Audit 360057

FY End
2024-09-30
Total Expended
$392.67M
Findings
2
Programs
42
Organization: City of Dallas, Texas (TX)
Year: 2024 Accepted: 2025-06-26

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
567384 2024-001 Significant Deficiency - AB
1143826 2024-001 Significant Deficiency - AB

Programs

ALN Program Spent Major Findings
66.468 Capitalization Grants for Drinking Water State Revolving Funds $13.51M - 0
14.239 Covid-19 - Home Investment Partnerships Program $11.70M Yes 0
66.458 Capitalization Grants for Clean Water State Revolving Funds $9.70M - 0
14.248 Community Development Block Grants_section 108 Loan Guarantees $7.75M Yes 0
20.106 Covid-19 - Airport Improvement Program $3.86M - 0
14.239 Home Investment Partnerships Program $2.05M Yes 0
21.023 Covid-19 - Emergency Rental Assistance Program $1.84M - 0
14.218 Community Development Block Grants/entitlement Grants $1.34M Yes 0
20.106 Airport Improvement Program $1.21M - 0
14.231 Emergency Solutions Grant Program $1.09M - 0
14.218 Covid-19 - Community Development Block Grants/entitlement Grants $975,981 Yes 0
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $815,476 - 0
21.027 Covid-19 - Coronavirus State and Local Fiscal Recovery Funds $761,172 Yes 0
16.543 Missing Children's Assistance $629,226 - 0
20.600 State and Community Highway Safety $609,701 - 0
16.922 Equitable Sharing Program $365,456 - 0
21.016 Equitable Sharing $250,000 - 0
14.241 Housing Opportunities for Persons with Aids $234,682 - 0
97.111 Regional Catastrophic Preparedness Grant Program (rcpgp) $229,197 - 0
66.605 Performance Partnership Grants $179,222 - 0
10.557 Special Supplemental Nutrition Program for Women, Infants, and Children $173,720 Yes 0
45.024 Promotion of the Arts_grants to Organizations and Individuals $169,740 - 0
66.312 State Environmental Justice Cooperative Agreement Program $157,771 - 0
16.710 Public Safety Partnership and Community Policing Grants $150,272 - 0
20.513 Enhanced Mobility of Seniors and Individuals with Disabilities $123,491 - 0
66.034 Covid-19 - Surveys, Studies, Research, Investigations, Demonstrations, and Special Purpose Activities Relating to the Clean Air Act $113,942 - 0
14.401 Fair Housing Assistance Program_state and Local $92,015 - 0
66.039 National Clean Diesel Emissions Reduction Program $91,188 - 0
16.585 Drug Court Discretionary Grant Program $90,494 - 0
97.045 Cooperating Technical Partners $85,879 - 0
10.935 Urban Agriculture and Innovative Production $75,422 - 0
16.738 Edward Byrne Memorial Justice Assistance Grant Program $60,772 - 0
14.900 Lead-Based Paint Hazard Control in Privately-Owned Housing $33,996 - 0
66.818 Brownfields Assessment and Cleanup Cooperative Agreements $23,332 - 0
45.310 Grants to States $19,799 - 0
20.205 Highway Planning and Construction $18,100 Yes 0
20.616 National Priority Safety Programs $14,136 - 0
97.067 Homeland Security Grant Program $12,944 - 0
14.231 Covid-19 - Emergency Solutions Grant Program $10,644 - 0
66.034 Surveys, Studies, Research, Investigations, Demonstrations, and Special Purpose Activities Relating to the Clean Air Act $9,519 - 0
97.041 National Dam Safety Program $3,606 - 0
93.243 Substance Abuse and Mental Health Services_projects of Regional and National Significance $667 - 0

Contacts

Name Title Type
XP53F2W6RLF4 Lance Sehorn Auditee
2146703547 Sara Dempsey Auditor
No contacts on file

