Audit 365989

Federal Program, Assistance Listing # and Year, Federal Agency, Pass-Through Entity: Choice Neighborhoods Implementation Grants, Assistance Listing #14.889, 2024, U.S. Department of Housing and Urban Development, Office of Community Planning and Development. COVID-19 - Coronavirus State and Local Fiscal Recovery Fund, Assistance Listing #21.027, 2021, U.S. Department of Treasury. Criteria or Specific Requirement: 2 CFR 200.303 requires the entity to establish and maintain effective internal controls over compliance with respect to federal awards and Section 1111(b)(2)(A) of the ESEA for compliance accountability. Proper internal controls require supporting documentation to be retained as evidence for effectiveness of the controls in place. Also, 2 CFR 180 prohibits non-Federal entities from entering into covered transactions with suspended or debarred entities.’t t Condition: The City failed to establish and maintain effective controls over suspension and debarment. The City failed to provide evidence the City verified vendor’s suspension and debarment status prior to procurement. Effect: The City of Shreveport risks not being in compliance with their federal funding procurement compliance requirements. Cause: Purchasing Department/Management failed to follow City Procurement Policy and Procedure when contracting vendors. Questioned Costs: Not applicable Context: The issue was identified in a sample of 25 disbursements for each major program. Recommendation: We recommend the City follows their Procurement Policy when ensuring vendor status prior to contracting services. Views of responsible officials and corrective action plan: The City will strengthen the controls over the vendor debarment and suspension status review during the procurement process with the following steps: (1) the Finance Purchasing Division will communicate with the City Departments receiving federal awards to ensure the contracts are routed through Purchasing for verification of debarment and suspension compliance; (2) the Finance Purchasing Division will run a contract audit report periodically to review the Department contract documents for compliance; and (3) throughout the year, the Finance Department will review the grant expenditures for vendor activity not meeting requirements.

Federal Program, Assistance Listing # and Year, Federal Agency, Pass-Through Entity: Choice Neighborhoods Implementation Grants, Assistance Listing #14.889, 2024, U.S. Department of Housing and Urban Development, Office of Community Planning and Development. COVID-19 - Coronavirus State and Local Fiscal Recovery Fund, Assistance Listing #21.027, 2021, U.S. Department of Treasury. Criteria or Specific Requirement: 2 CFR 200.303 requires the entity to establish and maintain effective internal controls over compliance with respect to federal awards and Section 1111(b)(2)(A) of the ESEA for compliance accountability. Proper internal controls require supporting documentation to be retained as evidence for effectiveness of the controls in place. Also, 2 CFR 180 prohibits non-Federal entities from entering into covered transactions with suspended or debarred entities.’t t Condition: The City failed to establish and maintain effective controls over suspension and debarment. The City failed to provide evidence the City verified vendor’s suspension and debarment status prior to procurement. Effect: The City of Shreveport risks not being in compliance with their federal funding procurement compliance requirements. Cause: Purchasing Department/Management failed to follow City Procurement Policy and Procedure when contracting vendors. Questioned Costs: Not applicable Context: The issue was identified in a sample of 25 disbursements for each major program. Recommendation: We recommend the City follows their Procurement Policy when ensuring vendor status prior to contracting services. Views of responsible officials and corrective action plan: The City will strengthen the controls over the vendor debarment and suspension status review during the procurement process with the following steps: (1) the Finance Purchasing Division will communicate with the City Departments receiving federal awards to ensure the contracts are routed through Purchasing for verification of debarment and suspension compliance; (2) the Finance Purchasing Division will run a contract audit report periodically to review the Department contract documents for compliance; and (3) throughout the year, the Finance Department will review the grant expenditures for vendor activity not meeting requirements.

Federal Program, Assistance Listing # and Year, Federal Agency, Pass-Through Entity: COVID-19 - Coronavirus State & Local Fiscal Recovery Fund, Assistance Listing #21.027, 2021, U.S. Department of Treasury. Criteria or Specific Requirement: In accordance with 2 CFR 200.1, all recipients of federal funds must complete and submit annual project and expenditure reports on all SLFRF funded projects. Also, 2 CFR 200.303 requires the entity to establish and maintain effective internal controls over compliance with respect to federal awards and Section 1111(b)(2)(A) of the ESEA for compliance accountability. Proper internal controls require supporting documentation to be retained as evidence for effectiveness of the controls in place. In accordance with 2 CFR.307, program income earned during the period of performance must be used in accordance with the terms and conditions of the federal award. Condition: During our testing, CRI identified a lack of internal controls related to reviewing and approving report submissions. During our testing, CRI identified 2024 report submissions did not agree to cumulativeto- date expenditures of the fiscal years 2021-2024. During our testing, CRI identified revenue recognized/earned during the period was improperly reported as program income and expenditures were improperly included as program income expenditures, causing inaccurate reporting. Program income was materially overstated. Effect: The City of Shreveport risks reports required to be submitted to the U.S. Department of the Treasury to be materially misstated. Cause: A lack of adequate controls over reporting requirements. Questioned Costs: Not applicable Context: The issue was identified while testing the population of reports. Recommendation: We recommend the City implements proper controls to review reports submitted, so as to identify and address any discrepancies. Views of responsible officials and corrective action plan: Accounting has reviewed all projects and Ordinances related to ARPA and has updated reports and records to fully account for ARPA funding. From the Chief Administrative Officer (CAO) and the department responsible for a specific project that has multiple funding sources, confirmation was obtained on what amounts were obligated ARPA funds. This strengthens the controls over the report submission process to ensure the reported amounts are accurate and reconciled properly.

