Criteria or Specific Requirement: In accordance with 2 CFR section 200.332(b), each subrecipient?s risk of noncompliance must be evaluated. Condition: The City has two subrecipients under this grant receiving $674,871 out of expenditures of $1,187,264. The documentation of the risk assessment for one of the subrecipients who received $103,621 could not be found. Cause: Due care as it relates to documentation retention was not in place. Effect: The City does not have evidence that the subrecipient has low risk of noncompliance. Questioned Costs: None. Context: Other elements of subrecipient monitoring, such as the oversight of expenditures of funds via monthly and/or quarterly reporting, were in place. Identification of a repeat finding: Not a repeat finding. Recommendation: We recommend that management establish and maintain effective internal control ensuring proper risk assessment procedures as well as a process of ensuring document retention. Management Response: See Corrective Action Plan.
Criteria or Specific Requirement: Grant recipients must comply with Uniform Guidance for procurement, specifically with 2 CFR sections 200.318 thru 200.327 including ensuring the procurement method used for the contracts are appropriate based on the dollar amount and conditions specified in 2 DFR section 200.320. Condition: The City did not comply with 2 CFR 200.320 or with City procurement policies. The City did not obtain quotes for a project for upgrades to the financial system for the purpose of grants accounting and management. Cause: The City began the system upgrade project in a prior year using 21.019 CARES CRF funding. Under that grant program, procurement standards were not applicable under Uniform Guidance. Those funds were set to expire December 2021. Therefore, management concluded that since those expenditures were also allowable under 21.027, they would complete the project using funds from the Coronavirus State and Local Fiscal Recover Funds grant (Assistance Listing (AL)21.027). However, under the AL 21.027 grant, the City is required to follow the Uniform Guidance for procurement of contracts. Effect: The City is out of compliance with procurement requirements. Questioned Costs: None. Context: A small purchase could have been applied as the total amount spent under the contract was more than the micro-purchase amount but less than the simplified acquisition threshold. Under small purchase procedures price or rate quotes must be obtained. Identification of a repeat finding: Not a repeat finding. Recommendation: We recommend that management establish and maintain effective internal control ensuring an understanding of compliance requirements prior to entering into contracts with vendors with intention of using of grant monies. Management Response: See Corrective Action Plan.
Criteria or Specific Requirement: In accordance with the Department of Treasury ERA1 reporting guidance, grantees are required to submit monthly reports by the 15th of the following month and quarterly reports by the 15th day of the month following the calendar quarter end. Condition: There were three monthly reports selected for testing, of which 2 were submitted late. The February 2022 monthly report was submitted two days late on March 15, 2022, and the April 2022 monthly report was submitted one day late on May 17, 2022. Note the 15th fell on a Sunday, thereby making the due date Monday, May 16, 2022. Of the two quarterly reports selected for testing, one was submitted three days late on July 18, 2022, instead of the 15th of the month as required. Cause: Controls were not consistently applied. Effect: The City did not have effective controls in place to ensure timely submission of reports by the required due date. Questioned Costs: None. Context: Guidance for required submission dates is provided for each month and each quarter so that it is clear to grantees which dates are the dues dates for both monthly and quarterly reports. Identification of a repeat finding: Not a repeat finding. Recommendation: We recommend that management establish and maintain effective internal control ensuring timely submission required under the Department of Treasury ERA1 reporting guidance. In addition, we recommend that the City conduct formal training to ensure that management has sufficient knowledge of the applicable reporting requirements. Management Response: See Corrective Action Plan.
Criteria or Specific Requirement: As a condition of receiving Federal awards, non-Federal entities agree to comply with laws, regulations, and the provisions of grant agreements and contracts, and to maintain internal control to provide reasonable assurance of compliance with these requirements. In accordance with 24 CFR 576.203(a)(1) and (2), metropolitan cities have up to 240 days from the date HUD signs the grant agreement to obligate ESG-CV funds. Condition: Of the $1,822,554 expenditures, $1,388,295 was distributed to subrecipients and of that, $237,361 was not obligated to the subrecipient until 271 days after the date of the signed agreement. Cause: Controls over the timely obligation of federal funds were not operating as designed over a portion of the ESG-CV funds. Effect: This portion of the ESG-CV funds were not obligated in a timely manner. Questioned Costs: None. Context: During our testing it was noted that a control was in place for review of the obligation date, however, the review related to obligation of funds was not set to occur within the required timeframe. Identification of a repeat finding: Not a repeat finding. Recommendation: We recommend that management establish and maintain effective internal control ensuring timely review in order to comply with the obligation requirements of the program. Management Response: See Corrective Action Plan.
Criteria or Specific Requirement: As a condition of receiving Federal awards, non-Federal entities agree to comply with laws, regulations, and the provisions of grant agreements and contracts, and to maintain internal control to provide reasonable assurance of compliance with these requirements. In accordance with 24 CFR 576.203(a)(1) and (2), metropolitan cities have up to 240 days from the date HUD signs the grant agreement to obligate ESG-CV funds. Condition: Of the $1,822,554 expenditures, $1,388,295 was distributed to subrecipients and of that, $237,361 was not obligated to the subrecipient until 271 days after the date of the signed agreement. Cause: Controls over the timely obligation of federal funds were not operating as designed over a portion of the ESG-CV funds. Effect: This portion of the ESG-CV funds were not obligated in a timely manner. Questioned Costs: None. Context: During our testing it was noted that a control was in place for review of the obligation date, however, the review related to obligation of funds was not set to occur within the required timeframe. Identification of a repeat finding: Not a repeat finding. Recommendation: We recommend that management establish and maintain effective internal control ensuring timely review in order to comply with the obligation requirements of the program. Management Response: See Corrective Action Plan.
