FAC Explorer

Finding 1153716 (2024-004)

Material Weakness Repeat Finding
Requirement
B
Questioned Costs
-
Year
2024
Accepted
2025-09-22
Audit: 366845
Organization: City of Bangor (ME)
Auditor: Runyon Kersteen Ouellette

AI Summary

  • Core Issue: City employees not familiar with the CDBG program approved expenditures, leading to potential mismanagement.
  • Impacted Requirements: Internal controls over federal awards are not effectively maintained, risking non-compliance with grant terms.
  • Recommended Follow-Up: Ensure all CDBG expenditures are reviewed and approved by the program manager before posting.

Finding Text

2024-004 Housing and Urban Development Assistance Listing #14.218 CDBG Entitlement Grants Cluster for the period July 1, 2023, to June 30, 2024 Criteria: The Uniform Guidance §200.303 requires that grant recipients establish and maintain internal controls over federal awards that provide reasonable assurance that the recipient is managing the Federal awards in compliance with the terms and conditions of the awards. The management of such awards includes overseeing allowable costs charged to the grant and ensuring expenditures fall within the period of performance for the grant, which requires knowledge of the grant. Condition: In FY 2024, the City had several expenditures that were charged to the CDBG program that were approved by City employees not directly involved with or familiar with the CDBG program. Cause: There are general expenditures the City sometimes charges to the CDBG program that are approved by the Department Managers and not by the CDBG program manager. Effect: The CDBG program manager is sometimes not aware of certain costs charged to the program until after they have been posted to its expenditures. In addition, the risk that a cost that is not allowable under the CDBG program is increased. Known Questioned Costs: None Likely Questioned Costs: None Recommendations: The City should ensure that all expenditures charged to the CDBG program are reviewed and approved by the program manager before they are posted to the program.

Corrective Action Plan

Management’s Response/Corrective Action Plan: The City of Bangor’s Community Development Block Grant program receives direct oversight by the Community Development Officer, responsible for ensuring compliance with Federal regulations, including the determination of eligibility, allowability, and allocability of all financial expenditures. Previously, the City’s practice concerning CDBG funds provided to other departments allowed those project managers to directly charge the CDBG account through payroll, requisition or direct charges which are not first reviewed and approved by the Community Development Officer. The Community Development Officer has implemented the following procedural changes: 1. Executing Interdepartmental Subrecipient Agreements. This document establishes certain standards and expectations for CDBG-funded programs. In 2025-26, Agreements will create new procedural safeguards including submitting requisitions for all expenditures not contained in the approved budget, and to submit receipts or invoices to the Community Development office directly to back up all approved expenses. 2. The Community Development Officer must review and sign off on all expenses charged to the CDBG account by Community and Economic Development Staff, including “OK To Pay” charges, and requisitions. The Community Development Officer recommends the following changes: 1. The issuance of a separate credit card to be used exclusively for CDBG expenditures. The reconciliation process is very tedious and involves sifting through unrelated expenses, and some expenses which are allocated to CDBG which have not been initiated by the Community Development Division and were deemed ineligible by the Community Development Officer. This creates some challenges finding another account to charge to, often a month or more after the expense occurred. The CDBG program does a monthly drawdown for administrative costs, which requires the CDO to make adjustments for expenses that are discovered during the reconciliation process. 2. Eliminating the practice of providing CDBG account numbers to individual departments to directly charge expenses. This leaves the program particularly vulnerable, as when a department charged nearly $435,000 to the CDBG account, requiring reversal of charges that were not eligible. The CDO believes that this change should be initiated by the Finance department with cooperation by the CED. 3. Establishing a review process for personnel expense outside of Salary and Fringe Benefit. Many charges in SunGard related to 701 charges are not viewable as they are deemed privileged expenses. However, some charges for personnel expenses have required review and reversal, and in one case a charge for “travel” was discovered for a program that does not involve this activity. The Finance Department might consider a change to include review if necessary.

