Audit 339863

FY End
2024-06-30
Total Expended
$106.21M
Findings
10
Programs
56
Organization: City of Albuquerque (NM)
Year: 2024 Accepted: 2025-01-27

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
520233 2024-009 Significant Deficiency Yes L
520234 2024-010 Significant Deficiency - AB
520235 2024-011 Significant Deficiency - AB
520236 2024-012 Significant Deficiency - L
520237 2024-013 Significant Deficiency - L
1096675 2024-009 Significant Deficiency Yes L
1096676 2024-010 Significant Deficiency - AB
1096677 2024-011 Significant Deficiency - AB
1096678 2024-012 Significant Deficiency - L
1096679 2024-013 Significant Deficiency - L

Programs

ALN Program Spent Major Findings
20.507 Federal Transit Formula Grants $41.50M Yes 1
20.106 Airport Improvement Program, Covid-19 Airports Programs, and Infrastructure Investment and Jobs Act Programs $15.54M - 0
21.027 Coronavirus State and Local Fiscal Recovery Funds $9.66M Yes 1
14.218 Community Development Block Grants/entitlement Grants $7.40M Yes 1
16.710 Public Safety Partnership and Community Policing Grants $6.03M Yes 2
14.239 Home Investment Partnerships Program $3.95M - 0
20.205 Highway Planning and Construction $3.66M - 0
14.267 Continuum of Care Program $2.85M - 0
93.045 Special Programs for the Aging, Title Iii, Part C, Nutrition Services $1.95M - 0
93.600 Head Start $1.83M - 0
10.558 Child and Adult Care Food Program $1.09M - 0
66.001 Air Pollution Control Program Support $770,662 - 0
93.044 Special Programs for the Aging, Title Iii, Part B, Grants for Supportive Services and Senior Centers $766,412 - 0
20.256 Federal Transit--Formula Grants $699,384 Yes 0
10.559 Summer Food Service Program for Children $686,552 - 0
97.039 Hazard Mitigation Grant $666,084 - 0
93.052 National Family Caregiver Support, Title Iii, Part E $630,849 - 0
16.741 Dna Backlog Reduction Program $627,969 - 0
95.001 High Intensity Drug Trafficking Areas Program $580,890 - 0
14.231 Emergency Solutions Grant Program $556,083 - 0
16.738 Edward Byrne Memorial Justice Assistance Grant Program $467,616 - 0
20.500 Federal Transit Capital Investment Grants $363,179 Yes 0
16.753 Congressionally Recommended Awards $334,079 - 0
20.608 Minimum Penalties for Repeat Offenders for Driving While Intoxicated $296,018 - 0
66.034 Surveys, Studies, Research, Investigations, Demonstrations, and Special Purpose Activities Relating to the Clean Air Act $282,178 - 0
11.805 Mbda Business Center $261,730 - 0
93.053 Nutrition Services Incentive Program $197,728 - 0
93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance $176,555 - 0
97.141 Shelter and Services Program $175,539 - 0
94.011 Americorps Seniors Foster Grandparent Program (fgp) 94.011 $171,051 - 0
59.059 Congressional Grants $166,308 - 0
16.034 Coronavirus Emergency Supplemental Funding Program $133,717 - 0
97.U02 Tsa Law Enforcement Officer Reimbursement Program $133,644 - 0
97.042 Emergency Management Performance Grants $130,998 - 0
93.043 Special Programs for the Aging, Title Iii, Part D, Disease Prevention and Health Promotion Services $130,960 - 0
20.215 Highway Training and Education $126,621 - 0
21.023 Emergency Rental Assistance Program $113,280 - 0
94.016 Americorps Seniors Senior Companion Program (scp) 94.016 $83,137 - 0
16.838 Comprehensive Opioid, Stimulant, and Other Substances Use Program $69,257 - 0
97.072 National Explosives Detection Canine Team Program $67,333 - 0
16.588 Violence Against Women Formula Grants $64,152 - 0
66.046 Climate Pollution Reduction Grants $61,204 - 0
45.024 Promotion of the Arts Grants to Organizations and Individuals $51,000 - 0
