Audit 330477

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Community Development Block Grants/Entitlement Grants Assistance Listing Number: 14.218 Federal Award Identification Number and Year: B-19-MC-55-0017, 2019; B-20-MC-55-0017, 2020; B- 20-MW-55-0017, 2020; B-21-MC-55-0017, 2021; B-22MC-55-0017, 2022; B-23MC-55-0017, 2023 Award Period: 1/1/2019 – 9/1/2030 Compliance Requirements: Reporting Type of Finding: * Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires the City to implement and maintain a system of internal controls over federal grants. Condition: The City has not formally designated an individual to review and approve the reports nor clarify how the review and approval was to be documented, to ensure the compliance requirements are completed in accordance with the grant requirements. Questioned costs: None Context: The City did not have procedures requiring documentation of the review and approval by an individual other than the preparer of all required annual reports. Cause: The City had not performed a periodic evaluation of the internal controls surrounding the grant program to identify the lack of documentation indicating a review of the annual reporting forms had been performed. Effect: Without documenting the review, there is a risk that the reports were not reviewed prior to submission by the City and could contain an error. Repeat Finding: Repeat of Finding 2022-001 Recommendation: We recommend the City review the various requirements of the CDBG grant program and identify individuals who can act as a reviewer and approver of the reporting process. We also recommend the City document these procedures and internal controls as required by Uniform Guidance. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Community Development Block Grants/Entitlement Grants Assistance Listing Number: 14.218 Federal Award Identification Number and Year: B-19-MC-55-0017, 2019; B-20-MC-55-0017, 2020; B- 20-MW-55-0017, 2020; B-21-MC-55-0017, 2021; B-22MC-55-0017, 2022; B-23MC-55-0017, 2023 Award Period: 1/1/2019 – 9/1/2030 Compliance Requirements: Reporting Type of Finding: * Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires the City to implement and maintain a system of internal controls over federal grants. Condition: The City has not formally designated an individual to review and approve the reports nor clarify how the review and approval was to be documented, to ensure the compliance requirements are completed in accordance with the grant requirements. Questioned costs: None Context: The City did not have procedures requiring documentation of the review and approval by an individual other than the preparer of all required annual reports. Cause: The City had not performed a periodic evaluation of the internal controls surrounding the grant program to identify the lack of documentation indicating a review of the annual reporting forms had been performed. Effect: Without documenting the review, there is a risk that the reports were not reviewed prior to submission by the City and could contain an error. Repeat Finding: Repeat of Finding 2022-001 Recommendation: We recommend the City review the various requirements of the CDBG grant program and identify individuals who can act as a reviewer and approver of the reporting process. We also recommend the City document these procedures and internal controls as required by Uniform Guidance. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Community Development Block Grants/Entitlement Grants Assistance Listing Number: 14.218 Federal Award Identification Number and Year: B-19-MC-55-0017, 2019; B-20-MC-55-0017, 2020; B-20-MW-55-0017, 2020; B-21-MC-55-0017, 2021; B-22MC-55-0017, 2022; B-23MC-55-0017, 2023 Award Period: 1/1/2019 – 9/1/2030 Compliance Requirements: Reporting Type of Finding: * Material Weakness in Internal Control over Compliance * Other Matters Criteria or specific requirement: Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System. In addition, 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires the City to implement and maintain a system of internal controls over federal grants. Condition: The City did not report any first tier subawards related to the CDBG grant program to the required federal reporting system for grant funds awarded during 2023. Questioned costs: None Context: The City did not report any of the subawards that required disclosure under the Federal Funding Accountability and Transparency Act. We noted that the City’s Community Development Department did not have procedures or documentation to ensure that this procedure was performed. Effect: The City failed to report first-tier subawards as required by federal law. Cause: The City had not performed a periodic evaluation of the requirements and internal controls surrounding the grant program to identify the requirement of the annual FFATA reporting requirement. Repeat Finding: No Recommendation: We recommend the City review the various grant requirements and laws surrounding the CDBG grant program and ensure that any written internal control or procedure manuals include all of the required compliance requirements. We also recommend that the City ensure multiple individuals are trained on the administration of the grant. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Community Development Block Grants/Entitlement Grants Assistance Listing Number: 14.218 Federal Award Identification Number and Year: B-19-MC-55-0017, 2019; B-20-MC-55-0017, 2020; B-20-MW-55-0017, 2020; B-21-MC-55-0017, 2021; B-22MC-55-0017, 2022; B-23MC-55-0017, 2023 Award Period: 1/1/2019 – 9/1/2030 Compliance Requirements: Reporting Type of Finding: * Material Weakness in Internal Control over Compliance * Other Matters Criteria or specific requirement: Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System. In addition, 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires the City to implement and maintain a system of internal controls over federal grants. Condition: The City did not report any first tier subawards related to the CDBG grant program to the required federal reporting system for grant funds awarded during 2023. Questioned costs: None Context: The City did not report any of the subawards that required disclosure under the Federal Funding Accountability and Transparency Act. We noted that the City’s Community Development Department did not have procedures or documentation to ensure that this procedure was performed. Effect: The City failed to report first-tier subawards as required by federal law. Cause: The City had not performed a periodic evaluation of the requirements and internal controls surrounding the grant program to identify the requirement of the annual FFATA reporting requirement. Repeat Finding: No Recommendation: We recommend the City review the various grant requirements and laws surrounding the CDBG grant program and ensure that any written internal control or procedure manuals include all of the required compliance requirements. We also recommend that the City ensure multiple individuals are trained on the administration of the grant. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of the Treasury Federal Program Name: State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Period: 3/3/2021 – 12/31/2026 Compliance Requirement: Procurement – Suspension and Debarment Type of Finding: * Significant Deficiency in Internal Control over Compliance * Other Matters Criteria or Specific Requirement: 2 CFR Section 200.214 requires non-federal entities to follow suspension and debarment regulations outlined in 2 CFR part 180. When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal 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. Condition: The City’s documentation of their search for suspension and debarment did not include the date the search was performed and therefore it was not possible to determine that the search was performed prior to the date of procurement. Questioned Costs: None Context: While performing audit procedures, it was noted that City management did not maintain documentation of the date that the search for suspension and debarment was performed and that it was prior to finalizing the procurement. Cause: The City did not have a procedure in place to require documentation be maintained that the search for suspension and department associated with procurement transactions in excess of the $25,000 threshold had been performed prior to procurement. Effect: Certain vendors could be used that are considered suspended or debarred by the federal government resulting in noncompliance. Repeat Finding: 2022-002 Recommendation: We recommend that the City review its policies over suspension and debarment review to ensure they are maintaining compliance and controls over verifying or contracting with vendors that are allowable. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Community Development Block Grants/Entitlement Grants Assistance Listing Number: 14.218 Federal Award Identification Number and Year: B-19-MC-55-0017, 2019; B-20-MC-55-0017, 2020; B- 20-MW-55-0017, 2020; B-21-MC-55-0017, 2021; B-22MC-55-0017, 2022; B-23MC-55-0017, 2023 Award Period: 1/1/2019 – 9/1/2030 Compliance Requirements: Reporting Type of Finding: * Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires the City to implement and maintain a system of internal controls over federal grants. Condition: The City has not formally designated an individual to review and approve the reports nor clarify how the review and approval was to be documented, to ensure the compliance requirements are completed in accordance with the grant requirements. Questioned costs: None Context: The City did not have procedures requiring documentation of the review and approval by an individual other than the preparer of all required annual reports. Cause: The City had not performed a periodic evaluation of the internal controls surrounding the grant program to identify the lack of documentation indicating a review of the annual reporting forms had been performed. Effect: Without documenting the review, there is a risk that the reports were not reviewed prior to submission by the City and could contain an error. Repeat Finding: Repeat of Finding 2022-001 Recommendation: We recommend the City review the various requirements of the CDBG grant program and identify individuals who can act as a reviewer and approver of the reporting process. We also recommend the City document these procedures and internal controls as required by Uniform Guidance. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Community Development Block Grants/Entitlement Grants Assistance Listing Number: 14.218 Federal Award Identification Number and Year: B-19-MC-55-0017, 2019; B-20-MC-55-0017, 2020; B- 20-MW-55-0017, 2020; B-21-MC-55-0017, 2021; B-22MC-55-0017, 2022; B-23MC-55-0017, 2023 Award Period: 1/1/2019 – 9/1/2030 Compliance Requirements: Reporting Type of Finding: * Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires the City to implement and maintain a system of internal controls over federal grants. Condition: The City has not formally designated an individual to review and approve the reports nor clarify how the review and approval was to be documented, to ensure the compliance requirements are completed in accordance with the grant requirements. Questioned costs: None Context: The City did not have procedures requiring documentation of the review and approval by an individual other than the preparer of all required annual reports. Cause: The City had not performed a periodic evaluation of the internal controls surrounding the grant program to identify the lack of documentation indicating a review of the annual reporting forms had been performed. Effect: Without documenting the review, there is a risk that the reports were not reviewed prior to submission by the City and could contain an error. Repeat Finding: Repeat of Finding 2022-001 Recommendation: We recommend the City review the various requirements of the CDBG grant program and identify individuals who can act as a reviewer and approver of the reporting process. We also recommend the City document these procedures and internal controls as required by Uniform Guidance. