2024‐002 INTERNAL CONTROL DOCUMENTATION
Federal Program Information: Federal Agency and Program Name Federal Assistance
Listing Number
U.S. Department of Housing and Urban Development
Community Development Block Grants/Entitlement Grants
14.218
Criteria: 2 CFR 200.303 requires that a non‐federal entity must “(a) establish and maintain
effective internal control over the Federal award that provides reasonable assurance that
the non‐Federal entity is managing the Federal award in compliance with Federal
statutes, regulations, and the terms and conditions of the Federal award. These internal
controls should be in compliance with guidance in “Standards for Internal Control in the
Federal Government” issued by the Comptroller General of the United States and the
“Internal Control Integrated Framework”, issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).”
Condition: The City’s policies provide for review and approval of documentation and reports related
to program compliance requirements however, evidence supporting the review for
internal control purposes was not consistently documented or retained.
Questioned Costs: Unknown
Context: Total federal expenditures for the Community Development Block Grants/Entitlement
Grants were $3,436,560 for the year ended June 30, 2024.
Cause: The City did not retain adequate documentation supporting the review and approval of
documentation.
Effect: The City may not be in compliance with related program compliance requirements.
Recommendation: We recommend that the City enhance their policies to ensure that documentation of
review and approvals are maintained as evidence of controls with the specified
requirements.
Views of Responsible Officials: Management acknowledges the finding. See corrective action plan.
2024–003 ALLOWABILITY‐PAYROLL
Federal Program Information: Federal Agency and Program Name Assistance Listing #
U.S. Department of Housing and Urban
Development
Community Development Block
Grants/Entitlement Grants
14.218
Criteria: 2 CFR 200.303 requires that a non‐federal entity must “(a) establish and maintain
effective internal control over the Federal award that provides reasonable assurance
that the non‐Federal entity is managing the Federal award in compliance with Federal
statutes, regulations, and the terms and conditions of the Federal award. These
internal controls should be in compliance with guidance in “Standards for Internal
Control in the Federal Government” issued by the Comptroller General of the United
States and the “Internal Control Integrated Framework”, issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).
2 CFR 200.430(g)(1) states, “Charges to Federal awards for salaries and wages must be
based on records that accurately reflect the work performed. These records must: (i)
Be supported by a system of internal control that provides reasonable assurance that
the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into
the official records of the recipient or subrecipient; (iii) Reasonably reflect the total
activity for which the employee is compensated by the recipient or subrecipient, not
exceeding 100 percent of compensated activities (for IHEs, this is the IBS); (iv)
Encompass federally‐assisted and all other activities compensated by the recipient or
subrecipient on an integrated basis but may include the use of subsidiary records as
defined in the recipient's or subrecipient's written policy; (v) Comply with the
established accounting policies and procedures of the recipient or subrecipient (See
paragraph (i)(1)(ii) of this section for treatment of incidental work for IHEs.); and (vi)
Support the distribution of the employee's salary or wages among specific activities or
cost objectives if the employee works on more than one Federal award; a Federal
award and non‐Federal award; an indirect cost activity and a direct cost activity; two
or more indirect activities allocated using different allocation bases; or an unallowable
activity and a direct or indirect cost activity.
2 CFR 200.403 indicates that costs must “be consistent with policies and procedures
that apply uniformly to both federally‐financed and other activities of the non‐Federal
entity” and must “be adequately documented”.
Condition: For 6 of the 17 payroll transactions selected for testing the individual’s hourly rate of
pay charged to the federal program was not consistent with actual pay rates.
Documentation supporting the difference in rate paid and rate reimbursed from the
federal program was not available.
Questioned Costs: $69
Context: Total federal expenditures for the Community Development Block Grant program
were $3,436,560. The 6 payroll transactions represent $8,906 of the total payroll
transactions tested of $24,915 for the program. Total payroll charged to the grant
was $292,826.
Cause: The City does not have adequate internal controls and policies and procedures in
place to ensure that the payroll amounts reimbursed from the federal funds
correspond to the payroll rates in the underlying payroll accounting records.
Effect: The City is not be in compliance with federal statues, regulations, and terms of the
conditions of the federal award. Expenditures were paid that are not allowable. The
Authority may not identify noncompliance with federal statues, regulations, and
terms of the conditions of the federal award including allowability.
Recommendation: We recommend that City enhance internal controls to ensure that expenditures charged to the federal awards are properly reviewed and supported.
Views of Responsible Officials: Management acknowledges the finding. See corrective action plan.
