FAC Explorer

Finding 1166078 (2023-003)

Material Weakness Repeat Finding
Requirement
AB
Questioned Costs
-
Year
2023
Accepted
2025-12-22
Audit: 376863
Organization: City of Lynn (MA)
Auditor: MARCUM LLP

AI Summary

  • Core Issue: The City failed to maintain adequate time and effort records for employees charged to federal grants, impacting compliance with federal requirements.
  • Impacted Requirements: This finding affects the compliance criteria for allowable costs under federal awards, specifically the need for proper documentation as outlined in 2 CFR 200.403(g).
  • Recommended Follow-Up: The City should strengthen internal controls to ensure all federal award transactions are properly documented and compliant with cost principles.

Finding Text

2023-003 Maintain Employee’s Time and Effort Records Federal Agency: U.S. Department of Housing and Urban Development Cluster/Program: CDBG – Entitlement Grants Cluster Award Name: Community Development Block Grants/Entitlement Grants AL Number(s): 14.218 Award Year: 2023 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Cluster/Program: Special Education Cluster Award Name: Special Education Grants to States and Preschool Grants AL Number(s): 84.027/84.173 Award Year: 2021, 2022, 2023 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding Compliance Internal Control over Compliance – Material Weakness Criteria or Specific Requirement Grantees must provide reasonable assurance that federal awards are expended only for allowable activities and that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles. Management of the City is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. The Code of Federal Regulations Section 200.403(g) states that for costs to be allowable under Federal awards, they must be adequately documented and there must be sufficient documentation. Condition and Context A sample of payroll disbursements were tested in order to determine if adequate time and effort certifications were maintained. As a result of our testing, it was determined that time and effort certifications were not maintained for all six employees tested in the Community Development Block Grants/Entitlement Grants program, and six employees tested in the Special Education Cluster. Cause Weaknesses in the design and implementation of internal controls. Effect or Potential Effect Due to the weaknesses in internal controls noted above, there is a risk that amounts charged to federal awards may not be allowable or in accordance with applicable cost principles. Questioned Costs Due to the condition noted, we were unable to determine if the costs charged to the applicable grants are allowable. AL Number(s) Name of Federal Program or Cluster Questioned Costs 14.218 Community Development Block Grants/Entitlement Grants $1,112,830 84.027/84.173 Special Education Cluster $5,439 Recommendation The City should address the weaknesses in internal controls noted above in order to provide reasonable assurance that federal award transactions are allowable and in accordance with the applicable cost principles. Views of Responsible Official and Planned Corrective Action Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.

Corrective Action Plan

Audit Finding Reference: 2023-003 Maintain Employee's Time and Effort Records (Material Weakness) Planned Corrective Action: The lack of record keeping in Community Development and our Special Education Department is a concern, CD has addressed this finding however still working with the School Department to address this finding. The context below is from CD: Corrective action implemented with City FY24 (07/01/23-06/30/24). Annually, a budget for staff salary and fringe is developed and approved by CD Director Marsh. The annual budget details staff hours and cost centers each will be charged during the year ( e.g. CDBG activity delivery, CDBG admin, Seaport Marina, Auditorium, ESG, etc.). Additionally, employees track time on individual time sheets weekly. This finding was also noted at the last HUD monitoring review, and marked as resolved and closed in June 2024 following HUD's post review. Name of Contact Person and Completion Date James Marsh, Executive Director of The Office of Community Development & Kevin McHugh, School Business Administrator December 31, 2025

