Finding #2024-005 – Lack of Written Grant Procedures over Federal Programs Criteria: Under Federal Uniform Guidance, all non-Federal subrecipient entities must establish and maintain written policies and procedures over Federal programs. Written grant procedures are required in the areas of verifyin...
Finding #2024-005 – Lack of Written Grant Procedures over Federal Programs Criteria: Under Federal Uniform Guidance, all non-Federal subrecipient entities must establish and maintain written policies and procedures over Federal programs. Written grant procedures are required in the areas of verifying allowable costs, cash management, and conflicts of interest, while procurement, subrecipient monitoring, and reporting procedures should also be included. Condition: During their audit procedures, the auditors noted that the City did not have comprehensive written grant procedures governing key compliance areas. Cause: The City’s management has relied on informal practices and institutional knowledge rather than formulating a grant procedures manual. Effect: Without written procedures, there is an increased risk of noncompliance with Uniform Guidance, including improper cost charging, non-compliant procurement, untimely drawdowns or cash on hand, inadequate subrecipient oversight, and ineffective internal controls. This exposes the City to the risk of questioned costs, potential repayment of federal funds, audit findings, and other possible impacts. Recommendation: The auditors recommend that the City develop, approve, and implement a consolidated Federal grant procedures manual. The procedures should not be a replication of the Federal requirements but instead step-by-step processes that are necessary to be in compliance with the Federal guidelines. Response: The City will begin the process of drafting and approving a Federal grant procedures manual in order to be in compliance with Federal requirements going forward.