2023-007 U.S. Department of Agriculture, For the period July 1, 2022 through June 30, 2023, Assistance Listing #10.553, 10.555, 10.556, 10.559, and 10.582 - Internal Controls over Child Nutrition Cluster
Criteria: The School Department receives federal reimbursement for free and reduced price meals provided to children at established reimbursement rates. Monthly claims for reimbursement must be based on lunch counts taken daily at the point of service, which correctly identify the number of free, reduced price, and paid lunches served to eligible students.
In addition, the School Department participates in the Fresh Fruit and Vegetable Program which provides reimbursement of fresh fruit and vegetable purchases and related operational program costs. Charges for salaries and wages to the program must be based on records that accurately reflect the work performed.
Condition: The April claim reimbursement form overstated breakfast meal counts by 1,000 meals, which comprised 7% of total meals claimed. In addition, operational and administrative payroll costs charged to the Fresh Fruit and Vegetable Program were based on estimated hours worked, rather than actual time and effort records.
Cause: The Business Manager approves all monthly claims in the CNPWeb system prior to submission to the State. However, the School Department does not have a policy to provide supporting claim documentation to the Business Manager to verify the accuracy of the monthly claim. In addition, the School Department does not have policies and procedures that provide reasonable assurance that payroll charges to the Fresh Fruit and Vegetable Program are accurate, allowable, and properly allocated.
Effect: Errors in monthly claims may not be detected and corrected in a timely basis resulting in potential questioned costs. Unsupported payroll charges may not meet cost principal requirements resulting in potential questioned costs.
Recommendation: We recommend the School Department establish policies and procedures that ensure the Business Manager has adequate supporting documentation to verify monthly nutrition claims before they are submitted to the State. We also recommend that policies and procedures be established to ensure employees allocating their time to the Fresh Fruit and Vegetable Program complete documentation as required by 2 CFR 200.430(i).
Likely Questioned Costs: None.
2023-007 U.S. Department of Agriculture, For the period July 1, 2022 through June 30, 2023, Assistance Listing #10.553, 10.555, 10.556, 10.559, and 10.582 - Internal Controls over Child Nutrition Cluster
Criteria: The School Department receives federal reimbursement for free and reduced price meals provided to children at established reimbursement rates. Monthly claims for reimbursement must be based on lunch counts taken daily at the point of service, which correctly identify the number of free, reduced price, and paid lunches served to eligible students.
In addition, the School Department participates in the Fresh Fruit and Vegetable Program which provides reimbursement of fresh fruit and vegetable purchases and related operational program costs. Charges for salaries and wages to the program must be based on records that accurately reflect the work performed.
Condition: The April claim reimbursement form overstated breakfast meal counts by 1,000 meals, which comprised 7% of total meals claimed. In addition, operational and administrative payroll costs charged to the Fresh Fruit and Vegetable Program were based on estimated hours worked, rather than actual time and effort records.
Cause: The Business Manager approves all monthly claims in the CNPWeb system prior to submission to the State. However, the School Department does not have a policy to provide supporting claim documentation to the Business Manager to verify the accuracy of the monthly claim. In addition, the School Department does not have policies and procedures that provide reasonable assurance that payroll charges to the Fresh Fruit and Vegetable Program are accurate, allowable, and properly allocated.
Effect: Errors in monthly claims may not be detected and corrected in a timely basis resulting in potential questioned costs. Unsupported payroll charges may not meet cost principal requirements resulting in potential questioned costs.
Recommendation: We recommend the School Department establish policies and procedures that ensure the Business Manager has adequate supporting documentation to verify monthly nutrition claims before they are submitted to the State. We also recommend that policies and procedures be established to ensure employees allocating their time to the Fresh Fruit and Vegetable Program complete documentation as required by 2 CFR 200.430(i).
Likely Questioned Costs: None.
2023-007 U.S. Department of Agriculture, For the period July 1, 2022 through June 30, 2023, Assistance Listing #10.553, 10.555, 10.556, 10.559, and 10.582 - Internal Controls over Child Nutrition Cluster
Criteria: The School Department receives federal reimbursement for free and reduced price meals provided to children at established reimbursement rates. Monthly claims for reimbursement must be based on lunch counts taken daily at the point of service, which correctly identify the number of free, reduced price, and paid lunches served to eligible students.