Categories

Allowable Costs / Cost Principles Material Weakness

Other Findings in this Audit

  • 1166022 2023-001
    Material Weakness Repeat
  • 1166023 2023-001
    Material Weakness Repeat
  • 1166024 2023-001
    Material Weakness Repeat
  • 1166025 2023-001
    Material Weakness Repeat
  • 1166026 2023-001
    Material Weakness Repeat
  • 1166027 2023-001
    Material Weakness Repeat
  • 1166028 2023-001
    Material Weakness Repeat
  • 1166029 2023-001
    Material Weakness Repeat
  • 1166030 2023-001
    Material Weakness Repeat
  • 1166031 2023-001
    Material Weakness Repeat
  • 1166032 2023-001
    Material Weakness Repeat
  • 1166033 2023-001
    Material Weakness Repeat
  • 1166034 2023-001
    Material Weakness Repeat
  • 1166035 2023-001
    Material Weakness Repeat
  • 1166036 2023-001
    Material Weakness Repeat
  • 1166037 2023-001
    Material Weakness Repeat
  • 1166038 2023-001
    Material Weakness Repeat
  • 1166039 2023-001
    Material Weakness Repeat
  • 1166040 2023-001
    Material Weakness Repeat
  • 1166041 2023-001
    Material Weakness Repeat
  • 1166042 2023-001
    Material Weakness Repeat
  • 1166043 2023-001
    Material Weakness Repeat
  • 1166044 2023-001
    Material Weakness Repeat
  • 1166045 2023-001
    Material Weakness Repeat
  • 1166046 2023-001
    Material Weakness Repeat
  • 1166047 2023-001
    Material Weakness Repeat
  • 1166048 2023-001
    Material Weakness Repeat
  • 1166049 2023-001
    Material Weakness Repeat
  • 1166050 2023-002
    Material Weakness Repeat
  • 1166051 2023-002
    Material Weakness Repeat
  • 1166052 2023-002
    Material Weakness Repeat
  • 1166053 2023-002
    Material Weakness Repeat
  • 1166054 2023-002
    Material Weakness Repeat
  • 1166055 2023-002
    Material Weakness Repeat
  • 1166056 2023-002
    Material Weakness Repeat
  • 1166057 2023-002
    Material Weakness Repeat
  • 1166058 2023-002
    Material Weakness Repeat
  • 1166059 2023-002
    Material Weakness Repeat
  • 1166060 2023-002
    Material Weakness Repeat
  • 1166061 2023-002
    Material Weakness Repeat
  • 1166062 2023-002
    Material Weakness Repeat
  • 1166063 2023-002
    Material Weakness Repeat
  • 1166064 2023-002
    Material Weakness Repeat
  • 1166065 2023-002
    Material Weakness Repeat
  • 1166066 2023-002
    Material Weakness Repeat
  • 1166067 2023-002
    Material Weakness Repeat
  • 1166068 2023-002
    Material Weakness Repeat
  • 1166069 2023-002
    Material Weakness Repeat
  • 1166070 2023-003
    Material Weakness Repeat
  • 1166071 2023-003
    Material Weakness Repeat
  • 1166072 2023-003
    Material Weakness Repeat
  • 1166073 2023-003
    Material Weakness Repeat
  • 1166074 2023-003
    Material Weakness Repeat
  • 1166075 2023-003
    Material Weakness Repeat
  • 1166076 2023-003
    Material Weakness Repeat
  • 1166077 2023-003
    Material Weakness Repeat
  • 1166079 2023-004
    Material Weakness Repeat
  • 1166080 2023-004
    Material Weakness Repeat
  • 1166081 2023-004
    Material Weakness Repeat
  • 1166082 2023-004
    Material Weakness Repeat
  • 1166083 2023-004
    Material Weakness Repeat
  • 1166084 2023-004