2024‐002 INTERNAL CONTROL DOCUMENTATION
Federal Program Information: Federal Agency and Program Name Federal Assistance
Listing Number
U.S. Department of Housing and Urban Development
Community Development Block Grants/Entitlement Grants
14.218
Criteria: 2 CFR 200.303 requires that a non‐federal entity must “(a) establish and maintain
effective internal control over the Federal award that provides reasonable assurance that
the non‐Federal entity is managing the Federal award in compliance with Federal
statutes, regulations, and the terms and conditions of the Federal award. These internal
controls should be in compliance with guidance in “Standards for Internal Control in the
Federal Government” issued by the Comptroller General of the United States and the
“Internal Control Integrated Framework”, issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).”
Condition: The City’s policies provide for review and approval of documentation and reports related
to program compliance requirements however, evidence supporting the review for
internal control purposes was not consistently documented or retained.
Questioned Costs: Unknown
Context: Total federal expenditures for the Community Development Block Grants/Entitlement
Grants were $3,436,560 for the year ended June 30, 2024.
Cause: The City did not retain adequate documentation supporting the review and approval of
documentation.
Effect: The City may not be in compliance with related program compliance requirements.
Recommendation: We recommend that the City enhance their policies to ensure that documentation of
review and approvals are maintained as evidence of controls with the specified
requirements.
Views of Responsible Officials: Management acknowledges the finding. See corrective action plan.
2024–003 ALLOWABILITY‐PAYROLL
Federal Program Information: Federal Agency and Program Name Assistance Listing #
U.S. Department of Housing and Urban
Development
Community Development Block
Grants/Entitlement Grants
14.218
Criteria: 2 CFR 200.303 requires that a non‐federal entity must “(a) establish and maintain
effective internal control over the Federal award that provides reasonable assurance
that the non‐Federal entity is managing the Federal award in compliance with Federal
statutes, regulations, and the terms and conditions of the Federal award. These
internal controls should be in compliance with guidance in “Standards for Internal
Control in the Federal Government” issued by the Comptroller General of the United
States and the “Internal Control Integrated Framework”, issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).
2 CFR 200.430(g)(1) states, “Charges to Federal awards for salaries and wages must be
based on records that accurately reflect the work performed. These records must: (i)
Be supported by a system of internal control that provides reasonable assurance that
the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into
the official records of the recipient or subrecipient; (iii) Reasonably reflect the total
activity for which the employee is compensated by the recipient or subrecipient, not
exceeding 100 percent of compensated activities (for IHEs, this is the IBS); (iv)
Encompass federally‐assisted and all other activities compensated by the recipient or
subrecipient on an integrated basis but may include the use of subsidiary records as
defined in the recipient's or subrecipient's written policy; (v) Comply with the
established accounting policies and procedures of the recipient or subrecipient (See
paragraph (i)(1)(ii) of this section for treatment of incidental work for IHEs.); and (vi)
Support the distribution of the employee's salary or wages among specific activities or
cost objectives if the employee works on more than one Federal award; a Federal
award and non‐Federal award; an indirect cost activity and a direct cost activity; two
or more indirect activities allocated using different allocation bases; or an unallowable
activity and a direct or indirect cost activity.
2 CFR 200.403 indicates that costs must “be consistent with policies and procedures
that apply uniformly to both federally‐financed and other activities of the non‐Federal
entity” and must “be adequately documented”.
Condition: For 6 of the 17 payroll transactions selected for testing the individual’s hourly rate of
pay charged to the federal program was not consistent with actual pay rates.
Documentation supporting the difference in rate paid and rate reimbursed from the
federal program was not available.
Questioned Costs: $69
Context: Total federal expenditures for the Community Development Block Grant program
were $3,436,560. The 6 payroll transactions represent $8,906 of the total payroll
transactions tested of $24,915 for the program. Total payroll charged to the grant
was $292,826.
Cause: The City does not have adequate internal controls and policies and procedures in
place to ensure that the payroll amounts reimbursed from the federal funds
correspond to the payroll rates in the underlying payroll accounting records.
Effect: The City is not be in compliance with federal statues, regulations, and terms of the
conditions of the federal award. Expenditures were paid that are not allowable. The
Authority may not identify noncompliance with federal statues, regulations, and
terms of the conditions of the federal award including allowability.
Recommendation: We recommend that City enhance internal controls to ensure that expenditures charged to the federal awards are properly reviewed and supported.
Views of Responsible Officials: Management acknowledges the finding. See corrective action plan.
