Finding 2025-002: Suspension and Debarment Requirements Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds ALN 21.027 Federal Agency: Department of the Treasury Pass-through Agencies: City of Pittsburgh and the Commonwealth of Pennsylvania, Department of Community and Economic Development Condition: During 2025, the URA did not follow internal control procedures to ensure that all covered contracts and subawards were not conducted with entities that are suspended and debarred. During our testing of procurement transactions subject to suspension and debarment requirements, we noted that the entity did not retain documentation demonstrating that it had reviewed the System for Award Management (SAM.gov) exclusion records prior to entering into contractual agreements. Specifically, there was no evidence that a SAM.gov printout was reviewed or approved to verify that vendors were not suspended or debarred at the time of contract execution. While the entity stated that such reviews are conducted, the lack of documented verification prevents confirmation that appropriate controls were consistently applied. In conjunction with the audit, we reviewed the SAM Exclusions for all transactions in our sample and we noted that no transactions were with entities that were suspended or debarred. Criteria: In accordance with 2 CFR Part 200.303, a non-Federal entity must establish and maintain effective internal control over Federal awards that provide reasonable assurance that the non-Federal entity manages the Federal award in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award. Cause: The URA did not follow internal control procedures to document the review of the SAM.gov exclusion list prior to contract execution. Effect: The lack of following internal control processes to review the verification of suspension and debarment prior to entering into contracts, agreements, and grants, could result in the URA entering into covered transactions with entities that are suspended and debarred which is not allowed under the requirements for the Coronavirus State and Local Fiscal Recovery Funds program. Questioned Costs: None Identification as a Repeat Finding: This is a repeat finding. Recommendation: We recommend that the URA consistently apply written procedures to verify, prior to executing any covered transaction expected to equal or exceed $25,000, that the prospective contractor is not suspended, debarred, or otherwise excluded. The URA should document its verification by retaining a dated SAM.gov exclusion search printout (or equivalent screenshot), obtaining a certification from the contractor, or including an appropriate suspension and debarment clause in the agreement. Evidence of the review and approval should be retained in the procurement file to demonstrate compliance. Views of responsible officials and Planned Corrective Action: Management agrees with this finding; see separate Corrective Action Plan.
Finding 2025-003 – Activities Allowed or Unallowed Program: CDBG – Entitlement Grants Cluster: Community Development Block Grants/Entitlement Grants ALN 14.218 Federal Agency: U.S. Department of Housing and Urban Development Pass-through Agencies: City of Pittsburgh Condition: The URA did not have sufficient internal controls to ensure that reimbursement requests were reviewed for compliance with the executed grant agreement before approval or payment. During our review of the grant agreement between the URA and Neighborhood Legal Services Association (NLSA), we noted that grant proceeds were required to be used for eligible project costs, including the salaries, wages, and related costs of NLSA staff performing the legal services. However, based on our examination of the reimbursement requests, NLSA billed the URA using a fixed hourly fee for salaries rather than actual expenditures. The reimbursement requests totaled $321,000, while the total grant award was $320,000. Because NLSA did not bill based on actual expenditures, the URA could have overpaid NLSA for services provided under the grant agreement. Although this represents noncompliance with the terms of the grant agreement, based on the information available, the potential effect of the noncompliance was not material to the major program. Criteria: 2 CFR 200.303 requires a non-Federal entity to establish and maintain effective internal control over a Federal award that provides reasonable assurance the award is managed in compliance with Federal statutes, regulations, and the terms and conditions of the award. Cause: The URA did not have sufficient internal controls to ensure that the executed grant agreement was followed when reviewing and approving NLSA’s reimbursement requests. Specifically, the URA’s review process did not require verification that billed salaries and wages represented actual eligible project costs and that cumulative reimbursement requests did not exceed the authorized grant amount. Effect: The reimbursement requests were not prepared in accordance with the terms of the grant agreement and created a risk that unallowable costs were reimbursed. Because NLSA billed using a fixed hourly fee rather than actual expenditures, the URA did not have assurance that all amounts requested represented allowable salaries, wages, and related project costs. The $1,000 billed in excess of the grant award is unallowable and additional unallowable costs may have existed if the fixed hourly billings exceeded NLSA’s actual allowable costs. The amount of any additional allowable costs could not be determined; however, based on the information available, the potential effect was not material to the major program. Questioned Costs: Unknown. The $1,000 billed in excess of the grant award and any additional unallowable costs that may have existed if the fixed hourly billings exceeded NLSA’s actual allowable costs. The amount of any additional unallowable costs could not be determined. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: The URA should establish and implement monitoring procedures requiring reimbursement requests to be reviewed against the executed grant agreement before approval or payment. The procedures should require verification that requests are supported by actual eligible costs, reconciled to payroll, time records, and related-cost documentation, and tracked against the authorized grant amount. The URA should coordinate with NLSA to determine the final allowable amount and require repayment or credit for any amount reimbursed in excess of allowable costs or the grant award. Views of responsible officials and Planned Corrective Action: Management agrees with this finding; see separate Corrective Action Plan.
Finding 2025-004: Subrecipient Monitoring Requirements Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds ALN 21.027 Federal Agency: Department of the Treasury Pass-through Agencies: City of Pittsburgh and the Commonwealth of Pennsylvania, Department of Community and Economic Development Condition: During 2024, the URA passed through federal funds to a subrecipient in excess of the Single Audit threshold of $750,000. During 2025, the URA did not have adequate controls in place to verify that subrecipients expected to be audited as required by 2 CFR Part 200, Subpart F, met this requirement. Criteria: In accordance with 2 CFR Part 200.303, a non-Federal entity must establish and maintain effective internal control over Federal awards that provide reasonable assurance that the non-Federal entity manages the Federal award in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award. The pass-through entity must also verify that a subrecipient is audited as required by 2 CFR Part 200, Subpart F. Cause: The URA did not have an effective, documented process to identify subrecipients that met the single audit threshold, track the status and due date of required audits, and follow up with subrecipients until the required audit was completed and obtained. Effect: The URA was unable to demonstrate that a subrecipient complied with applicable single audit requirements. In addition, the URA may not identify and address deficiencies, questioned costs, or corrective-action requirements related to the subrecipient’s use of federal funds in a timely manner. Questioned Costs: None Identification as a Repeat Finding: This is not a repeat finding. Recommendation: The URA should establish and implement a documented subrecipient audit-monitoring process that includes tracking subrecipients who were provided funding over the single audit threshold to reach out and determine if they spent over the single audit threshold. If the subrecipient had federal expenditures over the single audit threshold, the URA should track the audit status and follow up on outstanding audits until the audit report, or other appropriate documentation of compliance, is obtained, document the review of audit results and evaluate whether findings require additional monitoring, corrective action, a management decision, or adjustments to the URA’s records, and escalate unresolved audit-status issues to responsible management and impose additional monitoring or other appropriate enforcement measures when necessary. Corrective Action: Management agrees with this finding; see separate Corrective Action Plan.