2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Housing Federal Program Name: HOME Investment Partnerships Program Assistance Listing Number: 14.239 Federal Award Identification Number and Year: Various Award Period: Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to 24 CFR 92.504(d)(1)(ii)(D), inspections must be based on a statistically valid sample of units appropriate for the size of the HOME-assisted project, as set forth by HUD through notice. For projects with one-to-four HOME-assisted units, participating jurisdiction must inspect 100 percent of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. According to Ch 8 HOME Monitoring, the Comprehensive Review requires that 20% of HOME-assisted unit tenant files be reviewed for content, as well as conduct HQS inspections on 20% of the HOME-assisted units, utilizing the HQS inspection form (Form HUD-52580). For projects with one-to-four (1 ? 4) HOME-assisted units, the City inspects 100 % of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. Upon completion of the Comprehensive Monitoring Review, Program Specialists are responsible for preparing a monitoring report letter and monitoring report. The cover letter, monitoring report and complete monitoring packet ? includes monitoring routing form, all required monitoring forms used as well as any additional information/documents used in and received during the monitoring ? are submitted to the Program Specialists? supervisor for review and approval within 2 weeks of the completion of the monitoring visit. Upon supervisor approval, Program Specialist will forward the entire packet for review, approval and signature by the Community Development Division Manager and Fiscal Manager. Condition: During our testing, it was noted that the City did not perform the required percent of inspections. Also, the City lacked evidence of approval of the monitoring. Questioned costs: None Context: During our testing, we noted the following exceptions over housing quality standards requirements: ? For 1 of 5 projects, the City performed 17% of the required inspections rather than 20%. The one unit not inspected due to COVID-19 was not scheduled for reinspection. HUD did have a waiver in place for HQS Inspections from April 2020 until December 31, 2021. The inspection, however, was scheduled for March 24, 2022 which is subsequent to the extended waiver. ? For 1 of 5 projects, the City performed 33% of the required inspections rather than 100%. The City inspected one unit versus all three units. ? For 2 of 5 projects, the cover letter signed by the Community Development Division Manager and Fiscal Manager was not provided to us. 2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal housing quality standards regulation nor its HOME policies and procedures. Effect: The auditor noted instances of noncompliance. Noncompliance results in failure to identify those units on which housing quality inspections are due and perform inspections of units and that any needed repairs are completed timely. Recommendation: We recommend the City design controls to ensure compliance with federal housing quality standards regulation and its HOME policies and procedures. Management Response: The City concurs with the finding. The City did complete 20% of the program files however one unit was not inspected due to the client testing positive for COVID -19. In the future if a home in not able to be inspected, another tenant will be notified and a HQS inspection will occur at another residence at a later date. This action will be corrected by updating the Monitoring Checklist to ensure that staff knows the proper of units to be inspected. This will be reviewed with supervisor prior to monitoring. The City was not aware of the requirement that, in the case of HOME projects with between one and four units, all units needed to be inspected; the City typically looks at the project as a whole and inspects 10% or 20% depending on the Risk Assessment. This will be corrected in the future by updating the Monitoring Checklist to ensure staff knows the proper number of HOME units that need to be inspected. Timeline and Responsible Position: June 2023 ? Director of Family & Community Services
2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Housing Federal Program Name: HOME Investment Partnerships Program Assistance Listing Number: 14.239 Federal Award Identification Number and Year: Various Award Period: Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to 24 CFR 92.504(d)(1)(ii)(D), inspections must be based on a statistically valid sample of units appropriate for the size of the HOME-assisted project, as set forth by HUD through notice. For projects with one-to-four HOME-assisted units, participating jurisdiction must inspect 100 percent of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. According to Ch 8 HOME Monitoring, the Comprehensive Review requires that 20% of HOME-assisted unit tenant files be reviewed for content, as well as conduct HQS inspections on 20% of the HOME-assisted units, utilizing the HQS inspection form (Form HUD-52580). For projects with one-to-four (1 ? 4) HOME-assisted units, the City inspects 100 % of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. Upon completion of the Comprehensive Monitoring Review, Program Specialists are responsible for preparing a monitoring report letter and monitoring report. The cover letter, monitoring report and complete monitoring packet ? includes monitoring routing form, all required monitoring forms used as well as any additional information/documents used in and received during the monitoring ? are submitted to the Program Specialists? supervisor for review and approval within 2 weeks of the completion of the monitoring visit. Upon supervisor approval, Program Specialist will forward the entire packet for review, approval and signature by the Community Development Division Manager and Fiscal Manager. Condition: During our testing, it was noted that the City did not perform the required percent of inspections. Also, the City lacked evidence of approval of the monitoring. Questioned costs: None Context: During our testing, we noted the following exceptions over housing quality standards requirements: ? For 1 of 5 projects, the City performed 17% of the required inspections rather than 20%. The one unit not inspected due to COVID-19 was not scheduled for reinspection. HUD did have a waiver in place for HQS Inspections from April 2020 until December 31, 2021. The inspection, however, was scheduled for March 24, 2022 which is subsequent to the extended waiver. ? For 1 of 5 projects, the City performed 33% of the required inspections rather than 100%. The City inspected one unit versus all three units. ? For 2 of 5 projects, the cover letter signed by the Community Development Division Manager and Fiscal Manager was not provided to us. 2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal housing quality standards regulation nor its HOME policies and procedures. Effect: The auditor noted instances of noncompliance. Noncompliance results in failure to identify those units on which housing quality inspections are due and perform inspections of units and that any needed repairs are completed timely. Recommendation: We recommend the City design controls to ensure compliance with federal housing quality standards regulation and its HOME policies and procedures. Management Response: The City concurs with the finding. The City did complete 20% of the program files however one unit was not inspected due to the client testing positive for COVID -19. In the future if a home in not able to be inspected, another tenant will be notified and a HQS inspection will occur at another residence at a later date. This action will be corrected by updating the Monitoring Checklist to ensure that staff knows the proper of units to be inspected. This will be reviewed with supervisor prior to monitoring. The City was not aware of the requirement that, in the case of HOME projects with between one and four units, all units needed to be inspected; the City typically looks at the project as a whole and inspects 10% or 20% depending on the Risk Assessment. This will be corrected in the future by updating the Monitoring Checklist to ensure staff knows the proper number of HOME units that need to be inspected. Timeline and Responsible Position: June 2023 ? Director of Family & Community Services
2022 ? 005 Allowable Activities and Costs/Cost Principals (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury U.S. Department of Housing U.S. Department of Transportation Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds HOME Investment Partnerships Program Federal Transit Cluster Assistance Listing Number: 21.027, 14.239, Multiple Federal Award Identification Number and Year: ALN 21.027: Pub. L. No. 117-2-2021 ALN 14.239 M-19-MC-35-0209 2019 & M-16-MC-35-0209 2016; ALN Multiple: NM-2020-010 Award Period: ALN 21.027 ? 5/10/2021 - 12/31/2026 ALN 14.239 ? 7/22/2016-9/1/2027 ALN Multiple ? 1/20/2020-12/31/2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to ? 200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Further, the financial management system of each non-Federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements. According to the City's ARPA Program Plan Memorandum, all applicants must have 50 or fewer full-time equivalent (FTE) employees. Once the application is complete, it will enter a secondary review for final decision. Once a business receives a grant they must submit a report six months after as detailed in the grant agreement. Condition: During single audit testwork over reporting, the following issues were noted which are detailed by ALN Number. ALN 21.027 ? The City did not obtain employment verification for one applicant, perform a secondary review for two applications, nor obtain the six-month report for six applications. ALN 14.239/Multiple ? The City did not have effective internal controls in place to ensure timesheets are prepared timely as well as payroll grant hours accurately recorded in the accounting system. 2022 ? 005 Allowable Activities and Costs/Cost Principals (Significant Deficiency and Noncompliance) (Continued) Questioned costs: ALN 21.027: $30,000 ALN 14.239: $69.63 ALN Multiple: None Context: During our testing, we noted the following exceptions, which are detailed by ALN Number. ALN 21.027 ? 1 of the 60 small business applications did not have the number of employees. ? 2 of the 60 small business grant applications did not have a secondary review for final decision. ? 6 of the 60 small businesses did not submit a report six months after receiving the grant. ALN 14.239 ? During our testing, we noted three instances in which an employee's timesheet was not signed by the employee and their supervisor until between 8-12 months after the pay period ended. Also, we noted three instances in which grant hours listed on timesheets did not agree to the hours recorded in the accounting system and charged to the grant. ALN Multiple ? During our testing, we noted two instances in which an employee's time was not approved by their supervisor. Cause: The City did not follow its ARPA Program Plan Memorandum. Additionally, the City lacks a policy and internal control related to the required timing of timesheet preparation, review and approval. Effect: The auditor noted instances of noncompliance and lack of effective internal controls. Noncompliance results in ineligible small businesses receiving grant funding and the City not receiving the required reporting by the small businesses. Recommendation: We recommend the City design controls to ensure an adequate review process is in place to review applications to determine the eligibility of small business for grant funding. Also, we recommend the City design controls to ensure any required reports are submitted by grantees. Additionally, we recommend the City create a policy related to timesheet preparation, review and approval as well as develop a procedure to ensure all grant hours listed on timesheets are reconciled to the accounting system. Management Response: Management agrees with the finding. The grants distributed by the Economic Development Department were a lifeline to small businesses that were just holding on. While a strong program was set up in a very short timeframe some reviews and follow-up were not completed. Additionally, the Family & Community Services Department will ensure timesheets are signed timely. Additionally, the department will work with the Grants Section to ensure timesheets, Kronos and Peoplesoft agree. Timeline and Responsible Position: June 2023 ? Department Directors, Economic Development, Family & Community Services and Transit
2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Housing Federal Program Name: HOME Investment Partnerships Program Assistance Listing Number: 14.239 Federal Award Identification Number and Year: Various Award Period: Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to 24 CFR 92.504(d)(1)(ii)(D), inspections must be based on a statistically valid sample of units appropriate for the size of the HOME-assisted project, as set forth by HUD through notice. For projects with one-to-four HOME-assisted units, participating jurisdiction must inspect 100 percent of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. According to Ch 8 HOME Monitoring, the Comprehensive Review requires that 20% of HOME-assisted unit tenant files be reviewed for content, as well as conduct HQS inspections on 20% of the HOME-assisted units, utilizing the HQS inspection form (Form HUD-52580). For projects with one-to-four (1 ? 4) HOME-assisted units, the City inspects 100 % of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. Upon completion of the Comprehensive Monitoring Review, Program Specialists are responsible for preparing a monitoring report letter and monitoring report. The cover letter, monitoring report and complete monitoring packet ? includes monitoring routing form, all required monitoring forms used as well as any additional information/documents used in and received during the monitoring ? are submitted to the Program Specialists? supervisor for review and approval within 2 weeks of the completion of the monitoring visit. Upon supervisor approval, Program Specialist will forward the entire packet for review, approval and signature by the Community Development Division Manager and Fiscal Manager. Condition: During our testing, it was noted that the City did not perform the required percent of inspections. Also, the City lacked evidence of approval of the monitoring. Questioned costs: None Context: During our testing, we noted the following exceptions over housing quality standards requirements: ? For 1 of 5 projects, the City performed 17% of the required inspections rather than 20%. The one unit not inspected due to COVID-19 was not scheduled for reinspection. HUD did have a waiver in place for HQS Inspections from April 2020 until December 31, 2021. The inspection, however, was scheduled for March 24, 2022 which is subsequent to the extended waiver. ? For 1 of 5 projects, the City performed 33% of the required inspections rather than 100%. The City inspected one unit versus all three units. ? For 2 of 5 projects, the cover letter signed by the Community Development Division Manager and Fiscal Manager was not provided to us. 2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal housing quality standards regulation nor its HOME policies and procedures. Effect: The auditor noted instances of noncompliance. Noncompliance results in failure to identify those units on which housing quality inspections are due and perform inspections of units and that any needed repairs are completed timely. Recommendation: We recommend the City design controls to ensure compliance with federal housing quality standards regulation and its HOME policies and procedures. Management Response: The City concurs with the finding. The City did complete 20% of the program files however one unit was not inspected due to the client testing positive for COVID -19. In the future if a home in not able to be inspected, another tenant will be notified and a HQS inspection will occur at another residence at a later date. This action will be corrected by updating the Monitoring Checklist to ensure that staff knows the proper of units to be inspected. This will be reviewed with supervisor prior to monitoring. The City was not aware of the requirement that, in the case of HOME projects with between one and four units, all units needed to be inspected; the City typically looks at the project as a whole and inspects 10% or 20% depending on the Risk Assessment. This will be corrected in the future by updating the Monitoring Checklist to ensure staff knows the proper number of HOME units that need to be inspected. Timeline and Responsible Position: June 2023 ? Director of Family & Community Services
2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Housing Federal Program Name: HOME Investment Partnerships Program Assistance Listing Number: 14.239 Federal Award Identification Number and Year: Various Award Period: Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to 24 CFR 92.504(d)(1)(ii)(D), inspections must be based on a statistically valid sample of units appropriate for the size of the HOME-assisted project, as set forth by HUD through notice. For projects with one-to-four HOME-assisted units, participating jurisdiction must inspect 100 percent of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. According to Ch 8 HOME Monitoring, the Comprehensive Review requires that 20% of HOME-assisted unit tenant files be reviewed for content, as well as conduct HQS inspections on 20% of the HOME-assisted units, utilizing the HQS inspection form (Form HUD-52580). For projects with one-to-four (1 ? 4) HOME-assisted units, the City inspects 100 % of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. Upon completion of the Comprehensive Monitoring Review, Program Specialists are responsible for preparing a monitoring report letter and monitoring report. The cover letter, monitoring report and complete monitoring packet ? includes monitoring routing form, all required monitoring forms used as well as any additional information/documents used in and received during the monitoring ? are submitted to the Program Specialists? supervisor for review and approval within 2 weeks of the completion of the monitoring visit. Upon supervisor approval, Program Specialist will forward the entire packet for review, approval and signature by the Community Development Division Manager and Fiscal Manager. Condition: During our testing, it was noted that the City did not perform the required percent of inspections. Also, the City lacked evidence of approval of the monitoring. Questioned costs: None Context: During our testing, we noted the following exceptions over housing quality standards requirements: ? For 1 of 5 projects, the City performed 17% of the required inspections rather than 20%. The one unit not inspected due to COVID-19 was not scheduled for reinspection. HUD did have a waiver in place for HQS Inspections from April 2020 until December 31, 2021. The inspection, however, was scheduled for March 24, 2022 which is subsequent to the extended waiver. ? For 1 of 5 projects, the City performed 33% of the required inspections rather than 100%. The City inspected one unit versus all three units. ? For 2 of 5 projects, the cover letter signed by the Community Development Division Manager and Fiscal Manager was not provided to us. 2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal housing quality standards regulation nor its HOME policies and procedures. Effect: The auditor noted instances of noncompliance. Noncompliance results in failure to identify those units on which housing quality inspections are due and perform inspections of units and that any needed repairs are completed timely. Recommendation: We recommend the City design controls to ensure compliance with federal housing quality standards regulation and its HOME policies and procedures. Management Response: The City concurs with the finding. The City did complete 20% of the program files however one unit was not inspected due to the client testing positive for COVID -19. In the future if a home in not able to be inspected, another tenant will be notified and a HQS inspection will occur at another residence at a later date. This action will be corrected by updating the Monitoring Checklist to ensure that staff knows the proper of units to be inspected. This will be reviewed with supervisor prior to monitoring. The City was not aware of the requirement that, in the case of HOME projects with between one and four units, all units needed to be inspected; the City typically looks at the project as a whole and inspects 10% or 20% depending on the Risk Assessment. This will be corrected in the future by updating the Monitoring Checklist to ensure staff knows the proper number of HOME units that need to be inspected. Timeline and Responsible Position: June 2023 ? Director of Family & Community Services
2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Housing Federal Program Name: HOME Investment Partnerships Program Assistance Listing Number: 14.239 Federal Award Identification Number and Year: Various Award Period: Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to 24 CFR 92.504(d)(1)(ii)(D), inspections must be based on a statistically valid sample of units appropriate for the size of the HOME-assisted project, as set forth by HUD through notice. For projects with one-to-four HOME-assisted units, participating jurisdiction must inspect 100 percent of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. According to Ch 8 HOME Monitoring, the Comprehensive Review requires that 20% of HOME-assisted unit tenant files be reviewed for content, as well as conduct HQS inspections on 20% of the HOME-assisted units, utilizing the HQS inspection form (Form HUD-52580). For projects with one-to-four (1 ? 4) HOME-assisted units, the City inspects 100 % of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. Upon completion of the Comprehensive Monitoring Review, Program Specialists are responsible for preparing a monitoring report letter and monitoring report. The cover letter, monitoring report and complete monitoring packet ? includes monitoring routing form, all required monitoring forms used as well as any additional information/documents used in and received during the monitoring ? are submitted to the Program Specialists? supervisor for review and approval within 2 weeks of the completion of the monitoring visit. Upon supervisor approval, Program Specialist will forward the entire packet for review, approval and signature by the Community Development Division Manager and Fiscal Manager. Condition: During our testing, it was noted that the City did not perform the required percent of inspections. Also, the City lacked evidence of approval of the monitoring. Questioned costs: None Context: During our testing, we noted the following exceptions over housing quality standards requirements: ? For 1 of 5 projects, the City performed 17% of the required inspections rather than 20%. The one unit not inspected due to COVID-19 was not scheduled for reinspection. HUD did have a waiver in place for HQS Inspections from April 2020 until December 31, 2021. The inspection, however, was scheduled for March 24, 2022 which is subsequent to the extended waiver. ? For 1 of 5 projects, the City performed 33% of the required inspections rather than 100%. The City inspected one unit versus all three units. ? For 2 of 5 projects, the cover letter signed by the Community Development Division Manager and Fiscal Manager was not provided to us. 2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal housing quality standards regulation nor its HOME policies and procedures. Effect: The auditor noted instances of noncompliance. Noncompliance results in failure to identify those units on which housing quality inspections are due and perform inspections of units and that any needed repairs are completed timely. Recommendation: We recommend the City design controls to ensure compliance with federal housing quality standards regulation and its HOME policies and procedures. Management Response: The City concurs with the finding. The City did complete 20% of the program files however one unit was not inspected due to the client testing positive for COVID -19. In the future if a home in not able to be inspected, another tenant will be notified and a HQS inspection will occur at another residence at a later date. This action will be corrected by updating the Monitoring Checklist to ensure that staff knows the proper of units to be inspected. This will be reviewed with supervisor prior to monitoring. The City was not aware of the requirement that, in the case of HOME projects with between one and four units, all units needed to be inspected; the City typically looks at the project as a whole and inspects 10% or 20% depending on the Risk Assessment. This will be corrected in the future by updating the Monitoring Checklist to ensure staff knows the proper number of HOME units that need to be inspected. Timeline and Responsible Position: June 2023 ? Director of Family & Community Services
2022 ? 005 Allowable Activities and Costs/Cost Principals (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury U.S. Department of Housing U.S. Department of Transportation Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds HOME Investment Partnerships Program Federal Transit Cluster Assistance Listing Number: 21.027, 14.239, Multiple Federal Award Identification Number and Year: ALN 21.027: Pub. L. No. 117-2-2021 ALN 14.239 M-19-MC-35-0209 2019 & M-16-MC-35-0209 2016; ALN Multiple: NM-2020-010 Award Period: ALN 21.027 ? 5/10/2021 - 12/31/2026 ALN 14.239 ? 7/22/2016-9/1/2027 ALN Multiple ? 1/20/2020-12/31/2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to ? 200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Further, the financial management system of each non-Federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements. According to the City's ARPA Program Plan Memorandum, all applicants must have 50 or fewer full-time equivalent (FTE) employees. Once the application is complete, it will enter a secondary review for final decision. Once a business receives a grant they must submit a report six months after as detailed in the grant agreement. Condition: During single audit testwork over reporting, the following issues were noted which are detailed by ALN Number. ALN 21.027 ? The City did not obtain employment verification for one applicant, perform a secondary review for two applications, nor obtain the six-month report for six applications. ALN 14.239/Multiple ? The City did not have effective internal controls in place to ensure timesheets are prepared timely as well as payroll grant hours accurately recorded in the accounting system. 2022 ? 005 Allowable Activities and Costs/Cost Principals (Significant Deficiency and Noncompliance) (Continued) Questioned costs: ALN 21.027: $30,000 ALN 14.239: $69.63 ALN Multiple: None Context: During our testing, we noted the following exceptions, which are detailed by ALN Number. ALN 21.027 ? 1 of the 60 small business applications did not have the number of employees. ? 2 of the 60 small business grant applications did not have a secondary review for final decision. ? 6 of the 60 small businesses did not submit a report six months after receiving the grant. ALN 14.239 ? During our testing, we noted three instances in which an employee's timesheet was not signed by the employee and their supervisor until between 8-12 months after the pay period ended. Also, we noted three instances in which grant hours listed on timesheets did not agree to the hours recorded in the accounting system and charged to the grant. ALN Multiple ? During our testing, we noted two instances in which an employee's time was not approved by their supervisor. Cause: The City did not follow its ARPA Program Plan Memorandum. Additionally, the City lacks a policy and internal control related to the required timing of timesheet preparation, review and approval. Effect: The auditor noted instances of noncompliance and lack of effective internal controls. Noncompliance results in ineligible small businesses receiving grant funding and the City not receiving the required reporting by the small businesses. Recommendation: We recommend the City design controls to ensure an adequate review process is in place to review applications to determine the eligibility of small business for grant funding. Also, we recommend the City design controls to ensure any required reports are submitted by grantees. Additionally, we recommend the City create a policy related to timesheet preparation, review and approval as well as develop a procedure to ensure all grant hours listed on timesheets are reconciled to the accounting system. Management Response: Management agrees with the finding. The grants distributed by the Economic Development Department were a lifeline to small businesses that were just holding on. While a strong program was set up in a very short timeframe some reviews and follow-up were not completed. Additionally, the Family & Community Services Department will ensure timesheets are signed timely. Additionally, the department will work with the Grants Section to ensure timesheets, Kronos and Peoplesoft agree. Timeline and Responsible Position: June 2023 ? Department Directors, Economic Development, Family & Community Services and Transit