2024‐002 INTERNAL CONTROL DOCUMENTATION
Federal Program Information: Federal Agency and Program Name Federal Assistance
Listing Number
U.S. Department of Housing and Urban Development
Community Development Block Grants/Entitlement Grants
14.218
Criteria: 2 CFR 200.303 requires that a non‐federal entity must “(a) establish and maintain
effective internal control over the Federal award that provides reasonable assurance that
the non‐Federal entity is managing the Federal award in compliance with Federal
statutes, regulations, and the terms and conditions of the Federal award. These internal
controls should be in compliance with guidance in “Standards for Internal Control in the
Federal Government” issued by the Comptroller General of the United States and the
“Internal Control Integrated Framework”, issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).”
Condition: The City’s policies provide for review and approval of documentation and reports related
to program compliance requirements however, evidence supporting the review for
internal control purposes was not consistently documented or retained.
Questioned Costs: Unknown
Context: Total federal expenditures for the Community Development Block Grants/Entitlement
Grants were $3,436,560 for the year ended June 30, 2024.
Cause: The City did not retain adequate documentation supporting the review and approval of
documentation.
Effect: The City may not be in compliance with related program compliance requirements.
Recommendation: We recommend that the City enhance their policies to ensure that documentation of
review and approvals are maintained as evidence of controls with the specified
requirements.
Views of Responsible Officials: Management acknowledges the finding. See corrective action plan.
2024–003 ALLOWABILITY‐PAYROLL
Federal Program Information: Federal Agency and Program Name Assistance Listing #
U.S. Department of Housing and Urban
Development
Community Development Block
Grants/Entitlement Grants
14.218
Criteria: 2 CFR 200.303 requires that a non‐federal entity must “(a) establish and maintain
effective internal control over the Federal award that provides reasonable assurance
that the non‐Federal entity is managing the Federal award in compliance with Federal
statutes, regulations, and the terms and conditions of the Federal award. These
internal controls should be in compliance with guidance in “Standards for Internal
Control in the Federal Government” issued by the Comptroller General of the United
States and the “Internal Control Integrated Framework”, issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).
2 CFR 200.430(g)(1) states, “Charges to Federal awards for salaries and wages must be
based on records that accurately reflect the work performed. These records must: (i)
Be supported by a system of internal control that provides reasonable assurance that
the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into
the official records of the recipient or subrecipient; (iii) Reasonably reflect the total
activity for which the employee is compensated by the recipient or subrecipient, not
exceeding 100 percent of compensated activities (for IHEs, this is the IBS); (iv)
Encompass federally‐assisted and all other activities compensated by the recipient or
subrecipient on an integrated basis but may include the use of subsidiary records as
defined in the recipient's or subrecipient's written policy; (v) Comply with the
established accounting policies and procedures of the recipient or subrecipient (See
paragraph (i)(1)(ii) of this section for treatment of incidental work for IHEs.); and (vi)
Support the distribution of the employee's salary or wages among specific activities or
cost objectives if the employee works on more than one Federal award; a Federal
award and non‐Federal award; an indirect cost activity and a direct cost activity; two
or more indirect activities allocated using different allocation bases; or an unallowable
activity and a direct or indirect cost activity.
2 CFR 200.403 indicates that costs must “be consistent with policies and procedures
that apply uniformly to both federally‐financed and other activities of the non‐Federal
entity” and must “be adequately documented”.
Condition: For 6 of the 17 payroll transactions selected for testing the individual’s hourly rate of
pay charged to the federal program was not consistent with actual pay rates.
Documentation supporting the difference in rate paid and rate reimbursed from the
federal program was not available.
Questioned Costs: $69
Context: Total federal expenditures for the Community Development Block Grant program
were $3,436,560. The 6 payroll transactions represent $8,906 of the total payroll
transactions tested of $24,915 for the program. Total payroll charged to the grant
was $292,826.
Cause: The City does not have adequate internal controls and policies and procedures in
place to ensure that the payroll amounts reimbursed from the federal funds
correspond to the payroll rates in the underlying payroll accounting records.
Effect: The City is not be in compliance with federal statues, regulations, and terms of the
conditions of the federal award. Expenditures were paid that are not allowable. The
Authority may not identify noncompliance with federal statues, regulations, and
terms of the conditions of the federal award including allowability.
Recommendation: We recommend that City enhance internal controls to ensure that expenditures charged to the federal awards are properly reviewed and supported.
Views of Responsible Officials: Management acknowledges the finding. See corrective action plan.