In addition, the School Department participates in the Fresh Fruit and Vegetable Program which provides reimbursement of fresh fruit and vegetable purchases and related operational program costs. Charges for salaries and wages to the program must be based on records that accurately reflect the work performed.
Condition: The April claim reimbursement form overstated breakfast meal counts by 1,000 meals, which comprised 7% of total meals claimed. In addition, operational and administrative payroll costs charged to the Fresh Fruit and Vegetable Program were based on estimated hours worked, rather than actual time and effort records.
Cause: The Business Manager approves all monthly claims in the CNPWeb system prior to submission to the State. However, the School Department does not have a policy to provide supporting claim documentation to the Business Manager to verify the accuracy of the monthly claim. In addition, the School Department does not have policies and procedures that provide reasonable assurance that payroll charges to the Fresh Fruit and Vegetable Program are accurate, allowable, and properly allocated.
Effect: Errors in monthly claims may not be detected and corrected in a timely basis resulting in potential questioned costs. Unsupported payroll charges may not meet cost principal requirements resulting in potential questioned costs.
Recommendation: We recommend the School Department establish policies and procedures that ensure the Business Manager has adequate supporting documentation to verify monthly nutrition claims before they are submitted to the State. We also recommend that policies and procedures be established to ensure employees allocating their time to the Fresh Fruit and Vegetable Program complete documentation as required by 2 CFR 200.430(i).
Likely Questioned Costs: None.
2023-007 U.S. Department of Agriculture, For the period July 1, 2022 through June 30, 2023, Assistance Listing #10.553, 10.555, 10.556, 10.559, and 10.582 - Internal Controls over Child Nutrition Cluster
Criteria: The School Department receives federal reimbursement for free and reduced price meals provided to children at established reimbursement rates. Monthly claims for reimbursement must be based on lunch counts taken daily at the point of service, which correctly identify the number of free, reduced price, and paid lunches served to eligible students.
In addition, the School Department participates in the Fresh Fruit and Vegetable Program which provides reimbursement of fresh fruit and vegetable purchases and related operational program costs. Charges for salaries and wages to the program must be based on records that accurately reflect the work performed.
Condition: The April claim reimbursement form overstated breakfast meal counts by 1,000 meals, which comprised 7% of total meals claimed. In addition, operational and administrative payroll costs charged to the Fresh Fruit and Vegetable Program were based on estimated hours worked, rather than actual time and effort records.
Cause: The Business Manager approves all monthly claims in the CNPWeb system prior to submission to the State. However, the School Department does not have a policy to provide supporting claim documentation to the Business Manager to verify the accuracy of the monthly claim. In addition, the School Department does not have policies and procedures that provide reasonable assurance that payroll charges to the Fresh Fruit and Vegetable Program are accurate, allowable, and properly allocated.
Effect: Errors in monthly claims may not be detected and corrected in a timely basis resulting in potential questioned costs. Unsupported payroll charges may not meet cost principal requirements resulting in potential questioned costs.
Recommendation: We recommend the School Department establish policies and procedures that ensure the Business Manager has adequate supporting documentation to verify monthly nutrition claims before they are submitted to the State. We also recommend that policies and procedures be established to ensure employees allocating their time to the Fresh Fruit and Vegetable Program complete documentation as required by 2 CFR 200.430(i).
Likely Questioned Costs: None.
2023-007 U.S. Department of Agriculture, For the period July 1, 2022 through June 30, 2023, Assistance Listing #10.553, 10.555, 10.556, 10.559, and 10.582 - Internal Controls over Child Nutrition Cluster
Criteria: The School Department receives federal reimbursement for free and reduced price meals provided to children at established reimbursement rates. Monthly claims for reimbursement must be based on lunch counts taken daily at the point of service, which correctly identify the number of free, reduced price, and paid lunches served to eligible students.