94.013 Americorps Volunteers in Service to America 94.013 $50,000 - 0
93.048 Special Programs for the Aging, Title Iv, and Title Ii, Discretionary Projects $49,526 - 0
16.742 Paul Coverdell Forensic Sciences Improvement Grant Program $41,241 - 0
94.002 Americorps Seniors Retired and Senior Volunteer Program (rsvp) 94.002 $38,792 - 0
16.575 Crime Victim Assistance $34,381 - 0
93.074 Hospital Preparedness Program (hpp) and Public Health Emergency Preparedness (phep) Aligned Cooperative Agreements $33,298 - 0
20.600 State and Community Highway Safety $25,703 - 0
15.904 Historic Preservation Fund Grants-in-Aid $24,422 - 0
16.833 National Sexual Assault Kit Initiative $20,846 - 0
81.106 Transport of Transuranic Wastes to the Waste Isolation Pilot Plant: States and Tribal Concerns, Proposed Solutions $6,993 - 0
15.958 Route 66 Corridor Preservation $6,850 - 0
97.024 Emergency Food and Shelter National Board Program $1,187 - 0
93.137 Community Programs to Improve Minority Health Grant Program $-2,430 - 0

Contacts

Name Title Type
FXHXYLX5LWD8 Mari Hughes Auditee
5057683277 Laura Beltran-Schmitz Auditor
No contacts on file

Notes to SEFA

Title: NOTE A BASIS OF PRESENTATION Accounting Policies: The accompanying schedule of federal awards is prepared on the modified accrual basis of accounting. The schedule of federal awards includes expenditures of the City of Albuquerque. Such expenditures are recognized following the cost principles contained in OMB Circular A-87, Cost Principles for State, Local and Indian Tribal Governments, and Title 2, U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), where certain types of expenditures are not allowable or are limited as the reimbursement. The City has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The accompanying schedule of expenditures of federal awards (the “Schedule”) includes the federal grant activity of the City of Albuquerque (“City”) under program of the federal government for the year ended June 30, 2023. The information in this schedule is presented in accordance with the requirements of the Title 2-U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the schedule only presents a selected portion of the operations of the City, it is not intended to and does not present the financial position or changes in net position of the City.
Title: NOTE B SIGNIFICANT ACCOUNTING POLICY Accounting Policies: The accompanying schedule of federal awards is prepared on the modified accrual basis of accounting. The schedule of federal awards includes expenditures of the City of Albuquerque. Such expenditures are recognized following the cost principles contained in OMB Circular A-87, Cost Principles for State, Local and Indian Tribal Governments, and Title 2, U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), where certain types of expenditures are not allowable or are limited as the reimbursement. The City has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The accompanying schedule of federal awards is prepared on the modified accrual basis of accounting. The schedule of federal awards includes expenditures of the City of Albuquerque. Such expenditures are recognized following the cost principles contained in OMB Circular A-87, Cost Principles for State, Local and Indian Tribal Governments, and Title 2, U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), where certain types of expenditures are not allowable or are limited as the reimbursement. The City has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance.
