Finding Text
Finding Reference Number: SA 2022-001 Accurate Financial Reporting in the Annual PR26 Report and Quarterly PR29 Reports and Failure to File Quarterly PR29 Reports
AL Number: 14.218
Assistance Listing Title: CDBG - Entitlement Grants Cluster –
Community Development Block Grants/Entitlement Grants
COVID-19 - Community Development Block Grants/Entitlement Grants-CV
Federal Agency: Department of Housing and Urban Development
Federal Award Identification Number: B-14-MC-06-0037, B-15-MC-06-0037, B-16-MC-06-0037, B-17-MC-06-0037, B-18-MC-06-0037, B-19-MC-06-0037, B-20-MC-06-0037, B-20-MW-06-0037, B-21-MC-06-0037
Criteria: OMB No. 2506-0077 requires all grantees to submit a PR26 – CDBG Financial Summary Report for the CDBG Entitlement Program within 90 days after the year end of the grantee’s program year. The PR26 – CDBG Financial Summary Report is a report that contains summary information from the Integrated Disbursement Information System (IDIS) for the grantee’s program year.
The City is also required to file a C04PR29 Cash on Hand Quarterly Report in the IDIS system within 30 days of the end of each quarter. The report details cash drawdowns and expenditures made during each quarter.
Finally, the City is required to file the PR29, CDBG-CV Cash on Hand Quarterly Report within 10 days after the end of each calendar quarter. The report details cash drawdowns and expenditures made during each quarter.
Condition: During our review of the Program Year 2021 (fiscal year 2022) PR26 report for the CDBG program, we noted that the data in the PR26 report was inconsistent with the data extracted from IDIS and the Consolidated Annual Performance and Evaluation Report (CAPER) and the City’s general ledger. The exceptions noted were:
• Line 01 – Unexpended CDBG funds at end of previous program year was reported as $240,102, but the ending unexpended balance in the Program Year 2020 PR26 report was $365,005, which affected other amounts and calculations reported.
• Line 15 – Total expenditures in the PR26 of $422,819 could not be reconciled to the program expenditures on the SEFA of $555,547.
For the PR26 report for the CDBG-CV program, we understand that the IDIS program does not generate the report by program year, which means the report includes expenditures to the date the report is generated. However, City staff was unable to reconcile the total expenditures on Line 08 of $725,171 to the fiscal year 2021 and 2022 program expenditures on the SEFAs that totaled $717,651.
For the PR29 reports for the CDBG and CDBG-CV programs, we understand the fourth quarter CDBG report was not filed in the IDIS system and the four quarterly reports for the CDBG-CV program for fiscal year 2022 were not filed in the IDIS system.
Effect: The City is not in compliance with the performance reporting requirements of the CDBG program.
Cause: We understand the errors in reporting and failure to file the reports was due to staff oversight.
Identification as a Repeat Finding: Yes, since 2021
Recommendation: The City should develop procedures to ensure that all financial reports are reviewed for accuracy prior to submission. In addition, the City should work with the grantor to determine if the City should submit a corrected Program Year 2021 PR26 report, or if the report can be corrected on a prospective basis during the next reporting period. The City should also work with the grantor to determine if the City should submit the missing fiscal year 2022 Cash on Hand Quarterly Reports for both the CDBG and CDBG-CV programs.
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.