In addition, the School Department participates in the Fresh Fruit and Vegetable Program which provides reimbursement of fresh fruit and vegetable purchases and related operational program costs. Charges for salaries and wages to the program must be based on records that accurately reflect the work performed.
Condition: The April claim reimbursement form overstated breakfast meal counts by 1,000 meals, which comprised 7% of total meals claimed. In addition, operational and administrative payroll costs charged to the Fresh Fruit and Vegetable Program were based on estimated hours worked, rather than actual time and effort records.
Cause: The Business Manager approves all monthly claims in the CNPWeb system prior to submission to the State. However, the School Department does not have a policy to provide supporting claim documentation to the Business Manager to verify the accuracy of the monthly claim. In addition, the School Department does not have policies and procedures that provide reasonable assurance that payroll charges to the Fresh Fruit and Vegetable Program are accurate, allowable, and properly allocated.
Effect: Errors in monthly claims may not be detected and corrected in a timely basis resulting in potential questioned costs. Unsupported payroll charges may not meet cost principal requirements resulting in potential questioned costs.
Recommendation: We recommend the School Department establish policies and procedures that ensure the Business Manager has adequate supporting documentation to verify monthly nutrition claims before they are submitted to the State. We also recommend that policies and procedures be established to ensure employees allocating their time to the Fresh Fruit and Vegetable Program complete documentation as required by 2 CFR 200.430(i).
Likely Questioned Costs: None.
2023-008 U.S. Department of Housing and Urban Development, For the period July 1, 2022 through June 30, 2023, ALN # 14.218 – Internal Controls over Community Development Block Grant Entitlements Cluster
Criteria: In accordance with 2 CFR 200.307(e), program income must be deducted from total allowable costs to determine net allowable costs. Program income must be used for current costs unless the Federal awarding agency authorizes otherwise.
Condition: In the first quarter of fiscal year 2023, the City requested $21,212 of CDBG grant funds even though sufficient program income was available to cover those costs.
Cause: Internal controls over the CDBG grant program are insufficient to ensure grant funds are only drawn when program income is insufficient to cover program costs.
Effect: Since program income exceeded allowable costs in the first quarter of fiscal year 2023, there were no eligible costs for grant reimbursement. As a result, Federal funds were drawn to reimburse unallowable costs.
Recommendation: We recommend grant management staff review their grant drawdown procedures to ensure program income is reviewed prior to drawing new grant funds.
Known Questioned Costs: $21,212.
2023-008 U.S. Department of Housing and Urban Development, For the period July 1, 2022 through June 30, 2023, ALN # 14.218 – Internal Controls over Community Development Block Grant Entitlements Cluster
Criteria: In accordance with 2 CFR 200.307(e), program income must be deducted from total allowable costs to determine net allowable costs. Program income must be used for current costs unless the Federal awarding agency authorizes otherwise.
Condition: In the first quarter of fiscal year 2023, the City requested $21,212 of CDBG grant funds even though sufficient program income was available to cover those costs.
Cause: Internal controls over the CDBG grant program are insufficient to ensure grant funds are only drawn when program income is insufficient to cover program costs.
Effect: Since program income exceeded allowable costs in the first quarter of fiscal year 2023, there were no eligible costs for grant reimbursement. As a result, Federal funds were drawn to reimburse unallowable costs.
Recommendation: We recommend grant management staff review their grant drawdown procedures to ensure program income is reviewed prior to drawing new grant funds.
Known Questioned Costs: $21,212.
2023-008 U.S. Department of Housing and Urban Development, For the period July 1, 2022 through June 30, 2023, ALN # 14.218 – Internal Controls over Community Development Block Grant Entitlements Cluster
Criteria: In accordance with 2 CFR 200.307(e), program income must be deducted from total allowable costs to determine net allowable costs. Program income must be used for current costs unless the Federal awarding agency authorizes otherwise.
Condition: In the first quarter of fiscal year 2023, the City requested $21,212 of CDBG grant funds even though sufficient program income was available to cover those costs.
Cause: Internal controls over the CDBG grant program are insufficient to ensure grant funds are only drawn when program income is insufficient to cover program costs.