Title: NOTE C SUB-RECIPIENTS OF GRANT AWARDS Accounting Policies: The accompanying schedule of federal awards is prepared on the modified accrual basis of accounting. The schedule of federal awards includes expenditures of the City of Albuquerque. Such expenditures are recognized following the cost principles contained in OMB Circular A-87, Cost Principles for State, Local and Indian Tribal Governments, and Title 2, U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), where certain types of expenditures are not allowable or are limited as the reimbursement. The City has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. See the Notes to the SEFA for chart/table
Title: NOTE D NON-CASH ASSISTANCE, LOANS, AND LOAN GUARANTEES Accounting Policies: The accompanying schedule of federal awards is prepared on the modified accrual basis of accounting. The schedule of federal awards includes expenditures of the City of Albuquerque. Such expenditures are recognized following the cost principles contained in OMB Circular A-87, Cost Principles for State, Local and Indian Tribal Governments, and Title 2, U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), where certain types of expenditures are not allowable or are limited as the reimbursement. The City has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. In accordance with Title 2, U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, the City discloses loans, and loan guarantees. The City considers the non-cash assistance amount to be immaterial and will fully disclose amounts in subsequent years. The reported amount includes new loans made during the year, plus prior year loans for which the federal government imposes continuing compliance requirements. Accordingly, the total expenditures per the Schedule of Expenditures of Federal Awards is adjusted as follows: Total expenditures per Schedule of Expenditures of Federal Awards $ 103,170,901 Loans and loan guarantees: HOME program 14.239 3,039,926 Adjusted total expenditures per Schedule of Expenditures of Federal Awards $ 106,210,827 The outstanding balance of the loans and loan guarantees as of June 30, 2024, is $3,039,926.
Title: NOTE E RECONCILIATION OF SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS TO FINANCIAL STATEMENTS Accounting Policies: The accompanying schedule of federal awards is prepared on the modified accrual basis of accounting. The schedule of federal awards includes expenditures of the City of Albuquerque. Such expenditures are recognized following the cost principles contained in OMB Circular A-87, Cost Principles for State, Local and Indian Tribal Governments, and Title 2, U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), where certain types of expenditures are not allowable or are limited as the reimbursement. The City has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. See the Notes to the SEFA for chart/table

Finding Details

2024 - 009 Reporting - Capital Expenditures (2023-005 and 2022-008) Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Assistance Listing Number: 21. 027 Federal Award Identification Number and Year: Pub. L. No. 117-2-2021 Award Period: 5/10/2021 - l 2/3 l /2026 Type of Finding • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the recipient and subrecipient must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. According to the 2022 Final Rule, for projects with total expected capital expenditures of $1 million or greater, recipients must complete and meet the substantive requirements of a written justification for their capital expenditure. Such written justification must include the following elements: (i) Describe the harm or need to be addressed; (ii) Explain why a capital expenditure is appropriate; and (iii) Compare the proposed capital expenditure to at least two alternative capital expenditures and demonstrate why the proposed capital expenditure is superior. Condition: During our testing, we noted two of the two written justifications did not include all the elements outlined in the 2022 Final Rule. Questioned costs: None Context: During our testing, it was noted that the written justifications for the WECH Kitchen and Gibson Medical Respite projects did not compare the proposed capital expenditure to at least two alternative capital expenditures and demonstrate why the proposed capital expenditure is superior. Total federal expenditures for WECH Kitchen and Gibson Medical Respite as of June 30, 2024 are $1,484,411 and $6,236,193, respectively. Cause: Management oversight. The City did not follow the requirements of a written justification for capital expenditures as outlined in the 2022 Final Rule. Effect: The auditor noted instances of noncompliance. Noncompliance results in inaccurate reporting. Recommendation: We recommend the City update the written justifications to include all the elements outlined in the 2022 Final Rule. Management Response: The City concurs with the finding. The City's Grant Administrator will work with the Department of Health, Housing and Homeless and the Department of Municipal Development to adequately document the comparison of capital expenditure options and demonstrate the superiority of the chosen capital project in the final written justifications. Timeline and Responsible Position: March 2025 - Grant Administrator