2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Housing Federal Program Name: HOME Investment Partnerships Program Assistance Listing Number: 14.239 Federal Award Identification Number and Year: Various Award Period: Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to 24 CFR 92.504(d)(1)(ii)(D), inspections must be based on a statistically valid sample of units appropriate for the size of the HOME-assisted project, as set forth by HUD through notice. For projects with one-to-four HOME-assisted units, participating jurisdiction must inspect 100 percent of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. According to Ch 8 HOME Monitoring, the Comprehensive Review requires that 20% of HOME-assisted unit tenant files be reviewed for content, as well as conduct HQS inspections on 20% of the HOME-assisted units, utilizing the HQS inspection form (Form HUD-52580). For projects with one-to-four (1 ? 4) HOME-assisted units, the City inspects 100 % of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. Upon completion of the Comprehensive Monitoring Review, Program Specialists are responsible for preparing a monitoring report letter and monitoring report. The cover letter, monitoring report and complete monitoring packet ? includes monitoring routing form, all required monitoring forms used as well as any additional information/documents used in and received during the monitoring ? are submitted to the Program Specialists? supervisor for review and approval within 2 weeks of the completion of the monitoring visit. Upon supervisor approval, Program Specialist will forward the entire packet for review, approval and signature by the Community Development Division Manager and Fiscal Manager. Condition: During our testing, it was noted that the City did not perform the required percent of inspections. Also, the City lacked evidence of approval of the monitoring. Questioned costs: None Context: During our testing, we noted the following exceptions over housing quality standards requirements: ? For 1 of 5 projects, the City performed 17% of the required inspections rather than 20%. The one unit not inspected due to COVID-19 was not scheduled for reinspection. HUD did have a waiver in place for HQS Inspections from April 2020 until December 31, 2021. The inspection, however, was scheduled for March 24, 2022 which is subsequent to the extended waiver. ? For 1 of 5 projects, the City performed 33% of the required inspections rather than 100%. The City inspected one unit versus all three units. ? For 2 of 5 projects, the cover letter signed by the Community Development Division Manager and Fiscal Manager was not provided to us. 2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal housing quality standards regulation nor its HOME policies and procedures. Effect: The auditor noted instances of noncompliance. Noncompliance results in failure to identify those units on which housing quality inspections are due and perform inspections of units and that any needed repairs are completed timely. Recommendation: We recommend the City design controls to ensure compliance with federal housing quality standards regulation and its HOME policies and procedures. Management Response: The City concurs with the finding. The City did complete 20% of the program files however one unit was not inspected due to the client testing positive for COVID -19. In the future if a home in not able to be inspected, another tenant will be notified and a HQS inspection will occur at another residence at a later date. This action will be corrected by updating the Monitoring Checklist to ensure that staff knows the proper of units to be inspected. This will be reviewed with supervisor prior to monitoring. The City was not aware of the requirement that, in the case of HOME projects with between one and four units, all units needed to be inspected; the City typically looks at the project as a whole and inspects 10% or 20% depending on the Risk Assessment. This will be corrected in the future by updating the Monitoring Checklist to ensure staff knows the proper number of HOME units that need to be inspected. Timeline and Responsible Position: June 2023 ? Director of Family & Community Services
2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Housing Federal Program Name: HOME Investment Partnerships Program Assistance Listing Number: 14.239 Federal Award Identification Number and Year: Various Award Period: Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to 24 CFR 92.504(d)(1)(ii)(D), inspections must be based on a statistically valid sample of units appropriate for the size of the HOME-assisted project, as set forth by HUD through notice. For projects with one-to-four HOME-assisted units, participating jurisdiction must inspect 100 percent of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. According to Ch 8 HOME Monitoring, the Comprehensive Review requires that 20% of HOME-assisted unit tenant files be reviewed for content, as well as conduct HQS inspections on 20% of the HOME-assisted units, utilizing the HQS inspection form (Form HUD-52580). For projects with one-to-four (1 ? 4) HOME-assisted units, the City inspects 100 % of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. Upon completion of the Comprehensive Monitoring Review, Program Specialists are responsible for preparing a monitoring report letter and monitoring report. The cover letter, monitoring report and complete monitoring packet ? includes monitoring routing form, all required monitoring forms used as well as any additional information/documents used in and received during the monitoring ? are submitted to the Program Specialists? supervisor for review and approval within 2 weeks of the completion of the monitoring visit. Upon supervisor approval, Program Specialist will forward the entire packet for review, approval and signature by the Community Development Division Manager and Fiscal Manager. Condition: During our testing, it was noted that the City did not perform the required percent of inspections. Also, the City lacked evidence of approval of the monitoring. Questioned costs: None Context: During our testing, we noted the following exceptions over housing quality standards requirements: ? For 1 of 5 projects, the City performed 17% of the required inspections rather than 20%. The one unit not inspected due to COVID-19 was not scheduled for reinspection. HUD did have a waiver in place for HQS Inspections from April 2020 until December 31, 2021. The inspection, however, was scheduled for March 24, 2022 which is subsequent to the extended waiver. ? For 1 of 5 projects, the City performed 33% of the required inspections rather than 100%. The City inspected one unit versus all three units. ? For 2 of 5 projects, the cover letter signed by the Community Development Division Manager and Fiscal Manager was not provided to us. 2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal housing quality standards regulation nor its HOME policies and procedures. Effect: The auditor noted instances of noncompliance. Noncompliance results in failure to identify those units on which housing quality inspections are due and perform inspections of units and that any needed repairs are completed timely. Recommendation: We recommend the City design controls to ensure compliance with federal housing quality standards regulation and its HOME policies and procedures. Management Response: The City concurs with the finding. The City did complete 20% of the program files however one unit was not inspected due to the client testing positive for COVID -19. In the future if a home in not able to be inspected, another tenant will be notified and a HQS inspection will occur at another residence at a later date. This action will be corrected by updating the Monitoring Checklist to ensure that staff knows the proper of units to be inspected. This will be reviewed with supervisor prior to monitoring. The City was not aware of the requirement that, in the case of HOME projects with between one and four units, all units needed to be inspected; the City typically looks at the project as a whole and inspects 10% or 20% depending on the Risk Assessment. This will be corrected in the future by updating the Monitoring Checklist to ensure staff knows the proper number of HOME units that need to be inspected. Timeline and Responsible Position: June 2023 ? Director of Family & Community Services
2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Housing Federal Program Name: HOME Investment Partnerships Program Assistance Listing Number: 14.239 Federal Award Identification Number and Year: Various Award Period: Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to 24 CFR 92.504(d)(1)(ii)(D), inspections must be based on a statistically valid sample of units appropriate for the size of the HOME-assisted project, as set forth by HUD through notice. For projects with one-to-four HOME-assisted units, participating jurisdiction must inspect 100 percent of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. According to Ch 8 HOME Monitoring, the Comprehensive Review requires that 20% of HOME-assisted unit tenant files be reviewed for content, as well as conduct HQS inspections on 20% of the HOME-assisted units, utilizing the HQS inspection form (Form HUD-52580). For projects with one-to-four (1 ? 4) HOME-assisted units, the City inspects 100 % of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. Upon completion of the Comprehensive Monitoring Review, Program Specialists are responsible for preparing a monitoring report letter and monitoring report. The cover letter, monitoring report and complete monitoring packet ? includes monitoring routing form, all required monitoring forms used as well as any additional information/documents used in and received during the monitoring ? are submitted to the Program Specialists? supervisor for review and approval within 2 weeks of the completion of the monitoring visit. Upon supervisor approval, Program Specialist will forward the entire packet for review, approval and signature by the Community Development Division Manager and Fiscal Manager. Condition: During our testing, it was noted that the City did not perform the required percent of inspections. Also, the City lacked evidence of approval of the monitoring. Questioned costs: None Context: During our testing, we noted the following exceptions over housing quality standards requirements: ? For 1 of 5 projects, the City performed 17% of the required inspections rather than 20%. The one unit not inspected due to COVID-19 was not scheduled for reinspection. HUD did have a waiver in place for HQS Inspections from April 2020 until December 31, 2021. The inspection, however, was scheduled for March 24, 2022 which is subsequent to the extended waiver. ? For 1 of 5 projects, the City performed 33% of the required inspections rather than 100%. The City inspected one unit versus all three units. ? For 2 of 5 projects, the cover letter signed by the Community Development Division Manager and Fiscal Manager was not provided to us. 2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal housing quality standards regulation nor its HOME policies and procedures. Effect: The auditor noted instances of noncompliance. Noncompliance results in failure to identify those units on which housing quality inspections are due and perform inspections of units and that any needed repairs are completed timely. Recommendation: We recommend the City design controls to ensure compliance with federal housing quality standards regulation and its HOME policies and procedures. Management Response: The City concurs with the finding. The City did complete 20% of the program files however one unit was not inspected due to the client testing positive for COVID -19. In the future if a home in not able to be inspected, another tenant will be notified and a HQS inspection will occur at another residence at a later date. This action will be corrected by updating the Monitoring Checklist to ensure that staff knows the proper of units to be inspected. This will be reviewed with supervisor prior to monitoring. The City was not aware of the requirement that, in the case of HOME projects with between one and four units, all units needed to be inspected; the City typically looks at the project as a whole and inspects 10% or 20% depending on the Risk Assessment. This will be corrected in the future by updating the Monitoring Checklist to ensure staff knows the proper number of HOME units that need to be inspected. Timeline and Responsible Position: June 2023 ? Director of Family & Community Services
2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Housing Federal Program Name: HOME Investment Partnerships Program Assistance Listing Number: 14.239 Federal Award Identification Number and Year: Various Award Period: Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to 24 CFR 92.504(d)(1)(ii)(D), inspections must be based on a statistically valid sample of units appropriate for the size of the HOME-assisted project, as set forth by HUD through notice. For projects with one-to-four HOME-assisted units, participating jurisdiction must inspect 100 percent of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. According to Ch 8 HOME Monitoring, the Comprehensive Review requires that 20% of HOME-assisted unit tenant files be reviewed for content, as well as conduct HQS inspections on 20% of the HOME-assisted units, utilizing the HQS inspection form (Form HUD-52580). For projects with one-to-four (1 ? 4) HOME-assisted units, the City inspects 100 % of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. Upon completion of the Comprehensive Monitoring Review, Program Specialists are responsible for preparing a monitoring report letter and monitoring report. The cover letter, monitoring report and complete monitoring packet ? includes monitoring routing form, all required monitoring forms used as well as any additional information/documents used in and received during the monitoring ? are submitted to the Program Specialists? supervisor for review and approval within 2 weeks of the completion of the monitoring visit. Upon supervisor approval, Program Specialist will forward the entire packet for review, approval and signature by the Community Development Division Manager and Fiscal Manager. Condition: During our testing, it was noted that the City did not perform the required percent of inspections. Also, the City lacked evidence of approval of the monitoring. Questioned costs: None Context: During our testing, we noted the following exceptions over housing quality standards requirements: ? For 1 of 5 projects, the City performed 17% of the required inspections rather than 20%. The one unit not inspected due to COVID-19 was not scheduled for reinspection. HUD did have a waiver in place for HQS Inspections from April 2020 until December 31, 2021. The inspection, however, was scheduled for March 24, 2022 which is subsequent to the extended waiver. ? For 1 of 5 projects, the City performed 33% of the required inspections rather than 100%. The City inspected one unit versus all three units. ? For 2 of 5 projects, the cover letter signed by the Community Development Division Manager and Fiscal Manager was not provided to us. 2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal housing quality standards regulation nor its HOME policies and procedures. Effect: The auditor noted instances of noncompliance. Noncompliance results in failure to identify those units on which housing quality inspections are due and perform inspections of units and that any needed repairs are completed timely. Recommendation: We recommend the City design controls to ensure compliance with federal housing quality standards regulation and its HOME policies and procedures. Management Response: The City concurs with the finding. The City did complete 20% of the program files however one unit was not inspected due to the client testing positive for COVID -19. In the future if a home in not able to be inspected, another tenant will be notified and a HQS inspection will occur at another residence at a later date. This action will be corrected by updating the Monitoring Checklist to ensure that staff knows the proper of units to be inspected. This will be reviewed with supervisor prior to monitoring. The City was not aware of the requirement that, in the case of HOME projects with between one and four units, all units needed to be inspected; the City typically looks at the project as a whole and inspects 10% or 20% depending on the Risk Assessment. This will be corrected in the future by updating the Monitoring Checklist to ensure staff knows the proper number of HOME units that need to be inspected. Timeline and Responsible Position: June 2023 ? Director of Family & Community Services
2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Housing Federal Program Name: HOME Investment Partnerships Program Assistance Listing Number: 14.239 Federal Award Identification Number and Year: Various Award Period: Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to 24 CFR 92.504(d)(1)(ii)(D), inspections must be based on a statistically valid sample of units appropriate for the size of the HOME-assisted project, as set forth by HUD through notice. For projects with one-to-four HOME-assisted units, participating jurisdiction must inspect 100 percent of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. According to Ch 8 HOME Monitoring, the Comprehensive Review requires that 20% of HOME-assisted unit tenant files be reviewed for content, as well as conduct HQS inspections on 20% of the HOME-assisted units, utilizing the HQS inspection form (Form HUD-52580). For projects with one-to-four (1 ? 4) HOME-assisted units, the City inspects 100 % of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. Upon completion of the Comprehensive Monitoring Review, Program Specialists are responsible for preparing a monitoring report letter and monitoring report. The cover letter, monitoring report and complete monitoring packet ? includes monitoring routing form, all required monitoring forms used as well as any additional information/documents used in and received during the monitoring ? are submitted to the Program Specialists? supervisor for review and approval within 2 weeks of the completion of the monitoring visit. Upon supervisor approval, Program Specialist will forward the entire packet for review, approval and signature by the Community Development Division Manager and Fiscal Manager. Condition: During our testing, it was noted that the City did not perform the required percent of inspections. Also, the City lacked evidence of approval of the monitoring. Questioned costs: None Context: During our testing, we noted the following exceptions over housing quality standards requirements: ? For 1 of 5 projects, the City performed 17% of the required inspections rather than 20%. The one unit not inspected due to COVID-19 was not scheduled for reinspection. HUD did have a waiver in place for HQS Inspections from April 2020 until December 31, 2021. The inspection, however, was scheduled for March 24, 2022 which is subsequent to the extended waiver. ? For 1 of 5 projects, the City performed 33% of the required inspections rather than 100%. The City inspected one unit versus all three units. ? For 2 of 5 projects, the cover letter signed by the Community Development Division Manager and Fiscal Manager was not provided to us. 2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal housing quality standards regulation nor its HOME policies and procedures. Effect: The auditor noted instances of noncompliance. Noncompliance results in failure to identify those units on which housing quality inspections are due and perform inspections of units and that any needed repairs are completed timely. Recommendation: We recommend the City design controls to ensure compliance with federal housing quality standards regulation and its HOME policies and procedures. Management Response: The City concurs with the finding. The City did complete 20% of the program files however one unit was not inspected due to the client testing positive for COVID -19. In the future if a home in not able to be inspected, another tenant will be notified and a HQS inspection will occur at another residence at a later date. This action will be corrected by updating the Monitoring Checklist to ensure that staff knows the proper of units to be inspected. This will be reviewed with supervisor prior to monitoring. The City was not aware of the requirement that, in the case of HOME projects with between one and four units, all units needed to be inspected; the City typically looks at the project as a whole and inspects 10% or 20% depending on the Risk Assessment. This will be corrected in the future by updating the Monitoring Checklist to ensure staff knows the proper number of HOME units that need to be inspected. Timeline and Responsible Position: June 2023 ? Director of Family & Community Services
2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Housing Federal Program Name: HOME Investment Partnerships Program Assistance Listing Number: 14.239 Federal Award Identification Number and Year: Various Award Period: Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to 24 CFR 92.504(d)(1)(ii)(D), inspections must be based on a statistically valid sample of units appropriate for the size of the HOME-assisted project, as set forth by HUD through notice. For projects with one-to-four HOME-assisted units, participating jurisdiction must inspect 100 percent of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. According to Ch 8 HOME Monitoring, the Comprehensive Review requires that 20% of HOME-assisted unit tenant files be reviewed for content, as well as conduct HQS inspections on 20% of the HOME-assisted units, utilizing the HQS inspection form (Form HUD-52580). For projects with one-to-four (1 ? 4) HOME-assisted units, the City inspects 100 % of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. Upon completion of the Comprehensive Monitoring Review, Program Specialists are responsible for preparing a monitoring report letter and monitoring report. The cover letter, monitoring report and complete monitoring packet ? includes monitoring routing form, all required monitoring forms used as well as any additional information/documents used in and received during the monitoring ? are submitted to the Program Specialists? supervisor for review and approval within 2 weeks of the completion of the monitoring visit. Upon supervisor approval, Program Specialist will forward the entire packet for review, approval and signature by the Community Development Division Manager and Fiscal Manager. Condition: During our testing, it was noted that the City did not perform the required percent of inspections. Also, the City lacked evidence of approval of the monitoring. Questioned costs: None Context: During our testing, we noted the following exceptions over housing quality standards requirements: ? For 1 of 5 projects, the City performed 17% of the required inspections rather than 20%. The one unit not inspected due to COVID-19 was not scheduled for reinspection. HUD did have a waiver in place for HQS Inspections from April 2020 until December 31, 2021. The inspection, however, was scheduled for March 24, 2022 which is subsequent to the extended waiver. ? For 1 of 5 projects, the City performed 33% of the required inspections rather than 100%. The City inspected one unit versus all three units. ? For 2 of 5 projects, the cover letter signed by the Community Development Division Manager and Fiscal Manager was not provided to us. 2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal housing quality standards regulation nor its HOME policies and procedures. Effect: The auditor noted instances of noncompliance. Noncompliance results in failure to identify those units on which housing quality inspections are due and perform inspections of units and that any needed repairs are completed timely. Recommendation: We recommend the City design controls to ensure compliance with federal housing quality standards regulation and its HOME policies and procedures. Management Response: The City concurs with the finding. The City did complete 20% of the program files however one unit was not inspected due to the client testing positive for COVID -19. In the future if a home in not able to be inspected, another tenant will be notified and a HQS inspection will occur at another residence at a later date. This action will be corrected by updating the Monitoring Checklist to ensure that staff knows the proper of units to be inspected. This will be reviewed with supervisor prior to monitoring. The City was not aware of the requirement that, in the case of HOME projects with between one and four units, all units needed to be inspected; the City typically looks at the project as a whole and inspects 10% or 20% depending on the Risk Assessment. This will be corrected in the future by updating the Monitoring Checklist to ensure staff knows the proper number of HOME units that need to be inspected. Timeline and Responsible Position: June 2023 ? Director of Family & Community Services
2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Housing Federal Program Name: HOME Investment Partnerships Program Assistance Listing Number: 14.239 Federal Award Identification Number and Year: Various Award Period: Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to 24 CFR 92.504(d)(1)(ii)(D), inspections must be based on a statistically valid sample of units appropriate for the size of the HOME-assisted project, as set forth by HUD through notice. For projects with one-to-four HOME-assisted units, participating jurisdiction must inspect 100 percent of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. According to Ch 8 HOME Monitoring, the Comprehensive Review requires that 20% of HOME-assisted unit tenant files be reviewed for content, as well as conduct HQS inspections on 20% of the HOME-assisted units, utilizing the HQS inspection form (Form HUD-52580). For projects with one-to-four (1 ? 4) HOME-assisted units, the City inspects 100 % of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. Upon completion of the Comprehensive Monitoring Review, Program Specialists are responsible for preparing a monitoring report letter and monitoring report. The cover letter, monitoring report and complete monitoring packet ? includes monitoring routing form, all required monitoring forms used as well as any additional information/documents used in and received during the monitoring ? are submitted to the Program Specialists? supervisor for review and approval within 2 weeks of the completion of the monitoring visit. Upon supervisor approval, Program Specialist will forward the entire packet for review, approval and signature by the Community Development Division Manager and Fiscal Manager. Condition: During our testing, it was noted that the City did not perform the required percent of inspections. Also, the City lacked evidence of approval of the monitoring. Questioned costs: None Context: During our testing, we noted the following exceptions over housing quality standards requirements: ? For 1 of 5 projects, the City performed 17% of the required inspections rather than 20%. The one unit not inspected due to COVID-19 was not scheduled for reinspection. HUD did have a waiver in place for HQS Inspections from April 2020 until December 31, 2021. The inspection, however, was scheduled for March 24, 2022 which is subsequent to the extended waiver. ? For 1 of 5 projects, the City performed 33% of the required inspections rather than 100%. The City inspected one unit versus all three units. ? For 2 of 5 projects, the cover letter signed by the Community Development Division Manager and Fiscal Manager was not provided to us. 2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal housing quality standards regulation nor its HOME policies and procedures. Effect: The auditor noted instances of noncompliance. Noncompliance results in failure to identify those units on which housing quality inspections are due and perform inspections of units and that any needed repairs are completed timely. Recommendation: We recommend the City design controls to ensure compliance with federal housing quality standards regulation and its HOME policies and procedures. Management Response: The City concurs with the finding. The City did complete 20% of the program files however one unit was not inspected due to the client testing positive for COVID -19. In the future if a home in not able to be inspected, another tenant will be notified and a HQS inspection will occur at another residence at a later date. This action will be corrected by updating the Monitoring Checklist to ensure that staff knows the proper of units to be inspected. This will be reviewed with supervisor prior to monitoring. The City was not aware of the requirement that, in the case of HOME projects with between one and four units, all units needed to be inspected; the City typically looks at the project as a whole and inspects 10% or 20% depending on the Risk Assessment. This will be corrected in the future by updating the Monitoring Checklist to ensure staff knows the proper number of HOME units that need to be inspected. Timeline and Responsible Position: June 2023 ? Director of Family & Community Services