Notes to SEFA

Title: Relationship to Federal Financial Reports Accounting Policies: General The accompanying Schedule of Expenditures of Federal Awards presents the activity of all federal award programs of the City of Dallas, Texas (the City). The City’s reporting entity is defined in Note 1 to the City’s basic financial statements. All federal awards received directly by the primary government from federal agencies, as well as federal awards passed through other government agencies, are included in the scope of the Federal Single Audit requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) and are included on the Schedule of Expenditures of Federal Awards. Basis of Accounting The accompanying schedule of expenditures of federal awards is presented using the accrual basis of accounting, which is described in Note 1 to the City’s basic financial statements. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10% de minimis indirect cost rate. Grant expenditures reports as of September 30, 2024, which have been submitted to grantor agencies will, in some cases, differ slightly from amounts disclosed herein. The reports prepared for grantor agencies are typically prepared at a later date and often reflect refined estimates of year-end accruals. The reports will agree at termination of the grant as the discrepancies noted are timing differences.
Title: Commitments and Contingencies Accounting Policies: General The accompanying Schedule of Expenditures of Federal Awards presents the activity of all federal award programs of the City of Dallas, Texas (the City). The City’s reporting entity is defined in Note 1 to the City’s basic financial statements. All federal awards received directly by the primary government from federal agencies, as well as federal awards passed through other government agencies, are included in the scope of the Federal Single Audit requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) and are included on the Schedule of Expenditures of Federal Awards. Basis of Accounting The accompanying schedule of expenditures of federal awards is presented using the accrual basis of accounting, which is described in Note 1 to the City’s basic financial statements. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10% de minimis indirect cost rate. The City participates in several federal grant programs which are governed by various rules and regulations of the grantor agencies. Costs charged to the respective grant programs are subject to audit and adjustment by the grantor agencies; therefore, to the extent that the City has not complied with the rules and regulations governing the grants, refunds of any money received may be required and the collectability of any related receivable at September 30, 2024 may be impaired. Additionally, the City has received notification of potential non-compliance with certain federal programs and is responding to those letters. In the opinion of management, there are no significant contingent liabilities relating to compliance with the rules and regulations governing the respective grants.
Title: Loans Accounting Policies: General The accompanying Schedule of Expenditures of Federal Awards presents the activity of all federal award programs of the City of Dallas, Texas (the City). The City’s reporting entity is defined in Note 1 to the City’s basic financial statements. All federal awards received directly by the primary government from federal agencies, as well as federal awards passed through other government agencies, are included in the scope of the Federal Single Audit requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) and are included on the Schedule of Expenditures of Federal Awards. Basis of Accounting The accompanying schedule of expenditures of federal awards is presented using the accrual basis of accounting, which is described in Note 1 to the City’s basic financial statements. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10% de minimis indirect cost rate. Community Development Block Grants The City has outstanding loan balances for the Community Development Block Grant - Section 108 loans as of September 30, 2024 as follows (in thousands): See Notes to the SEFA for table. Clean Water State Revolving Loan Fund The City has outstanding loans payable under the Clean Water State Revolving Loan Fund from the Texas Water Development Board (TWDB), as a pass-through agency for the Environmental Protection Agency (Assistance Listing Number 66.458) as of September 30, 2024 as follows (in thousands): See Notes to the SEFA for table. Drinking Water State Revolving Loan Fund The City has outstanding loans payable under the Drinking Water State Revolving Loan Fund from the Texas Water Development Board (TWDB), as a pass-through agency for the Environmental Protection Agency (Assistance Listing Number 66.468) as of September 30, 2024 as follows (in thousands): See Notes to the SEFA for table.

