Finding 1106152 (2024-001)

Program/Cluster: CDBG – Entitlement/Special Purpose Grants Cluster Federal Financial Assistance Listing Number: 14.218 Federal Grantor: U.S. Department of Housing and Urban Development Award Year: 2023-24 Grant Award Number: B-23-MC-06-0533 Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Instance of Non-Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, 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: As a result of our audit procedures, we noted that one (1) out of one (1) first tier sub-awards tested were not reported timely in the FFATA Subaward Reporting System (FSRS), totaling $40,000. Transactions Tested Subaward Not Reported Report Not Timely Subaward Amount Incorrect Subaward Missing Key Elements 1 - 1 - - Dollar Amount of Tested Transactions Subaward Not Reported Report Not Timely Subaward Amount Incorrect Subaward Missing Key Elements $40,000 - $40,000 - - Cause: The City did not have proper internal controls in place to ensure sub-award information was submitted in accordance with FFATA. Effect: The lack of adequate policies governing report preparation and submission resulted in FFATA special reports not being filed as required by the program. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: We tested one (1) out of one (1) first tier subawards greater than $30,000 awarded during the fiscal year. Repeat Finding from Prior Year(s): No. Recommendation: We recommend the City implement policies and procedures to ensure the requirement FFATA reports are prepared and submitted to the Federal Funding Accountability and Transparency Act Subaward Reporting System in a timely manner. Views of Responsible Officials: Management agrees. See separately issued corrective action plan.