2024‐002 INTERNAL CONTROL DOCUMENTATION
Federal Program Information: Federal Agency and Program Name Federal Assistance
Listing Number
U.S. Department of Housing and Urban Development
Community Development Block Grants/Entitlement Grants
14.218
Criteria: 2 CFR 200.303 requires that a non‐federal entity must “(a) establish and maintain
effective internal control over the Federal award that provides reasonable assurance that
the non‐Federal entity is managing the Federal award in compliance with Federal
statutes, regulations, and the terms and conditions of the Federal award. These internal
controls should be in compliance with guidance in “Standards for Internal Control in the
Federal Government” issued by the Comptroller General of the United States and the
“Internal Control Integrated Framework”, issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).”
Condition: The City’s policies provide for review and approval of documentation and reports related
to program compliance requirements however, evidence supporting the review for
internal control purposes was not consistently documented or retained.
Questioned Costs: Unknown
Context: Total federal expenditures for the Community Development Block Grants/Entitlement
Grants were $3,436,560 for the year ended June 30, 2024.
Cause: The City did not retain adequate documentation supporting the review and approval of
documentation.
Effect: The City may not be in compliance with related program compliance requirements.
Recommendation: We recommend that the City enhance their policies to ensure that documentation of
review and approvals are maintained as evidence of controls with the specified
requirements.
Views of Responsible Officials: Management acknowledges the finding. See corrective action plan.
2024–003 ALLOWABILITY‐PAYROLL
Federal Program Information: Federal Agency and Program Name Assistance Listing #
U.S. Department of Housing and Urban
Development
Community Development Block
Grants/Entitlement Grants
14.218
Criteria: 2 CFR 200.303 requires that a non‐federal entity must “(a) establish and maintain
effective internal control over the Federal award that provides reasonable assurance
that the non‐Federal entity is managing the Federal award in compliance with Federal
statutes, regulations, and the terms and conditions of the Federal award. These
internal controls should be in compliance with guidance in “Standards for Internal
Control in the Federal Government” issued by the Comptroller General of the United
States and the “Internal Control Integrated Framework”, issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).
2 CFR 200.430(g)(1) states, “Charges to Federal awards for salaries and wages must be
based on records that accurately reflect the work performed. These records must: (i)
Be supported by a system of internal control that provides reasonable assurance that
the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into
the official records of the recipient or subrecipient; (iii) Reasonably reflect the total
activity for which the employee is compensated by the recipient or subrecipient, not
exceeding 100 percent of compensated activities (for IHEs, this is the IBS); (iv)
Encompass federally‐assisted and all other activities compensated by the recipient or
subrecipient on an integrated basis but may include the use of subsidiary records as
defined in the recipient's or subrecipient's written policy; (v) Comply with the
established accounting policies and procedures of the recipient or subrecipient (See
paragraph (i)(1)(ii) of this section for treatment of incidental work for IHEs.); and (vi)
Support the distribution of the employee's salary or wages among specific activities or
cost objectives if the employee works on more than one Federal award; a Federal
award and non‐Federal award; an indirect cost activity and a direct cost activity; two
or more indirect activities allocated using different allocation bases; or an unallowable
activity and a direct or indirect cost activity.
2 CFR 200.403 indicates that costs must “be consistent with policies and procedures
that apply uniformly to both federally‐financed and other activities of the non‐Federal
entity” and must “be adequately documented”.
Condition: For 6 of the 17 payroll transactions selected for testing the individual’s hourly rate of
pay charged to the federal program was not consistent with actual pay rates.
Documentation supporting the difference in rate paid and rate reimbursed from the
federal program was not available.
Questioned Costs: $69
Context: Total federal expenditures for the Community Development Block Grant program
were $3,436,560. The 6 payroll transactions represent $8,906 of the total payroll
transactions tested of $24,915 for the program. Total payroll charged to the grant
was $292,826.
Cause: The City does not have adequate internal controls and policies and procedures in
place to ensure that the payroll amounts reimbursed from the federal funds
correspond to the payroll rates in the underlying payroll accounting records.
Effect: The City is not be in compliance with federal statues, regulations, and terms of the
conditions of the federal award. Expenditures were paid that are not allowable. The
Authority may not identify noncompliance with federal statues, regulations, and
terms of the conditions of the federal award including allowability.
Recommendation: We recommend that City enhance internal controls to ensure that expenditures charged to the federal awards are properly reviewed and supported.
Views of Responsible Officials: Management acknowledges the finding. See corrective action plan.