department of Treasury. We also recommend the City implement retention procedures to track the reports and supporting information submitted to the Department of Treasury.

Condition During our audit, we examined the two ERA subawards for proper monitoring procedures. For the two subawards tested, the City did not follow their policies and procedures for performing on site reviews and did not review and evaluate the results of the subrecipients’ single audit reports. Criteria 2 CFR Section 200.332(d) requires a pass through entity to perform monitoring procedures which may include on site monitoring. The City’s policies and procedures require on site reviews to be conducted for its ERA programs. 2 CFR Section 200.332(d) also requires a pass through entity to review available single audit reports and follow up on any deficiencies pertaining to the federal award provided. Effect Without performing on site monitoring or evaluating subrecipients’ most recent single audit reports, the City may not be able to determine if subrecipients are using federal funds appropriately. Cause Due to staffing shortages and turnover, the City was not able to adhere to its on site monitoring procedures. The City also lacked procedures to review subrecipients’ single audit reports. Recommendation We recommend the City be more diligent in following its policies and procedures for on site monitoring of its subrecipients. We also recommend the City implement control procedures to review a subrecipient’s most recent single audit report to determine if any management decisions on findings or monitoring is necessary.

Condition During our audit, we selected a non statistical sample of three CSLFRF subawards for proper monitoring procedures. For two rental assistance subawards examined, we noted the City did not follow its policies and procedures for performing on site reviews and did not review and evaluate the results of the subrecipients’ single audit reports. Criteria 2 CFR Section 200.332(d) requires a pass through entity to perform monitoring procedures which may include on site monitoring. The City’s policies and procedures require on site reviews to be conducted for its CSLFRF programs. 2 CFR Section 200.332(d) also requires a pass through entity to review available single audit reports and follow up on any deficiencies pertaining to the federal award provided. Effect Without performing on site monitoring or evaluating subrecipients’ most recent single audit reports, the City may not be able to determine if subrecipients are using federal funds appropriately. Cause Due to staffing shortages and turnover, the City was not able to adhere to its on site monitoring procedures. The City also lacked procedures to review subrecipients’ single audit reports. Recommendation We recommend the City be more diligent in following its policies and procedures for on site monitoring of its subrecipients. We also recommend the City implement control procedures to review a subrecipient’s most recent single audit report to determine if any management decisions on findings or monitoring is necessary.

Condition The Department of Housing and Urban Development (“HUD”) notified the City, via letter dated May 31, 2023, that the City was not in compliance with the 60 day timeliness test conducted May 2, 2023, as the City had a line-of-credit balance 1.66 times its annual grant. Criteria 24 CFR Section 570.902 of the CDBG regulations states that a grantee is in compliance with timely expenditure requirements if, 60 days prior to the end of its program year, there is no more than 1.5 times its annual grant remaining in the line of credit, including any program income on hand. Effect Failure to meet the timeliness standard results in noncompliance with the period of performance requirement and could result in sanctions and reduction of future grant funds. However, HUD granted the City an exception to the timeliness requirements for the FY2023 grant year due to the lingering impacts of the COVID 19 pandemic. Cause The failure to meet the timeliness requirement was primarily due to the impact of the COVID‐19 pandemic compounded by supply chain issues. Recommendation We recommend that the City establish procedures to ensure that it complies with the CDBG timeliness standard specified in 24 CFR Section 570.902. In addition, we recommend that the City ensures that it adheres to the workout plan it submitted to HUD.

Condition The Department of Housing and Urban Development (“HUD”) notified the City, via letter dated May 31, 2023, that the City was not in compliance with the 60 day timeliness test conducted May 2, 2023, as the City had a line-of-credit balance 1.66 times its annual grant. Criteria 24 CFR Section 570.902 of the CDBG regulations states that a grantee is in compliance with timely expenditure requirements if, 60 days prior to the end of its program year, there is no more than 1.5 times its annual grant remaining in the line of credit, including any program income on hand. Effect Failure to meet the timeliness standard results in noncompliance with the period of performance requirement and could result in sanctions and reduction of future grant funds. However, HUD granted the City an exception to the timeliness requirements for the FY2023 grant year due to the lingering impacts of the COVID 19 pandemic. Cause The failure to meet the timeliness requirement was primarily due to the impact of the COVID‐19 pandemic compounded by supply chain issues. Recommendation We recommend that the City establish procedures to ensure that it complies with the CDBG timeliness standard specified in 24 CFR Section 570.902. In addition, we recommend that the City ensures that it adheres to the workout plan it submitted to HUD.

Condition During our audit, we examined a non statistical sample of two subawards and found that the required subaward information was not reported in the Federal Funding Accountability and Transparency Act Subaward Reporting System (“FSRS”) as required under the Federal Funding Accountability and Transparency Act (“FFATA”). The two subawards not reported to FSRS totaled approximately $3,793,000. Criteria Under FFATA, which is codified in 2 CFR §170, recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to FSRS, including the following subaward information: • Subawardee name • Subawardee DUNS number • Amount of subaward • Subaward obligation/action date • Subaward number • Subaward project description Effect Failure to fully report required subaward information in FSRS may result in noncompliance with FFATA reporting requirements and limits the transparency of the use of federal funds awarded. Cause The failure to meet the FFATA requirements was due to a lack of communication and staff turnover with the responsible personnel at the City. Recommendation We recommend that the City establish procedures to ensure that subawards are uploaded to the FSRS system on a timely basis.