2022 ? 005 Allowable Activities and Costs/Cost Principals (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury U.S. Department of Housing U.S. Department of Transportation Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds HOME Investment Partnerships Program Federal Transit Cluster Assistance Listing Number: 21.027, 14.239, Multiple Federal Award Identification Number and Year: ALN 21.027: Pub. L. No. 117-2-2021 ALN 14.239 M-19-MC-35-0209 2019 & M-16-MC-35-0209 2016; ALN Multiple: NM-2020-010 Award Period: ALN 21.027 ? 5/10/2021 - 12/31/2026 ALN 14.239 ? 7/22/2016-9/1/2027 ALN Multiple ? 1/20/2020-12/31/2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to ? 200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Further, the financial management system of each non-Federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements. According to the City's ARPA Program Plan Memorandum, all applicants must have 50 or fewer full-time equivalent (FTE) employees. Once the application is complete, it will enter a secondary review for final decision. Once a business receives a grant they must submit a report six months after as detailed in the grant agreement. Condition: During single audit testwork over reporting, the following issues were noted which are detailed by ALN Number. ALN 21.027 ? The City did not obtain employment verification for one applicant, perform a secondary review for two applications, nor obtain the six-month report for six applications. ALN 14.239/Multiple ? The City did not have effective internal controls in place to ensure timesheets are prepared timely as well as payroll grant hours accurately recorded in the accounting system. 2022 ? 005 Allowable Activities and Costs/Cost Principals (Significant Deficiency and Noncompliance) (Continued) Questioned costs: ALN 21.027: $30,000 ALN 14.239: $69.63 ALN Multiple: None Context: During our testing, we noted the following exceptions, which are detailed by ALN Number. ALN 21.027 ? 1 of the 60 small business applications did not have the number of employees. ? 2 of the 60 small business grant applications did not have a secondary review for final decision. ? 6 of the 60 small businesses did not submit a report six months after receiving the grant. ALN 14.239 ? During our testing, we noted three instances in which an employee's timesheet was not signed by the employee and their supervisor until between 8-12 months after the pay period ended. Also, we noted three instances in which grant hours listed on timesheets did not agree to the hours recorded in the accounting system and charged to the grant. ALN Multiple ? During our testing, we noted two instances in which an employee's time was not approved by their supervisor. Cause: The City did not follow its ARPA Program Plan Memorandum. Additionally, the City lacks a policy and internal control related to the required timing of timesheet preparation, review and approval. Effect: The auditor noted instances of noncompliance and lack of effective internal controls. Noncompliance results in ineligible small businesses receiving grant funding and the City not receiving the required reporting by the small businesses. Recommendation: We recommend the City design controls to ensure an adequate review process is in place to review applications to determine the eligibility of small business for grant funding. Also, we recommend the City design controls to ensure any required reports are submitted by grantees. Additionally, we recommend the City create a policy related to timesheet preparation, review and approval as well as develop a procedure to ensure all grant hours listed on timesheets are reconciled to the accounting system. Management Response: Management agrees with the finding. The grants distributed by the Economic Development Department were a lifeline to small businesses that were just holding on. While a strong program was set up in a very short timeframe some reviews and follow-up were not completed. Additionally, the Family & Community Services Department will ensure timesheets are signed timely. Additionally, the department will work with the Grants Section to ensure timesheets, Kronos and Peoplesoft agree. Timeline and Responsible Position: June 2023 ? Department Directors, Economic Development, Family & Community Services and Transit
2022 ? 004 (Previously 2021-012) Suspension and Debarment (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury U.S. Department of Transportation Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Federal Transit Cluster Assistance Listing Number: 21.027, Multiple Federal Award Identification Number and Year: ALN 21.027 ? Pub. L. No. 117-2- 2021; ALN Multiple ? 1523-2020-2 Award Period: ALN 21.027 ? 5/10/2021 - 12/31/2026 ALN Multiple ? 7/1/2019 ? 12/31/2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to the Program Compliance Supplement 2022 Part 4, prior to entering into subawards and contracts with award funds, recipients must verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded pursuant to 31 CFR section 19.300. Per 31 CFR Part 19, when you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person. Condition: During our testing, it was noted that the City did not follow federal suspension and debarment regulation nor its federal suspension and debarment procedures. Questioned costs: None Context: During single audit testwork over reporting, the following issues were noted which are detailed by ALN Number. ALN 21.027 ? For 1 of 2 procurement transactions, the City did not use one of the three ways a non-federal entity may accomplish the verification. The City included the suspension and debarment language on the back of the purchase order. 2022 ? 004 (Previously 2021-012) Suspension and Debarment (Significant Deficiency and Noncompliance) (Continued) ALN 21.027 (continued) ? For 1 of 3 subawards, the City did not perform searches in sam.gov with all potential entity names. The entity name used by the City in the search is not the entity name used in sam.gov. ? For 2 of 2 procurement transactions and 3 of 3 subawards, the City did not perform an exclusion check on sam.gov. This is not in accordance with the City's suspension and debarment procedures which is a www.sam.gov print screen of vendor (debarment check). Also, the City did not provide us with the SAMS (System for Award Management) form required as part of the requisition process. No evidence of review and approval of suspension and debarment verification checks. ALN Multiple ? For 1 of 1 procurement transactions, the City did not perform an exclusion check on sam.gov. This is not in accordance with the City's suspension and debarment procedures which is a www.sam.gov print screen of vendor (debarment check). Also, the City did not provide us with the SAMS (System for Award Management) form required as part of the requisition process. No evidence of review and approval of suspension and debarment verification checks. Management?s Progress for Repeat Findings: The 2021 finding was specific to one department and those controls were put in place. During 2022 other departments were not following suspension and debarment procedures. The 2022 management response will facilitate all City departments to follow the procedures. Cause: The City failed to follow suspension and debarment procedures. Repeat Finding: 2021-012 Effect: The auditor noted instances of noncompliance. Noncompliance results in entering into covered transactions with federally suspended and debarred entities. Recommendation: We recommend the City follow its procedures to ensure compliance with federal suspension and debarment regulation. Management Response: Management agrees with the finding. The City is implementing a new system, Contracts Life Management (CLM) that will go live in March 2023. We will add an intake form under the federal funding section. The intake form will include the question ?Is the Supplier suspended or debarred?? If the answer is yes, the contract process will not be allowed to proceed. Timeline and Responsible Position: June 2023 ? Chief Procurement Officer
2022 ? 006 (Previously 2021-012) Procurement (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury, U.S. Department of Transportation Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027, Multiple Federal Award Identification Number and Year: Pub. L. No. 117-2-2021, Various Award Period: 5/10/2021 - 12/31/2026 Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to ? 200.320 Methods of procurement to be followed of 2 CFR Part 200, when the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold, or a lower threshold established by a non-Federal entity, formal procurement methods are required. According to the City's Federal Procurement Guidance, formal procurement methods are required when goods and services are over $100,000. Condition: During our testing, it was noted that the City did not follow federal procurement regulation nor its federal procurement policy. Questioned costs: $160,181 Context: During our testing, we noted the following exceptions, which are detailed by ALN Number. ALN 21.027 ? For 1 of 4 procurement transactions totaling approximately $160.2K, the City utilized a RFB with a closing date of 09/05/2016. ALN Multiple ? For 3 of 7 procurement transactions, the executed contract/agreement was not provided to us. ? For 2 of 7 procurement transactions, the RFP and evaluation sheets were not provided to us. ? For 1 of 7 procurement transactions, only the Cost Price Analysis, ICE, and Purchase Order Release were provided to us. No other supporting documentation. ? For 1 of 7 procurement transactions, the SPA provided to us was not current. Management?s Progress for Repeat Findings: The City plans to review the controls in place to ensure that our federal procurement guidelines are clear on City process and the need for retention of proper supporting documentation. In addition, we will also plan to have the SEFA completed well before the deadline to allow sufficient management review and major programs can be identified earlier in the audit process. The additional time will allow City departments to provide requested audit documentation within the Auditor?s deadlines. 2022 ? 006 (Previously 2021-012) Procurement (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal procurement regulation nor its federal procurement policy. Repeat Finding: 2021-012 Effect: The auditor noted instances of noncompliance. Noncompliance results in procurement transactions for the acquisition of property or services required under a federal award not conducted in a manner providing full and open competition. Recommendation: We recommend the City design controls to ensure compliance with federal procurement regulation and its federal procurement policy. Management Response: The City respectfully disagrees with the finding. The two exceptions noted above are, on the contrary, examples of good fiscal management by the City. The statewide price agreement and the cooperative education services contract were both competitive. The uniform grant guidance in to ? 200.318(e) below encourages state and local intergovernmental agreements. To foster greater economy and efficiency, and in accordance with efforts to promote cost-effective use of shared services across the Federal Government, the non-Federal entity is encouraged to enter into state and local intergovernmental agreements or inter-entity agreements where appropriate for procurement or use of common or shared goods and services. Competition requirements will be met with documented procurement actions using strategic sourcing, shared services, and other similar procurement arrangements. In addition, the City did compete the temporary employment services. The request for bids awarded contracts in October 2016. Three (3) years, three (3) months into the five (5) year term of the contract, the first COVID case was reported in the United States and the President declared a public health emergency on January 31. New Mexico and the City of Albuquerque soon followed with their declarations. The City made the decision to extend the existing contract with the existing rates. There is nothing in City policy that prevents extension of contracts for a specific length of time. Extending the contract most likely was a cost savings to the City because the rates would most likely would have increased. Auditor?s Response: We were not provided supporting documentation, as identified in management?s response, during our testwork over procurement to apply the necessary procedures to resolve this exception. Timeline and Responsible Position: June 2023 ? Chief Procurement Officer
2022 ? 006 (Previously 2021-012) Procurement (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury, U.S. Department of Transportation Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027, Multiple Federal Award Identification Number and Year: Pub. L. No. 117-2-2021, Various Award Period: 5/10/2021 - 12/31/2026 Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to ? 200.320 Methods of procurement to be followed of 2 CFR Part 200, when the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold, or a lower threshold established by a non-Federal entity, formal procurement methods are required. According to the City's Federal Procurement Guidance, formal procurement methods are required when goods and services are over $100,000. Condition: During our testing, it was noted that the City did not follow federal procurement regulation nor its federal procurement policy. Questioned costs: $160,181 Context: During our testing, we noted the following exceptions, which are detailed by ALN Number. ALN 21.027 ? For 1 of 4 procurement transactions totaling approximately $160.2K, the City utilized a RFB with a closing date of 09/05/2016. ALN Multiple ? For 3 of 7 procurement transactions, the executed contract/agreement was not provided to us. ? For 2 of 7 procurement transactions, the RFP and evaluation sheets were not provided to us. ? For 1 of 7 procurement transactions, only the Cost Price Analysis, ICE, and Purchase Order Release were provided to us. No other supporting documentation. ? For 1 of 7 procurement transactions, the SPA provided to us was not current. Management?s Progress for Repeat Findings: The City plans to review the controls in place to ensure that our federal procurement guidelines are clear on City process and the need for retention of proper supporting documentation. In addition, we will also plan to have the SEFA completed well before the deadline to allow sufficient management review and major programs can be identified earlier in the audit process. The additional time will allow City departments to provide requested audit documentation within the Auditor?s deadlines. 2022 ? 006 (Previously 2021-012) Procurement (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal procurement regulation nor its federal procurement policy. Repeat Finding: 2021-012 Effect: The auditor noted instances of noncompliance. Noncompliance results in procurement transactions for the acquisition of property or services required under a federal award not conducted in a manner providing full and open competition. Recommendation: We recommend the City design controls to ensure compliance with federal procurement regulation and its federal procurement policy. Management Response: The City respectfully disagrees with the finding. The two exceptions noted above are, on the contrary, examples of good fiscal management by the City. The statewide price agreement and the cooperative education services contract were both competitive. The uniform grant guidance in to ? 200.318(e) below encourages state and local intergovernmental agreements. To foster greater economy and efficiency, and in accordance with efforts to promote cost-effective use of shared services across the Federal Government, the non-Federal entity is encouraged to enter into state and local intergovernmental agreements or inter-entity agreements where appropriate for procurement or use of common or shared goods and services. Competition requirements will be met with documented procurement actions using strategic sourcing, shared services, and other similar procurement arrangements. In addition, the City did compete the temporary employment services. The request for bids awarded contracts in October 2016. Three (3) years, three (3) months into the five (5) year term of the contract, the first COVID case was reported in the United States and the President declared a public health emergency on January 31. New Mexico and the City of Albuquerque soon followed with their declarations. The City made the decision to extend the existing contract with the existing rates. There is nothing in City policy that prevents extension of contracts for a specific length of time. Extending the contract most likely was a cost savings to the City because the rates would most likely would have increased. Auditor?s Response: We were not provided supporting documentation, as identified in management?s response, during our testwork over procurement to apply the necessary procedures to resolve this exception. Timeline and Responsible Position: June 2023 ? Chief Procurement Officer
2022 ? 006 (Previously 2021-012) Procurement (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury, U.S. Department of Transportation Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027, Multiple Federal Award Identification Number and Year: Pub. L. No. 117-2-2021, Various Award Period: 5/10/2021 - 12/31/2026 Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to ? 200.320 Methods of procurement to be followed of 2 CFR Part 200, when the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold, or a lower threshold established by a non-Federal entity, formal procurement methods are required. According to the City's Federal Procurement Guidance, formal procurement methods are required when goods and services are over $100,000. Condition: During our testing, it was noted that the City did not follow federal procurement regulation nor its federal procurement policy. Questioned costs: $160,181 Context: During our testing, we noted the following exceptions, which are detailed by ALN Number. ALN 21.027 ? For 1 of 4 procurement transactions totaling approximately $160.2K, the City utilized a RFB with a closing date of 09/05/2016. ALN Multiple ? For 3 of 7 procurement transactions, the executed contract/agreement was not provided to us. ? For 2 of 7 procurement transactions, the RFP and evaluation sheets were not provided to us. ? For 1 of 7 procurement transactions, only the Cost Price Analysis, ICE, and Purchase Order Release were provided to us. No other supporting documentation. ? For 1 of 7 procurement transactions, the SPA provided to us was not current. Management?s Progress for Repeat Findings: The City plans to review the controls in place to ensure that our federal procurement guidelines are clear on City process and the need for retention of proper supporting documentation. In addition, we will also plan to have the SEFA completed well before the deadline to allow sufficient management review and major programs can be identified earlier in the audit process. The additional time will allow City departments to provide requested audit documentation within the Auditor?s deadlines. 2022 ? 006 (Previously 2021-012) Procurement (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal procurement regulation nor its federal procurement policy. Repeat Finding: 2021-012 Effect: The auditor noted instances of noncompliance. Noncompliance results in procurement transactions for the acquisition of property or services required under a federal award not conducted in a manner providing full and open competition. Recommendation: We recommend the City design controls to ensure compliance with federal procurement regulation and its federal procurement policy. Management Response: The City respectfully disagrees with the finding. The two exceptions noted above are, on the contrary, examples of good fiscal management by the City. The statewide price agreement and the cooperative education services contract were both competitive. The uniform grant guidance in to ? 200.318(e) below encourages state and local intergovernmental agreements. To foster greater economy and efficiency, and in accordance with efforts to promote cost-effective use of shared services across the Federal Government, the non-Federal entity is encouraged to enter into state and local intergovernmental agreements or inter-entity agreements where appropriate for procurement or use of common or shared goods and services. Competition requirements will be met with documented procurement actions using strategic sourcing, shared services, and other similar procurement arrangements. In addition, the City did compete the temporary employment services. The request for bids awarded contracts in October 2016. Three (3) years, three (3) months into the five (5) year term of the contract, the first COVID case was reported in the United States and the President declared a public health emergency on January 31. New Mexico and the City of Albuquerque soon followed with their declarations. The City made the decision to extend the existing contract with the existing rates. There is nothing in City policy that prevents extension of contracts for a specific length of time. Extending the contract most likely was a cost savings to the City because the rates would most likely would have increased. Auditor?s Response: We were not provided supporting documentation, as identified in management?s response, during our testwork over procurement to apply the necessary procedures to resolve this exception. Timeline and Responsible Position: June 2023 ? Chief Procurement Officer
2022 ? 006 (Previously 2021-012) Procurement (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury, U.S. Department of Transportation Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027, Multiple Federal Award Identification Number and Year: Pub. L. No. 117-2-2021, Various Award Period: 5/10/2021 - 12/31/2026 Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to ? 200.320 Methods of procurement to be followed of 2 CFR Part 200, when the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold, or a lower threshold established by a non-Federal entity, formal procurement methods are required. According to the City's Federal Procurement Guidance, formal procurement methods are required when goods and services are over $100,000. Condition: During our testing, it was noted that the City did not follow federal procurement regulation nor its federal procurement policy. Questioned costs: $160,181 Context: During our testing, we noted the following exceptions, which are detailed by ALN Number. ALN 21.027 ? For 1 of 4 procurement transactions totaling approximately $160.2K, the City utilized a RFB with a closing date of 09/05/2016. ALN Multiple ? For 3 of 7 procurement transactions, the executed contract/agreement was not provided to us. ? For 2 of 7 procurement transactions, the RFP and evaluation sheets were not provided to us. ? For 1 of 7 procurement transactions, only the Cost Price Analysis, ICE, and Purchase Order Release were provided to us. No other supporting documentation. ? For 1 of 7 procurement transactions, the SPA provided to us was not current. Management?s Progress for Repeat Findings: The City plans to review the controls in place to ensure that our federal procurement guidelines are clear on City process and the need for retention of proper supporting documentation. In addition, we will also plan to have the SEFA completed well before the deadline to allow sufficient management review and major programs can be identified earlier in the audit process. The additional time will allow City departments to provide requested audit documentation within the Auditor?s deadlines. 2022 ? 006 (Previously 2021-012) Procurement (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal procurement regulation nor its federal procurement policy. Repeat Finding: 2021-012 Effect: The auditor noted instances of noncompliance. Noncompliance results in procurement transactions for the acquisition of property or services required under a federal award not conducted in a manner providing full and open competition. Recommendation: We recommend the City design controls to ensure compliance with federal procurement regulation and its federal procurement policy. Management Response: The City respectfully disagrees with the finding. The two exceptions noted above are, on the contrary, examples of good fiscal management by the City. The statewide price agreement and the cooperative education services contract were both competitive. The uniform grant guidance in to ? 200.318(e) below encourages state and local intergovernmental agreements. To foster greater economy and efficiency, and in accordance with efforts to promote cost-effective use of shared services across the Federal Government, the non-Federal entity is encouraged to enter into state and local intergovernmental agreements or inter-entity agreements where appropriate for procurement or use of common or shared goods and services. Competition requirements will be met with documented procurement actions using strategic sourcing, shared services, and other similar procurement arrangements. In addition, the City did compete the temporary employment services. The request for bids awarded contracts in October 2016. Three (3) years, three (3) months into the five (5) year term of the contract, the first COVID case was reported in the United States and the President declared a public health emergency on January 31. New Mexico and the City of Albuquerque soon followed with their declarations. The City made the decision to extend the existing contract with the existing rates. There is nothing in City policy that prevents extension of contracts for a specific length of time. Extending the contract most likely was a cost savings to the City because the rates would most likely would have increased. Auditor?s Response: We were not provided supporting documentation, as identified in management?s response, during our testwork over procurement to apply the necessary procedures to resolve this exception. Timeline and Responsible Position: June 2023 ? Chief Procurement Officer
