Audit 415653

2025-003 Period of Performance - Community Development Block Grants/Entitlement Grants Cluster Assistance Listing Number 14.218 Grant Period - Year Ended December 31, 2025 Criteria: 24 CFR Section 570.902 of the CDBG regulations states that a grantee is in compliance with timely expenditure requirements if, 60 days prior to the end of its program year, there is no more than 1.5 times its annual grant remaining in the line of credit, including any program income on hand. Condition/Context: The City did not meet program timeliness spending requirements. The City’s unexpended balance at December 31, 2025 of $2,435,653 is more than 1.5 times the $1,303,056 entitlement grant for the current year. We consider this to be an instance of non-compliance relating to the Period of Performance Compliance Requirement. This finding is a repeat finding and also reported in Section IV-Prior Year Audit Findings as finding 2024-003. Questioned Costs: $0 Cause: The City experienced delays in projects funded by the grant. Effect: Failure to meet the timeliness standard results in noncompliance with the period of performance requirement and could result in sanctions and reduction of future grant funds. Recommendation: We recommend that the City establish procedures to ensure that it complies with the CDBG timeliness standard specified in 24 CFR Section 570.902. Views of Responsible Officials: Management agrees with the Single Audit finding and a response is included in the Corrective Action Plan.