Finding Text
2023-010– Special Reporting for Federal Funding Accountability and Transparency Act
Finding Type. Immaterial Noncompliance/Sigificant Deficiency in Internal Control over Compliance (Reporting).
Programs. Choice Neighborhoods Implementation Grant; U.S. Department of Housing and Urban Development; Assistance Listing Number 14.889' Award Number MI5F519CNG117.
Substance Abuse and Mental Health Services - Projects of Regional and National Significance; U.S. Department of Health and Human Services; Assistance Listing Number 93.243; Award Number 1H79SM084918-01.
Criteria. Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS).
Condition. Despite passing through qualifying amounts, the City could produce no evidence that the subawards had been reported through the FSRS.
Cause. The City does not have the proper internal controls in place to ensure that subaward reporting is submitted for all direct grants.
Effect. The City is exposed to an increased risk that future noncompliance could occur and not be prevented or detected by the City's internal controls.
Questioned Costs. No costs were required to be questioned as a result of this finding inasmuch as our tests of transactions did not indicate any unallowable costs.
Recommendation. We recommend that the City implement necessary internal controls to ensure that reporting of subawards greater than $30,000 is submitted to the FSRS for all direct grants.
View of Responsible Officials. The City will implement the necessary internal controls to ensure the policy for compliance is followed and documented.