2024 - 010 Allowable Activities and Costs/Cost Principles - Payroll (2023-010 and 2022-005) Federal Agency: U.S. Department of Transportation Federal Program Name: Federal Transit Cluster - Federal Transit - Formula Grants Assistance Listing Number: 20.507 Federal Award Identification Number and Year: N1vl-2023-022-00 - 2023 N1vl-2023-036-00 - 2023 Award Period: 5/31/2023 - 9/30/2024 12/18/2023 - 6/30/2025 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the recipient and subrecipient must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. According to §200.511 Audit findings follow-up of 2 CFR Part 200, the auditee is responsible for follow-up and corrective action on all audit findings. At the completion of the audit, the auditee must prepare a corrective action plan to address each audit finding included in the auditor's report for the current year. According to the City's Corrective Action Plan for the year ended June 30, 2023, the Transit department has established a timeline for the completion and approval of the time card policy, and it is expected that the policy will take effect in April 2024. Condition: During our testing, we noted the City did not have adequate internal controls designed to ensure proper timecard approval. Management's Progress for Repeat Findings: This is a repeated and modified finding. While the City has improved its efforts, there are still opportunities for improvement to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements as well as compliance with City policy. Questioned costs: None Context: During our testing, it was noted that thirteen out of sixteen payroll disbursements did not have approval of the employees' timecards. Cause: The City has not implemented corrective action from the audit for the year ended June 30, 2023. The Transit department is working on the policy and in the final stages of getting the policy updated. Effect: The auditor noted no instances of noncompliance with the provisions of allowable activities and costs/cost principles; however, the lack of internal controls over these compliance requirements provides an opportunity for noncompliance. Recommendation: We recommend the City work to implement full corrective action. Management Response: The City concurs with the finding. Transit Department staff is in the process of developing a policy establishing internal controls over timekeeping and is near finalizing the policy. Once finalized, the policy will be reviewed with appropriate parties. Further, the Transit Department is exploring the purchase and implementation of additional software to assist with enacting these controls. Timeline and Responsible Position: April 2025 - Transit Department Director
2024 - 011 Allowable Activities and Costs/Cost Principles - Payroll Federal Agency: U.S. Department of Justice Federal Program Name: Public Safety Partnership and Community Policing Grants Assistance Listing Number: 16. 710 Federal Award Identification Number and Year: 2020ULWX0001 - 2020 Award Period: 7/1/2020 - 6/30/2024 Type of Finding • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the recipient and subrecipient must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. According to §200.403 Factors affecting allowability of costs of 2 CFR Part 200, costs must conform to any limitations or exclusions set forth in these principles or in the federal award as to types or amount of cost items. The FY 2020 COPS Hiring Program (CHP) award provides funding to law enforcement agencies to hire and/or rehire career law enforcement officers. Specific to the City, CHP funding is for forty new hires. According to the award, the City may only be reimbursed for the approved cost categories that are documented within the Financial Clearance Memorandum (FC:M). Condition: During our testing, we noted the City paid incentive pay with CHP funding. Also, we noted the City paid salaries and fringe benefits for four officers not listed in the Date of Hire - COPS Officer List with CHP funding. Questioned costs: $16,882.17 Context: During our testing, it was noted that the City paid incentive pay of $3,000.00 for the pay period end 12/01/2023. The FCM does not have a cost category for incentive pay. Also, it was noted that the City paid salaries and fringe benefits of $13,882.17 for four officers not listed in the Date of Hire - COPS Officer List provided to the federal agency. Cause: The City charged the incentive pay to the grant by mistake. The City transferred the four officers to the grant during its initial years. The City moved the original forty officers to the grant and transferred any officers off the grant back to their positions funded by the general fund. These officers should have been moved out. Effect: The auditor noted instances of noncompliance. Noncompliance results in potential pay back of federal funds. Recommendation: We recommend the City review costs charged to the grant to ensure the FCM has a cost category for the costs. We recommend the City review the officers