Effect: Since program income exceeded allowable costs in the first quarter of fiscal year 2023, there were no eligible costs for grant reimbursement. As a result, Federal funds were drawn to reimburse unallowable costs.
Recommendation: We recommend grant management staff review their grant drawdown procedures to ensure program income is reviewed prior to drawing new grant funds.
Known Questioned Costs: $21,212.
2023-006 U.S. Department of the Treasury, For the period July 1, 2022 through June 30, 2023, Assistance Listing #21.027 – Internal Controls over State and Local Fiscal Recovery Fund
Criteria: As a recipient of State and Local Fiscal Recovery Funds (SLRF), the City is required to submit quarterly Project and Expenditure Reports to the U.S. Department of the Treasury. These submissions report cumulative and quarterly obligations and expenditures by project, subaward and vendor information, and revenue replacement information.
Condition: We tested 10 of the 39 SLRF projects reported on the quarterly ARPA reports to determine whether cumulative and quarterly expenditures reconcile with the accounting system. We found errors in 4 of the 10 reports:
• one project failed to include the reversal of the prior year payroll accrual totaling $1,385, causing that expense to be double-counted;
• three projects reported a total of $374,811 of expenditures when the purchase order was approved; however the service had not been performed and the expenditure had not yet been realized. These items were properly reported as obligations but should not have been reported as expenditures.
Cause: The project spreadsheets developed to track cumulative and quarterly expenditures do not separately track obligations. In addition, there is no secondary review by a member of the Finance Department to double check the data in the reports. As a result, errors in reporting remain undetected.
Effect: Failure to complete reports accurately and maintain proper supporting documentation for amounts reported could skew the financial position of the program and related projects. As such, measurement of results and management decisions for future projects could be based on inaccurate information.
Recommendation: We recommend revising the City’s project tracking spreadsheets to include columns to separately track purchase orders. This will ensure expenses aren’t confused with obligations. We also recommend a member of the Finance Department review and approve the report before it is submitted to the U.S. Department of the Treasury.
Likely Questioned Costs: None.
2023-007 U.S. Department of Agriculture, For the period July 1, 2022 through June 30, 2023, Assistance Listing #10.553, 10.555, 10.556, 10.559, and 10.582 - Internal Controls over Child Nutrition Cluster
Criteria: The School Department receives federal reimbursement for free and reduced price meals provided to children at established reimbursement rates. Monthly claims for reimbursement must be based on lunch counts taken daily at the point of service, which correctly identify the number of free, reduced price, and paid lunches served to eligible students.
In addition, the School Department participates in the Fresh Fruit and Vegetable Program which provides reimbursement of fresh fruit and vegetable purchases and related operational program costs. Charges for salaries and wages to the program must be based on records that accurately reflect the work performed.
Condition: The April claim reimbursement form overstated breakfast meal counts by 1,000 meals, which comprised 7% of total meals claimed. In addition, operational and administrative payroll costs charged to the Fresh Fruit and Vegetable Program were based on estimated hours worked, rather than actual time and effort records.
Cause: The Business Manager approves all monthly claims in the CNPWeb system prior to submission to the State. However, the School Department does not have a policy to provide supporting claim documentation to the Business Manager to verify the accuracy of the monthly claim. In addition, the School Department does not have policies and procedures that provide reasonable assurance that payroll charges to the Fresh Fruit and Vegetable Program are accurate, allowable, and properly allocated.
Effect: Errors in monthly claims may not be detected and corrected in a timely basis resulting in potential questioned costs. Unsupported payroll charges may not meet cost principal requirements resulting in potential questioned costs.
Recommendation: We recommend the School Department establish policies and procedures that ensure the Business Manager has adequate supporting documentation to verify monthly nutrition claims before they are submitted to the State. We also recommend that policies and procedures be established to ensure employees allocating their time to the Fresh Fruit and Vegetable Program complete documentation as required by 2 CFR 200.430(i).
Likely Questioned Costs: None.
