2022-002 Activities Allowed and Unallowed, Allowable Costs/Cost Principles, and Period of Performance Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of the Treasury Program: 21.023 COVID-19 ? Emergency Rental Assistance Program Award Number and Year: ERA0166, ERAE0477, and B-20-MW-27-0003; 2021 Pass-Through Agency: N/A Criteria: Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The City?s subrecipient agreements state, ?invoice, admin cost summary report and payroll reports, and randomly selected files for monitoring must be submitted by provider for reimbursement.? Condition: In the sample of seven disbursements tested for Activities Allowed and Unallowed and Allowable Costs/Cost Principles, all seven did not have itemized documentation supporting the expenditures. In addition, in the sample of six disbursements tested to verify they were expended within the period of performance, two did not have itemized documentation supporting the expenditures, thus, it could not be determined that they were expended within the period of performance. Questioned Costs: None. Context: The City passed through $12,285,250 of the $12,299,743 expended of its Emergency Rental Assistance funds to subrecipients. The City completed monitoring procedures over its subrecipients and its applicants throughout 2022, which included reviewing spending of the subrecipients against budgets established at the beginning of the program and viewing data entered by its subrecipients into portals noting rent and utility assistance provided. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: By not obtaining itemized documentation, the City cannot be assured that its subrecipients were expending funds on allowable activities and met the requirements of allowable costs, or that the subrecipients expended funds within the period of performance. In addition, the City's subrecipients were not meeting the requirements outlined in their agreements with the City. Cause: The City considered its procedures sufficient in lieu of obtaining itemized invoices. Recommendation: We recommend the City obtain itemized documentation prior to paying invoices to ensure compliance with grant requirements. In addition, we recommend the City implement procedures to ensure its subrecipients are in compliance with established agreements. View of Responsible Official: Concur.
2022-003 Project and Expenditure Special Report Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 ? Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: SLT0790, 2021; E-20-MW-27-0003, 2020 Pass-Through Agency: Minnesota Department of Health Criteria: Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: While testing the fourth quarter Project and Expenditure Special Report, the completeness of the Subawards Section could not be determined. The supporting documentation was not maintained in a manner that supported the amounts in the report. Data for some elements of the section could be obtained by reperforming work but that took significant time. Immaterial differences were also identified in other sections of the report. Questioned Costs: None. Context: The U.S. Treasury uses the subawards section to report ?contracts, grant, loans, direct payments, and other,? which is a broader definition than that used by the Code of Federal Regulations. The City has several projects, and payments within these projects, that need to be tracked in different ways for reporting in the Project and Expenditure Special Report. The documentation for some projects showed the approved contract amounts but did not document that no expenditures had been applied to the contracts yet. Effect: Completeness of the subawards section of the fourth quarter Project and Expenditure Special Report could not be determined. In addition, immaterial differences were identified in the reported amounts for the Subawards, Expenditures for Awards more than $50,000, and Payments to Individuals sections of the report. Cause: The City uses tracking files and queries from the general ledger system for reporting but does not have a process to determine completeness for subawards compared to expenditures. Also, the report instructions are updated each quarter by the U.S. Treasury providing further instructions and clarifications of previous instructions. Recommendation: We recommend the City review the process to accumulate data reported for the Project and Expenditure Special Report to ensure documentation is complete and accurately reflects activity for the period. View of Responsible Official: Concur
2022-003 Project and Expenditure Special Report Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 ? Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: SLT0790, 2021; E-20-MW-27-0003, 2020 Pass-Through Agency: Minnesota Department of Health Criteria: Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: While testing the fourth quarter Project and Expenditure Special Report, the completeness of the Subawards Section could not be determined. The supporting documentation was not maintained in a manner that supported the amounts in the report. Data for some elements of the section could be obtained by reperforming work but that took significant time. Immaterial differences were also identified in other sections of the report. Questioned Costs: None. Context: The U.S. Treasury uses the subawards section to report ?contracts, grant, loans, direct payments, and other,? which is a broader definition than that used by the Code of Federal Regulations. The City has several projects, and payments within these projects, that need to be tracked in different ways for reporting in the Project and Expenditure Special Report. The documentation for some projects showed the approved contract amounts but did not document that no expenditures had been applied to the contracts yet. Effect: Completeness of the subawards section of the fourth quarter Project and Expenditure Special Report could not be determined. In addition, immaterial differences were identified in the reported amounts for the Subawards, Expenditures for Awards more than $50,000, and Payments to Individuals sections of the report. Cause: The City uses tracking files and queries from the general ledger system for reporting but does not have a process to determine completeness for subawards compared to expenditures. Also, the report instructions are updated each quarter by the U.S. Treasury providing further instructions and clarifications of previous instructions. Recommendation: We recommend the City review the process to accumulate data reported for the Project and Expenditure Special Report to ensure documentation is complete and accurately reflects activity for the period. View of Responsible Official: Concur