charged to the grant to ensure they are listed in the he Date of Hire - COPS Officer List provided to the federal agency. For any questioned costs, we recommend the City work with the federal agency for resolution. Management Response: The City concurs with the finding. Albuquerque Police Department (APD) Grant Administrator will meet with the City Grant Administrator to review and prepare the necessary payroll corrections, ensuring that all payroll charges allocated to the grant are accurate. The APD Grant Administrator will be responsible for submitting correcting payroll reclassifications to the City's Grants Management Section for review, entry and approval no later than January 31, 2025. APD will work directly with the City's Grants Management Section to establish new reconciliation, reclassification and validation processes to ensure that only eligible officers and pay types are charged to the grant. Timeline and Responsible Position: January 2025 - APD Grant Administrator
2024 - 012 Reporting Federal Agency: U.S. Department of Justice Federal Program Name: Public Safety Partnership and Community Policing Grants Assistance Listing Number: 16. 710 Federal Award Identification Number and Year: l SJCOPS-23-GG-01715-TECP - 2023 Award Period: 12/29/2022 - 12/31 /2024 Type of Finding • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the recipient and subrecipient must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. According to Part 3 of the Compliance Supplement 2024, compliance testing of performance and special reports is only required for data, identified by agencies in parts 4 and 5 as key line items, that are quantifiable and are capable of evaluation against objective criteria stated in the statutes, regulations, contract or grant agreements pertaining to the program. Performance and special reports in parts 4 and 5 are assumed to meet the above criteria. However, if an agency does not identify key line items for a performance or special report, auditors are only required to test that the report was submitted in a timely manner and no other procedures are required. According to the terms and conditions of the award, the City is responsible for submitting semi-annual programmatic performance reports that describe project activities during the reporting period. Performance reports are due August 30 and March 1. Condition: During our testing, we noted one of the three performance reports was not submitted timely. Questioned costs: None Context: During our testing, it was noted that one of the three performance reports was not submitted timely. The performance report for the reporting period end date January 31 , 2024 and due March 1, 2024 was submitted on March 11 , 2024. Cause: Management oversight. The City did not submit the performance report by the due date. Effect: The auditor noted an instance of noncompliance. Noncompliance results in untimely submission of information to the federal agency. Recommendation: We recommend the City establish a reporting calendar. We recommend the City periodically reviews the completeness and accuracy of and adherence to the reporting calendar. Management Response: The City concurs with the finding. The APD Grant Administrator will establish a process to ensure that all programmatic reports are submitted on time by creating a spreadsheet to track the due dates for each programmatic report. Once the reports are submitted, it will be the responsibility of the Grant Coordinator to record the submission date. If a report is submitted late, the Grant Coordinator must contact the grantor by the end of the day to explain the reason for the delay. Timeline and Responsible Position: December 2024 -APD Grant Administrator
2024- 013 Reporting- Special FFATA Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Community Development Block Grant Program for Entitlement Communities Assistance Listing Number: 14.218 Federal Award Identification Number and Year: B-23-MC-35-0001 - 2023 Award Period: 7/1/2023 - 9/1/2030 Type of Finding • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of reporting. The City should have internal controls designed to ensure compliance with those provisions. Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred as the "Transparency Act" 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 (FSRS). The key data elements are to be accurately reported and supported by the source documentation. The action is to be reported in FSRS no later than the last day of the month following the month in which the subaward/subaward amendment obligation was made or the subcontract award/subcontract modification was made. Condition: During our testing, we noted the City did not have adequate internal controls designed to ensure the accuracy of the subaward project description for two of the four subawards. Also, the report was not timely for three of the four subawards. Lastly, the subaward amount was incorrect for one of the four subawards. Questioned costs: None Context: During our testing of special reporting under the requirements of the Federal Funding Accountability and Transparency Act (FFATA), we noted the following instances of