2022 ? 008 Reporting (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Emergency Rental Assistance Program Assistance Listing Number: 21.027, 21.023 Federal Award Identification Number and Year: ALN 21.027 ? Pub. L. No. 117-2 2021 ALN 21.023 ? ERA0335 - 2021 Award Period: ALN 21.027 ? 5/10/2021 - 12/31/2026 ALN 21.023 ? 1/20/2021 - 9/30/2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to ? 200.302 Financial management of 2 CFR Part 200, the non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. Further, the financial management system of each non-Federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements. According to ? 200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to the Compliance Supplement 2022 Part 3, program income does not include interest earned on advances of federal funds. Condition: During our testing, it was noted that the City did not have effective internal controls in place to ensure accurate and complete reporting. Questioned costs: None Context: During our testing, we noted the following exceptions, which are detailed by ALN Number. ALN 21.027 ? For the interim report, support was not provided for Category 1.7 Capital Investments or Physical Plant Changes to Public Facilities that respond to the COVID-19 public health emergency Cumulative Obligations of approximately $280.2K. The City did, however, cancel this project after the initial reporting. 2022 ? 008 Reporting (Significant Deficiency and Noncompliance) (Continued) ALN 21.027 (continued) ? For the Project and Expenditure Report 1, we noted the following exceptions. o Project Name: Police Vehicles Total Cumulative Obligations of approximately $2,654,705. The City identified requisitions and purchase orders of approximately $2,655,183. Thus, a variance of $478. o Project Name: Police Vehicles Total Cumulative Obligations and Total Cumulative Expenditures of approximately $2,654,705 and $1,095,985, respectively, are listed twice in the project overview. Thus, the project is duplicated in the Total Obligations and Total Expenditures in the overview section. The City states this to be a glitch of the portal. However, there is no communication between the City and Treasury to evidence the Treasury's acknowledgment of this glitch in the portal. o Project Name: Eviction Prevention: New Mexico Legal Aid Total Cumulative Obligations of approximately $216K. The total should be approximately $26K. Thus, a variance of $190K. ? Subaward No: SUB-0034501 Period of Performance Start and End of 9/1/2021 to 12/31/2022. However, the subrecipient agreement signed by all parties early September 2021 has a Subaward Period of Performance Start and End Date 9/14/2021 to 3/31/2022. ? Subaward No: SUB-0034394 Period of Performance Start and End of 10/25/2021 to 12/31/2022. However, the contract control form approved by all parties late October 2021 has a contract term 10/20/2021 to 10/19/2022. ? Subaward No: SUB-0034455 Subaward Date of 3/11/2021. This date is the Federal Award Date of Award to the Recipient by the Federal Agency not the subaward start date of 9/1/2021. The subrecipient agreement signed by all parties 9/29/2021 and 10/1/2021. ? Subaward No: SUB-0034462 Subaward Date of 3/11/2021. This date is the Federal Award Date of Award to the Recipient by the Federal Agency not the subaward start date of 9/1/2021. The subrecipient agreement signed by all parties late December 2021. ? Expenditures for Awards more than $50,000 ? All projects have a Subaward Amount of 54405428.50. The City states this to be an error with the portal exporting. However, there is no communication between the City and Treasury to evidence the Treasury's acknowledgment of this error with portal exporting. ? Subaward Crossroads for Women amount of $750K with Subaward Period of Performance Start and End Date of 12/1/2021 to 12/31/2024 not included in the report. Agreement signed by all parties end December 2021. ? Contractual 2021 expenditures of approximately $122K not included in the report. o For the Project and Expenditure Report 2, we noted the following exceptions. ? Subaward No: SLFRP0013-RIVENROCK Subaward Obligation of $50K. However, total purchase order amount of approximately $74.5K. Thus, a variance of approximately $24.5K. ? Subaward No: 33-202200796 Subaward Date of 9/1/2021 and Period of Performance Start and End of 9/1/2021 to 12/31/2023. However, the subrecipient agreement signed by all parties end December 2021 has a Subaward Date of 12/1/2021 and Subaward Period of Performance Start and End Date 12/1/2021 to 12/31/2024. ? Payments To Individuals Expenditure: EN-00044853 Total Period Expenditure Amount of approximately $6.9 million. Amount includes approximately $128.1K of contractor payments not business grants. 2022 ? 008 Reporting (Significant Deficiency and Noncompliance) (Continued) ALN 21.023 ? For 3 of 5 financial reports, the City reported interest earned on advances of federal funds totaling approximately $380.8K as program income. However, interest earned on advances of federal funds is not program income. ? For 1 of 5 special quarterly reports, we noted the following exceptions. o The City did not provide support for any changes from the last report we had which was ERA 1 Quarter 3 2021 (July-September). o The City incorrectly reported cumulative expenditures to date of approximately $13.1 million The amount reported should have been approximately $17.1 million based on a reconciliation provided to us by the City. Thus, a variance of approximately $4 million. o The City incorrectly reported cumulative obligations to date of approximately $23.7 million. The amount reported should have been approximately $23.6 million based on a reconciliation provided to us by the City. Thus, a variance of approximately $151K. Cause: The City lacks effective internal controls and procedures over financial grant management to ensure submitted reports are complete and agree to supporting documentation. Effect: The auditor noted instances of noncompliance. Noncompliance results in inaccurate reporting. Recommendation: We recommend the City design controls to ensure compliance with federal financial management regulation. Management Response: The City agrees with the finding. The City will implement controls to ensure compliance with federal financial management regulations. The City recognizes that it needs to improve its procedures for preparing quarterly report for Treasury funds. Going forward, the Family and Community Services Department will work with the Grants Section to develop and implement standardized procedures for identifying and documenting expenditures, and for reviewing quarterly reports prior to submission. Timeline and Responsible Position: June 2023 ? City Controller/DFAS Deputy Director and Director of Family & Community Services
2022 ? 004 (Previously 2021-012) Suspension and Debarment (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury U.S. Department of Transportation Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Federal Transit Cluster Assistance Listing Number: 21.027, Multiple Federal Award Identification Number and Year: ALN 21.027 ? Pub. L. No. 117-2- 2021; ALN Multiple ? 1523-2020-2 Award Period: ALN 21.027 ? 5/10/2021 - 12/31/2026 ALN Multiple ? 7/1/2019 ? 12/31/2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to the Program Compliance Supplement 2022 Part 4, prior to entering into subawards and contracts with award funds, recipients must verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded pursuant to 31 CFR section 19.300. Per 31 CFR Part 19, when you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person. Condition: During our testing, it was noted that the City did not follow federal suspension and debarment regulation nor its federal suspension and debarment procedures. Questioned costs: None Context: During single audit testwork over reporting, the following issues were noted which are detailed by ALN Number. ALN 21.027 ? For 1 of 2 procurement transactions, the City did not use one of the three ways a non-federal entity may accomplish the verification. The City included the suspension and debarment language on the back of the purchase order. 2022 ? 004 (Previously 2021-012) Suspension and Debarment (Significant Deficiency and Noncompliance) (Continued) ALN 21.027 (continued) ? For 1 of 3 subawards, the City did not perform searches in sam.gov with all potential entity names. The entity name used by the City in the search is not the entity name used in sam.gov. ? For 2 of 2 procurement transactions and 3 of 3 subawards, the City did not perform an exclusion check on sam.gov. This is not in accordance with the City's suspension and debarment procedures which is a www.sam.gov print screen of vendor (debarment check). Also, the City did not provide us with the SAMS (System for Award Management) form required as part of the requisition process. No evidence of review and approval of suspension and debarment verification checks. ALN Multiple ? For 1 of 1 procurement transactions, the City did not perform an exclusion check on sam.gov. This is not in accordance with the City's suspension and debarment procedures which is a www.sam.gov print screen of vendor (debarment check). Also, the City did not provide us with the SAMS (System for Award Management) form required as part of the requisition process. No evidence of review and approval of suspension and debarment verification checks. Management?s Progress for Repeat Findings: The 2021 finding was specific to one department and those controls were put in place. During 2022 other departments were not following suspension and debarment procedures. The 2022 management response will facilitate all City departments to follow the procedures. Cause: The City failed to follow suspension and debarment procedures. Repeat Finding: 2021-012 Effect: The auditor noted instances of noncompliance. Noncompliance results in entering into covered transactions with federally suspended and debarred entities. Recommendation: We recommend the City follow its procedures to ensure compliance with federal suspension and debarment regulation. Management Response: Management agrees with the finding. The City is implementing a new system, Contracts Life Management (CLM) that will go live in March 2023. We will add an intake form under the federal funding section. The intake form will include the question ?Is the Supplier suspended or debarred?? If the answer is yes, the contract process will not be allowed to proceed. Timeline and Responsible Position: June 2023 ? Chief Procurement Officer
2022 ? 005 Allowable Activities and Costs/Cost Principals (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury U.S. Department of Housing U.S. Department of Transportation Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds HOME Investment Partnerships Program Federal Transit Cluster Assistance Listing Number: 21.027, 14.239, Multiple Federal Award Identification Number and Year: ALN 21.027: Pub. L. No. 117-2-2021 ALN 14.239 M-19-MC-35-0209 2019 & M-16-MC-35-0209 2016; ALN Multiple: NM-2020-010 Award Period: ALN 21.027 ? 5/10/2021 - 12/31/2026 ALN 14.239 ? 7/22/2016-9/1/2027 ALN Multiple ? 1/20/2020-12/31/2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to ? 200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Further, the financial management system of each non-Federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements. According to the City's ARPA Program Plan Memorandum, all applicants must have 50 or fewer full-time equivalent (FTE) employees. Once the application is complete, it will enter a secondary review for final decision. Once a business receives a grant they must submit a report six months after as detailed in the grant agreement. Condition: During single audit testwork over reporting, the following issues were noted which are detailed by ALN Number. ALN 21.027 ? The City did not obtain employment verification for one applicant, perform a secondary review for two applications, nor obtain the six-month report for six applications. ALN 14.239/Multiple ? The City did not have effective internal controls in place to ensure timesheets are prepared timely as well as payroll grant hours accurately recorded in the accounting system. 2022 ? 005 Allowable Activities and Costs/Cost Principals (Significant Deficiency and Noncompliance) (Continued) Questioned costs: ALN 21.027: $30,000 ALN 14.239: $69.63 ALN Multiple: None Context: During our testing, we noted the following exceptions, which are detailed by ALN Number. ALN 21.027 ? 1 of the 60 small business applications did not have the number of employees. ? 2 of the 60 small business grant applications did not have a secondary review for final decision. ? 6 of the 60 small businesses did not submit a report six months after receiving the grant. ALN 14.239 ? During our testing, we noted three instances in which an employee's timesheet was not signed by the employee and their supervisor until between 8-12 months after the pay period ended. Also, we noted three instances in which grant hours listed on timesheets did not agree to the hours recorded in the accounting system and charged to the grant. ALN Multiple ? During our testing, we noted two instances in which an employee's time was not approved by their supervisor. Cause: The City did not follow its ARPA Program Plan Memorandum. Additionally, the City lacks a policy and internal control related to the required timing of timesheet preparation, review and approval. Effect: The auditor noted instances of noncompliance and lack of effective internal controls. Noncompliance results in ineligible small businesses receiving grant funding and the City not receiving the required reporting by the small businesses. Recommendation: We recommend the City design controls to ensure an adequate review process is in place to review applications to determine the eligibility of small business for grant funding. Also, we recommend the City design controls to ensure any required reports are submitted by grantees. Additionally, we recommend the City create a policy related to timesheet preparation, review and approval as well as develop a procedure to ensure all grant hours listed on timesheets are reconciled to the accounting system. Management Response: Management agrees with the finding. The grants distributed by the Economic Development Department were a lifeline to small businesses that were just holding on. While a strong program was set up in a very short timeframe some reviews and follow-up were not completed. Additionally, the Family & Community Services Department will ensure timesheets are signed timely. Additionally, the department will work with the Grants Section to ensure timesheets, Kronos and Peoplesoft agree. Timeline and Responsible Position: June 2023 ? Department Directors, Economic Development, Family & Community Services and Transit
2022 ? 006 (Previously 2021-012) Procurement (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury, U.S. Department of Transportation Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027, Multiple Federal Award Identification Number and Year: Pub. L. No. 117-2-2021, Various Award Period: 5/10/2021 - 12/31/2026 Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to ? 200.320 Methods of procurement to be followed of 2 CFR Part 200, when the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold, or a lower threshold established by a non-Federal entity, formal procurement methods are required. According to the City's Federal Procurement Guidance, formal procurement methods are required when goods and services are over $100,000. Condition: During our testing, it was noted that the City did not follow federal procurement regulation nor its federal procurement policy. Questioned costs: $160,181 Context: During our testing, we noted the following exceptions, which are detailed by ALN Number. ALN 21.027 ? For 1 of 4 procurement transactions totaling approximately $160.2K, the City utilized a RFB with a closing date of 09/05/2016. ALN Multiple ? For 3 of 7 procurement transactions, the executed contract/agreement was not provided to us. ? For 2 of 7 procurement transactions, the RFP and evaluation sheets were not provided to us. ? For 1 of 7 procurement transactions, only the Cost Price Analysis, ICE, and Purchase Order Release were provided to us. No other supporting documentation. ? For 1 of 7 procurement transactions, the SPA provided to us was not current. Management?s Progress for Repeat Findings: The City plans to review the controls in place to ensure that our federal procurement guidelines are clear on City process and the need for retention of proper supporting documentation. In addition, we will also plan to have the SEFA completed well before the deadline to allow sufficient management review and major programs can be identified earlier in the audit process. The additional time will allow City departments to provide requested audit documentation within the Auditor?s deadlines. 2022 ? 006 (Previously 2021-012) Procurement (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal procurement regulation nor its federal procurement policy. Repeat Finding: 2021-012 Effect: The auditor noted instances of noncompliance. Noncompliance results in procurement transactions for the acquisition of property or services required under a federal award not conducted in a manner providing full and open competition. Recommendation: We recommend the City design controls to ensure compliance with federal procurement regulation and its federal procurement policy. Management Response: The City respectfully disagrees with the finding. The two exceptions noted above are, on the contrary, examples of good fiscal management by the City. The statewide price agreement and the cooperative education services contract were both competitive. The uniform grant guidance in to ? 200.318(e) below encourages state and local intergovernmental agreements. To foster greater economy and efficiency, and in accordance with efforts to promote cost-effective use of shared services across the Federal Government, the non-Federal entity is encouraged to enter into state and local intergovernmental agreements or inter-entity agreements where appropriate for procurement or use of common or shared goods and services. Competition requirements will be met with documented procurement actions using strategic sourcing, shared services, and other similar procurement arrangements. In addition, the City did compete the temporary employment services. The request for bids awarded contracts in October 2016. Three (3) years, three (3) months into the five (5) year term of the contract, the first COVID case was reported in the United States and the President declared a public health emergency on January 31. New Mexico and the City of Albuquerque soon followed with their declarations. The City made the decision to extend the existing contract with the existing rates. There is nothing in City policy that prevents extension of contracts for a specific length of time. Extending the contract most likely was a cost savings to the City because the rates would most likely would have increased. Auditor?s Response: We were not provided supporting documentation, as identified in management?s response, during our testwork over procurement to apply the necessary procedures to resolve this exception. Timeline and Responsible Position: June 2023 ? Chief Procurement Officer
2022 ? 007 (Previously 2021-003) Subrecipient Monitoring (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: Pub. L. No. 117-2-2021 Award Period: 5/10/2021 - 12/31/2026 Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to ? 200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to ? 200.332 Requirements for pass-through entities of 2 CFR Part 200, all pass-through entities must: ? Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. ? Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. ? Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in ? 200.501. ? Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records. According to the City's subrecipient monitoring policies and procedures, monitoring of subrecipients shall be conducted as often as may be required at the discretion of the Community Development Division or at least once per program year. An annual Risk Assessment will be completed to determine a ranking for the activity. The Risk Assessment ranking score will determine whether a monitoring review will occur. Condition: During our testing, it was noted that the City did not follow federal subrecipient monitoring and management regulation nor its subrecipient monitoring policies and procedures. Questioned costs: None 2022 ? 007 (Previously 2021-003) Subrecipient Monitoring (Significant Deficiency and Noncompliance) (Continued) Context: During our testing, we noted the following exceptions: ? For 2 of 4 subrecipients, the City did not utilize the risk assessment tool specific to ARPA which does have a different risk assessment ranking score determining the monitoring of the subrecipient. The City did, however, perform a monitoring visit for the subrecipients. ? For 1 of 4 subrecipients, the City did not utilize the risk assessment tool specific to ARPA. The City utilized the AGA Risk Assessment Monitoring Tool. We noted the following exceptions. ? According to the Introduction of the AGA Risk Assessment Monitoring Tool, while the risk assessment monitoring tool may be useful in supplementing existing tools, it is not intended to replace any risk assessment tools that may already be in use by monitoring agencies. Further, the City omitted the Programmatic Assessment of the AGA Risk Assessment Monitoring Tool. ? According to the Introduction of the AGA Risk Assessment Monitoring Tool, in using the risk assessment tool, monitoring agencies are encouraged to develop applicable risk factors to evaluate programmatic compliance risk and should use professional judgment in developing a weighted scoring system for each component of the assessment. The City did not develop a weighted scoring system for each component of the assessment. ? No evidence of approval of the AGA Risk Assessment Monitoring Tool. ? In the Monitoring/Audit Assessment section of the AGA Risk Assessment Monitoring Tool, the City marked all N/A based on a response of the subrecipient has not needed to complete a single audit in the past. However, the subrecipient did have a single audit for the fiscal year end date of 12/31/2020 with the Federal Audit Clearinghouse receiving the audit report on 5/27/2021. No review of the single audit by the City. Management?s Progress for Repeat Findings: The City Controller reviewed the listing of subrecipient risk assessments for 2022 and the listing was determined to be complete. The City will update the subrecipient monitoring policies and procedures ad provide training to the departments. Cause: The City failed to follow federal subrecipient monitoring and management regulation nor its subrecipient monitoring policies and procedures. Repeat Finding: 2021-003 Effect: The auditor noted instances of noncompliance. Noncompliance results in subrecipients' noncompliance with federal statutes, regulations, and the terms and conditions of the subaward. Recommendation: We recommend the City design controls to ensure compliance with federal subrecipient monitoring and management regulation and its subrecipient monitoring policies and procedures. Management Response: Management agrees with the finding. The City will develop standard City-wide subrecipient management policies and procedures including risk assessment and monitoring tools. Additionally, any federal program with two or more City departments managing subrecipients will use the same subrecipient tools to ensure consistency. Timeline and Responsible Position: June 2023 ? City Controller/DFAS Deputy Director
2022 ? 008 Reporting (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Emergency Rental Assistance Program Assistance Listing Number: 21.027, 21.023 Federal Award Identification Number and Year: ALN 21.027 ? Pub. L. No. 117-2 2021 ALN 21.023 ? ERA0335 - 2021 Award Period: ALN 21.027 ? 5/10/2021 - 12/31/2026 ALN 21.023 ? 1/20/2021 - 9/30/2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to ? 200.302 Financial management of 2 CFR Part 200, the non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. Further, the financial management system of each non-Federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements. According to ? 200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to the Compliance Supplement 2022 Part 3, program income does not include interest earned on advances of federal funds. Condition: During our testing, it was noted that the City did not have effective internal controls in place to ensure accurate and complete reporting. Questioned costs: None Context: During our testing, we noted the following exceptions, which are detailed by ALN Number. ALN 21.027 ? For the interim report, support was not provided for Category 1.7 Capital Investments or Physical Plant Changes to Public Facilities that respond to the COVID-19 public health emergency Cumulative Obligations of approximately $280.2K. The City did, however, cancel this project after the initial reporting. 2022 ? 008 Reporting (Significant Deficiency and Noncompliance) (Continued) ALN 21.027 (continued) ? For the Project and Expenditure Report 1, we noted the following exceptions. o Project Name: Police Vehicles Total Cumulative Obligations of approximately $2,654,705. The City identified requisitions and purchase orders of approximately $2,655,183. Thus, a variance of $478. o Project Name: Police Vehicles Total Cumulative Obligations and Total Cumulative Expenditures of approximately $2,654,705 and $1,095,985, respectively, are listed twice in the project overview. Thus, the project is duplicated in the Total Obligations and Total Expenditures in the overview section. The City states this to be a glitch of the portal. However, there is no communication between the City and Treasury to evidence the Treasury's acknowledgment of this glitch in the portal. o Project Name: Eviction Prevention: New Mexico Legal Aid Total Cumulative Obligations of approximately $216K. The total should be approximately $26K. Thus, a variance of $190K. ? Subaward No: SUB-0034501 Period of Performance Start and End of 9/1/2021 to 12/31/2022. However, the subrecipient agreement signed by all parties early September 2021 has a Subaward Period of Performance Start and End Date 9/14/2021 to 3/31/2022. ? Subaward No: SUB-0034394 Period of Performance Start and End of 10/25/2021 to 12/31/2022. However, the contract control form approved by all parties late October 2021 has a contract term 10/20/2021 to 10/19/2022. ? Subaward No: SUB-0034455 Subaward Date of 3/11/2021. This date is the Federal Award Date of Award to the Recipient by the Federal Agency not the subaward start date of 9/1/2021. The subrecipient agreement signed by all parties 9/29/2021 and 10/1/2021. ? Subaward No: SUB-0034462 Subaward Date of 3/11/2021. This date is the Federal Award Date of Award to the Recipient by the Federal Agency not the subaward start date of 9/1/2021. The subrecipient agreement signed by all parties late December 2021. ? Expenditures for Awards more than $50,000 ? All projects have a Subaward Amount of 54405428.50. The City states this to be an error with the portal exporting. However, there is no communication between the City and Treasury to evidence the Treasury's acknowledgment of this error with portal exporting. ? Subaward Crossroads for Women amount of $750K with Subaward Period of Performance Start and End Date of 12/1/2021 to 12/31/2024 not included in the report. Agreement signed by all parties end December 2021. ? Contractual 2021 expenditures of approximately $122K not included in the report. o For the Project and Expenditure Report 2, we noted the following exceptions. ? Subaward No: SLFRP0013-RIVENROCK Subaward Obligation of $50K. However, total purchase order amount of approximately $74.5K. Thus, a variance of approximately $24.5K. ? Subaward No: 33-202200796 Subaward Date of 9/1/2021 and Period of Performance Start and End of 9/1/2021 to 12/31/2023. However, the subrecipient agreement signed by all parties end December 2021 has a Subaward Date of 12/1/2021 and Subaward Period of Performance Start and End Date 12/1/2021 to 12/31/2024. ? Payments To Individuals Expenditure: EN-00044853 Total Period Expenditure Amount of approximately $6.9 million. Amount includes approximately $128.1K of contractor payments not business grants. 2022 ? 008 Reporting (Significant Deficiency and Noncompliance) (Continued) ALN 21.023 ? For 3 of 5 financial reports, the City reported interest earned on advances of federal funds totaling approximately $380.8K as program income. However, interest earned on advances of federal funds is not program income. ? For 1 of 5 special quarterly reports, we noted the following exceptions. o The City did not provide support for any changes from the last report we had which was ERA 1 Quarter 3 2021 (July-September). o The City incorrectly reported cumulative expenditures to date of approximately $13.1 million The amount reported should have been approximately $17.1 million based on a reconciliation provided to us by the City. Thus, a variance of approximately $4 million. o The City incorrectly reported cumulative obligations to date of approximately $23.7 million. The amount reported should have been approximately $23.6 million based on a reconciliation provided to us by the City. Thus, a variance of approximately $151K. Cause: The City lacks effective internal controls and procedures over financial grant management to ensure submitted reports are complete and agree to supporting documentation. Effect: The auditor noted instances of noncompliance. Noncompliance results in inaccurate reporting. Recommendation: We recommend the City design controls to ensure compliance with federal financial management regulation. Management Response: The City agrees with the finding. The City will implement controls to ensure compliance with federal financial management regulations. The City recognizes that it needs to improve its procedures for preparing quarterly report for Treasury funds. Going forward, the Family and Community Services Department will work with the Grants Section to develop and implement standardized procedures for identifying and documenting expenditures, and for reviewing quarterly reports prior to submission. Timeline and Responsible Position: June 2023 ? City Controller/DFAS Deputy Director and Director of Family & Community Services
