Audit 384579

U.S. Department of Housing and Urban Development Federal Program Name: Home Investment Partnership Program Assistance Listing Number 14.239 Subrecipient Monitoring Material Weakness and Material Noncompliance Finding 2025-002 Criteria: Section 200.303 of the Uniform Grant Guidance states that a non-federal entity must 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. Additionally, according to section 200.332 of the Uniform Grant Guidance, a non-federal entity must monitor the activities of the subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. Non-federal entities must also verify that a subrecipient is audited as required by the Uniform Grant Guidance. Condition: The City did not perform monitoring for subrecipient eligibility determinations and did not verify subrecipients were audited as required by the Uniform Grant Guidance. Effect: The City could be reimbursing subrecipients for unallowable costs. Cause: The City did not have an adequate process in place to ensure reviews of subrecipient activities were being completed and required audits were being completed. Questioned Costs: $262,000 Recommendation: We recommend the City ensure its subrecipient monitoring policies are followed and include procedures to review audit reports of subrecipients and review of subrecipient monitoring eligibility determinations. Views of responsible officials: Management agrees with the finding and is implementing procedures to correct this, which is further discussed in the corrective action plan.

U.S. Department of Housing and Urban Development Federal Program Name: Community Development Block Grant Assistance Listing Number 14.218 Reporting Significant Deficiency and Nonmaterial Noncompliance Finding 2025-003 Criteria: Section 170 Appendix A of the Uniform Guidance states that unless the direct recipient is exempt, the direct recipient must report each subaward that equals or exceeds $30,000 in Federal funds for a subaward to an entity or Federal agency. The recipient must also report a subaward if a modification increases the Federal funding to an amount that equals or exceeds $30,000. All reported subawards should reflect the total amount of the subaward. According to section 200.303 of the Uniform Grant Guidance, a non-federal entity must 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. Condition: The City did not report subrecipient awards as required per the Federal Funding Accountability and Transparency Act (FFATA) and the Uniform Grant Guidance. Questioned Costs: None reported. Effect: The City is not in compliance with reporting requirements of the Uniform Grant Guidance. Cause: The City did not have an adequate process in place to ensure subrecipient awards were timely reported to the Federal agency. Recommendation: We recommend the City ensure their subrecipient monitoring policies are followed and include procedures to ensure awards are reported timely to the respective Federal agency. Views of responsible officials: Management agrees with the finding and is implementing procedures to correct this, which is further discussed in the corrective action plan.