Audit 412315

2025-003: Workforce Investment Opportunity Cluster – Assistance Listing #17.258 / 17.259 / 17.278, Subrecipient Monitoring – Material Noncompliance (Material Weakness) Condition During our review of subrecipient monitoring, we noted that the City’s monitoring was not performed according to the formal written policy. There was a lack of evidence of testing and suggestions to the subrecipient during the fiscal year 2025. Criteria According to 2CFR 200.331(a) of the OMB Compliance Supplement, the City should make subrecipients aware of award information. According to the City’s Program Participant Monitoring Plan, the City is supposed to conduct subrecipient monitoring on a semi-annual basis which should include desk reviews of payroll, disbursements, and other financial items. City of Roanoke, Virginia Schedule of Findings and Questioned Costs June 30, 2025 174 Cause Staff turnover, particularly for the role of grant accountant, caused these procedures to be overlooked. Management prioritized core operating activities with staffing vacancies in lieu of monitoring activities. Management asserts staff went onsite to review key documents, as documented by email activities, but did not document specific items subject to review. Effect Noncompliance with federal grant requirements with regard to subrecipient monitoring, as well as an increased risk of subrecipient misusing funds. Questioned Cost Amount Not applicable. Perspective Information Two out of two subawards. Recommendation We recommend performing subrecipient monitoring in accordance with the City’s guidelines and following the procedures laid out in the Program Participant Monitoring Plan. Repeat Finding 2024-002 View of Responsible Officials and Planned Corrective Action Management concurs with the finding. The City has reinforced its subrecipient monitoring procedures and will ensure monitoring is performed and documented in accordance with its Program Participant Monitoring Plan. Responsibilities have been clarified, a monitoring schedule and checklist have been implemented, and supervisory review will be incorporated to help ensure required monitoring activities are completed, documented, and retained in the grant files.

2025-004: Lead Hazard Control – Assistance Listing #14.900, Report Preparation – Controls (Material Weakness) Condition During our review of reporting, we noted that the City lacked a review process due to departmental constraints. We noted a lack of evidence of review of reporting prior to submission for quarterly reports during the fiscal year 2025. Criteria Controls over report review should be in place and documented to ensure timely and accurate reporting. Cause Due to the small nature of the department, there is overlap in position responsibilities. Effect Increased risk of errors in reporting. Questioned Cost Amount Not applicable. Perspective Information Quarterly Progress Reports to HUD. Recommendation We recommend segregating duties appropriately so that reports can be prepared and reviewed prior to submission by separate individuals. We also recommend maintaining evidence of review. Repeat Finding 2024-003 View of Responsible Officials and Planned Corrective Action Management concurs with recommendation. Staffing issues contributed to this condition. Management has developed more breadth of staff to prepare and review reports. This includes the program manager of Lead Safe Roanoke, the Housing Programs and Policy Officer and the Project Grants Manager. Going forward, the City will ensure that reports are prepared and reviewed by separate qualified individuals and that such review is documented.

2025-005: Lead Hazard Control – Assistance Listing #14.900, Report Submission – Material Noncompliance Condition During our review of the SF-425 Federal Financial quarterly reports, we noted that two quarterly reports were not submitted. Criteria SF-425 Federal Financial quarterly reports are due 30 calendar days after the end of each reporting quarter. Cause Due to the small nature of the department, there is overlap in position responsibilities. Gap of grant accountant specifically within the City to prepare these reports. Effect Not meeting UG requirements. Questioned Cost Amount Not applicable. Perspective Information Quarterly reports. Recommendation We recommend completing and submitting the quarterly reports within 30 calendar days after the end of each reporting quarter. View of Responsible Officials Management concurs with recommendation. Staffing issues contributed to this condition. Management has developed more breadth of staff to prepare and review reports. This includes the program manager of Lead Safe Roanoke, the Housing Programs and Policy Officer and the Project Grants Manager. Going forward, the City will ensure that reports are prepared, reviewed and submitted in a timely manner.

2025-006: Coronavirus State and Local Fiscal Recovery Funds – Assistance Listing #21.027, Subrecipient Monitoring – Material Noncompliance (Material Weakness) Condition Subrecipient monitoring was not done according the City’s formal, written policy and procedures for funds distributed. Criteria Subrecipient monitoring must include following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient by the pass-through entity detected through audits, on-site reviews, and other means. Cause Staff turnover, including the lack of a grant accountant. Effect Not meeting UG requirements. Questioned Cost Amount Not applicable. Perspective Information Not applicable. Recommendation We recommend preforming subrecipient monitoring in accordance with Uniform Guidance and City policy. City of Roanoke, Virginia Schedule of Findings and Questioned Costs June 30, 2025 176 View of Responsible Officials and Planned Corrective Action Management agrees with the finding. Staff turnover and the lack of a dedicated grant accountant contributed to the deficiencies in the monitoring process. The City is currently correcting this responsibility for subrecipient monitoring. The designated staff has begun desk monitoring of all subrecipients to ensure required monitoring activities are completed and properly documented. These corrective actions will be implemented as part of the City’s ongoing grant management processes and will apply to current and future Federal awards subject to subrecipient monitoring requirements.