Categories

Allowable Costs / Cost Principles Period of Performance Internal Control / Segregation of Duties

Other Findings in this Audit

  • 1153705 2024-003
    Material Weakness Repeat
  • 1153706 2024-007
    Material Weakness Repeat
  • 1153707 2024-008
    Material Weakness Repeat
  • 1153708 2024-007
    Material Weakness Repeat
  • 1153709 2024-008
    Material Weakness Repeat
  • 1153710 2024-007
    Material Weakness Repeat
  • 1153711 2024-008
    Material Weakness Repeat
  • 1153712 2024-007
    Material Weakness Repeat
  • 1153713 2024-008
    Material Weakness Repeat
  • 1153714 2024-004
    Material Weakness Repeat
  • 1153715 2024-005
    Material Weakness Repeat
  • 1153717 2024-005
    Material Weakness Repeat
  • 1153718 2024-011
    Material Weakness Repeat
  • 1153719 2024-011
    Material Weakness Repeat
  • 1153720 2024-011
    Material Weakness Repeat
  • 1153721 2024-006
    Material Weakness Repeat
  • 1153722 2024-006
    Material Weakness Repeat
  • 1153723 2024-006
    Material Weakness Repeat
  • 1153724 2024-006
    Material Weakness Repeat
  • 1153725 2024-006
    Material Weakness Repeat
  • 1153726 2024-006
    Material Weakness Repeat
  • 1153727 2024-006
    Material Weakness Repeat
  • 1153728 2024-006
    Material Weakness Repeat
  • 1153729 2024-003
    Material Weakness Repeat
  • 1153730 2024-010
    Material Weakness Repeat
  • 1153731 2024-003
    Material Weakness Repeat
  • 1153732 2024-009
    Material Weakness Repeat
  • 1153733 2024-010
    Material Weakness Repeat
  • 1153734 2024-003
    Material Weakness Repeat
  • 1153735 2024-009
    Material Weakness Repeat
  • 1153736 2024-010
    Material Weakness Repeat
  • 1153737 2024-003
    Material Weakness Repeat
  • 1153738 2024-009
    Material Weakness Repeat
  • 1153739 2024-010
    Material Weakness Repeat
  • 1153740 2024-003
    Material Weakness Repeat
  • 1153741 2024-009
    Material Weakness Repeat
  • 1153742 2024-010
    Material Weakness Repeat
  • 1153743 2024-003
    Material Weakness Repeat
  • 1153744 2024-009
    Material Weakness Repeat
  • 1153745 2024-010
    Material Weakness Repeat
  • 1153746 2024-003
    Material Weakness Repeat
  • 1153747 2024-009
    Material Weakness Repeat
  • 1153748 2024-010
    Material Weakness Repeat
  • 1153749 2024-003
    Material Weakness Repeat
  • 1153750 2024-009
    Material Weakness Repeat
  • 1153751 2024-010
    Material Weakness Repeat
  • 1153752 2024-003
    Material Weakness Repeat
  • 1153753 2024-009
    Material Weakness Repeat
  • 1153754 2024-010
    Material Weakness Repeat
  • 1153755 2024-003
    Material Weakness Repeat
  • 1153756 2024-009
    Material Weakness Repeat
  • 1153757 2024-010
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
84.425 Covid - Elementary and Secondary School Emergency Relief Fund III (arpa) $4.99M
84.425 Covid - Elementary and Secondary School Emergency Relief Fund II $4.17M
10.557 Women, Infants, and Children (wic) $2.98M
20.507 Federal Transit - Operating $2.08M
21.027 Covid - State and Local Fiscal Recovery Funds (arpa) $1.72M
14.218 Community Development Block Grants $1.52M
84.010 Title 1a $1.48M
