Audit 394903

Section III Federal Awards Findings and Questioned Costs Reference Number: 2025-001 Federal Program Title: Community Development Block Grants / Entitlement Grants Federal Assistance Listing Number: 14.218 Federal Agency: U.S. Department of Housing and Urban Development (HUD) Pass-Through Entity: N/A Federal Award Number and Year: B-24-MC-06-0011; 2024 Name of Department: Human Services Category of Finding: Reporting Type of finding: Instance of Noncompliance; Significant Deficiency in Internal Control over Compliance Criteria: In accordance with Title 2 U.S. Code of Federal Regulations (CFR) Part 170 – Reporting Subaward and Executive Compensation Information, Appendix A to Part 170 – Award Term, Section I(a), prime awardees awarded a Federal grant are required to file a Federal Funding Accountability and Transparency Act (FFATA) report by the end of the month following the month in which the prime awardee awards any sub-grant equal to or greater than $30,000. Condition: The City did not comply with the Federal Funding Accountability and Transparency Act (FFATA) reporting requirements. The City did not submit the required FFATA subaward report into the FSRS system within the required timeframe, which is no later than the end of the month following the month in which the subaward was made. The City submitted the report after the required deadline as outlined in the table below. Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 7 0 3 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $1,382,685 $0 $1,047,859 $0 $0 Cause: The City had varying interpretations of the FFATA reporting timeline, which resulted in subaward reports being submitted outside the required reporting window. This occurred, in part, because stakeholders relied on differing interpretations of the timing requirements based on their understanding of the available guidance. Questioned Costs: Questioned costs were not identified. Context: Seven subawards requiring the submission of an subaward report were selected for testing from a total population of seven subrecipient awards. Three of the seven tested reports were not submitted in a timely manner. Effect: Because the required submission was not completed by the applicable due date, the City was not in compliance with the provisions of the FFATA reporting requirements. Recommendation: The Human Services Department which oversees this program should develop and document a standardized process to identify, track, and report all subaward agreements and modifications executed during the fiscal year that are subject to FFATA reporting requirements. Views of Responsible Officials and Planned Corrective Action: Management’s response is reported in the “Corrective Action Plan” section of this report.