Federal Program, Assistance Listing # and Year, Federal Agency, Pass-Through Entity: Choice Neighborhoods Implementation Grants, Assistance Listing #14.889, 2024, U.S. Department of Housing and Urban Development, Office of Community Planning and Development. COVID-19 - Coronavirus State and Local Fiscal Recovery Fund, Assistance Listing #21.027, 2021, U.S. Department of Treasury. Criteria or Specific Requirement: 2 CFR 200.303 requires the entity to establish and maintain effective internal controls over compliance with respect to federal awards and Section 1111(b)(2)(A) of the ESEA for compliance accountability. Proper internal controls require supporting documentation to be retained as evidence for effectiveness of the controls in place. Also, 2 CFR 180 prohibits non-Federal entities from entering into covered transactions with suspended or debarred entities.’t t Condition: The City failed to establish and maintain effective controls over suspension and debarment. The City failed to provide evidence the City verified vendor’s suspension and debarment status prior to procurement. Effect: The City of Shreveport risks not being in compliance with their federal funding procurement compliance requirements. Cause: Purchasing Department/Management failed to follow City Procurement Policy and Procedure when contracting vendors. Questioned Costs: Not applicable Context: The issue was identified in a sample of 25 disbursements for each major program. Recommendation: We recommend the City follows their Procurement Policy when ensuring vendor status prior to contracting services. Views of responsible officials and corrective action plan: The City will strengthen the controls over the vendor debarment and suspension status review during the procurement process with the following steps: (1) the Finance Purchasing Division will communicate with the City Departments receiving federal awards to ensure the contracts are routed through Purchasing for verification of debarment and suspension compliance; (2) the Finance Purchasing Division will run a contract audit report periodically to review the Department contract documents for compliance; and (3) throughout the year, the Finance Department will review the grant expenditures for vendor activity not meeting requirements.

Federal Program, Assistance Listing # and Year, Federal Agency, Pass-Through Entity: Choice Neighborhoods Implementation Grants, Assistance Listing #14.889, 2024, U.S. Department of Housing and Urban Development, Office of Community Planning and Development. COVID-19 - Coronavirus State and Local Fiscal Recovery Fund, Assistance Listing #21.027, 2021, U.S. Department of Treasury. Criteria or Specific Requirement: 2 CFR 200.303 requires the entity to establish and maintain effective internal controls over compliance with respect to federal awards and Section 1111(b)(2)(A) of the ESEA for compliance accountability. Proper internal controls require supporting documentation to be retained as evidence for effectiveness of the controls in place. Also, 2 CFR 180 prohibits non-Federal entities from entering into covered transactions with suspended or debarred entities.’t t Condition: The City failed to establish and maintain effective controls over suspension and debarment. The City failed to provide evidence the City verified vendor’s suspension and debarment status prior to procurement. Effect: The City of Shreveport risks not being in compliance with their federal funding procurement compliance requirements. Cause: Purchasing Department/Management failed to follow City Procurement Policy and Procedure when contracting vendors. Questioned Costs: Not applicable Context: The issue was identified in a sample of 25 disbursements for each major program. Recommendation: We recommend the City follows their Procurement Policy when ensuring vendor status prior to contracting services. Views of responsible officials and corrective action plan: The City will strengthen the controls over the vendor debarment and suspension status review during the procurement process with the following steps: (1) the Finance Purchasing Division will communicate with the City Departments receiving federal awards to ensure the contracts are routed through Purchasing for verification of debarment and suspension compliance; (2) the Finance Purchasing Division will run a contract audit report periodically to review the Department contract documents for compliance; and (3) throughout the year, the Finance Department will review the grant expenditures for vendor activity not meeting requirements.

Federal Program, Assistance Listing # and Year, Federal Agency, Pass-Through Entity: COVID-19 - Coronavirus State & Local Fiscal Recovery Fund, Assistance Listing #21.027, 2021, U.S. Department of Treasury. Criteria or Specific Requirement: In accordance with 2 CFR 200.1, all recipients of federal funds must complete and submit annual project and expenditure reports on all SLFRF funded projects. Also, 2 CFR 200.303 requires the entity to establish and maintain effective internal controls over compliance with respect to federal awards and Section 1111(b)(2)(A) of the ESEA for compliance accountability. Proper internal controls require supporting documentation to be retained as evidence for effectiveness of the controls in place. In accordance with 2 CFR.307, program income earned during the period of performance must be used in accordance with the terms and conditions of the federal award. Condition: During our testing, CRI identified a lack of internal controls related to reviewing and approving report submissions. During our testing, CRI identified 2024 report submissions did not agree to cumulativeto- date expenditures of the fiscal years 2021-2024. During our testing, CRI identified revenue recognized/earned during the period was improperly reported as program income and expenditures were improperly included as program income expenditures, causing inaccurate reporting. Program income was materially overstated. Effect: The City of Shreveport risks reports required to be submitted to the U.S. Department of the Treasury to be materially misstated. Cause: A lack of adequate controls over reporting requirements. Questioned Costs: Not applicable Context: The issue was identified while testing the population of reports. Recommendation: We recommend the City implements proper controls to review reports submitted, so as to identify and address any discrepancies. Views of responsible officials and corrective action plan: Accounting has reviewed all projects and Ordinances related to ARPA and has updated reports and records to fully account for ARPA funding. From the Chief Administrative Officer (CAO) and the department responsible for a specific project that has multiple funding sources, confirmation was obtained on what amounts were obligated ARPA funds. This strengthens the controls over the report submission process to ensure the reported amounts are accurate and reconciled properly.