2023-007 U.S. Department of Agriculture, For the period July 1, 2022 through June 30, 2023, Assistance Listing #10.553, 10.555, 10.556, 10.559, and 10.582 - Internal Controls over Child Nutrition Cluster
Criteria: The School Department receives federal reimbursement for free and reduced price meals provided to children at established reimbursement rates. Monthly claims for reimbursement must be based on lunch counts taken daily at the point of service, which correctly identify the number of free, reduced price, and paid lunches served to eligible students.
In addition, the School Department participates in the Fresh Fruit and Vegetable Program which provides reimbursement of fresh fruit and vegetable purchases and related operational program costs. Charges for salaries and wages to the program must be based on records that accurately reflect the work performed.
Condition: The April claim reimbursement form overstated breakfast meal counts by 1,000 meals, which comprised 7% of total meals claimed. In addition, operational and administrative payroll costs charged to the Fresh Fruit and Vegetable Program were based on estimated hours worked, rather than actual time and effort records.
Cause: The Business Manager approves all monthly claims in the CNPWeb system prior to submission to the State. However, the School Department does not have a policy to provide supporting claim documentation to the Business Manager to verify the accuracy of the monthly claim. In addition, the School Department does not have policies and procedures that provide reasonable assurance that payroll charges to the Fresh Fruit and Vegetable Program are accurate, allowable, and properly allocated.
Effect: Errors in monthly claims may not be detected and corrected in a timely basis resulting in potential questioned costs. Unsupported payroll charges may not meet cost principal requirements resulting in potential questioned costs.
Recommendation: We recommend the School Department establish policies and procedures that ensure the Business Manager has adequate supporting documentation to verify monthly nutrition claims before they are submitted to the State. We also recommend that policies and procedures be established to ensure employees allocating their time to the Fresh Fruit and Vegetable Program complete documentation as required by 2 CFR 200.430(i).
Likely Questioned Costs: None.
2023-007 U.S. Department of Agriculture, For the period July 1, 2022 through June 30, 2023, Assistance Listing #10.553, 10.555, 10.556, 10.559, and 10.582 - Internal Controls over Child Nutrition Cluster
Criteria: The School Department receives federal reimbursement for free and reduced price meals provided to children at established reimbursement rates. Monthly claims for reimbursement must be based on lunch counts taken daily at the point of service, which correctly identify the number of free, reduced price, and paid lunches served to eligible students.
In addition, the School Department participates in the Fresh Fruit and Vegetable Program which provides reimbursement of fresh fruit and vegetable purchases and related operational program costs. Charges for salaries and wages to the program must be based on records that accurately reflect the work performed.
Condition: The April claim reimbursement form overstated breakfast meal counts by 1,000 meals, which comprised 7% of total meals claimed. In addition, operational and administrative payroll costs charged to the Fresh Fruit and Vegetable Program were based on estimated hours worked, rather than actual time and effort records.
Cause: The Business Manager approves all monthly claims in the CNPWeb system prior to submission to the State. However, the School Department does not have a policy to provide supporting claim documentation to the Business Manager to verify the accuracy of the monthly claim. In addition, the School Department does not have policies and procedures that provide reasonable assurance that payroll charges to the Fresh Fruit and Vegetable Program are accurate, allowable, and properly allocated.
Effect: Errors in monthly claims may not be detected and corrected in a timely basis resulting in potential questioned costs. Unsupported payroll charges may not meet cost principal requirements resulting in potential questioned costs.
Recommendation: We recommend the School Department establish policies and procedures that ensure the Business Manager has adequate supporting documentation to verify monthly nutrition claims before they are submitted to the State. We also recommend that policies and procedures be established to ensure employees allocating their time to the Fresh Fruit and Vegetable Program complete documentation as required by 2 CFR 200.430(i).
Likely Questioned Costs: None.
2023-007 U.S. Department of Agriculture, For the period July 1, 2022 through June 30, 2023, Assistance Listing #10.553, 10.555, 10.556, 10.559, and 10.582 - Internal Controls over Child Nutrition Cluster
Criteria: The School Department receives federal reimbursement for free and reduced price meals provided to children at established reimbursement rates. Monthly claims for reimbursement must be based on lunch counts taken daily at the point of service, which correctly identify the number of free, reduced price, and paid lunches served to eligible students.