2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Housing Federal Program Name: HOME Investment Partnerships Program Assistance Listing Number: 14.239 Federal Award Identification Number and Year: Various Award Period: Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to 24 CFR 92.504(d)(1)(ii)(D), inspections must be based on a statistically valid sample of units appropriate for the size of the HOME-assisted project, as set forth by HUD through notice. For projects with one-to-four HOME-assisted units, participating jurisdiction must inspect 100 percent of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. According to Ch 8 HOME Monitoring, the Comprehensive Review requires that 20% of HOME-assisted unit tenant files be reviewed for content, as well as conduct HQS inspections on 20% of the HOME-assisted units, utilizing the HQS inspection form (Form HUD-52580). For projects with one-to-four (1 ? 4) HOME-assisted units, the City inspects 100 % of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. Upon completion of the Comprehensive Monitoring Review, Program Specialists are responsible for preparing a monitoring report letter and monitoring report. The cover letter, monitoring report and complete monitoring packet ? includes monitoring routing form, all required monitoring forms used as well as any additional information/documents used in and received during the monitoring ? are submitted to the Program Specialists? supervisor for review and approval within 2 weeks of the completion of the monitoring visit. Upon supervisor approval, Program Specialist will forward the entire packet for review, approval and signature by the Community Development Division Manager and Fiscal Manager. Condition: During our testing, it was noted that the City did not perform the required percent of inspections. Also, the City lacked evidence of approval of the monitoring. Questioned costs: None Context: During our testing, we noted the following exceptions over housing quality standards requirements: ? For 1 of 5 projects, the City performed 17% of the required inspections rather than 20%. The one unit not inspected due to COVID-19 was not scheduled for reinspection. HUD did have a waiver in place for HQS Inspections from April 2020 until December 31, 2021. The inspection, however, was scheduled for March 24, 2022 which is subsequent to the extended waiver. ? For 1 of 5 projects, the City performed 33% of the required inspections rather than 100%. The City inspected one unit versus all three units. ? For 2 of 5 projects, the cover letter signed by the Community Development Division Manager and Fiscal Manager was not provided to us. 2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal housing quality standards regulation nor its HOME policies and procedures. Effect: The auditor noted instances of noncompliance. Noncompliance results in failure to identify those units on which housing quality inspections are due and perform inspections of units and that any needed repairs are completed timely. Recommendation: We recommend the City design controls to ensure compliance with federal housing quality standards regulation and its HOME policies and procedures. Management Response: The City concurs with the finding. The City did complete 20% of the program files however one unit was not inspected due to the client testing positive for COVID -19. In the future if a home in not able to be inspected, another tenant will be notified and a HQS inspection will occur at another residence at a later date. This action will be corrected by updating the Monitoring Checklist to ensure that staff knows the proper of units to be inspected. This will be reviewed with supervisor prior to monitoring. The City was not aware of the requirement that, in the case of HOME projects with between one and four units, all units needed to be inspected; the City typically looks at the project as a whole and inspects 10% or 20% depending on the Risk Assessment. This will be corrected in the future by updating the Monitoring Checklist to ensure staff knows the proper number of HOME units that need to be inspected. Timeline and Responsible Position: June 2023 ? Director of Family & Community Services
2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Housing Federal Program Name: HOME Investment Partnerships Program Assistance Listing Number: 14.239 Federal Award Identification Number and Year: Various Award Period: Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to 24 CFR 92.504(d)(1)(ii)(D), inspections must be based on a statistically valid sample of units appropriate for the size of the HOME-assisted project, as set forth by HUD through notice. For projects with one-to-four HOME-assisted units, participating jurisdiction must inspect 100 percent of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. According to Ch 8 HOME Monitoring, the Comprehensive Review requires that 20% of HOME-assisted unit tenant files be reviewed for content, as well as conduct HQS inspections on 20% of the HOME-assisted units, utilizing the HQS inspection form (Form HUD-52580). For projects with one-to-four (1 ? 4) HOME-assisted units, the City inspects 100 % of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. Upon completion of the Comprehensive Monitoring Review, Program Specialists are responsible for preparing a monitoring report letter and monitoring report. The cover letter, monitoring report and complete monitoring packet ? includes monitoring routing form, all required monitoring forms used as well as any additional information/documents used in and received during the monitoring ? are submitted to the Program Specialists? supervisor for review and approval within 2 weeks of the completion of the monitoring visit. Upon supervisor approval, Program Specialist will forward the entire packet for review, approval and signature by the Community Development Division Manager and Fiscal Manager. Condition: During our testing, it was noted that the City did not perform the required percent of inspections. Also, the City lacked evidence of approval of the monitoring. Questioned costs: None Context: During our testing, we noted the following exceptions over housing quality standards requirements: ? For 1 of 5 projects, the City performed 17% of the required inspections rather than 20%. The one unit not inspected due to COVID-19 was not scheduled for reinspection. HUD did have a waiver in place for HQS Inspections from April 2020 until December 31, 2021. The inspection, however, was scheduled for March 24, 2022 which is subsequent to the extended waiver. ? For 1 of 5 projects, the City performed 33% of the required inspections rather than 100%. The City inspected one unit versus all three units. ? For 2 of 5 projects, the cover letter signed by the Community Development Division Manager and Fiscal Manager was not provided to us. 2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal housing quality standards regulation nor its HOME policies and procedures. Effect: The auditor noted instances of noncompliance. Noncompliance results in failure to identify those units on which housing quality inspections are due and perform inspections of units and that any needed repairs are completed timely. Recommendation: We recommend the City design controls to ensure compliance with federal housing quality standards regulation and its HOME policies and procedures. Management Response: The City concurs with the finding. The City did complete 20% of the program files however one unit was not inspected due to the client testing positive for COVID -19. In the future if a home in not able to be inspected, another tenant will be notified and a HQS inspection will occur at another residence at a later date. This action will be corrected by updating the Monitoring Checklist to ensure that staff knows the proper of units to be inspected. This will be reviewed with supervisor prior to monitoring. The City was not aware of the requirement that, in the case of HOME projects with between one and four units, all units needed to be inspected; the City typically looks at the project as a whole and inspects 10% or 20% depending on the Risk Assessment. This will be corrected in the future by updating the Monitoring Checklist to ensure staff knows the proper number of HOME units that need to be inspected. Timeline and Responsible Position: June 2023 ? Director of Family & Community Services
2022 ? 005 Allowable Activities and Costs/Cost Principals (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury U.S. Department of Housing U.S. Department of Transportation Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds HOME Investment Partnerships Program Federal Transit Cluster Assistance Listing Number: 21.027, 14.239, Multiple Federal Award Identification Number and Year: ALN 21.027: Pub. L. No. 117-2-2021 ALN 14.239 M-19-MC-35-0209 2019 & M-16-MC-35-0209 2016; ALN Multiple: NM-2020-010 Award Period: ALN 21.027 ? 5/10/2021 - 12/31/2026 ALN 14.239 ? 7/22/2016-9/1/2027 ALN Multiple ? 1/20/2020-12/31/2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to ? 200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Further, the financial management system of each non-Federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements. According to the City's ARPA Program Plan Memorandum, all applicants must have 50 or fewer full-time equivalent (FTE) employees. Once the application is complete, it will enter a secondary review for final decision. Once a business receives a grant they must submit a report six months after as detailed in the grant agreement. Condition: During single audit testwork over reporting, the following issues were noted which are detailed by ALN Number. ALN 21.027 ? The City did not obtain employment verification for one applicant, perform a secondary review for two applications, nor obtain the six-month report for six applications. ALN 14.239/Multiple ? The City did not have effective internal controls in place to ensure timesheets are prepared timely as well as payroll grant hours accurately recorded in the accounting system. 2022 ? 005 Allowable Activities and Costs/Cost Principals (Significant Deficiency and Noncompliance) (Continued) Questioned costs: ALN 21.027: $30,000 ALN 14.239: $69.63 ALN Multiple: None Context: During our testing, we noted the following exceptions, which are detailed by ALN Number. ALN 21.027 ? 1 of the 60 small business applications did not have the number of employees. ? 2 of the 60 small business grant applications did not have a secondary review for final decision. ? 6 of the 60 small businesses did not submit a report six months after receiving the grant. ALN 14.239 ? During our testing, we noted three instances in which an employee's timesheet was not signed by the employee and their supervisor until between 8-12 months after the pay period ended. Also, we noted three instances in which grant hours listed on timesheets did not agree to the hours recorded in the accounting system and charged to the grant. ALN Multiple ? During our testing, we noted two instances in which an employee's time was not approved by their supervisor. Cause: The City did not follow its ARPA Program Plan Memorandum. Additionally, the City lacks a policy and internal control related to the required timing of timesheet preparation, review and approval. Effect: The auditor noted instances of noncompliance and lack of effective internal controls. Noncompliance results in ineligible small businesses receiving grant funding and the City not receiving the required reporting by the small businesses. Recommendation: We recommend the City design controls to ensure an adequate review process is in place to review applications to determine the eligibility of small business for grant funding. Also, we recommend the City design controls to ensure any required reports are submitted by grantees. Additionally, we recommend the City create a policy related to timesheet preparation, review and approval as well as develop a procedure to ensure all grant hours listed on timesheets are reconciled to the accounting system. Management Response: Management agrees with the finding. The grants distributed by the Economic Development Department were a lifeline to small businesses that were just holding on. While a strong program was set up in a very short timeframe some reviews and follow-up were not completed. Additionally, the Family & Community Services Department will ensure timesheets are signed timely. Additionally, the department will work with the Grants Section to ensure timesheets, Kronos and Peoplesoft agree. Timeline and Responsible Position: June 2023 ? Department Directors, Economic Development, Family & Community Services and Transit
2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Housing Federal Program Name: HOME Investment Partnerships Program Assistance Listing Number: 14.239 Federal Award Identification Number and Year: Various Award Period: Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to 24 CFR 92.504(d)(1)(ii)(D), inspections must be based on a statistically valid sample of units appropriate for the size of the HOME-assisted project, as set forth by HUD through notice. For projects with one-to-four HOME-assisted units, participating jurisdiction must inspect 100 percent of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. According to Ch 8 HOME Monitoring, the Comprehensive Review requires that 20% of HOME-assisted unit tenant files be reviewed for content, as well as conduct HQS inspections on 20% of the HOME-assisted units, utilizing the HQS inspection form (Form HUD-52580). For projects with one-to-four (1 ? 4) HOME-assisted units, the City inspects 100 % of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. Upon completion of the Comprehensive Monitoring Review, Program Specialists are responsible for preparing a monitoring report letter and monitoring report. The cover letter, monitoring report and complete monitoring packet ? includes monitoring routing form, all required monitoring forms used as well as any additional information/documents used in and received during the monitoring ? are submitted to the Program Specialists? supervisor for review and approval within 2 weeks of the completion of the monitoring visit. Upon supervisor approval, Program Specialist will forward the entire packet for review, approval and signature by the Community Development Division Manager and Fiscal Manager. Condition: During our testing, it was noted that the City did not perform the required percent of inspections. Also, the City lacked evidence of approval of the monitoring. Questioned costs: None Context: During our testing, we noted the following exceptions over housing quality standards requirements: ? For 1 of 5 projects, the City performed 17% of the required inspections rather than 20%. The one unit not inspected due to COVID-19 was not scheduled for reinspection. HUD did have a waiver in place for HQS Inspections from April 2020 until December 31, 2021. The inspection, however, was scheduled for March 24, 2022 which is subsequent to the extended waiver. ? For 1 of 5 projects, the City performed 33% of the required inspections rather than 100%. The City inspected one unit versus all three units. ? For 2 of 5 projects, the cover letter signed by the Community Development Division Manager and Fiscal Manager was not provided to us. 2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal housing quality standards regulation nor its HOME policies and procedures. Effect: The auditor noted instances of noncompliance. Noncompliance results in failure to identify those units on which housing quality inspections are due and perform inspections of units and that any needed repairs are completed timely. Recommendation: We recommend the City design controls to ensure compliance with federal housing quality standards regulation and its HOME policies and procedures. Management Response: The City concurs with the finding. The City did complete 20% of the program files however one unit was not inspected due to the client testing positive for COVID -19. In the future if a home in not able to be inspected, another tenant will be notified and a HQS inspection will occur at another residence at a later date. This action will be corrected by updating the Monitoring Checklist to ensure that staff knows the proper of units to be inspected. This will be reviewed with supervisor prior to monitoring. The City was not aware of the requirement that, in the case of HOME projects with between one and four units, all units needed to be inspected; the City typically looks at the project as a whole and inspects 10% or 20% depending on the Risk Assessment. This will be corrected in the future by updating the Monitoring Checklist to ensure staff knows the proper number of HOME units that need to be inspected. Timeline and Responsible Position: June 2023 ? Director of Family & Community Services
2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Housing Federal Program Name: HOME Investment Partnerships Program Assistance Listing Number: 14.239 Federal Award Identification Number and Year: Various Award Period: Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to 24 CFR 92.504(d)(1)(ii)(D), inspections must be based on a statistically valid sample of units appropriate for the size of the HOME-assisted project, as set forth by HUD through notice. For projects with one-to-four HOME-assisted units, participating jurisdiction must inspect 100 percent of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. According to Ch 8 HOME Monitoring, the Comprehensive Review requires that 20% of HOME-assisted unit tenant files be reviewed for content, as well as conduct HQS inspections on 20% of the HOME-assisted units, utilizing the HQS inspection form (Form HUD-52580). For projects with one-to-four (1 ? 4) HOME-assisted units, the City inspects 100 % of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. Upon completion of the Comprehensive Monitoring Review, Program Specialists are responsible for preparing a monitoring report letter and monitoring report. The cover letter, monitoring report and complete monitoring packet ? includes monitoring routing form, all required monitoring forms used as well as any additional information/documents used in and received during the monitoring ? are submitted to the Program Specialists? supervisor for review and approval within 2 weeks of the completion of the monitoring visit. Upon supervisor approval, Program Specialist will forward the entire packet for review, approval and signature by the Community Development Division Manager and Fiscal Manager. Condition: During our testing, it was noted that the City did not perform the required percent of inspections. Also, the City lacked evidence of approval of the monitoring. Questioned costs: None Context: During our testing, we noted the following exceptions over housing quality standards requirements: ? For 1 of 5 projects, the City performed 17% of the required inspections rather than 20%. The one unit not inspected due to COVID-19 was not scheduled for reinspection. HUD did have a waiver in place for HQS Inspections from April 2020 until December 31, 2021. The inspection, however, was scheduled for March 24, 2022 which is subsequent to the extended waiver. ? For 1 of 5 projects, the City performed 33% of the required inspections rather than 100%. The City inspected one unit versus all three units. ? For 2 of 5 projects, the cover letter signed by the Community Development Division Manager and Fiscal Manager was not provided to us. 2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal housing quality standards regulation nor its HOME policies and procedures. Effect: The auditor noted instances of noncompliance. Noncompliance results in failure to identify those units on which housing quality inspections are due and perform inspections of units and that any needed repairs are completed timely. Recommendation: We recommend the City design controls to ensure compliance with federal housing quality standards regulation and its HOME policies and procedures. Management Response: The City concurs with the finding. The City did complete 20% of the program files however one unit was not inspected due to the client testing positive for COVID -19. In the future if a home in not able to be inspected, another tenant will be notified and a HQS inspection will occur at another residence at a later date. This action will be corrected by updating the Monitoring Checklist to ensure that staff knows the proper of units to be inspected. This will be reviewed with supervisor prior to monitoring. The City was not aware of the requirement that, in the case of HOME projects with between one and four units, all units needed to be inspected; the City typically looks at the project as a whole and inspects 10% or 20% depending on the Risk Assessment. This will be corrected in the future by updating the Monitoring Checklist to ensure staff knows the proper number of HOME units that need to be inspected. Timeline and Responsible Position: June 2023 ? Director of Family & Community Services
2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Housing Federal Program Name: HOME Investment Partnerships Program Assistance Listing Number: 14.239 Federal Award Identification Number and Year: Various Award Period: Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to 24 CFR 92.504(d)(1)(ii)(D), inspections must be based on a statistically valid sample of units appropriate for the size of the HOME-assisted project, as set forth by HUD through notice. For projects with one-to-four HOME-assisted units, participating jurisdiction must inspect 100 percent of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. According to Ch 8 HOME Monitoring, the Comprehensive Review requires that 20% of HOME-assisted unit tenant files be reviewed for content, as well as conduct HQS inspections on 20% of the HOME-assisted units, utilizing the HQS inspection form (Form HUD-52580). For projects with one-to-four (1 ? 4) HOME-assisted units, the City inspects 100 % of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. Upon completion of the Comprehensive Monitoring Review, Program Specialists are responsible for preparing a monitoring report letter and monitoring report. The cover letter, monitoring report and complete monitoring packet ? includes monitoring routing form, all required monitoring forms used as well as any additional information/documents used in and received during the monitoring ? are submitted to the Program Specialists? supervisor for review and approval within 2 weeks of the completion of the monitoring visit. Upon supervisor approval, Program Specialist will forward the entire packet for review, approval and signature by the Community Development Division Manager and Fiscal Manager. Condition: During our testing, it was noted that the City did not perform the required percent of inspections. Also, the City lacked evidence of approval of the monitoring. Questioned costs: None Context: During our testing, we noted the following exceptions over housing quality standards requirements: ? For 1 of 5 projects, the City performed 17% of the required inspections rather than 20%. The one unit not inspected due to COVID-19 was not scheduled for reinspection. HUD did have a waiver in place for HQS Inspections from April 2020 until December 31, 2021. The inspection, however, was scheduled for March 24, 2022 which is subsequent to the extended waiver. ? For 1 of 5 projects, the City performed 33% of the required inspections rather than 100%. The City inspected one unit versus all three units. ? For 2 of 5 projects, the cover letter signed by the Community Development Division Manager and Fiscal Manager was not provided to us. 2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal housing quality standards regulation nor its HOME policies and procedures. Effect: The auditor noted instances of noncompliance. Noncompliance results in failure to identify those units on which housing quality inspections are due and perform inspections of units and that any needed repairs are completed timely. Recommendation: We recommend the City design controls to ensure compliance with federal housing quality standards regulation and its HOME policies and procedures. Management Response: The City concurs with the finding. The City did complete 20% of the program files however one unit was not inspected due to the client testing positive for COVID -19. In the future if a home in not able to be inspected, another tenant will be notified and a HQS inspection will occur at another residence at a later date. This action will be corrected by updating the Monitoring Checklist to ensure that staff knows the proper of units to be inspected. This will be reviewed with supervisor prior to monitoring. The City was not aware of the requirement that, in the case of HOME projects with between one and four units, all units needed to be inspected; the City typically looks at the project as a whole and inspects 10% or 20% depending on the Risk Assessment. This will be corrected in the future by updating the Monitoring Checklist to ensure staff knows the proper number of HOME units that need to be inspected. Timeline and Responsible Position: June 2023 ? Director of Family & Community Services
2022 ? 005 Allowable Activities and Costs/Cost Principals (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury U.S. Department of Housing U.S. Department of Transportation Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds HOME Investment Partnerships Program Federal Transit Cluster Assistance Listing Number: 21.027, 14.239, Multiple Federal Award Identification Number and Year: ALN 21.027: Pub. L. No. 117-2-2021 ALN 14.239 M-19-MC-35-0209 2019 & M-16-MC-35-0209 2016; ALN Multiple: NM-2020-010 Award Period: ALN 21.027 ? 5/10/2021 - 12/31/2026 ALN 14.239 ? 7/22/2016-9/1/2027 ALN Multiple ? 1/20/2020-12/31/2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to ? 200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Further, the financial management system of each non-Federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements. According to the City's ARPA Program Plan Memorandum, all applicants must have 50 or fewer full-time equivalent (FTE) employees. Once the application is complete, it will enter a secondary review for final decision. Once a business receives a grant they must submit a report six months after as detailed in the grant agreement. Condition: During single audit testwork over reporting, the following issues were noted which are detailed by ALN Number. ALN 21.027 ? The City did not obtain employment verification for one applicant, perform a secondary review for two applications, nor obtain the six-month report for six applications. ALN 14.239/Multiple ? The City did not have effective internal controls in place to ensure timesheets are prepared timely as well as payroll grant hours accurately recorded in the accounting system. 2022 ? 005 Allowable Activities and Costs/Cost Principals (Significant Deficiency and Noncompliance) (Continued) Questioned costs: ALN 21.027: $30,000 ALN 14.239: $69.63 ALN Multiple: None Context: During our testing, we noted the following exceptions, which are detailed by ALN Number. ALN 21.027 ? 1 of the 60 small business applications did not have the number of employees. ? 2 of the 60 small business grant applications did not have a secondary review for final decision. ? 6 of the 60 small businesses did not submit a report six months after receiving the grant. ALN 14.239 ? During our testing, we noted three instances in which an employee's timesheet was not signed by the employee and their supervisor until between 8-12 months after the pay period ended. Also, we noted three instances in which grant hours listed on timesheets did not agree to the hours recorded in the accounting system and charged to the grant. ALN Multiple ? During our testing, we noted two instances in which an employee's time was not approved by their supervisor. Cause: The City did not follow its ARPA Program Plan Memorandum. Additionally, the City lacks a policy and internal control related to the required timing of timesheet preparation, review and approval. Effect: The auditor noted instances of noncompliance and lack of effective internal controls. Noncompliance results in ineligible small businesses receiving grant funding and the City not receiving the required reporting by the small businesses. Recommendation: We recommend the City design controls to ensure an adequate review process is in place to review applications to determine the eligibility of small business for grant funding. Also, we recommend the City design controls to ensure any required reports are submitted by grantees. Additionally, we recommend the City create a policy related to timesheet preparation, review and approval as well as develop a procedure to ensure all grant hours listed on timesheets are reconciled to the accounting system. Management Response: Management agrees with the finding. The grants distributed by the Economic Development Department were a lifeline to small businesses that were just holding on. While a strong program was set up in a very short timeframe some reviews and follow-up were not completed. Additionally, the Family & Community Services Department will ensure timesheets are signed timely. Additionally, the department will work with the Grants Section to ensure timesheets, Kronos and Peoplesoft agree. Timeline and Responsible Position: June 2023 ? Department Directors, Economic Development, Family & Community Services and Transit