    Material Weakness Repeat
  • 1166085 2023-004
    Material Weakness Repeat
  • 1166086 2023-004
    Material Weakness Repeat
  • 1166087 2023-004
    Material Weakness Repeat
  • 1166088 2023-004
    Material Weakness Repeat
  • 1166089 2023-005
    Material Weakness Repeat
  • 1166090 2023-005
    Material Weakness Repeat
  • 1166091 2023-005
    Material Weakness Repeat
  • 1166092 2023-005
    Material Weakness Repeat
  • 1166093 2023-005
    Material Weakness Repeat
  • 1166094 2023-005
    Material Weakness Repeat
  • 1166095 2023-005
    Material Weakness Repeat
  • 1166096 2023-006
    Material Weakness Repeat
  • 1166097 2023-006
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
10.553 SCHOOL BREAKFAST PROGRAM $2.09M
14.231 EMERGENCY SOLUTIONS GRANT PROGRAM $1.47M
97.036 DISASTER GRANTS - PUBLIC ASSISTANCE (PRESIDENTIALLY DECLARED DISASTERS) $1.22M
14.239 HOME INVESTMENT PARTNERSHIPS PROGRAM $890,673
14.900 LEAD HAZARD REDUCTION GRANT PROGRAM $871,698
14.241 HOUSING OPPORTUNITIES FOR PERSONS WITH AIDS $580,296
10.555 NATIONAL SCHOOL LUNCH PROGRAM $482,888
97.044 ASSISTANCE TO FIREFIGHTERS GRANT $435,850
84.367 SUPPORTING EFFECTIVE INSTRUCTION STATE GRANTS (FORMERLY IMPROVING TEACHER QUALITY STATE GRANTS) $420,364
93.323 EPIDEMIOLOGY AND LABORATORY CAPACITY FOR INFECTIOUS DISEASES (ELC) $360,259
84.027 SPECIAL EDUCATION GRANTS TO STATES $353,611
59.075 SHUTTERED VENUE OPERATORS GRANT PROGRAM $300,713
10.559 SUMMER FOOD SERVICE PROGRAM FOR CHILDREN $261,193
93.959 BLOCK GRANTS FOR PREVENTION AND TREATMENT OF SUBSTANCE ABUSE $188,860
84.371 COMPREHENSIVE LITERACY DEVELOPMENT $183,371
14.218 COMMUNITY DEVELOPMENT BLOCK GRANTS/ENTITLEMENT GRANTS $172,749
10.582 FRESH FRUIT AND VEGETABLE PROGRAM $170,430
16.803 RECOVERY ACT - EDWARD BYRNE MEMORIAL JUSTICE ASSISTANCE GRANT (JAG) PROGRAM/ GRANTS TO STATES AND TERRITORIES $154,589
10.558 CHILD AND ADULT CARE FOOD PROGRAM $146,001
84.287 TWENTY-FIRST CENTURY COMMUNITY LEARNING CENTERS $109,225
84.010 TITLE I GRANTS TO LOCAL EDUCATIONAL AGENCIES $103,579
16.922 EQUITABLE SHARING PROGRAM $101,851
93.354 PUBLIC HEALTH EMERGENCY RESPONSE: COOPERATIVE AGREEMENT FOR EMERGENCY RESPONSE: PUBLIC HEALTH CRISIS RESPONSE $100,000
21.027 CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS $60,000
93.788 OPIOID STR $54,732
16.804 RECOVERY ACT - EDWARD BYRNE MEMORIAL JUSTICE ASSISTANCE GRANT (JAG) PROGRAM / GRANTS TO UNITS OF LOCAL GOVERNMENT $50,517
97.042 EMERGENCY MANAGEMENT PERFORMANCE GRANTS $48,939
45.310 GRANTS TO STATES $45,108
97.047 BRIC: BUILDING RESILIENT INFRASTRUCTURE AND COMMUNITIES $42,651
84.196 EDUCATION FOR HOMELESS CHILDREN AND YOUTH $41,708
93.493 CONGRESSIONAL DIRECTIVES $41,136
84.425 EDUCATION STABILIZATION FUND $34,908
84.173 SPECIAL EDUCATION PRESCHOOL GRANTS $30,649
20.600 STATE AND COMMUNITY HIGHWAY SAFETY $14,356
84.365 ENGLISH LANGUAGE ACQUISITION STATE GRANTS $8,968
84.048 CAREER AND TECHNICAL EDUCATION -- BASIC GRANTS TO STATES $6,993
93.103 FOOD AND DRUG ADMINISTRATION RESEARCH $4,533
93.566 REFUGEE AND ENTRANT ASSISTANCE STATE/REPLACEMENT DESIGNEE ADMINISTERED PROGRAMS $3,800
84.424 STUDENT SUPPORT AND ACADEMIC ENRICHMENT PROGRAM $1,000