2022-002 Activities Allowed and Unallowed, Allowable Costs/Cost Principles, and Period of Performance Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of the Treasury Program: 21.023 COVID-19 ? Emergency Rental Assistance Program Award Number and Year: ERA0166, ERAE0477, and B-20-MW-27-0003; 2021 Pass-Through Agency: N/A Criteria: Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The City?s subrecipient agreements state, ?invoice, admin cost summary report and payroll reports, and randomly selected files for monitoring must be submitted by provider for reimbursement.? Condition: In the sample of seven disbursements tested for Activities Allowed and Unallowed and Allowable Costs/Cost Principles, all seven did not have itemized documentation supporting the expenditures. In addition, in the sample of six disbursements tested to verify they were expended within the period of performance, two did not have itemized documentation supporting the expenditures, thus, it could not be determined that they were expended within the period of performance. Questioned Costs: None. Context: The City passed through $12,285,250 of the $12,299,743 expended of its Emergency Rental Assistance funds to subrecipients. The City completed monitoring procedures over its subrecipients and its applicants throughout 2022, which included reviewing spending of the subrecipients against budgets established at the beginning of the program and viewing data entered by its subrecipients into portals noting rent and utility assistance provided. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: By not obtaining itemized documentation, the City cannot be assured that its subrecipients were expending funds on allowable activities and met the requirements of allowable costs, or that the subrecipients expended funds within the period of performance. In addition, the City's subrecipients were not meeting the requirements outlined in their agreements with the City. Cause: The City considered its procedures sufficient in lieu of obtaining itemized invoices. Recommendation: We recommend the City obtain itemized documentation prior to paying invoices to ensure compliance with grant requirements. In addition, we recommend the City implement procedures to ensure its subrecipients are in compliance with established agreements. View of Responsible Official: Concur.
2022-003 Project and Expenditure Special Report Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 ? Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: SLT0790, 2021; E-20-MW-27-0003, 2020 Pass-Through Agency: Minnesota Department of Health Criteria: Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: While testing the fourth quarter Project and Expenditure Special Report, the completeness of the Subawards Section could not be determined. The supporting documentation was not maintained in a manner that supported the amounts in the report. Data for some elements of the section could be obtained by reperforming work but that took significant time. Immaterial differences were also identified in other sections of the report. Questioned Costs: None. Context: The U.S. Treasury uses the subawards section to report ?contracts, grant, loans, direct payments, and other,? which is a broader definition than that used by the Code of Federal Regulations. The City has several projects, and payments within these projects, that need to be tracked in different ways for reporting in the Project and Expenditure Special Report. The documentation for some projects showed the approved contract amounts but did not document that no expenditures had been applied to the contracts yet. Effect: Completeness of the subawards section of the fourth quarter Project and Expenditure Special Report could not be determined. In addition, immaterial differences were identified in the reported amounts for the Subawards, Expenditures for Awards more than $50,000, and Payments to Individuals sections of the report. Cause: The City uses tracking files and queries from the general ledger system for reporting but does not have a process to determine completeness for subawards compared to expenditures. Also, the report instructions are updated each quarter by the U.S. Treasury providing further instructions and clarifications of previous instructions. Recommendation: We recommend the City review the process to accumulate data reported for the Project and Expenditure Special Report to ensure documentation is complete and accurately reflects activity for the period. View of Responsible Official: Concur
2022-003 Project and Expenditure Special Report Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 ? Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: SLT0790, 2021; E-20-MW-27-0003, 2020 Pass-Through Agency: Minnesota Department of Health Criteria: Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: While testing the fourth quarter Project and Expenditure Special Report, the completeness of the Subawards Section could not be determined. The supporting documentation was not maintained in a manner that supported the amounts in the report. Data for some elements of the section could be obtained by reperforming work but that took significant time. Immaterial differences were also identified in other sections of the report. Questioned Costs: None. Context: The U.S. Treasury uses the subawards section to report ?contracts, grant, loans, direct payments, and other,? which is a broader definition than that used by the Code of Federal Regulations. The City has several projects, and payments within these projects, that need to be tracked in different ways for reporting in the Project and Expenditure Special Report. The documentation for some projects showed the approved contract amounts but did not document that no expenditures had been applied to the contracts yet. Effect: Completeness of the subawards section of the fourth quarter Project and Expenditure Special Report could not be determined. In addition, immaterial differences were identified in the reported amounts for the Subawards, Expenditures for Awards more than $50,000, and Payments to Individuals sections of the report. Cause: The City uses tracking files and queries from the general ledger system for reporting but does not have a process to determine completeness for subawards compared to expenditures. Also, the report instructions are updated each quarter by the U.S. Treasury providing further instructions and clarifications of previous instructions. Recommendation: We recommend the City review the process to accumulate data reported for the Project and Expenditure Special Report to ensure documentation is complete and accurately reflects activity for the period. View of Responsible Official: Concur