Audit 385675

Criteria: Per 24 CFR 570.902, a grantee is determined to not be carrying out its Community Development Block Grant activities in a timely manner, if sixty days prior to the end of the grantee's current program year, the amount of entitlement grant funds available to the City under grant agreements but undisbursed by the U.S. Treasury is more than 1.5 times the entitlement grant amount for its program year, and if the grantee fails to demonstrate to the grantor’s satisfaction that the lack of timeliness has resulted from factors beyond the grantee's reasonable control. Condition: We tested whether the City is in compliance with the timeliness standard pursuant to 24 CFR 570.902 by calculating the ratio of unspent funds in its line of credit to the amount of its current program year entitlement grant as of December 31, 2024. We noted the ratio is above the maximum ratio of 1.5. Cause: Program managers inadequately monitored program spending in order to timely initiate projects as laid out in the Action Plan. Effect: If the City does not meet the 1.5 timeliness requirement at the time the next 60-day ratio is measured, a future grant may be reduced by 100% of the amount exceeding the 1.5 standard. Perspective Information: This finding represents a systemic issue. Identification of Repeat Finding: 2023-001 Recommendation: We recommend that the City implement procedures to ensure the timeliness standard is met. View of Responsible Official: The City is in agreement with this finding and will complete and implement a corrective action plan.

Criteria: The City is required to provide the grantors with various quarterly, annual and final financial and performance reports that are due within time frames specified in grant agreements and contracts. Condition: We selected a sample of reports for the year ended December 31, 2024, to test the completeness and timeliness of report submissions. We noted the first three quarters of CDBG Cash on Hand reports were revised after the submission due dates, with the original submissions not kept on file as audit trails for timely submission. Cause: Lapse in recordkeeping procedures. Effect: Noncompliance with reporting requirements. Perspective Information: This finding represents a systemic issue. Identification of Repeat Finding: Finding 2023-002. Recommendation: We recommend that the City keeps all original report submissions on file as audit trails. View of Responsible Official: The City is in agreement with this finding and will complete and implement a corrective action plan.

Criteria: The City is required to comply with statutory and regulatory requirements governing procurement of goods and services over the bid threshold (N.J.S.A. 40A:11 and N.J.A.C. 5:34 or “Local Public Contracts Law and Regulation”). Condition: For 2 vendor procurements examined for proper bidding procedures, we noted public bidding was not done prior to the award of contracts or issuances of purchase orders related to the same projects that were, individually or in the aggregate, over the bid threshold. Cause: Inadequate procedures in place to review planned projects and vendor procurements to identify vendor costs that exceed the bid threshold in the aggregate to ensure all required bid procedures are performed and awards by governing body are completed prior to contracting with the vendor. Effect: Noncompliance with Local Public Contracts Law and Regulation. Recommendation: We recommend that the City implement procedures to review planned projects and vendor procurements to identify vendor project costs that exceed the bid threshold in the aggregate. We recommend communications are streamlined with the Purchasing Department to ensure any projects that may exceed the bid threshold are properly reviewed for bid requirements. We also recommend regular trainings over procurement statutes and regulations are conducted for all personnel involved in purchasing functions, including those responsible for planning and initiating projects, creating or reviewing and approving purchase orders and procuring goods and services. Procedures for reviewing purchase orders related to the same project for purposes of aggregation to achieve compliance with Local Public Contracts Law and Regulation should also be established. Management’s Response to Finding: The City is in agreement with this finding and will complete and implement a corrective action plan.

Criteria: The City is required to submit the federal single audit data collection form and reporting package by regulatory deadlines. Condition: The City’s regulatory financial statement audit was not completed within the single audit reporting deadline of September 30, 2025. Cause: Delays in the regulatory financial statement audit related to timeliness and accuracy of financial reporting. Effect: Late submission of the single audit data collection form and reporting package to the federal clearinghouse. Perspective Information: This finding represents a systemic issue. Recommendation: We recommend that the City implement procedures to ensure the audit is completed and submitted to the federal clearinghouse in a timely manner. View of Responsible Official: The City is in agreement with this finding and will complete and implement a corrective action plan.