Finding Text
Information on the Federal Program: United States Department of Housing and Urban Development Assistance Listing Number: 14.218 Program Name: CDBG – Entitlement Grants Cluster Pass-through Awards under the Uniform Guidance Requirements: Pass-through Entity Award Number Award Period City of Cleveland Multiple Multiple Cuyahoga County Multiple Multiple Type of Finding: Significant Deficiency Criteria: In accordance with §200.303, Internal Controls, the non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: During our internal controls over compliance testing of non-payroll disbursements, we noted instances where management was unable to locate approved payment request forms with evidence of approval prior to being submitted for reimbursement. We tested 60 transactions noting 2 internal control exceptions relating to internal controls over allowable costs/cost principles. Cause: Management could not provide support for the proper review of payment requests prior to submission for reimbursement due to personnel changes in the accounting department. Effect or Potential Effect: An ineffective control system related to internal controls over compliance can lead to noncompliance with laws and regulations and loss of funding for the related program. Questioned Costs: None Context: This is a condition based on testing of the Organization’s internal controls over compliance with specified requirements using a non-statistical method. The prevalence of these findings is detailed in the conditions section above. Repeat Finding: Repeat finding of 2023-001 Recommendation: We recommend the Organization review, and revise as needed, its controls over review of the reimbursement packets. The Organization should maintain documentation of the review of the reimbursement packet in a designated location and retain such documentation in accordance with the relevant requirements. Views of Responsible Officials: The Organization’s management agrees with the finding and recommendations set forth within and has developed a corrective action plan to address the significant deficiency identified.