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Community Development Block Grants/Entitlement Grants Assistance Listing Number: 14.218 Federal Award Identification Number and Year: B-19-MC-55-0017, 2019; B-20-MC-55-0017, 2020; B-20-MW-55-0017, 2020; B-21-MC-55-0017, 2021; B-22MC-55-0017, 2022; B-23MC-55-0017, 2023 Award Period: 1/1/2019 – 9/1/2030 Compliance Requirements: Reporting Type of Finding: * Material Weakness in Internal Control over Compliance * Other Matters Criteria or specific requirement: Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System. In addition, 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires the City to implement and maintain a system of internal controls over federal grants. Condition: The City did not report any first tier subawards related to the CDBG grant program to the required federal reporting system for grant funds awarded during 2023. Questioned costs: None Context: The City did not report any of the subawards that required disclosure under the Federal Funding Accountability and Transparency Act. We noted that the City’s Community Development Department did not have procedures or documentation to ensure that this procedure was performed. Effect: The City failed to report first-tier subawards as required by federal law. Cause: The City had not performed a periodic evaluation of the requirements and internal controls surrounding the grant program to identify the requirement of the annual FFATA reporting requirement. Repeat Finding: No Recommendation: We recommend the City review the various grant requirements and laws surrounding the CDBG grant program and ensure that any written internal control or procedure manuals include all of the required compliance requirements. We also recommend that the City ensure multiple individuals are trained on the administration of the grant. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Community Development Block Grants/Entitlement Grants Assistance Listing Number: 14.218 Federal Award Identification Number and Year: B-19-MC-55-0017, 2019; B-20-MC-55-0017, 2020; B-20-MW-55-0017, 2020; B-21-MC-55-0017, 2021; B-22MC-55-0017, 2022; B-23MC-55-0017, 2023 Award Period: 1/1/2019 – 9/1/2030 Compliance Requirements: Reporting Type of Finding: * Material Weakness in Internal Control over Compliance * Other Matters Criteria or specific requirement: Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System. In addition, 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires the City to implement and maintain a system of internal controls over federal grants. Condition: The City did not report any first tier subawards related to the CDBG grant program to the required federal reporting system for grant funds awarded during 2023. Questioned costs: None Context: The City did not report any of the subawards that required disclosure under the Federal Funding Accountability and Transparency Act. We noted that the City’s Community Development Department did not have procedures or documentation to ensure that this procedure was performed. Effect: The City failed to report first-tier subawards as required by federal law. Cause: The City had not performed a periodic evaluation of the requirements and internal controls surrounding the grant program to identify the requirement of the annual FFATA reporting requirement. Repeat Finding: No Recommendation: We recommend the City review the various grant requirements and laws surrounding the CDBG grant program and ensure that any written internal control or procedure manuals include all of the required compliance requirements. We also recommend that the City ensure multiple individuals are trained on the administration of the grant. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of the Treasury Federal Program Name: State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Period: 3/3/2021 – 12/31/2026 Compliance Requirement: Procurement – Suspension and Debarment Type of Finding: * Significant Deficiency in Internal Control over Compliance * Other Matters Criteria or Specific Requirement: 2 CFR Section 200.214 requires non-federal entities to follow suspension and debarment regulations outlined in 2 CFR part 180. When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal 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. Condition: The City’s documentation of their search for suspension and debarment did not include the date the search was performed and therefore it was not possible to determine that the search was performed prior to the date of procurement. Questioned Costs: None Context: While performing audit procedures, it was noted that City management did not maintain documentation of the date that the search for suspension and debarment was performed and that it was prior to finalizing the procurement. Cause: The City did not have a procedure in place to require documentation be maintained that the search for suspension and department associated with procurement transactions in excess of the $25,000 threshold had been performed prior to procurement. Effect: Certain vendors could be used that are considered suspended or debarred by the federal government resulting in noncompliance. Repeat Finding: 2022-002 Recommendation: We recommend that the City review its policies over suspension and debarment review to ensure they are maintaining compliance and controls over verifying or contracting with vendors that are allowable. Views of Responsible Officials: There is no disagreement with the audit finding.