Audit 307377

Finding 2017-006 - Material Weakness - Maintenance of Financial Records -- Federal Awarding Agency: Department of Housing and Urban Development -- CFDA Number and Title: CDBG Entitlement Grants Cluster; 14.218 Community Development Block Grants/Entitlement Grants -- Applicable Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs/Cost Principles -- CFDA Number and Title: 14.267 Continuum of Care Program -- Applicable Compliance Requirements: -- Activities Allowed or Unallowed; Allowable Costs/Cost Principles and Eligibility. -- Criteria: Title 24 of the United States Department of Housing Urban Development (“HUD”) of the Code of Federal Regulations (“CFR”) §570.506(a) specifies that the grantee must keep records which provide a full description of each activity that is selected for assistance, including its location, the amount of funds budgeted, obligated and expended for the activity, and the provision of the regulations under which the activity is eligible. -- Condition: Our audit revealed that certain documentation supporting drawdown amounts for certain expenditures were misplaced. -- Cause: Constant turnover in personnel responsible for administering these programs and lack of adequate training and cross training of personnel. -- Effect or Potential Effect: The funding agency could disallow the costs that do not have the appropriate supporting documentation and approvals. -- Known Questioned Costs: $173,143 -- Recommendation: We recommend that the Agency maintain the supporting documentation for expenditures as required by the federal guidelines. Further, documentation should be reviewed and approved prior to payment. -- Management’s Responses: See corrective action plan.

Finding 2017-007 - Significant Deficiency - Untimely Submissions; CFDA Number and Title: CDBG Entitlement Grants Cluster; 14.218 Community Development Block Grants/Entitlement Grants; -- Applicable Compliance Requirements: Reporting -- Criteria: Per the Uniform Guidance, states, local governments, and nonprofit organizations (“the auditee”) that annually spend $750,000 or more in federal awards must perform a Single Audit and complete Form SF-SAC (“Data Collection Form”) and submit both to the Federal Audit Clearinghouse (“FAC”). The auditee should submit the Data Collection Form and the reporting package to the FAC within the earlier of 30 days after the receipt of the auditors’ reports or nine months after the end of the audit period, unless a longer period is agreed to in advance by the cognizant or oversight agency for audit. -- Condition: The City did not submit the Data Collection Form and the reporting package for 2017 to the FAC by the due date in accordance with Uniform Guidance requirements. -- Cause: The year end closing of the general ledger and preparation for audit were not completed by management in a timely manner. - Context: During our audit we noted that significant reconciliations, analyses and information were not available on a timely basis to complete the audit. -- Effect: The City did not comply with the Uniform Guidance reporting requirements. - Recommendation: We recommend that the City submit the reports referred to above on a timely basis as required. - Management’s Responses: See corrective action plan

Finding 2017-006 - Material Weakness - Maintenance of Financial Records -- Federal Awarding Agency: Department of Housing and Urban Development -- CFDA Number and Title: CDBG Entitlement Grants Cluster; 14.218 Community Development Block Grants/Entitlement Grants -- Applicable Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs/Cost Principles -- CFDA Number and Title: 14.267 Continuum of Care Program -- Applicable Compliance Requirements: -- Activities Allowed or Unallowed; Allowable Costs/Cost Principles and Eligibility. -- Criteria: Title 24 of the United States Department of Housing Urban Development (“HUD”) of the Code of Federal Regulations (“CFR”) §570.506(a) specifies that the grantee must keep records which provide a full description of each activity that is selected for assistance, including its location, the amount of funds budgeted, obligated and expended for the activity, and the provision of the regulations under which the activity is eligible. -- Condition: Our audit revealed that certain documentation supporting drawdown amounts for certain expenditures were misplaced. -- Cause: Constant turnover in personnel responsible for administering these programs and lack of adequate training and cross training of personnel. -- Effect or Potential Effect: The funding agency could disallow the costs that do not have the appropriate supporting documentation and approvals. -- Known Questioned Costs: $173,143 -- Recommendation: We recommend that the Agency maintain the supporting documentation for expenditures as required by the federal guidelines. Further, documentation should be reviewed and approved prior to payment. -- Management’s Responses: See corrective action plan.

Finding 2017-007 - Significant Deficiency - Untimely Submissions; CFDA Number and Title: CDBG Entitlement Grants Cluster; 14.218 Community Development Block Grants/Entitlement Grants; -- Applicable Compliance Requirements: Reporting -- Criteria: Per the Uniform Guidance, states, local governments, and nonprofit organizations (“the auditee”) that annually spend $750,000 or more in federal awards must perform a Single Audit and complete Form SF-SAC (“Data Collection Form”) and submit both to the Federal Audit Clearinghouse (“FAC”). The auditee should submit the Data Collection Form and the reporting package to the FAC within the earlier of 30 days after the receipt of the auditors’ reports or nine months after the end of the audit period, unless a longer period is agreed to in advance by the cognizant or oversight agency for audit. -- Condition: The City did not submit the Data Collection Form and the reporting package for 2017 to the FAC by the due date in accordance with Uniform Guidance requirements. -- Cause: The year end closing of the general ledger and preparation for audit were not completed by management in a timely manner. - Context: During our audit we noted that significant reconciliations, analyses and information were not available on a timely basis to complete the audit. -- Effect: The City did not comply with the Uniform Guidance reporting requirements. - Recommendation: We recommend that the City submit the reports referred to above on a timely basis as required. - Management’s Responses: See corrective action plan