2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Housing Federal Program Name: HOME Investment Partnerships Program Assistance Listing Number: 14.239 Federal Award Identification Number and Year: Various Award Period: Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to 24 CFR 92.504(d)(1)(ii)(D), inspections must be based on a statistically valid sample of units appropriate for the size of the HOME-assisted project, as set forth by HUD through notice. For projects with one-to-four HOME-assisted units, participating jurisdiction must inspect 100 percent of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. According to Ch 8 HOME Monitoring, the Comprehensive Review requires that 20% of HOME-assisted unit tenant files be reviewed for content, as well as conduct HQS inspections on 20% of the HOME-assisted units, utilizing the HQS inspection form (Form HUD-52580). For projects with one-to-four (1 ? 4) HOME-assisted units, the City inspects 100 % of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. Upon completion of the Comprehensive Monitoring Review, Program Specialists are responsible for preparing a monitoring report letter and monitoring report. The cover letter, monitoring report and complete monitoring packet ? includes monitoring routing form, all required monitoring forms used as well as any additional information/documents used in and received during the monitoring ? are submitted to the Program Specialists? supervisor for review and approval within 2 weeks of the completion of the monitoring visit. Upon supervisor approval, Program Specialist will forward the entire packet for review, approval and signature by the Community Development Division Manager and Fiscal Manager. Condition: During our testing, it was noted that the City did not perform the required percent of inspections. Also, the City lacked evidence of approval of the monitoring. Questioned costs: None Context: During our testing, we noted the following exceptions over housing quality standards requirements: ? For 1 of 5 projects, the City performed 17% of the required inspections rather than 20%. The one unit not inspected due to COVID-19 was not scheduled for reinspection. HUD did have a waiver in place for HQS Inspections from April 2020 until December 31, 2021. The inspection, however, was scheduled for March 24, 2022 which is subsequent to the extended waiver. ? For 1 of 5 projects, the City performed 33% of the required inspections rather than 100%. The City inspected one unit versus all three units. ? For 2 of 5 projects, the cover letter signed by the Community Development Division Manager and Fiscal Manager was not provided to us. 2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal housing quality standards regulation nor its HOME policies and procedures. Effect: The auditor noted instances of noncompliance. Noncompliance results in failure to identify those units on which housing quality inspections are due and perform inspections of units and that any needed repairs are completed timely. Recommendation: We recommend the City design controls to ensure compliance with federal housing quality standards regulation and its HOME policies and procedures. Management Response: The City concurs with the finding. The City did complete 20% of the program files however one unit was not inspected due to the client testing positive for COVID -19. In the future if a home in not able to be inspected, another tenant will be notified and a HQS inspection will occur at another residence at a later date. This action will be corrected by updating the Monitoring Checklist to ensure that staff knows the proper of units to be inspected. This will be reviewed with supervisor prior to monitoring. The City was not aware of the requirement that, in the case of HOME projects with between one and four units, all units needed to be inspected; the City typically looks at the project as a whole and inspects 10% or 20% depending on the Risk Assessment. This will be corrected in the future by updating the Monitoring Checklist to ensure staff knows the proper number of HOME units that need to be inspected. Timeline and Responsible Position: June 2023 ? Director of Family & Community Services
2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Housing Federal Program Name: HOME Investment Partnerships Program Assistance Listing Number: 14.239 Federal Award Identification Number and Year: Various Award Period: Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to 24 CFR 92.504(d)(1)(ii)(D), inspections must be based on a statistically valid sample of units appropriate for the size of the HOME-assisted project, as set forth by HUD through notice. For projects with one-to-four HOME-assisted units, participating jurisdiction must inspect 100 percent of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. According to Ch 8 HOME Monitoring, the Comprehensive Review requires that 20% of HOME-assisted unit tenant files be reviewed for content, as well as conduct HQS inspections on 20% of the HOME-assisted units, utilizing the HQS inspection form (Form HUD-52580). For projects with one-to-four (1 ? 4) HOME-assisted units, the City inspects 100 % of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. Upon completion of the Comprehensive Monitoring Review, Program Specialists are responsible for preparing a monitoring report letter and monitoring report. The cover letter, monitoring report and complete monitoring packet ? includes monitoring routing form, all required monitoring forms used as well as any additional information/documents used in and received during the monitoring ? are submitted to the Program Specialists? supervisor for review and approval within 2 weeks of the completion of the monitoring visit. Upon supervisor approval, Program Specialist will forward the entire packet for review, approval and signature by the Community Development Division Manager and Fiscal Manager. Condition: During our testing, it was noted that the City did not perform the required percent of inspections. Also, the City lacked evidence of approval of the monitoring. Questioned costs: None Context: During our testing, we noted the following exceptions over housing quality standards requirements: ? For 1 of 5 projects, the City performed 17% of the required inspections rather than 20%. The one unit not inspected due to COVID-19 was not scheduled for reinspection. HUD did have a waiver in place for HQS Inspections from April 2020 until December 31, 2021. The inspection, however, was scheduled for March 24, 2022 which is subsequent to the extended waiver. ? For 1 of 5 projects, the City performed 33% of the required inspections rather than 100%. The City inspected one unit versus all three units. ? For 2 of 5 projects, the cover letter signed by the Community Development Division Manager and Fiscal Manager was not provided to us. 2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal housing quality standards regulation nor its HOME policies and procedures. Effect: The auditor noted instances of noncompliance. Noncompliance results in failure to identify those units on which housing quality inspections are due and perform inspections of units and that any needed repairs are completed timely. Recommendation: We recommend the City design controls to ensure compliance with federal housing quality standards regulation and its HOME policies and procedures. Management Response: The City concurs with the finding. The City did complete 20% of the program files however one unit was not inspected due to the client testing positive for COVID -19. In the future if a home in not able to be inspected, another tenant will be notified and a HQS inspection will occur at another residence at a later date. This action will be corrected by updating the Monitoring Checklist to ensure that staff knows the proper of units to be inspected. This will be reviewed with supervisor prior to monitoring. The City was not aware of the requirement that, in the case of HOME projects with between one and four units, all units needed to be inspected; the City typically looks at the project as a whole and inspects 10% or 20% depending on the Risk Assessment. This will be corrected in the future by updating the Monitoring Checklist to ensure staff knows the proper number of HOME units that need to be inspected. Timeline and Responsible Position: June 2023 ? Director of Family & Community Services
2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Housing Federal Program Name: HOME Investment Partnerships Program Assistance Listing Number: 14.239 Federal Award Identification Number and Year: Various Award Period: Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to 24 CFR 92.504(d)(1)(ii)(D), inspections must be based on a statistically valid sample of units appropriate for the size of the HOME-assisted project, as set forth by HUD through notice. For projects with one-to-four HOME-assisted units, participating jurisdiction must inspect 100 percent of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. According to Ch 8 HOME Monitoring, the Comprehensive Review requires that 20% of HOME-assisted unit tenant files be reviewed for content, as well as conduct HQS inspections on 20% of the HOME-assisted units, utilizing the HQS inspection form (Form HUD-52580). For projects with one-to-four (1 ? 4) HOME-assisted units, the City inspects 100 % of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. Upon completion of the Comprehensive Monitoring Review, Program Specialists are responsible for preparing a monitoring report letter and monitoring report. The cover letter, monitoring report and complete monitoring packet ? includes monitoring routing form, all required monitoring forms used as well as any additional information/documents used in and received during the monitoring ? are submitted to the Program Specialists? supervisor for review and approval within 2 weeks of the completion of the monitoring visit. Upon supervisor approval, Program Specialist will forward the entire packet for review, approval and signature by the Community Development Division Manager and Fiscal Manager. Condition: During our testing, it was noted that the City did not perform the required percent of inspections. Also, the City lacked evidence of approval of the monitoring. Questioned costs: None Context: During our testing, we noted the following exceptions over housing quality standards requirements: ? For 1 of 5 projects, the City performed 17% of the required inspections rather than 20%. The one unit not inspected due to COVID-19 was not scheduled for reinspection. HUD did have a waiver in place for HQS Inspections from April 2020 until December 31, 2021. The inspection, however, was scheduled for March 24, 2022 which is subsequent to the extended waiver. ? For 1 of 5 projects, the City performed 33% of the required inspections rather than 100%. The City inspected one unit versus all three units. ? For 2 of 5 projects, the cover letter signed by the Community Development Division Manager and Fiscal Manager was not provided to us. 2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal housing quality standards regulation nor its HOME policies and procedures. Effect: The auditor noted instances of noncompliance. Noncompliance results in failure to identify those units on which housing quality inspections are due and perform inspections of units and that any needed repairs are completed timely. Recommendation: We recommend the City design controls to ensure compliance with federal housing quality standards regulation and its HOME policies and procedures. Management Response: The City concurs with the finding. The City did complete 20% of the program files however one unit was not inspected due to the client testing positive for COVID -19. In the future if a home in not able to be inspected, another tenant will be notified and a HQS inspection will occur at another residence at a later date. This action will be corrected by updating the Monitoring Checklist to ensure that staff knows the proper of units to be inspected. This will be reviewed with supervisor prior to monitoring. The City was not aware of the requirement that, in the case of HOME projects with between one and four units, all units needed to be inspected; the City typically looks at the project as a whole and inspects 10% or 20% depending on the Risk Assessment. This will be corrected in the future by updating the Monitoring Checklist to ensure staff knows the proper number of HOME units that need to be inspected. Timeline and Responsible Position: June 2023 ? Director of Family & Community Services
2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Housing Federal Program Name: HOME Investment Partnerships Program Assistance Listing Number: 14.239 Federal Award Identification Number and Year: Various Award Period: Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to 24 CFR 92.504(d)(1)(ii)(D), inspections must be based on a statistically valid sample of units appropriate for the size of the HOME-assisted project, as set forth by HUD through notice. For projects with one-to-four HOME-assisted units, participating jurisdiction must inspect 100 percent of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. According to Ch 8 HOME Monitoring, the Comprehensive Review requires that 20% of HOME-assisted unit tenant files be reviewed for content, as well as conduct HQS inspections on 20% of the HOME-assisted units, utilizing the HQS inspection form (Form HUD-52580). For projects with one-to-four (1 ? 4) HOME-assisted units, the City inspects 100 % of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. Upon completion of the Comprehensive Monitoring Review, Program Specialists are responsible for preparing a monitoring report letter and monitoring report. The cover letter, monitoring report and complete monitoring packet ? includes monitoring routing form, all required monitoring forms used as well as any additional information/documents used in and received during the monitoring ? are submitted to the Program Specialists? supervisor for review and approval within 2 weeks of the completion of the monitoring visit. Upon supervisor approval, Program Specialist will forward the entire packet for review, approval and signature by the Community Development Division Manager and Fiscal Manager. Condition: During our testing, it was noted that the City did not perform the required percent of inspections. Also, the City lacked evidence of approval of the monitoring. Questioned costs: None Context: During our testing, we noted the following exceptions over housing quality standards requirements: ? For 1 of 5 projects, the City performed 17% of the required inspections rather than 20%. The one unit not inspected due to COVID-19 was not scheduled for reinspection. HUD did have a waiver in place for HQS Inspections from April 2020 until December 31, 2021. The inspection, however, was scheduled for March 24, 2022 which is subsequent to the extended waiver. ? For 1 of 5 projects, the City performed 33% of the required inspections rather than 100%. The City inspected one unit versus all three units. ? For 2 of 5 projects, the cover letter signed by the Community Development Division Manager and Fiscal Manager was not provided to us. 2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal housing quality standards regulation nor its HOME policies and procedures. Effect: The auditor noted instances of noncompliance. Noncompliance results in failure to identify those units on which housing quality inspections are due and perform inspections of units and that any needed repairs are completed timely. Recommendation: We recommend the City design controls to ensure compliance with federal housing quality standards regulation and its HOME policies and procedures. Management Response: The City concurs with the finding. The City did complete 20% of the program files however one unit was not inspected due to the client testing positive for COVID -19. In the future if a home in not able to be inspected, another tenant will be notified and a HQS inspection will occur at another residence at a later date. This action will be corrected by updating the Monitoring Checklist to ensure that staff knows the proper of units to be inspected. This will be reviewed with supervisor prior to monitoring. The City was not aware of the requirement that, in the case of HOME projects with between one and four units, all units needed to be inspected; the City typically looks at the project as a whole and inspects 10% or 20% depending on the Risk Assessment. This will be corrected in the future by updating the Monitoring Checklist to ensure staff knows the proper number of HOME units that need to be inspected. Timeline and Responsible Position: June 2023 ? Director of Family & Community Services
2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Housing Federal Program Name: HOME Investment Partnerships Program Assistance Listing Number: 14.239 Federal Award Identification Number and Year: Various Award Period: Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to 24 CFR 92.504(d)(1)(ii)(D), inspections must be based on a statistically valid sample of units appropriate for the size of the HOME-assisted project, as set forth by HUD through notice. For projects with one-to-four HOME-assisted units, participating jurisdiction must inspect 100 percent of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. According to Ch 8 HOME Monitoring, the Comprehensive Review requires that 20% of HOME-assisted unit tenant files be reviewed for content, as well as conduct HQS inspections on 20% of the HOME-assisted units, utilizing the HQS inspection form (Form HUD-52580). For projects with one-to-four (1 ? 4) HOME-assisted units, the City inspects 100 % of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. Upon completion of the Comprehensive Monitoring Review, Program Specialists are responsible for preparing a monitoring report letter and monitoring report. The cover letter, monitoring report and complete monitoring packet ? includes monitoring routing form, all required monitoring forms used as well as any additional information/documents used in and received during the monitoring ? are submitted to the Program Specialists? supervisor for review and approval within 2 weeks of the completion of the monitoring visit. Upon supervisor approval, Program Specialist will forward the entire packet for review, approval and signature by the Community Development Division Manager and Fiscal Manager. Condition: During our testing, it was noted that the City did not perform the required percent of inspections. Also, the City lacked evidence of approval of the monitoring. Questioned costs: None Context: During our testing, we noted the following exceptions over housing quality standards requirements: ? For 1 of 5 projects, the City performed 17% of the required inspections rather than 20%. The one unit not inspected due to COVID-19 was not scheduled for reinspection. HUD did have a waiver in place for HQS Inspections from April 2020 until December 31, 2021. The inspection, however, was scheduled for March 24, 2022 which is subsequent to the extended waiver. ? For 1 of 5 projects, the City performed 33% of the required inspections rather than 100%. The City inspected one unit versus all three units. ? For 2 of 5 projects, the cover letter signed by the Community Development Division Manager and Fiscal Manager was not provided to us. 2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal housing quality standards regulation nor its HOME policies and procedures. Effect: The auditor noted instances of noncompliance. Noncompliance results in failure to identify those units on which housing quality inspections are due and perform inspections of units and that any needed repairs are completed timely. Recommendation: We recommend the City design controls to ensure compliance with federal housing quality standards regulation and its HOME policies and procedures. Management Response: The City concurs with the finding. The City did complete 20% of the program files however one unit was not inspected due to the client testing positive for COVID -19. In the future if a home in not able to be inspected, another tenant will be notified and a HQS inspection will occur at another residence at a later date. This action will be corrected by updating the Monitoring Checklist to ensure that staff knows the proper of units to be inspected. This will be reviewed with supervisor prior to monitoring. The City was not aware of the requirement that, in the case of HOME projects with between one and four units, all units needed to be inspected; the City typically looks at the project as a whole and inspects 10% or 20% depending on the Risk Assessment. This will be corrected in the future by updating the Monitoring Checklist to ensure staff knows the proper number of HOME units that need to be inspected. Timeline and Responsible Position: June 2023 ? Director of Family & Community Services
2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Housing Federal Program Name: HOME Investment Partnerships Program Assistance Listing Number: 14.239 Federal Award Identification Number and Year: Various Award Period: Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to 24 CFR 92.504(d)(1)(ii)(D), inspections must be based on a statistically valid sample of units appropriate for the size of the HOME-assisted project, as set forth by HUD through notice. For projects with one-to-four HOME-assisted units, participating jurisdiction must inspect 100 percent of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. According to Ch 8 HOME Monitoring, the Comprehensive Review requires that 20% of HOME-assisted unit tenant files be reviewed for content, as well as conduct HQS inspections on 20% of the HOME-assisted units, utilizing the HQS inspection form (Form HUD-52580). For projects with one-to-four (1 ? 4) HOME-assisted units, the City inspects 100 % of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. Upon completion of the Comprehensive Monitoring Review, Program Specialists are responsible for preparing a monitoring report letter and monitoring report. The cover letter, monitoring report and complete monitoring packet ? includes monitoring routing form, all required monitoring forms used as well as any additional information/documents used in and received during the monitoring ? are submitted to the Program Specialists? supervisor for review and approval within 2 weeks of the completion of the monitoring visit. Upon supervisor approval, Program Specialist will forward the entire packet for review, approval and signature by the Community Development Division Manager and Fiscal Manager. Condition: During our testing, it was noted that the City did not perform the required percent of inspections. Also, the City lacked evidence of approval of the monitoring. Questioned costs: None Context: During our testing, we noted the following exceptions over housing quality standards requirements: ? For 1 of 5 projects, the City performed 17% of the required inspections rather than 20%. The one unit not inspected due to COVID-19 was not scheduled for reinspection. HUD did have a waiver in place for HQS Inspections from April 2020 until December 31, 2021. The inspection, however, was scheduled for March 24, 2022 which is subsequent to the extended waiver. ? For 1 of 5 projects, the City performed 33% of the required inspections rather than 100%. The City inspected one unit versus all three units. ? For 2 of 5 projects, the cover letter signed by the Community Development Division Manager and Fiscal Manager was not provided to us. 2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal housing quality standards regulation nor its HOME policies and procedures. Effect: The auditor noted instances of noncompliance. Noncompliance results in failure to identify those units on which housing quality inspections are due and perform inspections of units and that any needed repairs are completed timely. Recommendation: We recommend the City design controls to ensure compliance with federal housing quality standards regulation and its HOME policies and procedures. Management Response: The City concurs with the finding. The City did complete 20% of the program files however one unit was not inspected due to the client testing positive for COVID -19. In the future if a home in not able to be inspected, another tenant will be notified and a HQS inspection will occur at another residence at a later date. This action will be corrected by updating the Monitoring Checklist to ensure that staff knows the proper of units to be inspected. This will be reviewed with supervisor prior to monitoring. The City was not aware of the requirement that, in the case of HOME projects with between one and four units, all units needed to be inspected; the City typically looks at the project as a whole and inspects 10% or 20% depending on the Risk Assessment. This will be corrected in the future by updating the Monitoring Checklist to ensure staff knows the proper number of HOME units that need to be inspected. Timeline and Responsible Position: June 2023 ? Director of Family & Community Services
2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Housing Federal Program Name: HOME Investment Partnerships Program Assistance Listing Number: 14.239 Federal Award Identification Number and Year: Various Award Period: Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to 24 CFR 92.504(d)(1)(ii)(D), inspections must be based on a statistically valid sample of units appropriate for the size of the HOME-assisted project, as set forth by HUD through notice. For projects with one-to-four HOME-assisted units, participating jurisdiction must inspect 100 percent of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. According to Ch 8 HOME Monitoring, the Comprehensive Review requires that 20% of HOME-assisted unit tenant files be reviewed for content, as well as conduct HQS inspections on 20% of the HOME-assisted units, utilizing the HQS inspection form (Form HUD-52580). For projects with one-to-four (1 ? 4) HOME-assisted units, the City inspects 100 % of the HOME-assisted units and the inspectable items (site, building exterior, building systems, and common areas) for each building housing HOME-assisted units. Upon completion of the Comprehensive Monitoring Review, Program Specialists are responsible for preparing a monitoring report letter and monitoring report. The cover letter, monitoring report and complete monitoring packet ? includes monitoring routing form, all required monitoring forms used as well as any additional information/documents used in and received during the monitoring ? are submitted to the Program Specialists? supervisor for review and approval within 2 weeks of the completion of the monitoring visit. Upon supervisor approval, Program Specialist will forward the entire packet for review, approval and signature by the Community Development Division Manager and Fiscal Manager. Condition: During our testing, it was noted that the City did not perform the required percent of inspections. Also, the City lacked evidence of approval of the monitoring. Questioned costs: None Context: During our testing, we noted the following exceptions over housing quality standards requirements: ? For 1 of 5 projects, the City performed 17% of the required inspections rather than 20%. The one unit not inspected due to COVID-19 was not scheduled for reinspection. HUD did have a waiver in place for HQS Inspections from April 2020 until December 31, 2021. The inspection, however, was scheduled for March 24, 2022 which is subsequent to the extended waiver. ? For 1 of 5 projects, the City performed 33% of the required inspections rather than 100%. The City inspected one unit versus all three units. ? For 2 of 5 projects, the cover letter signed by the Community Development Division Manager and Fiscal Manager was not provided to us. 2022 ? 009 Special Tests and Provisions ? Housing Quality Standards (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal housing quality standards regulation nor its HOME policies and procedures. Effect: The auditor noted instances of noncompliance. Noncompliance results in failure to identify those units on which housing quality inspections are due and perform inspections of units and that any needed repairs are completed timely. Recommendation: We recommend the City design controls to ensure compliance with federal housing quality standards regulation and its HOME policies and procedures. Management Response: The City concurs with the finding. The City did complete 20% of the program files however one unit was not inspected due to the client testing positive for COVID -19. In the future if a home in not able to be inspected, another tenant will be notified and a HQS inspection will occur at another residence at a later date. This action will be corrected by updating the Monitoring Checklist to ensure that staff knows the proper of units to be inspected. This will be reviewed with supervisor prior to monitoring. The City was not aware of the requirement that, in the case of HOME projects with between one and four units, all units needed to be inspected; the City typically looks at the project as a whole and inspects 10% or 20% depending on the Risk Assessment. This will be corrected in the future by updating the Monitoring Checklist to ensure staff knows the proper number of HOME units that need to be inspected. Timeline and Responsible Position: June 2023 ? Director of Family & Community Services