2025-007: Coronavirus State and Local Fiscal Recovery Funds – Assistance Listing #21.027, Reporting – Material Noncompliance (Material Weakness) Condition During our review of the Project and Expenditures quarterly reports, we noted that support was not available for review. Also, we noted that the Quarter 3 (April 2025-June 2025) cumulative totals of expenditures did not agree to the total amounts reported on the schedule of expenditures of federal awards for the past four years and the reconciled remaining balance of funds recorded as unearned revenue. Criteria Quarterly project and expenditures reports submitted should agree to supporting documentation, reconciled to current and prior SEFAs (Schedule of Expenditures of Federal Awards), and related account balances on the general ledger. Cause Staff turnover, including the lack of a grant accountant. Effect Increased risk of errors in reporting. Not meeting UG requirements. Questioned Cost Amount Not applicable. Perspective Information Not applicable. Recommendation We recommend maintaining the supporting documentation on a shared drive for easy access and making sure the information keyed into the reports agrees to supporting documentation. We also recommend reconciling to the SEFA and related balances in the general ledger. View of Responsible Officials and Planned Corrective Action Management concurs recommendation. The City acknowledges that supporting documentation was not readily available for review for the Project and Expenditures quarterly reports and that the Quarter 3 cumulative expenditures did not agree with the amounts reported on the Schedule of Expenditures of Federal Awards (SEFA) and the reconciled remaining balance of funds recorded as unearned revenue. Staff turnover, financial system challenges, and the lack of a dedicated grant accountant contributed to these deficiencies. Corrective action has already begun for preparing, reviewing, and maintaining Federal award reporting documentation. Supporting documentation for quarterly Project and Expenditures reports will be maintained in a designated shared electronic drive and organized by reporting period and Federal award to ensure documentation is readily accessible for review. A reconciliation was completed for the quarter ending June 30, 2026, and the quarterly report agrees to the general ledger.

2025-008: Community Development Block Grant – Assistance Listing #14.218, Reporting Submission – Material Noncompliance Condition During our review of the CDBG and CDBG-CV PR29 Cash on Hand quarterly reports, we noted that one out of two tested were not submitted timely. City of Roanoke, Virginia Schedule of Findings and Questioned Costs June 30, 2025 177 Criteria PR29 quarterly reports are due 30 days after program quarter end. Cause Staff turnover. Effect Not meeting UG requirements. Questioned Cost Amount Not applicable. Perspective Information Not applicable. Recommendation We recommend submitting the PR29 quarterly timely. View of Responsible Officials and Planned Corrective Action Management concurs with recommendation. Staffing issues contributed to this condition. Management has developed more breadth of staff to prepare and review reports. This includes the program manager of Lead Safe Roanoke, the Housing Programs and Policy Officer and the Project Grants Manager. Centralization of financial management tasks within the Housing office is also planned. Going forward, the City will ensure that reports are prepared, reviewed and submitted in a timely manner.

2025-009: Community Development Block Grant – Assistance Listing #14.218, Report Preparation – Controls (Material Weakness) Condition During our review of reporting, we noted that the City lacked a review process due to departmental constraints. We noted a lack of evidence of review of reporting prior to submission for quarterly reports during the fiscal year 2025. Criteria Controls over report review should be in place and documented to ensure timely and accurate reporting. Cause Due to the small nature of the department, there is overlap in position responsibilities. Effect Increased risk of errors in reporting. Questioned Cost Amount Not applicable. Perspective Information Quarterly Progress Reports to HUD. Recommendation We recommend segregating duties appropriately so that reports can be prepared and reviewed prior to submission by separate individuals. We also recommend maintaining evidence of review. View of Responsible Officials and Planned Corrective Action Management concurs with recommendation. Staffing issues contributed to this condition. Management has developed more breadth of staff to prepare and review reports. This includes the program manager of Lead Safe Roanoke, the Housing Programs and Policy Officer and the Project Grants Manager. Going forward, the City will ensure that reports are prepared, reviewed and approved by someone other than the preparer and submitted in a timely manner.