noncompliance: transactions tested - 4, subawards not reported - 0; report not timely - 3; subaward amount incorrect - 1; subaward missing key elements - 2; dollar amount of tested transactions -#2,444,598.00; Subaward not reported - $0; Report not timely - $1,444,598; subaward amount incorrect - $1,179,000; Subaward missing key elements - $2,179,000.00 Cause: :tvfanagement oversight. Specific to report not timely, the delay was due to staff turnover. Specific to subaward amount incorrect, the difference was due to the amount used from the investment summary which included the Program Income. Effect: The auditor noted instances of noncompliance with special reporting under the requirements of the FF AT A Recommendation: We recommend the City establish a reporting calendar. We recommend the City periodically reviews the completeness and accuracy of and adherence to the reporting calendar. Also, we recommend the City implement a formal review process of the reporting of first-tier subawards of $30,000 or more to the FSRS. Management Response: The City concurs with the finding. The CDBG contract check list has been updated to include the FF AT A reporting requirement. The Fiscal CDBG Policies and procedures have been modified to include a section on FFATA reporting to be completed with the time frame set forth in the FF AT A requirements. Timeline and Responsible Position: December 2024 - Department of Health, Housing and Homelessness Fiscal Manager
2024 - 009 Reporting - Capital Expenditures (2023-005 and 2022-008) Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Assistance Listing Number: 21. 027 Federal Award Identification Number and Year: Pub. L. No. 117-2-2021 Award Period: 5/10/2021 - l 2/3 l /2026 Type of Finding • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the recipient and subrecipient must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. According to the 2022 Final Rule, for projects with total expected capital expenditures of $1 million or greater, recipients must complete and meet the substantive requirements of a written justification for their capital expenditure. Such written justification must include the following elements: (i) Describe the harm or need to be addressed; (ii) Explain why a capital expenditure is appropriate; and (iii) Compare the proposed capital expenditure to at least two alternative capital expenditures and demonstrate why the proposed capital expenditure is superior. Condition: During our testing, we noted two of the two written justifications did not include all the elements outlined in the 2022 Final Rule. Questioned costs: None Context: During our testing, it was noted that the written justifications for the WECH Kitchen and Gibson Medical Respite projects did not compare the proposed capital expenditure to at least two alternative capital expenditures and demonstrate why the proposed capital expenditure is superior. Total federal expenditures for WECH Kitchen and Gibson Medical Respite as of June 30, 2024 are $1,484,411 and $6,236,193, respectively. Cause: Management oversight. The City did not follow the requirements of a written justification for capital expenditures as outlined in the 2022 Final Rule. Effect: The auditor noted instances of noncompliance. Noncompliance results in inaccurate reporting. Recommendation: We recommend the City update the written justifications to include all the elements outlined in the 2022 Final Rule. Management Response: The City concurs with the finding. The City's Grant Administrator will work with the Department of Health, Housing and Homeless and the Department of Municipal Development to adequately document the comparison of capital expenditure options and demonstrate the superiority of the chosen capital project in the final written justifications. Timeline and Responsible Position: March 2025 - Grant Administrator
2024 - 010 Allowable Activities and Costs/Cost Principles - Payroll (2023-010 and 2022-005) Federal Agency: U.S. Department of Transportation Federal Program Name: Federal Transit Cluster - Federal Transit - Formula Grants Assistance Listing Number: 20.507 Federal Award Identification Number and Year: N1vl-2023-022-00 - 2023 N1vl-2023-036-00 - 2023 Award Period: 5/31/2023 - 9/30/2024 12/18/2023 - 6/30/2025 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the recipient and subrecipient must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. According to §200.511 Audit findings follow-up of 2 CFR Part 200, the auditee is responsible for follow-up and corrective action on all audit findings. At the completion of the audit, the auditee must prepare a corrective action plan to address each audit finding included in the auditor's report for the current year. According to the City's Corrective Action Plan for the year ended June 30, 2023, the Transit department has established a timeline for the completion and approval of the time card policy, and it is expected that the policy will take effect in April 2024. Condition: During our testing, we noted the City did not have adequate internal controls designed to ensure proper timecard approval. Management's Progress for Repeat Findings: This is