84.027 Special Education - Grants to Local States $1.36M
93.788 Opioid Str $1.01M
10.555 School Lunch Program $932,138
20.106 Airport Improvement Plan $586,168
20.205 24771.00 Riverfront Trail (7646) [80% Fed] $446,750
10.561 Supplemental Nutrition Assistance Program $388,690
14.238 Shelter Plus Care: Me 0028l1t002215 Tra (8715) $384,760
84.287 21st Century $325,020
20.526 Bus and Bus Facilities Formula and Discretionary Programs $319,555
20.205 23114.00 Penobscot Corridor Signals (7626) [80% Fed] $312,175
14.238 Shelter Plus Care: Me 0082l1t002206 Tra (8714) $304,033
10.553 School Breakfast Program $289,923
21.027 Covid - Pre-K Expansion $284,260
84.367 Title Iia - Supporting Effective Instruction $271,910
84.041 Impact Aid $238,220
14.218 Covid - Community Development Block Grants - Cv $173,236
93.354 Covid - Public Health Infrastructure $173,203
84.002 Adult Basic Education $171,708
84.425 Covid - Arp Esser (literacy Grant) $168,352
20.205 25379.00 Oak St (7638) [80% Fed] $154,366
10.555 School Lunch Donated Commodities $131,259
93.243 Substance Abuse and Mental Health Services Projects $130,145
97.044 Assistance to Firefighters $126,247
14.238 Shelter Plus Care: Me 0082l1t002307 Tra (8714) $118,031
97.072 Nedctp (8713) $110,578
84.425 Covid - Arp Esser (distinguished Educator) $102,744
14.238 Shelter Plus Care: Me 0026l1t002215 Tra (8716) $96,980
97.090 Law Enforcement Reimbursement Program $80,709
10.582 Fresh Fruit and Vegetable Program $80,612
10.555 Supply Chain Assistance $80,010
20.205 23112.00 Penobscot Corridor Signals Brewer (7636) [80% Fed] $77,836
14.238 Shelter Plus Care: Me 0028l1t002114 Tra (8715) $75,850
20.205 23573.00 State St/forest Ave (7628) [80% Fed] $67,814
21.027 Covid - Career Advancement & Navigation Pilot $64,053
14.238 Shelter Plus Care: Me 0117l1t002201 Tra (8719) $56,716
14.238 Shelter Plus Care: Me 0026l1t002114 Tra (8716) $56,159
93.959 Block Grants for Prevention and Treatment of Substance Abuse $55,817
97.067 Homeland Security Grant Program $53,584
84.425 Covid - Homeless Children and Youth II $50,486
93.959 Covid - Block Grants for Prevention and Treatment of Substance Abuse $49,396
93.387 National and State Tobacco Control Program $47,093
21.027 Covid - Mjrp $41,289
10.557 Wic Breastfeeding $40,925
20.205 25617.00 Broadway Ped Imp/heads Up (7645) [80% Fed] $29,271
84.173 Preschool $23,170
10.558 Child and Adult Care Food Program (cacfp) $23,066
10.555 After School Program $19,493
66.818 Brownfields Assessment and Cleanup $16,240
10.572 Wic Farmer's Market Food $12,246
16.738 Edward Byrnes Memorial Justice Assistance Grant (jag) $10,886
20.205 26354.00 Griffin/kenduskeag (7649) [80% Fed] $9,863
84.173 Covid - Preschool (arpa) $8,407
16.839 Stop School Violence $7,136
16.607 Bullet Proof Vests $7,130
84.425 Covid - Learning Management Systems (lms) (arpa) $6,913
10.649 Covid - Pandemic Ebt $6,530
14.238 Shelter Plus Care: Me 0117l1t001700 Tra (8719) $4,901
20.205 26932.00 Hammond St Ext to Hermon (7604) [80% Fed] $4,139
20.507 Federal Transit - Bus Acquisition $3,180
84.425 Covid - Arp Esser (summer Reservation) $2,626
84.425 Covid - Homeless Children and Youth I $931