2022 ? 005 Allowable Activities and Costs/Cost Principals (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury U.S. Department of Housing U.S. Department of Transportation Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds HOME Investment Partnerships Program Federal Transit Cluster Assistance Listing Number: 21.027, 14.239, Multiple Federal Award Identification Number and Year: ALN 21.027: Pub. L. No. 117-2-2021 ALN 14.239 M-19-MC-35-0209 2019 & M-16-MC-35-0209 2016; ALN Multiple: NM-2020-010 Award Period: ALN 21.027 ? 5/10/2021 - 12/31/2026 ALN 14.239 ? 7/22/2016-9/1/2027 ALN Multiple ? 1/20/2020-12/31/2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to ? 200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Further, the financial management system of each non-Federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements. According to the City's ARPA Program Plan Memorandum, all applicants must have 50 or fewer full-time equivalent (FTE) employees. Once the application is complete, it will enter a secondary review for final decision. Once a business receives a grant they must submit a report six months after as detailed in the grant agreement. Condition: During single audit testwork over reporting, the following issues were noted which are detailed by ALN Number. ALN 21.027 ? The City did not obtain employment verification for one applicant, perform a secondary review for two applications, nor obtain the six-month report for six applications. ALN 14.239/Multiple ? The City did not have effective internal controls in place to ensure timesheets are prepared timely as well as payroll grant hours accurately recorded in the accounting system. 2022 ? 005 Allowable Activities and Costs/Cost Principals (Significant Deficiency and Noncompliance) (Continued) Questioned costs: ALN 21.027: $30,000 ALN 14.239: $69.63 ALN Multiple: None Context: During our testing, we noted the following exceptions, which are detailed by ALN Number. ALN 21.027 ? 1 of the 60 small business applications did not have the number of employees. ? 2 of the 60 small business grant applications did not have a secondary review for final decision. ? 6 of the 60 small businesses did not submit a report six months after receiving the grant. ALN 14.239 ? During our testing, we noted three instances in which an employee's timesheet was not signed by the employee and their supervisor until between 8-12 months after the pay period ended. Also, we noted three instances in which grant hours listed on timesheets did not agree to the hours recorded in the accounting system and charged to the grant. ALN Multiple ? During our testing, we noted two instances in which an employee's time was not approved by their supervisor. Cause: The City did not follow its ARPA Program Plan Memorandum. Additionally, the City lacks a policy and internal control related to the required timing of timesheet preparation, review and approval. Effect: The auditor noted instances of noncompliance and lack of effective internal controls. Noncompliance results in ineligible small businesses receiving grant funding and the City not receiving the required reporting by the small businesses. Recommendation: We recommend the City design controls to ensure an adequate review process is in place to review applications to determine the eligibility of small business for grant funding. Also, we recommend the City design controls to ensure any required reports are submitted by grantees. Additionally, we recommend the City create a policy related to timesheet preparation, review and approval as well as develop a procedure to ensure all grant hours listed on timesheets are reconciled to the accounting system. Management Response: Management agrees with the finding. The grants distributed by the Economic Development Department were a lifeline to small businesses that were just holding on. While a strong program was set up in a very short timeframe some reviews and follow-up were not completed. Additionally, the Family & Community Services Department will ensure timesheets are signed timely. Additionally, the department will work with the Grants Section to ensure timesheets, Kronos and Peoplesoft agree. Timeline and Responsible Position: June 2023 ? Department Directors, Economic Development, Family & Community Services and Transit
2022 ? 004 (Previously 2021-012) Suspension and Debarment (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury U.S. Department of Transportation Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Federal Transit Cluster Assistance Listing Number: 21.027, Multiple Federal Award Identification Number and Year: ALN 21.027 ? Pub. L. No. 117-2- 2021; ALN Multiple ? 1523-2020-2 Award Period: ALN 21.027 ? 5/10/2021 - 12/31/2026 ALN Multiple ? 7/1/2019 ? 12/31/2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to the Program Compliance Supplement 2022 Part 4, prior to entering into subawards and contracts with award funds, recipients must verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded pursuant to 31 CFR section 19.300. Per 31 CFR Part 19, when you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person. Condition: During our testing, it was noted that the City did not follow federal suspension and debarment regulation nor its federal suspension and debarment procedures. Questioned costs: None Context: During single audit testwork over reporting, the following issues were noted which are detailed by ALN Number. ALN 21.027 ? For 1 of 2 procurement transactions, the City did not use one of the three ways a non-federal entity may accomplish the verification. The City included the suspension and debarment language on the back of the purchase order. 2022 ? 004 (Previously 2021-012) Suspension and Debarment (Significant Deficiency and Noncompliance) (Continued) ALN 21.027 (continued) ? For 1 of 3 subawards, the City did not perform searches in sam.gov with all potential entity names. The entity name used by the City in the search is not the entity name used in sam.gov. ? For 2 of 2 procurement transactions and 3 of 3 subawards, the City did not perform an exclusion check on sam.gov. This is not in accordance with the City's suspension and debarment procedures which is a www.sam.gov print screen of vendor (debarment check). Also, the City did not provide us with the SAMS (System for Award Management) form required as part of the requisition process. No evidence of review and approval of suspension and debarment verification checks. ALN Multiple ? For 1 of 1 procurement transactions, the City did not perform an exclusion check on sam.gov. This is not in accordance with the City's suspension and debarment procedures which is a www.sam.gov print screen of vendor (debarment check). Also, the City did not provide us with the SAMS (System for Award Management) form required as part of the requisition process. No evidence of review and approval of suspension and debarment verification checks. Management?s Progress for Repeat Findings: The 2021 finding was specific to one department and those controls were put in place. During 2022 other departments were not following suspension and debarment procedures. The 2022 management response will facilitate all City departments to follow the procedures. Cause: The City failed to follow suspension and debarment procedures. Repeat Finding: 2021-012 Effect: The auditor noted instances of noncompliance. Noncompliance results in entering into covered transactions with federally suspended and debarred entities. Recommendation: We recommend the City follow its procedures to ensure compliance with federal suspension and debarment regulation. Management Response: Management agrees with the finding. The City is implementing a new system, Contracts Life Management (CLM) that will go live in March 2023. We will add an intake form under the federal funding section. The intake form will include the question ?Is the Supplier suspended or debarred?? If the answer is yes, the contract process will not be allowed to proceed. Timeline and Responsible Position: June 2023 ? Chief Procurement Officer
2022 ? 006 (Previously 2021-012) Procurement (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury, U.S. Department of Transportation Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027, Multiple Federal Award Identification Number and Year: Pub. L. No. 117-2-2021, Various Award Period: 5/10/2021 - 12/31/2026 Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to ? 200.320 Methods of procurement to be followed of 2 CFR Part 200, when the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold, or a lower threshold established by a non-Federal entity, formal procurement methods are required. According to the City's Federal Procurement Guidance, formal procurement methods are required when goods and services are over $100,000. Condition: During our testing, it was noted that the City did not follow federal procurement regulation nor its federal procurement policy. Questioned costs: $160,181 Context: During our testing, we noted the following exceptions, which are detailed by ALN Number. ALN 21.027 ? For 1 of 4 procurement transactions totaling approximately $160.2K, the City utilized a RFB with a closing date of 09/05/2016. ALN Multiple ? For 3 of 7 procurement transactions, the executed contract/agreement was not provided to us. ? For 2 of 7 procurement transactions, the RFP and evaluation sheets were not provided to us. ? For 1 of 7 procurement transactions, only the Cost Price Analysis, ICE, and Purchase Order Release were provided to us. No other supporting documentation. ? For 1 of 7 procurement transactions, the SPA provided to us was not current. Management?s Progress for Repeat Findings: The City plans to review the controls in place to ensure that our federal procurement guidelines are clear on City process and the need for retention of proper supporting documentation. In addition, we will also plan to have the SEFA completed well before the deadline to allow sufficient management review and major programs can be identified earlier in the audit process. The additional time will allow City departments to provide requested audit documentation within the Auditor?s deadlines. 2022 ? 006 (Previously 2021-012) Procurement (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal procurement regulation nor its federal procurement policy. Repeat Finding: 2021-012 Effect: The auditor noted instances of noncompliance. Noncompliance results in procurement transactions for the acquisition of property or services required under a federal award not conducted in a manner providing full and open competition. Recommendation: We recommend the City design controls to ensure compliance with federal procurement regulation and its federal procurement policy. Management Response: The City respectfully disagrees with the finding. The two exceptions noted above are, on the contrary, examples of good fiscal management by the City. The statewide price agreement and the cooperative education services contract were both competitive. The uniform grant guidance in to ? 200.318(e) below encourages state and local intergovernmental agreements. To foster greater economy and efficiency, and in accordance with efforts to promote cost-effective use of shared services across the Federal Government, the non-Federal entity is encouraged to enter into state and local intergovernmental agreements or inter-entity agreements where appropriate for procurement or use of common or shared goods and services. Competition requirements will be met with documented procurement actions using strategic sourcing, shared services, and other similar procurement arrangements. In addition, the City did compete the temporary employment services. The request for bids awarded contracts in October 2016. Three (3) years, three (3) months into the five (5) year term of the contract, the first COVID case was reported in the United States and the President declared a public health emergency on January 31. New Mexico and the City of Albuquerque soon followed with their declarations. The City made the decision to extend the existing contract with the existing rates. There is nothing in City policy that prevents extension of contracts for a specific length of time. Extending the contract most likely was a cost savings to the City because the rates would most likely would have increased. Auditor?s Response: We were not provided supporting documentation, as identified in management?s response, during our testwork over procurement to apply the necessary procedures to resolve this exception. Timeline and Responsible Position: June 2023 ? Chief Procurement Officer
2022 ? 006 (Previously 2021-012) Procurement (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury, U.S. Department of Transportation Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027, Multiple Federal Award Identification Number and Year: Pub. L. No. 117-2-2021, Various Award Period: 5/10/2021 - 12/31/2026 Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to ? 200.320 Methods of procurement to be followed of 2 CFR Part 200, when the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold, or a lower threshold established by a non-Federal entity, formal procurement methods are required. According to the City's Federal Procurement Guidance, formal procurement methods are required when goods and services are over $100,000. Condition: During our testing, it was noted that the City did not follow federal procurement regulation nor its federal procurement policy. Questioned costs: $160,181 Context: During our testing, we noted the following exceptions, which are detailed by ALN Number. ALN 21.027 ? For 1 of 4 procurement transactions totaling approximately $160.2K, the City utilized a RFB with a closing date of 09/05/2016. ALN Multiple ? For 3 of 7 procurement transactions, the executed contract/agreement was not provided to us. ? For 2 of 7 procurement transactions, the RFP and evaluation sheets were not provided to us. ? For 1 of 7 procurement transactions, only the Cost Price Analysis, ICE, and Purchase Order Release were provided to us. No other supporting documentation. ? For 1 of 7 procurement transactions, the SPA provided to us was not current. Management?s Progress for Repeat Findings: The City plans to review the controls in place to ensure that our federal procurement guidelines are clear on City process and the need for retention of proper supporting documentation. In addition, we will also plan to have the SEFA completed well before the deadline to allow sufficient management review and major programs can be identified earlier in the audit process. The additional time will allow City departments to provide requested audit documentation within the Auditor?s deadlines. 2022 ? 006 (Previously 2021-012) Procurement (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal procurement regulation nor its federal procurement policy. Repeat Finding: 2021-012 Effect: The auditor noted instances of noncompliance. Noncompliance results in procurement transactions for the acquisition of property or services required under a federal award not conducted in a manner providing full and open competition. Recommendation: We recommend the City design controls to ensure compliance with federal procurement regulation and its federal procurement policy. Management Response: The City respectfully disagrees with the finding. The two exceptions noted above are, on the contrary, examples of good fiscal management by the City. The statewide price agreement and the cooperative education services contract were both competitive. The uniform grant guidance in to ? 200.318(e) below encourages state and local intergovernmental agreements. To foster greater economy and efficiency, and in accordance with efforts to promote cost-effective use of shared services across the Federal Government, the non-Federal entity is encouraged to enter into state and local intergovernmental agreements or inter-entity agreements where appropriate for procurement or use of common or shared goods and services. Competition requirements will be met with documented procurement actions using strategic sourcing, shared services, and other similar procurement arrangements. In addition, the City did compete the temporary employment services. The request for bids awarded contracts in October 2016. Three (3) years, three (3) months into the five (5) year term of the contract, the first COVID case was reported in the United States and the President declared a public health emergency on January 31. New Mexico and the City of Albuquerque soon followed with their declarations. The City made the decision to extend the existing contract with the existing rates. There is nothing in City policy that prevents extension of contracts for a specific length of time. Extending the contract most likely was a cost savings to the City because the rates would most likely would have increased. Auditor?s Response: We were not provided supporting documentation, as identified in management?s response, during our testwork over procurement to apply the necessary procedures to resolve this exception. Timeline and Responsible Position: June 2023 ? Chief Procurement Officer
2022 ? 006 (Previously 2021-012) Procurement (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury, U.S. Department of Transportation Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027, Multiple Federal Award Identification Number and Year: Pub. L. No. 117-2-2021, Various Award Period: 5/10/2021 - 12/31/2026 Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to ? 200.320 Methods of procurement to be followed of 2 CFR Part 200, when the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold, or a lower threshold established by a non-Federal entity, formal procurement methods are required. According to the City's Federal Procurement Guidance, formal procurement methods are required when goods and services are over $100,000. Condition: During our testing, it was noted that the City did not follow federal procurement regulation nor its federal procurement policy. Questioned costs: $160,181 Context: During our testing, we noted the following exceptions, which are detailed by ALN Number. ALN 21.027 ? For 1 of 4 procurement transactions totaling approximately $160.2K, the City utilized a RFB with a closing date of 09/05/2016. ALN Multiple ? For 3 of 7 procurement transactions, the executed contract/agreement was not provided to us. ? For 2 of 7 procurement transactions, the RFP and evaluation sheets were not provided to us. ? For 1 of 7 procurement transactions, only the Cost Price Analysis, ICE, and Purchase Order Release were provided to us. No other supporting documentation. ? For 1 of 7 procurement transactions, the SPA provided to us was not current. Management?s Progress for Repeat Findings: The City plans to review the controls in place to ensure that our federal procurement guidelines are clear on City process and the need for retention of proper supporting documentation. In addition, we will also plan to have the SEFA completed well before the deadline to allow sufficient management review and major programs can be identified earlier in the audit process. The additional time will allow City departments to provide requested audit documentation within the Auditor?s deadlines. 2022 ? 006 (Previously 2021-012) Procurement (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal procurement regulation nor its federal procurement policy. Repeat Finding: 2021-012 Effect: The auditor noted instances of noncompliance. Noncompliance results in procurement transactions for the acquisition of property or services required under a federal award not conducted in a manner providing full and open competition. Recommendation: We recommend the City design controls to ensure compliance with federal procurement regulation and its federal procurement policy. Management Response: The City respectfully disagrees with the finding. The two exceptions noted above are, on the contrary, examples of good fiscal management by the City. The statewide price agreement and the cooperative education services contract were both competitive. The uniform grant guidance in to ? 200.318(e) below encourages state and local intergovernmental agreements. To foster greater economy and efficiency, and in accordance with efforts to promote cost-effective use of shared services across the Federal Government, the non-Federal entity is encouraged to enter into state and local intergovernmental agreements or inter-entity agreements where appropriate for procurement or use of common or shared goods and services. Competition requirements will be met with documented procurement actions using strategic sourcing, shared services, and other similar procurement arrangements. In addition, the City did compete the temporary employment services. The request for bids awarded contracts in October 2016. Three (3) years, three (3) months into the five (5) year term of the contract, the first COVID case was reported in the United States and the President declared a public health emergency on January 31. New Mexico and the City of Albuquerque soon followed with their declarations. The City made the decision to extend the existing contract with the existing rates. There is nothing in City policy that prevents extension of contracts for a specific length of time. Extending the contract most likely was a cost savings to the City because the rates would most likely would have increased. Auditor?s Response: We were not provided supporting documentation, as identified in management?s response, during our testwork over procurement to apply the necessary procedures to resolve this exception. Timeline and Responsible Position: June 2023 ? Chief Procurement Officer
2022 ? 006 (Previously 2021-012) Procurement (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury, U.S. Department of Transportation Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027, Multiple Federal Award Identification Number and Year: Pub. L. No. 117-2-2021, Various Award Period: 5/10/2021 - 12/31/2026 Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to ? 200.320 Methods of procurement to be followed of 2 CFR Part 200, when the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold, or a lower threshold established by a non-Federal entity, formal procurement methods are required. According to the City's Federal Procurement Guidance, formal procurement methods are required when goods and services are over $100,000. Condition: During our testing, it was noted that the City did not follow federal procurement regulation nor its federal procurement policy. Questioned costs: $160,181 Context: During our testing, we noted the following exceptions, which are detailed by ALN Number. ALN 21.027 ? For 1 of 4 procurement transactions totaling approximately $160.2K, the City utilized a RFB with a closing date of 09/05/2016. ALN Multiple ? For 3 of 7 procurement transactions, the executed contract/agreement was not provided to us. ? For 2 of 7 procurement transactions, the RFP and evaluation sheets were not provided to us. ? For 1 of 7 procurement transactions, only the Cost Price Analysis, ICE, and Purchase Order Release were provided to us. No other supporting documentation. ? For 1 of 7 procurement transactions, the SPA provided to us was not current. Management?s Progress for Repeat Findings: The City plans to review the controls in place to ensure that our federal procurement guidelines are clear on City process and the need for retention of proper supporting documentation. In addition, we will also plan to have the SEFA completed well before the deadline to allow sufficient management review and major programs can be identified earlier in the audit process. The additional time will allow City departments to provide requested audit documentation within the Auditor?s deadlines. 2022 ? 006 (Previously 2021-012) Procurement (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal procurement regulation nor its federal procurement policy. Repeat Finding: 2021-012 Effect: The auditor noted instances of noncompliance. Noncompliance results in procurement transactions for the acquisition of property or services required under a federal award not conducted in a manner providing full and open competition. Recommendation: We recommend the City design controls to ensure compliance with federal procurement regulation and its federal procurement policy. Management Response: The City respectfully disagrees with the finding. The two exceptions noted above are, on the contrary, examples of good fiscal management by the City. The statewide price agreement and the cooperative education services contract were both competitive. The uniform grant guidance in to ? 200.318(e) below encourages state and local intergovernmental agreements. To foster greater economy and efficiency, and in accordance with efforts to promote cost-effective use of shared services across the Federal Government, the non-Federal entity is encouraged to enter into state and local intergovernmental agreements or inter-entity agreements where appropriate for procurement or use of common or shared goods and services. Competition requirements will be met with documented procurement actions using strategic sourcing, shared services, and other similar procurement arrangements. In addition, the City did compete the temporary employment services. The request for bids awarded contracts in October 2016. Three (3) years, three (3) months into the five (5) year term of the contract, the first COVID case was reported in the United States and the President declared a public health emergency on January 31. New Mexico and the City of Albuquerque soon followed with their declarations. The City made the decision to extend the existing contract with the existing rates. There is nothing in City policy that prevents extension of contracts for a specific length of time. Extending the contract most likely was a cost savings to the City because the rates would most likely would have increased. Auditor?s Response: We were not provided supporting documentation, as identified in management?s response, during our testwork over procurement to apply the necessary procedures to resolve this exception. Timeline and Responsible Position: June 2023 ? Chief Procurement Officer