Condition During our audit, we examined a non statistical sample of two subawards and found that the required subaward information was not reported in the Federal Funding Accountability and Transparency Act Subaward Reporting System (“FSRS”) as required under the Federal Funding Accountability and Transparency Act (“FFATA”). The two subawards not reported to FSRS totaled approximately $3,793,000. Criteria Under FFATA, which is codified in 2 CFR §170, recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to FSRS, including the following subaward information: • Subawardee name • Subawardee DUNS number • Amount of subaward • Subaward obligation/action date • Subaward number • Subaward project description Effect Failure to fully report required subaward information in FSRS may result in noncompliance with FFATA reporting requirements and limits the transparency of the use of federal funds awarded. Cause The failure to meet the FFATA requirements was due to a lack of communication and staff turnover with the responsible personnel at the City. Recommendation We recommend that the City establish procedures to ensure that subawards are uploaded to the FSRS system on a timely basis.

Condition During our audit, we examined 15 haphazardly selected program exit forms to test if proper controls were being followed for participants exiting the program. We identified for all samples selected, there was no evidence of review of the program exit forms. Criteria 20 CFR Section 677 provides certain requirements for reporting and determining participants who exit the program. Effect A lack of review on exited participants could result in improper reporting and untimely exits from the program. Cause Although the City has policies and procedures in place to ensure proper exit reviews, program personnel were not diligent in maintaining evidence of compliance with the policies and procedures. Recommendation We recommend the City be more diligent in following its policies and procedures for tracking, documenting and performing its exit processes.

Condition During our audit, we examined 15 haphazardly selected program exit forms to test if proper controls were being followed for participants exiting the program. We identified for all samples selected, there was no evidence of review of the program exit forms. Criteria 20 CFR Section 677 provides certain requirements for reporting and determining participants who exit the program. Effect A lack of review on exited participants could result in improper reporting and untimely exits from the program. Cause Although the City has policies and procedures in place to ensure proper exit reviews, program personnel were not diligent in maintaining evidence of compliance with the policies and procedures. Recommendation We recommend the City be more diligent in following its policies and procedures for tracking, documenting and performing its exit processes.

Condition During our audit, we examined 15 haphazardly selected program exit forms to test if proper controls were being followed for participants exiting the program. We identified for all samples selected, there was no evidence of review of the program exit forms. Criteria 20 CFR Section 677 provides certain requirements for reporting and determining participants who exit the program. Effect A lack of review on exited participants could result in improper reporting and untimely exits from the program. Cause Although the City has policies and procedures in place to ensure proper exit reviews, program personnel were not diligent in maintaining evidence of compliance with the policies and procedures. Recommendation We recommend the City be more diligent in following its policies and procedures for tracking, documenting and performing its exit processes.

Condition During our audit, we examined a non statistical sample of four ERA quarterly compliance reports. We identified inaccurate information submitted for one of the reports examined. Also, for two reports examined, we were unable to complete our testing due to incomplete reports being provided. Criteria 2 CFR Sections 200.328 and 200.329 provide certain requirements for accurate financial and performance reporting. Effect Inaccurate reporting affects the accuracy and transparency of the program funds used and reported to the Department of Treasury. Cause Although the City has policies and procedures in place to ensure proper reporting, City personnel were not diligent in following procedures to ensure accurate reporting. Also due to system limitations at the Department of Treasury and a lack of retention policies, the City was unable to provide completed quarterly reports. Recommendation We recommend the City be more diligent in following its policies and procedures for submitting quarterly information to the Department of Treasury. We also recommend the City implement retention procedures to track the reports and supporting information submitted to the Department of Treasury.

Condition During our audit, we examined the two ERA subawards for proper monitoring procedures. For the two subawards tested, the City did not follow their policies and procedures for performing on site reviews and did not review and evaluate the results of the subrecipients’ single audit reports. Criteria 2 CFR Section 200.332(d) requires a pass through entity to perform monitoring procedures which may include on site monitoring. The City’s policies and procedures require on site reviews to be conducted for its ERA programs. 2 CFR Section 200.332(d) also requires a pass through entity to review available single audit reports and follow up on any deficiencies pertaining to the federal award provided. Effect Without performing on site monitoring or evaluating subrecipients’ most recent single audit reports, the City may not be able to determine if subrecipients are using federal funds appropriately. Cause Due to staffing shortages and turnover, the City was not able to adhere to its on site monitoring procedures. The City also lacked procedures to review subrecipients’ single audit reports. Recommendation We recommend the City be more diligent in following its policies and procedures for on site monitoring of its subrecipients. We also recommend the City implement control procedures to review a subrecipient’s most recent single audit report to determine if any management decisions on findings or monitoring is necessary.

Condition During our audit, we selected a non statistical sample of three CSLFRF subawards for proper monitoring procedures. For two rental assistance subawards examined, we noted the City did not follow its policies and procedures for performing on site reviews and did not review and evaluate the results of the subrecipients’ single audit reports. Criteria 2 CFR Section 200.332(d) requires a pass through entity to perform monitoring procedures which may include on site monitoring. The City’s policies and procedures require on site reviews to be conducted for its CSLFRF programs. 2 CFR Section 200.332(d) also requires a pass through entity to review available single audit reports and follow up on any deficiencies pertaining to the federal award provided. Effect Without performing on site monitoring or evaluating subrecipients’ most recent single audit reports, the City may not be able to determine if subrecipients are using federal funds appropriately. Cause Due to staffing shortages and turnover, the City was not able to adhere to its on site monitoring procedures. The City also lacked procedures to review subrecipients’ single audit reports. Recommendation We recommend the City be more diligent in following its policies and procedures for on site monitoring of its subrecipients. We also recommend the City implement control procedures to review a subrecipient’s most recent single audit report to determine if any management decisions on findings or monitoring is necessary.