Finding Details

Finding 2024-001: Significant Deficiency and known questioned costs related to activities allowed or unallowed and allowable costs/cost principles Major Program: HOME Investment Partnership Program Federal Agency: U.S. Department of Housing and Urban Development Assistant Listing Number: 14.239 Criteria: The City is responsible for ensuring compliance with all applicable provisions of the HOME Investment Partnerships Program (HOME) as prescribed by the U.S. Department of Housing and Urban Development. According to requirements included in the OMB Compliance Supplement, all HOME Funds may be used by participating jurisdictions to provide for: (a) incentives to develop and support affordable rental housing and homeownership affordability through the acquisition, new construction, reconstruction, or rehabilitation of non-luxury housing with suitable amenities, including real property acquisition, site improvements, conversion, demolition, and other expenses, including financing costs, relocation expenses of any displaced persons, families, businesses, or organizations; (b) tenant-based rental assistance, including security deposits; (c) the payment of reasonable administrative and planning costs; and (d) the payment of operating expenses of Community Housing Development Organizations (CHDOs). The housing must be permanent or transitional. The acquisition of vacant land or demolition can only be undertaken with respect to a particular housing project intended to provide affordable housing, and when construction is expected to begin within 12 months. Conversion of an existing structure to affordable housing is rehabilitation unless certain circumstances exist. Manufactured housing may be purchased or rehabilitated and the land upon which it is built may be purchased with HOME funds. HOME funds may be used to pay for development construction hard costs, refinancing costs, acquisition costs, related soft costs, CHDO costs, relocation costs, and costs related to the repayment of loans (24 CFR sections 92.205(a) and 92.206).” 2 CFR 200.516(a)(3) requires an audit finding to be reported for known questioned costs that are greater than $25,000 for a type of compliance requirement for a major program. Condition and Context: During testing of HOME activities allowed or unallowed and allowable costs/cost principles (AB) compliance requirements, it was noted that one (1) out of thirty-nine (39) disbursement transactions reviewed did not meet the AB compliance requirements. 2 CFR 200.305(b)(8) states that “a payment must not be made to a recipient or subrecipient for amounts that the recipient or subrecipient withholds from contractors to assure satisfactory completion of work. Payment must be made when the recipient or subrecipient disburses the withheld funds to the contractors or to escrow accounts established to ensure satisfactory completion of work.” The City requested reimbursement for retainage amounts that were not released as of September 30, 2024. Cause: The City had turnover in the project manager department related to HOME construction projects. The project manager turnover caused a miscommunication between the project managers and grant accounting employees which resulted in the request for reimbursement of retainage that had not yet been paid by the City. Effect or Potential Effect: The City received grant reimbursements related to expenditures that were not paid as of September 30, 2025. Known Questioned Costs: $112,539 from October 1st, 2023 through September 30th, 2024. These are for all projects that retainage was requested for reimbursement but the retainage was not released as of September 30, 2024. Repeat Finding: No Recommendation: We recommend the City continue to train its employees to on allowable activities and costs related to the HOME grant. View of Responsible Officials: See Corrective Action Plan on page 10
Finding 2024-001: Significant Deficiency and known questioned costs related to activities allowed or unallowed and allowable costs/cost principles Major Program: HOME Investment Partnership Program Federal Agency: U.S. Department of Housing and Urban Development Assistant Listing Number: 14.239 Criteria: The City is responsible for ensuring compliance with all applicable provisions of the HOME Investment Partnerships Program (HOME) as prescribed by the U.S. Department of Housing and Urban Development. According to requirements included in the OMB Compliance Supplement, all HOME Funds may be used by participating jurisdictions to provide for: (a) incentives to develop and support affordable rental housing and homeownership affordability through the acquisition, new construction, reconstruction, or rehabilitation of non-luxury housing with suitable amenities, including real property acquisition, site improvements, conversion, demolition, and other expenses, including financing costs, relocation expenses of any displaced persons, families, businesses, or organizations; (b) tenant-based rental assistance, including security deposits; (c) the payment of reasonable administrative and planning costs; and (d) the payment of operating expenses of Community Housing Development Organizations (CHDOs). The housing must be permanent or transitional. The acquisition of vacant land or demolition can only be undertaken with respect to a particular housing project intended to provide affordable housing, and when construction is expected to begin within 12 months. Conversion of an existing structure to affordable housing is rehabilitation unless certain circumstances exist. Manufactured housing may be purchased or rehabilitated and the land upon which it is built may be purchased with HOME funds. HOME funds may be used to pay for development construction hard costs, refinancing costs, acquisition costs, related soft costs, CHDO costs, relocation costs, and costs related to the repayment of loans (24 CFR sections 92.205(a) and 92.206).” 2 CFR 200.516(a)(3) requires an audit finding to be reported for known questioned costs that are greater than $25,000 for a type of compliance requirement for a major program. Condition and Context: During testing of HOME activities allowed or unallowed and allowable costs/cost principles (AB) compliance requirements, it was noted that one (1) out of thirty-nine (39) disbursement transactions reviewed did not meet the AB compliance requirements. 2 CFR 200.305(b)(8) states that “a payment must not be made to a recipient or subrecipient for amounts that the recipient or subrecipient withholds from contractors to assure satisfactory completion of work. Payment must be made when the recipient or subrecipient disburses the withheld funds to the contractors or to escrow accounts established to ensure satisfactory completion of work.” The City requested reimbursement for retainage amounts that were not released as of September 30, 2024. Cause: The City had turnover in the project manager department related to HOME construction projects. The project manager turnover caused a miscommunication between the project managers and grant accounting employees which resulted in the request for reimbursement of retainage that had not yet been paid by the City. Effect or Potential Effect: The City received grant reimbursements related to expenditures that were not paid as of September 30, 2025. Known Questioned Costs: $112,539 from October 1st, 2023 through September 30th, 2024. These are for all projects that retainage was requested for reimbursement but the retainage was not released as of September 30, 2024. Repeat Finding: No Recommendation: We recommend the City continue to train its employees to on allowable activities and costs related to the HOME grant. View of Responsible Officials: See Corrective Action Plan on page 10