Finding 1150409 (2024-001)

Federal Agency: U.S. Department of Housing and Urban Development (“HUD”) Program Title: Community Development Block Grants Entitlement Grants Assistance Listing Number: 14.218 Federal Award Source: Pass-Through Pass-Through Entity: City of Tucson Pass-Through Identifying Number: 19412 Criteria – Under the requirements of 2 CFR, Part 200, Subpart 305, payment methods must minimize the time elapsing between the transfer of funds from the Federal agency and the disbursement of funds by the recipient. Condition – During our audit of the allowable cost requirements for the Organization’s awards, we noted the Organization incorrectly reported expenditures and revenue for a program expenditure, which resulted in billing occurring before the expenditures were incurred. Cause – The finding appears to be the result of an error in data entry and an internal control breakdown related to the review of the expenditure and related billing. Effect and Context – The Organization is not in compliance with the cash management requirements of its award and therefore, expenditures were billed prior to being incurred for one out of two samples. Our sample was a statistically valid sample. Questioned Costs – None noted. Recommendation –We recommend the Organization implement policies and procedures to ensure its compliance with the cash management requirements.