In addition, the School Department participates in the Fresh Fruit and Vegetable Program which provides reimbursement of fresh fruit and vegetable purchases and related operational program costs. Charges for salaries and wages to the program must be based on records that accurately reflect the work performed.
Condition: The April claim reimbursement form overstated breakfast meal counts by 1,000 meals, which comprised 7% of total meals claimed. In addition, operational and administrative payroll costs charged to the Fresh Fruit and Vegetable Program were based on estimated hours worked, rather than actual time and effort records.
Cause: The Business Manager approves all monthly claims in the CNPWeb system prior to submission to the State. However, the School Department does not have a policy to provide supporting claim documentation to the Business Manager to verify the accuracy of the monthly claim. In addition, the School Department does not have policies and procedures that provide reasonable assurance that payroll charges to the Fresh Fruit and Vegetable Program are accurate, allowable, and properly allocated.
Effect: Errors in monthly claims may not be detected and corrected in a timely basis resulting in potential questioned costs. Unsupported payroll charges may not meet cost principal requirements resulting in potential questioned costs.
Recommendation: We recommend the School Department establish policies and procedures that ensure the Business Manager has adequate supporting documentation to verify monthly nutrition claims before they are submitted to the State. We also recommend that policies and procedures be established to ensure employees allocating their time to the Fresh Fruit and Vegetable Program complete documentation as required by 2 CFR 200.430(i).
Likely Questioned Costs: None.
2023-007 U.S. Department of Agriculture, For the period July 1, 2022 through June 30, 2023, Assistance Listing #10.553, 10.555, 10.556, 10.559, and 10.582 - Internal Controls over Child Nutrition Cluster
Criteria: The School Department receives federal reimbursement for free and reduced price meals provided to children at established reimbursement rates. Monthly claims for reimbursement must be based on lunch counts taken daily at the point of service, which correctly identify the number of free, reduced price, and paid lunches served to eligible students.
In addition, the School Department participates in the Fresh Fruit and Vegetable Program which provides reimbursement of fresh fruit and vegetable purchases and related operational program costs. Charges for salaries and wages to the program must be based on records that accurately reflect the work performed.
Condition: The April claim reimbursement form overstated breakfast meal counts by 1,000 meals, which comprised 7% of total meals claimed. In addition, operational and administrative payroll costs charged to the Fresh Fruit and Vegetable Program were based on estimated hours worked, rather than actual time and effort records.
Cause: The Business Manager approves all monthly claims in the CNPWeb system prior to submission to the State. However, the School Department does not have a policy to provide supporting claim documentation to the Business Manager to verify the accuracy of the monthly claim. In addition, the School Department does not have policies and procedures that provide reasonable assurance that payroll charges to the Fresh Fruit and Vegetable Program are accurate, allowable, and properly allocated.
Effect: Errors in monthly claims may not be detected and corrected in a timely basis resulting in potential questioned costs. Unsupported payroll charges may not meet cost principal requirements resulting in potential questioned costs.
Recommendation: We recommend the School Department establish policies and procedures that ensure the Business Manager has adequate supporting documentation to verify monthly nutrition claims before they are submitted to the State. We also recommend that policies and procedures be established to ensure employees allocating their time to the Fresh Fruit and Vegetable Program complete documentation as required by 2 CFR 200.430(i).
Likely Questioned Costs: None.
2023-008 U.S. Department of Housing and Urban Development, For the period July 1, 2022 through June 30, 2023, ALN # 14.218 – Internal Controls over Community Development Block Grant Entitlements Cluster
Criteria: In accordance with 2 CFR 200.307(e), program income must be deducted from total allowable costs to determine net allowable costs. Program income must be used for current costs unless the Federal awarding agency authorizes otherwise.
Condition: In the first quarter of fiscal year 2023, the City requested $21,212 of CDBG grant funds even though sufficient program income was available to cover those costs.
Cause: Internal controls over the CDBG grant program are insufficient to ensure grant funds are only drawn when program income is insufficient to cover program costs.
