Finding Text
2024-008 U.S. Department of Housing and Urban Development, For the period July 1, 2023, through June 30, 2024, ALN # 14.218 – Internal Controls over Community Development Block Grant Entitlements Cluster Criteria: Federal regulations require grantees to maintain accurate financial records and submit timely reports. Specifically, HUD guidance for the PR-29 Cash on Hand Quarterly Report requires submission within 30 days of the end of each quarter and accurate reporting of program income balances. In addition, Uniform Guidance requires the City to have adequate internal controls over grant management. Condition: The City submitted the required PR-29 Cash on Hand Quarterly Reports late for all quarters reviewed. Specifically, all quarterly reports were submitted after the 30-day deadline following the end of the reporting period. Additionally, the beginning balance of program income was reported incorrectly for all quarters reviewed, resulting in inaccurate financial reporting to the U.S. Department of Housing and Urban Development (HUD). In addition, we found there was no secondary review of either the PR-29 Cash on Hand Quarterly Report or the PR-26 Financial Summary Report. Cause: The delays and inaccuracies were due to insufficient oversight, a lack of formalized timelines for report preparation and submission, staff turnover, and inadequate reconciliation of balances prior to report completion. Effect: The City did not comply with HUD’s reporting requirements for the PR-29 Cash on Hand Quarterly Report, which may impair program oversight and transparency. Late and inaccurate reporting can hinder HUD’s ability to monitor program performance and financial management. In addition, lack of review procedures increases the risk of untimely or inaccurate reporting. Recommendation: We recommend the City: • Establish and enforce internal deadlines to ensure timely submission of required reports. • Implement a reconciliation and review process to verify the accuracy of reported balances prior to submission. • Provide training to staff responsible for preparing and reviewing HUD reports to ensure compliance with federal requirements. Questioned Costs: none