Criteria or Specific Requirement: In accordance with 2 CFR section 200.332(b), each subrecipient?s risk of noncompliance must be evaluated. Condition: The City has two subrecipients under this grant receiving $674,871 out of expenditures of $1,187,264. The documentation of the risk assessment for one of the subrecipients who received $103,621 could not be found. Cause: Due care as it relates to documentation retention was not in place. Effect: The City does not have evidence that the subrecipient has low risk of noncompliance. Questioned Costs: None. Context: Other elements of subrecipient monitoring, such as the oversight of expenditures of funds via monthly and/or quarterly reporting, were in place. Identification of a repeat finding: Not a repeat finding. Recommendation: We recommend that management establish and maintain effective internal control ensuring proper risk assessment procedures as well as a process of ensuring document retention. Management Response: See Corrective Action Plan.
Criteria or Specific Requirement: Grant recipients must comply with Uniform Guidance for procurement, specifically with 2 CFR sections 200.318 thru 200.327 including ensuring the procurement method used for the contracts are appropriate based on the dollar amount and conditions specified in 2 DFR section 200.320. Condition: The City did not comply with 2 CFR 200.320 or with City procurement policies. The City did not obtain quotes for a project for upgrades to the financial system for the purpose of grants accounting and management. Cause: The City began the system upgrade project in a prior year using 21.019 CARES CRF funding. Under that grant program, procurement standards were not applicable under Uniform Guidance. Those funds were set to expire December 2021. Therefore, management concluded that since those expenditures were also allowable under 21.027, they would complete the project using funds from the Coronavirus State and Local Fiscal Recover Funds grant (Assistance Listing (AL)21.027). However, under the AL 21.027 grant, the City is required to follow the Uniform Guidance for procurement of contracts. Effect: The City is out of compliance with procurement requirements. Questioned Costs: None. Context: A small purchase could have been applied as the total amount spent under the contract was more than the micro-purchase amount but less than the simplified acquisition threshold. Under small purchase procedures price or rate quotes must be obtained. Identification of a repeat finding: Not a repeat finding. Recommendation: We recommend that management establish and maintain effective internal control ensuring an understanding of compliance requirements prior to entering into contracts with vendors with intention of using of grant monies. Management Response: See Corrective Action Plan.
Criteria or Specific Requirement: In accordance with the Department of Treasury ERA1 reporting guidance, grantees are required to submit monthly reports by the 15th of the following month and quarterly reports by the 15th day of the month following the calendar quarter end. Condition: There were three monthly reports selected for testing, of which 2 were submitted late. The February 2022 monthly report was submitted two days late on March 15, 2022, and the April 2022 monthly report was submitted one day late on May 17, 2022. Note the 15th fell on a Sunday, thereby making the due date Monday, May 16, 2022. Of the two quarterly reports selected for testing, one was submitted three days late on July 18, 2022, instead of the 15th of the month as required. Cause: Controls were not consistently applied. Effect: The City did not have effective controls in place to ensure timely submission of reports by the required due date. Questioned Costs: None. Context: Guidance for required submission dates is provided for each month and each quarter so that it is clear to grantees which dates are the dues dates for both monthly and quarterly reports. Identification of a repeat finding: Not a repeat finding. Recommendation: We recommend that management establish and maintain effective internal control ensuring timely submission required under the Department of Treasury ERA1 reporting guidance. In addition, we recommend that the City conduct formal training to ensure that management has sufficient knowledge of the applicable reporting requirements. Management Response: See Corrective Action Plan.
Criteria or Specific Requirement: As a condition of receiving Federal awards, non-Federal entities agree to comply with laws, regulations, and the provisions of grant agreements and contracts, and to maintain internal control to provide reasonable assurance of compliance with these requirements. In accordance with 24 CFR 576.203(a)(1) and (2), metropolitan cities have up to 240 days from the date HUD signs the grant agreement to obligate ESG-CV funds. Condition: Of the $1,822,554 expenditures, $1,388,295 was distributed to subrecipients and of that, $237,361 was not obligated to the subrecipient until 271 days after the date of the signed agreement. Cause: Controls over the timely obligation of federal funds were not operating as designed over a portion of the ESG-CV funds. Effect: This portion of the ESG-CV funds were not obligated in a timely manner. Questioned Costs: None. Context: During our testing it was noted that a control was in place for review of the obligation date, however, the review related to obligation of funds was not set to occur within the required timeframe. Identification of a repeat finding: Not a repeat finding. Recommendation: We recommend that management establish and maintain effective internal control ensuring timely review in order to comply with the obligation requirements of the program. Management Response: See Corrective Action Plan.
Criteria or Specific Requirement: As a condition of receiving Federal awards, non-Federal entities agree to comply with laws, regulations, and the provisions of grant agreements and contracts, and to maintain internal control to provide reasonable assurance of compliance with these requirements. In accordance with 24 CFR 576.203(a)(1) and (2), metropolitan cities have up to 240 days from the date HUD signs the grant agreement to obligate ESG-CV funds. Condition: Of the $1,822,554 expenditures, $1,388,295 was distributed to subrecipients and of that, $237,361 was not obligated to the subrecipient until 271 days after the date of the signed agreement. Cause: Controls over the timely obligation of federal funds were not operating as designed over a portion of the ESG-CV funds. Effect: This portion of the ESG-CV funds were not obligated in a timely manner. Questioned Costs: None. Context: During our testing it was noted that a control was in place for review of the obligation date, however, the review related to obligation of funds was not set to occur within the required timeframe. Identification of a repeat finding: Not a repeat finding. Recommendation: We recommend that management establish and maintain effective internal control ensuring timely review in order to comply with the obligation requirements of the program. Management Response: See Corrective Action Plan.