2022 ? 008 Reporting (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Emergency Rental Assistance Program Assistance Listing Number: 21.027, 21.023 Federal Award Identification Number and Year: ALN 21.027 ? Pub. L. No. 117-2 2021 ALN 21.023 ? ERA0335 - 2021 Award Period: ALN 21.027 ? 5/10/2021 - 12/31/2026 ALN 21.023 ? 1/20/2021 - 9/30/2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to ? 200.302 Financial management of 2 CFR Part 200, the non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. Further, the financial management system of each non-Federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements. According to ? 200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to the Compliance Supplement 2022 Part 3, program income does not include interest earned on advances of federal funds. Condition: During our testing, it was noted that the City did not have effective internal controls in place to ensure accurate and complete reporting. Questioned costs: None Context: During our testing, we noted the following exceptions, which are detailed by ALN Number. ALN 21.027 ? For the interim report, support was not provided for Category 1.7 Capital Investments or Physical Plant Changes to Public Facilities that respond to the COVID-19 public health emergency Cumulative Obligations of approximately $280.2K. The City did, however, cancel this project after the initial reporting. 2022 ? 008 Reporting (Significant Deficiency and Noncompliance) (Continued) ALN 21.027 (continued) ? For the Project and Expenditure Report 1, we noted the following exceptions. o Project Name: Police Vehicles Total Cumulative Obligations of approximately $2,654,705. The City identified requisitions and purchase orders of approximately $2,655,183. Thus, a variance of $478. o Project Name: Police Vehicles Total Cumulative Obligations and Total Cumulative Expenditures of approximately $2,654,705 and $1,095,985, respectively, are listed twice in the project overview. Thus, the project is duplicated in the Total Obligations and Total Expenditures in the overview section. The City states this to be a glitch of the portal. However, there is no communication between the City and Treasury to evidence the Treasury's acknowledgment of this glitch in the portal. o Project Name: Eviction Prevention: New Mexico Legal Aid Total Cumulative Obligations of approximately $216K. The total should be approximately $26K. Thus, a variance of $190K. ? Subaward No: SUB-0034501 Period of Performance Start and End of 9/1/2021 to 12/31/2022. However, the subrecipient agreement signed by all parties early September 2021 has a Subaward Period of Performance Start and End Date 9/14/2021 to 3/31/2022. ? Subaward No: SUB-0034394 Period of Performance Start and End of 10/25/2021 to 12/31/2022. However, the contract control form approved by all parties late October 2021 has a contract term 10/20/2021 to 10/19/2022. ? Subaward No: SUB-0034455 Subaward Date of 3/11/2021. This date is the Federal Award Date of Award to the Recipient by the Federal Agency not the subaward start date of 9/1/2021. The subrecipient agreement signed by all parties 9/29/2021 and 10/1/2021. ? Subaward No: SUB-0034462 Subaward Date of 3/11/2021. This date is the Federal Award Date of Award to the Recipient by the Federal Agency not the subaward start date of 9/1/2021. The subrecipient agreement signed by all parties late December 2021. ? Expenditures for Awards more than $50,000 ? All projects have a Subaward Amount of 54405428.50. The City states this to be an error with the portal exporting. However, there is no communication between the City and Treasury to evidence the Treasury's acknowledgment of this error with portal exporting. ? Subaward Crossroads for Women amount of $750K with Subaward Period of Performance Start and End Date of 12/1/2021 to 12/31/2024 not included in the report. Agreement signed by all parties end December 2021. ? Contractual 2021 expenditures of approximately $122K not included in the report. o For the Project and Expenditure Report 2, we noted the following exceptions. ? Subaward No: SLFRP0013-RIVENROCK Subaward Obligation of $50K. However, total purchase order amount of approximately $74.5K. Thus, a variance of approximately $24.5K. ? Subaward No: 33-202200796 Subaward Date of 9/1/2021 and Period of Performance Start and End of 9/1/2021 to 12/31/2023. However, the subrecipient agreement signed by all parties end December 2021 has a Subaward Date of 12/1/2021 and Subaward Period of Performance Start and End Date 12/1/2021 to 12/31/2024. ? Payments To Individuals Expenditure: EN-00044853 Total Period Expenditure Amount of approximately $6.9 million. Amount includes approximately $128.1K of contractor payments not business grants. 2022 ? 008 Reporting (Significant Deficiency and Noncompliance) (Continued) ALN 21.023 ? For 3 of 5 financial reports, the City reported interest earned on advances of federal funds totaling approximately $380.8K as program income. However, interest earned on advances of federal funds is not program income. ? For 1 of 5 special quarterly reports, we noted the following exceptions. o The City did not provide support for any changes from the last report we had which was ERA 1 Quarter 3 2021 (July-September). o The City incorrectly reported cumulative expenditures to date of approximately $13.1 million The amount reported should have been approximately $17.1 million based on a reconciliation provided to us by the City. Thus, a variance of approximately $4 million. o The City incorrectly reported cumulative obligations to date of approximately $23.7 million. The amount reported should have been approximately $23.6 million based on a reconciliation provided to us by the City. Thus, a variance of approximately $151K. Cause: The City lacks effective internal controls and procedures over financial grant management to ensure submitted reports are complete and agree to supporting documentation. Effect: The auditor noted instances of noncompliance. Noncompliance results in inaccurate reporting. Recommendation: We recommend the City design controls to ensure compliance with federal financial management regulation. Management Response: The City agrees with the finding. The City will implement controls to ensure compliance with federal financial management regulations. The City recognizes that it needs to improve its procedures for preparing quarterly report for Treasury funds. Going forward, the Family and Community Services Department will work with the Grants Section to develop and implement standardized procedures for identifying and documenting expenditures, and for reviewing quarterly reports prior to submission. Timeline and Responsible Position: June 2023 ? City Controller/DFAS Deputy Director and Director of Family & Community Services
2022 ? 004 (Previously 2021-012) Suspension and Debarment (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury U.S. Department of Transportation Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Federal Transit Cluster Assistance Listing Number: 21.027, Multiple Federal Award Identification Number and Year: ALN 21.027 ? Pub. L. No. 117-2- 2021; ALN Multiple ? 1523-2020-2 Award Period: ALN 21.027 ? 5/10/2021 - 12/31/2026 ALN Multiple ? 7/1/2019 ? 12/31/2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to the Program Compliance Supplement 2022 Part 4, prior to entering into subawards and contracts with award funds, recipients must verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded pursuant to 31 CFR section 19.300. Per 31 CFR Part 19, when you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person. Condition: During our testing, it was noted that the City did not follow federal suspension and debarment regulation nor its federal suspension and debarment procedures. Questioned costs: None Context: During single audit testwork over reporting, the following issues were noted which are detailed by ALN Number. ALN 21.027 ? For 1 of 2 procurement transactions, the City did not use one of the three ways a non-federal entity may accomplish the verification. The City included the suspension and debarment language on the back of the purchase order. 2022 ? 004 (Previously 2021-012) Suspension and Debarment (Significant Deficiency and Noncompliance) (Continued) ALN 21.027 (continued) ? For 1 of 3 subawards, the City did not perform searches in sam.gov with all potential entity names. The entity name used by the City in the search is not the entity name used in sam.gov. ? For 2 of 2 procurement transactions and 3 of 3 subawards, the City did not perform an exclusion check on sam.gov. This is not in accordance with the City's suspension and debarment procedures which is a www.sam.gov print screen of vendor (debarment check). Also, the City did not provide us with the SAMS (System for Award Management) form required as part of the requisition process. No evidence of review and approval of suspension and debarment verification checks. ALN Multiple ? For 1 of 1 procurement transactions, the City did not perform an exclusion check on sam.gov. This is not in accordance with the City's suspension and debarment procedures which is a www.sam.gov print screen of vendor (debarment check). Also, the City did not provide us with the SAMS (System for Award Management) form required as part of the requisition process. No evidence of review and approval of suspension and debarment verification checks. Management?s Progress for Repeat Findings: The 2021 finding was specific to one department and those controls were put in place. During 2022 other departments were not following suspension and debarment procedures. The 2022 management response will facilitate all City departments to follow the procedures. Cause: The City failed to follow suspension and debarment procedures. Repeat Finding: 2021-012 Effect: The auditor noted instances of noncompliance. Noncompliance results in entering into covered transactions with federally suspended and debarred entities. Recommendation: We recommend the City follow its procedures to ensure compliance with federal suspension and debarment regulation. Management Response: Management agrees with the finding. The City is implementing a new system, Contracts Life Management (CLM) that will go live in March 2023. We will add an intake form under the federal funding section. The intake form will include the question ?Is the Supplier suspended or debarred?? If the answer is yes, the contract process will not be allowed to proceed. Timeline and Responsible Position: June 2023 ? Chief Procurement Officer
2022 ? 005 Allowable Activities and Costs/Cost Principals (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury U.S. Department of Housing U.S. Department of Transportation Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds HOME Investment Partnerships Program Federal Transit Cluster Assistance Listing Number: 21.027, 14.239, Multiple Federal Award Identification Number and Year: ALN 21.027: Pub. L. No. 117-2-2021 ALN 14.239 M-19-MC-35-0209 2019 & M-16-MC-35-0209 2016; ALN Multiple: NM-2020-010 Award Period: ALN 21.027 ? 5/10/2021 - 12/31/2026 ALN 14.239 ? 7/22/2016-9/1/2027 ALN Multiple ? 1/20/2020-12/31/2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to ? 200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Further, the financial management system of each non-Federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements. According to the City's ARPA Program Plan Memorandum, all applicants must have 50 or fewer full-time equivalent (FTE) employees. Once the application is complete, it will enter a secondary review for final decision. Once a business receives a grant they must submit a report six months after as detailed in the grant agreement. Condition: During single audit testwork over reporting, the following issues were noted which are detailed by ALN Number. ALN 21.027 ? The City did not obtain employment verification for one applicant, perform a secondary review for two applications, nor obtain the six-month report for six applications. ALN 14.239/Multiple ? The City did not have effective internal controls in place to ensure timesheets are prepared timely as well as payroll grant hours accurately recorded in the accounting system. 2022 ? 005 Allowable Activities and Costs/Cost Principals (Significant Deficiency and Noncompliance) (Continued) Questioned costs: ALN 21.027: $30,000 ALN 14.239: $69.63 ALN Multiple: None Context: During our testing, we noted the following exceptions, which are detailed by ALN Number. ALN 21.027 ? 1 of the 60 small business applications did not have the number of employees. ? 2 of the 60 small business grant applications did not have a secondary review for final decision. ? 6 of the 60 small businesses did not submit a report six months after receiving the grant. ALN 14.239 ? During our testing, we noted three instances in which an employee's timesheet was not signed by the employee and their supervisor until between 8-12 months after the pay period ended. Also, we noted three instances in which grant hours listed on timesheets did not agree to the hours recorded in the accounting system and charged to the grant. ALN Multiple ? During our testing, we noted two instances in which an employee's time was not approved by their supervisor. Cause: The City did not follow its ARPA Program Plan Memorandum. Additionally, the City lacks a policy and internal control related to the required timing of timesheet preparation, review and approval. Effect: The auditor noted instances of noncompliance and lack of effective internal controls. Noncompliance results in ineligible small businesses receiving grant funding and the City not receiving the required reporting by the small businesses. Recommendation: We recommend the City design controls to ensure an adequate review process is in place to review applications to determine the eligibility of small business for grant funding. Also, we recommend the City design controls to ensure any required reports are submitted by grantees. Additionally, we recommend the City create a policy related to timesheet preparation, review and approval as well as develop a procedure to ensure all grant hours listed on timesheets are reconciled to the accounting system. Management Response: Management agrees with the finding. The grants distributed by the Economic Development Department were a lifeline to small businesses that were just holding on. While a strong program was set up in a very short timeframe some reviews and follow-up were not completed. Additionally, the Family & Community Services Department will ensure timesheets are signed timely. Additionally, the department will work with the Grants Section to ensure timesheets, Kronos and Peoplesoft agree. Timeline and Responsible Position: June 2023 ? Department Directors, Economic Development, Family & Community Services and Transit
2022 ? 006 (Previously 2021-012) Procurement (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury, U.S. Department of Transportation Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027, Multiple Federal Award Identification Number and Year: Pub. L. No. 117-2-2021, Various Award Period: 5/10/2021 - 12/31/2026 Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to ? 200.320 Methods of procurement to be followed of 2 CFR Part 200, when the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold, or a lower threshold established by a non-Federal entity, formal procurement methods are required. According to the City's Federal Procurement Guidance, formal procurement methods are required when goods and services are over $100,000. Condition: During our testing, it was noted that the City did not follow federal procurement regulation nor its federal procurement policy. Questioned costs: $160,181 Context: During our testing, we noted the following exceptions, which are detailed by ALN Number. ALN 21.027 ? For 1 of 4 procurement transactions totaling approximately $160.2K, the City utilized a RFB with a closing date of 09/05/2016. ALN Multiple ? For 3 of 7 procurement transactions, the executed contract/agreement was not provided to us. ? For 2 of 7 procurement transactions, the RFP and evaluation sheets were not provided to us. ? For 1 of 7 procurement transactions, only the Cost Price Analysis, ICE, and Purchase Order Release were provided to us. No other supporting documentation. ? For 1 of 7 procurement transactions, the SPA provided to us was not current. Management?s Progress for Repeat Findings: The City plans to review the controls in place to ensure that our federal procurement guidelines are clear on City process and the need for retention of proper supporting documentation. In addition, we will also plan to have the SEFA completed well before the deadline to allow sufficient management review and major programs can be identified earlier in the audit process. The additional time will allow City departments to provide requested audit documentation within the Auditor?s deadlines. 2022 ? 006 (Previously 2021-012) Procurement (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal procurement regulation nor its federal procurement policy. Repeat Finding: 2021-012 Effect: The auditor noted instances of noncompliance. Noncompliance results in procurement transactions for the acquisition of property or services required under a federal award not conducted in a manner providing full and open competition. Recommendation: We recommend the City design controls to ensure compliance with federal procurement regulation and its federal procurement policy. Management Response: The City respectfully disagrees with the finding. The two exceptions noted above are, on the contrary, examples of good fiscal management by the City. The statewide price agreement and the cooperative education services contract were both competitive. The uniform grant guidance in to ? 200.318(e) below encourages state and local intergovernmental agreements. To foster greater economy and efficiency, and in accordance with efforts to promote cost-effective use of shared services across the Federal Government, the non-Federal entity is encouraged to enter into state and local intergovernmental agreements or inter-entity agreements where appropriate for procurement or use of common or shared goods and services. Competition requirements will be met with documented procurement actions using strategic sourcing, shared services, and other similar procurement arrangements. In addition, the City did compete the temporary employment services. The request for bids awarded contracts in October 2016. Three (3) years, three (3) months into the five (5) year term of the contract, the first COVID case was reported in the United States and the President declared a public health emergency on January 31. New Mexico and the City of Albuquerque soon followed with their declarations. The City made the decision to extend the existing contract with the existing rates. There is nothing in City policy that prevents extension of contracts for a specific length of time. Extending the contract most likely was a cost savings to the City because the rates would most likely would have increased. Auditor?s Response: We were not provided supporting documentation, as identified in management?s response, during our testwork over procurement to apply the necessary procedures to resolve this exception. Timeline and Responsible Position: June 2023 ? Chief Procurement Officer
2022 ? 007 (Previously 2021-003) Subrecipient Monitoring (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: Pub. L. No. 117-2-2021 Award Period: 5/10/2021 - 12/31/2026 Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to ? 200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to ? 200.332 Requirements for pass-through entities of 2 CFR Part 200, all pass-through entities must: ? Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. ? Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. ? Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in ? 200.501. ? Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records. According to the City's subrecipient monitoring policies and procedures, monitoring of subrecipients shall be conducted as often as may be required at the discretion of the Community Development Division or at least once per program year. An annual Risk Assessment will be completed to determine a ranking for the activity. The Risk Assessment ranking score will determine whether a monitoring review will occur. Condition: During our testing, it was noted that the City did not follow federal subrecipient monitoring and management regulation nor its subrecipient monitoring policies and procedures. Questioned costs: None 2022 ? 007 (Previously 2021-003) Subrecipient Monitoring (Significant Deficiency and Noncompliance) (Continued) Context: During our testing, we noted the following exceptions: ? For 2 of 4 subrecipients, the City did not utilize the risk assessment tool specific to ARPA which does have a different risk assessment ranking score determining the monitoring of the subrecipient. The City did, however, perform a monitoring visit for the subrecipients. ? For 1 of 4 subrecipients, the City did not utilize the risk assessment tool specific to ARPA. The City utilized the AGA Risk Assessment Monitoring Tool. We noted the following exceptions. ? According to the Introduction of the AGA Risk Assessment Monitoring Tool, while the risk assessment monitoring tool may be useful in supplementing existing tools, it is not intended to replace any risk assessment tools that may already be in use by monitoring agencies. Further, the City omitted the Programmatic Assessment of the AGA Risk Assessment Monitoring Tool. ? According to the Introduction of the AGA Risk Assessment Monitoring Tool, in using the risk assessment tool, monitoring agencies are encouraged to develop applicable risk factors to evaluate programmatic compliance risk and should use professional judgment in developing a weighted scoring system for each component of the assessment. The City did not develop a weighted scoring system for each component of the assessment. ? No evidence of approval of the AGA Risk Assessment Monitoring Tool. ? In the Monitoring/Audit Assessment section of the AGA Risk Assessment Monitoring Tool, the City marked all N/A based on a response of the subrecipient has not needed to complete a single audit in the past. However, the subrecipient did have a single audit for the fiscal year end date of 12/31/2020 with the Federal Audit Clearinghouse receiving the audit report on 5/27/2021. No review of the single audit by the City. Management?s Progress for Repeat Findings: The City Controller reviewed the listing of subrecipient risk assessments for 2022 and the listing was determined to be complete. The City will update the subrecipient monitoring policies and procedures ad provide training to the departments. Cause: The City failed to follow federal subrecipient monitoring and management regulation nor its subrecipient monitoring policies and procedures. Repeat Finding: 2021-003 Effect: The auditor noted instances of noncompliance. Noncompliance results in subrecipients' noncompliance with federal statutes, regulations, and the terms and conditions of the subaward. Recommendation: We recommend the City design controls to ensure compliance with federal subrecipient monitoring and management regulation and its subrecipient monitoring policies and procedures. Management Response: Management agrees with the finding. The City will develop standard City-wide subrecipient management policies and procedures including risk assessment and monitoring tools. Additionally, any federal program with two or more City departments managing subrecipients will use the same subrecipient tools to ensure consistency. Timeline and Responsible Position: June 2023 ? City Controller/DFAS Deputy Director
2022 ? 008 Reporting (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Emergency Rental Assistance Program Assistance Listing Number: 21.027, 21.023 Federal Award Identification Number and Year: ALN 21.027 ? Pub. L. No. 117-2 2021 ALN 21.023 ? ERA0335 - 2021 Award Period: ALN 21.027 ? 5/10/2021 - 12/31/2026 ALN 21.023 ? 1/20/2021 - 9/30/2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to ? 200.302 Financial management of 2 CFR Part 200, the non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. Further, the financial management system of each non-Federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements. According to ? 200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to the Compliance Supplement 2022 Part 3, program income does not include interest earned on advances of federal funds. Condition: During our testing, it was noted that the City did not have effective internal controls in place to ensure accurate and complete reporting. Questioned costs: None Context: During our testing, we noted the following exceptions, which are detailed by ALN Number. ALN 21.027 ? For the interim report, support was not provided for Category 1.7 Capital Investments or Physical Plant Changes to Public Facilities that respond to the COVID-19 public health emergency Cumulative Obligations of approximately $280.2K. The City did, however, cancel this project after the initial reporting. 2022 ? 008 Reporting (Significant Deficiency and Noncompliance) (Continued) ALN 21.027 (continued) ? For the Project and Expenditure Report 1, we noted the following exceptions. o Project Name: Police Vehicles Total Cumulative Obligations of approximately $2,654,705. The City identified requisitions and purchase orders of approximately $2,655,183. Thus, a variance of $478. o Project Name: Police Vehicles Total Cumulative Obligations and Total Cumulative Expenditures of approximately $2,654,705 and $1,095,985, respectively, are listed twice in the project overview. Thus, the project is duplicated in the Total Obligations and Total Expenditures in the overview section. The City states this to be a glitch of the portal. However, there is no communication between the City and Treasury to evidence the Treasury's acknowledgment of this glitch in the portal. o Project Name: Eviction Prevention: New Mexico Legal Aid Total Cumulative Obligations of approximately $216K. The total should be approximately $26K. Thus, a variance of $190K. ? Subaward No: SUB-0034501 Period of Performance Start and End of 9/1/2021 to 12/31/2022. However, the subrecipient agreement signed by all parties early September 2021 has a Subaward Period of Performance Start and End Date 9/14/2021 to 3/31/2022. ? Subaward No: SUB-0034394 Period of Performance Start and End of 10/25/2021 to 12/31/2022. However, the contract control form approved by all parties late October 2021 has a contract term 10/20/2021 to 10/19/2022. ? Subaward No: SUB-0034455 Subaward Date of 3/11/2021. This date is the Federal Award Date of Award to the Recipient by the Federal Agency not the subaward start date of 9/1/2021. The subrecipient agreement signed by all parties 9/29/2021 and 10/1/2021. ? Subaward No: SUB-0034462 Subaward Date of 3/11/2021. This date is the Federal Award Date of Award to the Recipient by the Federal Agency not the subaward start date of 9/1/2021. The subrecipient agreement signed by all parties late December 2021. ? Expenditures for Awards more than $50,000 ? All projects have a Subaward Amount of 54405428.50. The City states this to be an error with the portal exporting. However, there is no communication between the City and Treasury to evidence the Treasury's acknowledgment of this error with portal exporting. ? Subaward Crossroads for Women amount of $750K with Subaward Period of Performance Start and End Date of 12/1/2021 to 12/31/2024 not included in the report. Agreement signed by all parties end December 2021. ? Contractual 2021 expenditures of approximately $122K not included in the report. o For the Project and Expenditure Report 2, we noted the following exceptions. ? Subaward No: SLFRP0013-RIVENROCK Subaward Obligation of $50K. However, total purchase order amount of approximately $74.5K. Thus, a variance of approximately $24.5K. ? Subaward No: 33-202200796 Subaward Date of 9/1/2021 and Period of Performance Start and End of 9/1/2021 to 12/31/2023. However, the subrecipient agreement signed by all parties end December 2021 has a Subaward Date of 12/1/2021 and Subaward Period of Performance Start and End Date 12/1/2021 to 12/31/2024. ? Payments To Individuals Expenditure: EN-00044853 Total Period Expenditure Amount of approximately $6.9 million. Amount includes approximately $128.1K of contractor payments not business grants. 2022 ? 008 Reporting (Significant Deficiency and Noncompliance) (Continued) ALN 21.023 ? For 3 of 5 financial reports, the City reported interest earned on advances of federal funds totaling approximately $380.8K as program income. However, interest earned on advances of federal funds is not program income. ? For 1 of 5 special quarterly reports, we noted the following exceptions. o The City did not provide support for any changes from the last report we had which was ERA 1 Quarter 3 2021 (July-September). o The City incorrectly reported cumulative expenditures to date of approximately $13.1 million The amount reported should have been approximately $17.1 million based on a reconciliation provided to us by the City. Thus, a variance of approximately $4 million. o The City incorrectly reported cumulative obligations to date of approximately $23.7 million. The amount reported should have been approximately $23.6 million based on a reconciliation provided to us by the City. Thus, a variance of approximately $151K. Cause: The City lacks effective internal controls and procedures over financial grant management to ensure submitted reports are complete and agree to supporting documentation. Effect: The auditor noted instances of noncompliance. Noncompliance results in inaccurate reporting. Recommendation: We recommend the City design controls to ensure compliance with federal financial management regulation. Management Response: The City agrees with the finding. The City will implement controls to ensure compliance with federal financial management regulations. The City recognizes that it needs to improve its procedures for preparing quarterly report for Treasury funds. Going forward, the Family and Community Services Department will work with the Grants Section to develop and implement standardized procedures for identifying and documenting expenditures, and for reviewing quarterly reports prior to submission. Timeline and Responsible Position: June 2023 ? City Controller/DFAS Deputy Director and Director of Family & Community Services