Finding 1088547 (2021-001)

Material Weakness
Requirement
B
Questioned Costs
-
Year
2021
Accepted
2024-11-25
Audit: 329833
Organization: Urban Strategies, Inc. (MO)
Auditor: Rubinbrown LLP

AI Summary

  • Core Issue: The organization failed to retain documentation showing that expenditures were reviewed and approved before payment, indicating a lack of effective controls.
  • Impacted Requirements: This finding violates Uniform Guidance, which mandates that compliance controls must be properly designed and operational to ensure adherence to federal program requirements.
  • Recommended Follow-Up: Implement a control for pre-payment review of expenditures, ensuring documentation includes the reviewer's signature and date, conducted by someone knowledgeable about grant eligibility.

Finding Text

Finding 2021-001 - Material Weakness: Allowable Activities and Costs - Control Finding ALN 14.889 - Choice Neighborhoods Implementation Grant - Hope VI Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: The City of St. Louis and the Housing Authority of the City of Winston-Salem Criteria Or Specific Requirement: Uniform Guidance requires that controls over compliance be properly designed, in place and operating effectively to ensure compliance with the requirements of the federal program. Condition: Based on the testing completed over the allowable activities and costs compliance requirement, the Organization did not retain documentation that expenditures were reviewed and approved prior to payment. Cause: Controls over compliance put in place by management were not operating effectively as it relates to these compliance requirements. Effect: The possibility exists that noncompliance with federal requirements could go undetected without proper controls over compliance. Questioned Costs: Not applicable. Context: During testing performed for allowable activities and costs, appropriate documentation that expenditures were reviewed and approved prior to payment was not retained. For 23 of the 40 expenditures tested, the expenditure was paid without appropriate documentation to support proper review. All 40 expenditures tested appear to be allowable. Statistical sampling was not used to test this compliance requirement. Identification As A Repeat Finding: Not applicable. Recommendation: We recommend that management put a control in place for a review of expenditures prior to payment. The review should be properly documented with the reviewer's signature and the date the review was performed. The review should be performed by someone other than the preparer and who has knowledge of the grant's eligibility requirements. Views Of Responsible Officials: The management agrees with the finding and has put together a correction action plan for finding. See corrective action plan included in this report.

Categories

Subrecipient Monitoring Eligibility Material Weakness

Other Findings in this Audit

  • 512105 2021-001
    Material Weakness
  • 512106 2021-001
    Material Weakness
  • 512107 2021-002
    Material Weakness
  • 1088548 2021-001
    Material Weakness
  • 1088549 2021-002
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
93.558 Temporary Assistance for Needy Families $781,882
14.889 Choice Neighborhoods Implementation Grants $456,180
21.027 Coronavirus State and Local Fiscal Recovery Funds $18,736