Audit 407369

Significant deficiency in internal controls over compliance related to allowable costs. Federal Agencies: Department of Treasury and Department of Housing and Urban Development Program Titles: Coronavirus State and Local Fiscal Recovery Fund and CDBG Entitlement/Special Purpose Grants Cluster Assistance Listing Numbers: 21.027 and 14.218 Award Numbers: City of Monroe ARPA Awards, HCS-23-AR-2110-048, EL-23-AR-48-048, EL-23-AR-47-048, and SLFRP0194. HCS-22-26-2205-048, CDBG - MH & TS, and Unknown Project Period: November 1, 2021 - September 30, 2025 and July 1, 2023 - June 30, 2026 Criteria Under 2 CFR § 200.303, a nonfederal entity is required to establish, document, and maintain effective internal control over federal awards that provides reasonable assurance that the entity is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition/Context for Evaluation During the audit for the year ending June 30, 2024, it was noted that the Agency did not consistently have manager review and approval for employee timesheets during a period of six months. The employees were signing the timesheets, but the control for the manager review and approval was not followed. Questioned Costs Not applicable. Cause The Agency had switched payroll systems during that time and there was an expectation that there would be a change in the review process. The updated control was determined not to be effective and the Agency switched back to manual review and approval of timesheets. However, due to employee turnover in the finance department, this switch back to the original control did not occur timely, leading to a lapse in control activities. Effect or Potential Effect The Agency did not apply their stated controls over allowable costs during a six-month period. Repeat Finding Not Applicable. Recommendation We recommend that the Agency strengthen monitoring over its allowable costs to ensure manager review and approval of employee timesheets is performed consistently and timely throughout the year. Views of Responsible Officials of Auditee Management concurs with the finding and has provided the accompanying management corrective action.

Material weakness in internal controls over compliance and instances of noncompliance related to subrecipient monitoring. Federal Agency: Department of Treasury Program Title: Coronavirus State and Local Fiscal Recovery Fund Assistance Listing Number: 21.027 Award Numbers: HCS-23-AR-2110-048, SLFRP0194 Project Period: November 1, 2021 - March 31, 2025 Criteria 2 U.S. Code of Federal Regulations (CFR) 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Subpart D requires a pass-through entity to adopt compliance policies to ensure sub-recipients comply with requirements under the award, and evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of such agreements for the purposes of determining appropriate subrecipient monitoring. Condition/Context for Evaluation During the audit for the year ending June 30, 2024, the Agency did not have a subrecipient monitoring policy and did not conduct monitoring over subrecipients awarded under the program. Questioned Costs Not applicable. Cause The Agency’s subrecipient monitoring policy did not include all the required provisions outlined in 2 CFR 200.332. Effect or Potential Effect The Organization did not fully comply with the requirements regarding subrecipient monitoring. Repeat Finding Yes, see finding 2023-002. Recommendation We recommend that the Agency develop a subrecipient monitoring policy that meets the required provisions outlined in 2 CFR 200.332 and ensure a risk assessment is performed over all subrecipients. Views of Responsible Officials of Auditee Management concurs with the finding and has provided the accompanying management corrective action.