a repeated and modified finding. While the City has improved its efforts, there are still opportunities for improvement to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements as well as compliance with City policy. Questioned costs: None Context: During our testing, it was noted that thirteen out of sixteen payroll disbursements did not have approval of the employees' timecards. Cause: The City has not implemented corrective action from the audit for the year ended June 30, 2023. The Transit department is working on the policy and in the final stages of getting the policy updated. Effect: The auditor noted no instances of noncompliance with the provisions of allowable activities and costs/cost principles; however, the lack of internal controls over these compliance requirements provides an opportunity for noncompliance. Recommendation: We recommend the City work to implement full corrective action. Management Response: The City concurs with the finding. Transit Department staff is in the process of developing a policy establishing internal controls over timekeeping and is near finalizing the policy. Once finalized, the policy will be reviewed with appropriate parties. Further, the Transit Department is exploring the purchase and implementation of additional software to assist with enacting these controls. Timeline and Responsible Position: April 2025 - Transit Department Director
2024 - 011 Allowable Activities and Costs/Cost Principles - Payroll Federal Agency: U.S. Department of Justice Federal Program Name: Public Safety Partnership and Community Policing Grants Assistance Listing Number: 16. 710 Federal Award Identification Number and Year: 2020ULWX0001 - 2020 Award Period: 7/1/2020 - 6/30/2024 Type of Finding • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the recipient and subrecipient must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. According to §200.403 Factors affecting allowability of costs of 2 CFR Part 200, costs must conform to any limitations or exclusions set forth in these principles or in the federal award as to types or amount of cost items. The FY 2020 COPS Hiring Program (CHP) award provides funding to law enforcement agencies to hire and/or rehire career law enforcement officers. Specific to the City, CHP funding is for forty new hires. According to the award, the City may only be reimbursed for the approved cost categories that are documented within the Financial Clearance Memorandum (FC:M). Condition: During our testing, we noted the City paid incentive pay with CHP funding. Also, we noted the City paid salaries and fringe benefits for four officers not listed in the Date of Hire - COPS Officer List with CHP funding. Questioned costs: $16,882.17 Context: During our testing, it was noted that the City paid incentive pay of $3,000.00 for the pay period end 12/01/2023. The FCM does not have a cost category for incentive pay. Also, it was noted that the City paid salaries and fringe benefits of $13,882.17 for four officers not listed in the Date of Hire - COPS Officer List provided to the federal agency. Cause: The City charged the incentive pay to the grant by mistake. The City transferred the four officers to the grant during its initial years. The City moved the original forty officers to the grant and transferred any officers off the grant back to their positions funded by the general fund. These officers should have been moved out. Effect: The auditor noted instances of noncompliance. Noncompliance results in potential pay back of federal funds. Recommendation: We recommend the City review costs charged to the grant to ensure the FCM has a cost category for the costs. We recommend the City review the officers charged to the grant to ensure they are listed in the he Date of Hire - COPS Officer List provided to the federal agency. For any questioned costs, we recommend the City work with the federal agency for resolution. Management Response: The City concurs with the finding. Albuquerque Police Department (APD) Grant Administrator will meet with the City Grant Administrator to review and prepare the necessary payroll corrections, ensuring that all payroll charges allocated to the grant are accurate. The APD Grant Administrator will be responsible for submitting correcting payroll reclassifications to the City's Grants Management Section for review, entry and approval no later than January 31, 2025. APD will work directly with the City's Grants Management Section to establish new reconciliation, reclassification and validation processes to ensure that only eligible officers and pay types are charged to the grant. Timeline and Responsible Position: January 2025 - APD Grant Administrator