Effect: Since program income exceeded allowable costs in the first quarter of fiscal year 2023, there were no eligible costs for grant reimbursement. As a result, Federal funds were drawn to reimburse unallowable costs.
Recommendation: We recommend grant management staff review their grant drawdown procedures to ensure program income is reviewed prior to drawing new grant funds.
Known Questioned Costs: $21,212.
2023-008 U.S. Department of Housing and Urban Development, For the period July 1, 2022 through June 30, 2023, ALN # 14.218 – Internal Controls over Community Development Block Grant Entitlements Cluster
Criteria: In accordance with 2 CFR 200.307(e), program income must be deducted from total allowable costs to determine net allowable costs. Program income must be used for current costs unless the Federal awarding agency authorizes otherwise.
Condition: In the first quarter of fiscal year 2023, the City requested $21,212 of CDBG grant funds even though sufficient program income was available to cover those costs.
Cause: Internal controls over the CDBG grant program are insufficient to ensure grant funds are only drawn when program income is insufficient to cover program costs.
Effect: Since program income exceeded allowable costs in the first quarter of fiscal year 2023, there were no eligible costs for grant reimbursement. As a result, Federal funds were drawn to reimburse unallowable costs.
Recommendation: We recommend grant management staff review their grant drawdown procedures to ensure program income is reviewed prior to drawing new grant funds.
Known Questioned Costs: $21,212.
2023-008 U.S. Department of Housing and Urban Development, For the period July 1, 2022 through June 30, 2023, ALN # 14.218 – Internal Controls over Community Development Block Grant Entitlements Cluster
Criteria: In accordance with 2 CFR 200.307(e), program income must be deducted from total allowable costs to determine net allowable costs. Program income must be used for current costs unless the Federal awarding agency authorizes otherwise.
Condition: In the first quarter of fiscal year 2023, the City requested $21,212 of CDBG grant funds even though sufficient program income was available to cover those costs.
Cause: Internal controls over the CDBG grant program are insufficient to ensure grant funds are only drawn when program income is insufficient to cover program costs.
Effect: Since program income exceeded allowable costs in the first quarter of fiscal year 2023, there were no eligible costs for grant reimbursement. As a result, Federal funds were drawn to reimburse unallowable costs.
Recommendation: We recommend grant management staff review their grant drawdown procedures to ensure program income is reviewed prior to drawing new grant funds.
Known Questioned Costs: $21,212.
2023-006 U.S. Department of the Treasury, For the period July 1, 2022 through June 30, 2023, Assistance Listing #21.027 – Internal Controls over State and Local Fiscal Recovery Fund
Criteria: As a recipient of State and Local Fiscal Recovery Funds (SLRF), the City is required to submit quarterly Project and Expenditure Reports to the U.S. Department of the Treasury. These submissions report cumulative and quarterly obligations and expenditures by project, subaward and vendor information, and revenue replacement information.
Condition: We tested 10 of the 39 SLRF projects reported on the quarterly ARPA reports to determine whether cumulative and quarterly expenditures reconcile with the accounting system. We found errors in 4 of the 10 reports:
• one project failed to include the reversal of the prior year payroll accrual totaling $1,385, causing that expense to be double-counted;
• three projects reported a total of $374,811 of expenditures when the purchase order was approved; however the service had not been performed and the expenditure had not yet been realized. These items were properly reported as obligations but should not have been reported as expenditures.
Cause: The project spreadsheets developed to track cumulative and quarterly expenditures do not separately track obligations. In addition, there is no secondary review by a member of the Finance Department to double check the data in the reports. As a result, errors in reporting remain undetected.
Effect: Failure to complete reports accurately and maintain proper supporting documentation for amounts reported could skew the financial position of the program and related projects. As such, measurement of results and management decisions for future projects could be based on inaccurate information.
Recommendation: We recommend revising the City’s project tracking spreadsheets to include columns to separately track purchase orders. This will ensure expenses aren’t confused with obligations. We also recommend a member of the Finance Department review and approve the report before it is submitted to the U.S. Department of the Treasury.
Likely Questioned Costs: None.