Audit 371422

The City is required to comply with the Federal Funding Accountability and Transparency Act of 2006 (Transparency Act or FFATA) for direct grants. The Transparency Act was created to empower Americans with the ability to hold the government accountable for each spending decision and, as a result, to reduce wasteful spending by the government. The Transparency Act requires the federal government to make certain information on federal awards available to the public. In accordance with the Transparency Act, the City is required to report information about subgrants, or subawards, given to other governments or to nonprofit organizations, also referred to as subrecipients. Federal regulations [2 CFR 200.1] define a subaward as an award provided by a pass-through entity, in this case the City, to an entity to carry out part of a federal grant award received by the pass-through entity. A subrecipient is defined in federal regulations [2 CFR 200.1] as “an entity, usually but not limited to non-Federal entities, that receives a subaward from a pass-through entity to carry out part of a federal award; but does not include an individual that is a beneficiary of such award. A subrecipient may also be a recipient of other Federal awards directly from a federal awarding agency.” The City is required to submit FFATA information through the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Once the City submits a report to FSRS, the public can view information from the report, including the subrecipient’s name, subaward identification number, subaward obligation/action date, subaward amount, federal awarding agency and subagency, the City’s name, and the Citty’s grant award identification number. The City omitted the FFATA reports for CDBG. he City did not have a control over FFATA reporting. Without sufficient review and monitoring controls, the FFATA reporting required for the grant was not performed by the City. The City should implement internal controls for CDBG and all direct grants by developing policies and procedures to ensure that it complies with requirements under the Federal Funding Accountability and Transparency Act. These procedures should include requirements to maintain supporting documentation, including evidence of timely submission and subaward documentation for awards made to subrecipients, as required. The City agrees with the finding and has put together a correction action plan for the finding. See corrective action plan included in this report.