2024 - 012 Reporting Federal Agency: U.S. Department of Justice Federal Program Name: Public Safety Partnership and Community Policing Grants Assistance Listing Number: 16. 710 Federal Award Identification Number and Year: l SJCOPS-23-GG-01715-TECP - 2023 Award Period: 12/29/2022 - 12/31 /2024 Type of Finding • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the recipient and subrecipient must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. According to Part 3 of the Compliance Supplement 2024, compliance testing of performance and special reports is only required for data, identified by agencies in parts 4 and 5 as key line items, that are quantifiable and are capable of evaluation against objective criteria stated in the statutes, regulations, contract or grant agreements pertaining to the program. Performance and special reports in parts 4 and 5 are assumed to meet the above criteria. However, if an agency does not identify key line items for a performance or special report, auditors are only required to test that the report was submitted in a timely manner and no other procedures are required. According to the terms and conditions of the award, the City is responsible for submitting semi-annual programmatic performance reports that describe project activities during the reporting period. Performance reports are due August 30 and March 1. Condition: During our testing, we noted one of the three performance reports was not submitted timely. Questioned costs: None Context: During our testing, it was noted that one of the three performance reports was not submitted timely. The performance report for the reporting period end date January 31 , 2024 and due March 1, 2024 was submitted on March 11 , 2024. Cause: Management oversight. The City did not submit the performance report by the due date. Effect: The auditor noted an instance of noncompliance. Noncompliance results in untimely submission of information to the federal agency. Recommendation: We recommend the City establish a reporting calendar. We recommend the City periodically reviews the completeness and accuracy of and adherence to the reporting calendar. Management Response: The City concurs with the finding. The APD Grant Administrator will establish a process to ensure that all programmatic reports are submitted on time by creating a spreadsheet to track the due dates for each programmatic report. Once the reports are submitted, it will be the responsibility of the Grant Coordinator to record the submission date. If a report is submitted late, the Grant Coordinator must contact the grantor by the end of the day to explain the reason for the delay. Timeline and Responsible Position: December 2024 -APD Grant Administrator
2024- 013 Reporting- Special FFATA Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Community Development Block Grant Program for Entitlement Communities Assistance Listing Number: 14.218 Federal Award Identification Number and Year: B-23-MC-35-0001 - 2023 Award Period: 7/1/2023 - 9/1/2030 Type of Finding • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of reporting. The City should have internal controls designed to ensure compliance with those provisions. Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred as the "Transparency Act" 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 (FSRS). The key data elements are to be accurately reported and supported by the source documentation. The action is to be reported in FSRS no later than the last day of the month following the month in which the subaward/subaward amendment obligation was made or the subcontract award/subcontract modification was made. Condition: During our testing, we noted the City did not have adequate internal controls designed to ensure the accuracy of the subaward project description for two of the four subawards. Also, the report was not timely for three of the four subawards. Lastly, the subaward amount was incorrect for one of the four subawards. Questioned costs: None Context: During our testing of special reporting under the requirements of the Federal Funding Accountability and Transparency Act (FFATA), we noted the following instances of noncompliance: transactions tested - 4, subawards not reported - 0; report not timely - 3; subaward amount incorrect - 1; subaward missing key elements - 2; dollar amount of tested transactions -#2,444,598.00; Subaward not reported - $0; Report not timely - $1,444,598; subaward amount incorrect - $1,179,000; Subaward missing key elements - $2,179,000.00 Cause: :tvfanagement oversight. Specific to report not timely, the delay was due to staff turnover. Specific to subaward amount incorrect, the difference was due to the amount used from the investment summary which included the Program Income. Effect: The auditor noted instances of noncompliance with special reporting under the requirements of the FF AT A Recommendation: We recommend the City establish a reporting calendar. We recommend the City periodically reviews the completeness and accuracy of and adherence to the reporting calendar. Also, we recommend the City implement a formal review process of the reporting of first-tier subawards of $30,000 or more to the FSRS. Management Response: The City concurs with the finding. The CDBG contract check list has been updated to include the FF AT A reporting requirement. The Fiscal CDBG Policies and procedures have been modified to include a section on FFATA reporting to be completed with the time frame set forth in the FF AT A requirements. Timeline and Responsible Position: December 2024 - Department of Health, Housing and Homelessness Fiscal Manager