FAC Explorer

Finding 1166641 (2024-018)

Material Weakness Repeat Finding
Requirement
L
Questioned Costs
-
Year
2024
Accepted
2025-12-24
Audit: 377616
Organization: City of Philadelphia (PA)
Auditor: CITY OF PHILADELPHIA OFFICE OF THE CONTROLLER

AI Summary

  • Core Issue: GAAU incorrectly reported prior year expenditures for six grant programs in the FY 2024 SEFA instead of the correct fiscal year, violating GAAP.
  • Impacted Requirements: OMB’s Uniform Guidance mandates accurate reporting of federal awards based on when activities occur, not when invoices are received.
  • Recommended Follow-Up: Finance should enhance the accounts payable process to ensure expenditures are recorded in the correct fiscal year, and departments must diligently review pending invoices and encumbrances.

Finding Text

Assistance Listing 14.231 Emergency Solutions Grants Program Assistance Listing 93.224 & 93.527 Health Center Program & Grants for New and Expanded Services under the Health Center Program Assistance Listing 93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response Assistance Listing 93.667 Social Services Block Grant Assistance Listing 93.914 HIV Emergency Relief Project Grants Condition: In our review of the fiscal year (FY) 2024 SEFA, we noted that GAAU improperly reported prior period expenditures for six grant programs in the current year SEFA. Specifically, we noted expenditures for the programs in Table 5 below, occurred in FY 2023, but were not included in the year end accounts payable accrual or reported in the FY 2023 SEFA. Instead, GAAU inappropriately reported those expenditures in the FY 2024 SEFA. Criteria: OMB’s Uniform Guidance, Title 2, Part 200, Subpart F, paragraph 200.510(b) specifies that the grantee must prepare a SEFA for the period covered by the financial statements which must include the total federal awards expended as determined in accordance with 200.502 Basis for Determining federal awards expended. OMB’s Uniform Guidance, Title 2, Part 200, Subpart F, paragraph 200.502(a) specifies that the determination of when a federal award is expended must be based on when the activity related to the federal award occurs. Additionally, the city’s financial statements are prepared on the modified accrual basis and follow Generally Accepted Accounting Principles (GAAP). GAAP requires that governments report a liability in the period in which it is incurred. Accordingly, governmental entities should record expenditures when a liability is incurred, or when the activity related to a federal award occurs and not based on when the invoice is received. Effect: Failure to report grant expenditures on the SEFA during the correct fiscal year is a departure from GAAP and caused inaccurate reporting of federal expenditures. Cause: Finance provides the departments with a list of payables and a list of open encumbrances with a cut-off date of September. The departments are required to review any pending invoices, open encumbrances, and payables for any payables that need to be recorded. During the audit, the departments did not perform a thorough review of their pending invoices and open encumbrances, so Finance was unable to detect significant payables. Recommendation: Finance should improve its accounts payable process by following GAAP and the accrual basis of accounting by recording expenditures in the fiscal year they occur. All other city departments should review pending invoices and unliquidated encumbrances and follow up with contractors and subrecipients to ensure that the invoices are processed within the cut-off date for accounts payable. Views of the Responsible Officials and Corrective Action Plan: Although we acknowledge that certain prior-year expenditures were recorded in the FY24 SEFA, we do not believe these errors were material to the basic financial statements. In addition, we do not believe that including these expenditures affected the determination of major programs or our compliance with any federal grant requirements. We confirm that our financial statements are prepared in accordance with Generally Accepted Accounting Principles and that, as presented, they are materially accurate. For FY 2025, we expanded our search for unrecorded liabilities to include activity through seven months after year-end. Because the risk of unrecorded liabilities declines as we move further from fiscal year-end, we focused our review on transactions that could reasonably have a material impact on the financial statements. We will work closely with all departments to ensure that any outstanding obligations that have not yet been vouchered are identified and addressed. Contact Person: Shantae Thorpe, Accounting Manager, Finance, 215-686-5629

Corrective Action Plan

Assistance Listing 14.231 Emergency Solutions Grants Program Assistance Listing 93.224 & 93.527 Health Center Program & Grants for New and Expanded Services under the Health Center Program Assistance Listing 93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response Assistance Listing 93.667 Social Services Block Grant Assistance Listing 93.914 HIV Emergency Relief Project Grants Views of the Responsible Officials and Corrective Action Plan: Although we acknowledge that certain prior-year expenditures were recorded in the FY24 SEFA, we do not believe these errors were material to the basic financial statements. In addition, we do not believe that including these expenditures affected the determination of major programs or our compliance with any federal grant requirements. We confirm that our financial statements are prepared in accordance with Generally Accepted Accounting Principles and that, as presented, they are materially accurate. For FY 2025, we expanded our search for unrecorded liabilities to include activity through seven months after year-end. Because the risk of unrecorded liabilities declines as we move further from fiscal year-end, we focused our review on transactions that could reasonably have a material impact on the financial statements. We will work closely with all departments to ensure that any outstanding obligations that have not yet been vouchered are identified and addressed. Contact Person: Shantae Thorpe, Accounting Manager, Finance, 215-686-5629

Categories

Reporting

Other Findings in this Audit

  • 1166623 2024-011
    Material Weakness Repeat
  • 1166624 2024-011
    Material Weakness Repeat
  • 1166625 2024-012
    Material Weakness Repeat
  • 1166626 2024-013
    Material Weakness Repeat
  • 1166627 2024-013
    Material Weakness Repeat
  • 1166628 2024-013
    Material Weakness Repeat
  • 1166629 2024-013
    Material Weakness Repeat
  • 1166630 2024-014
    Material Weakness Repeat
  • 1166631 2024-015
    Material Weakness Repeat
  • 1166632 2024-015
    Material Weakness Repeat
  • 1166633 2024-016
    Material Weakness Repeat
  • 1166634 2024-017
    Material Weakness Repeat
  • 1166635 2024-018
    Material Weakness Repeat
  • 1166636 2024-018
    Material Weakness Repeat
  • 1166637 2024-018
    Material Weakness Repeat
  • 1166638 2024-018
    Material Weakness Repeat
  • 1166639 2024-018
    Material Weakness Repeat
  • 1166640 2024-018
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
93.658 FOSTER CARE TITLE IV-E $97.68M
97.036 DISASTER GRANTS - PUBLIC ASSISTANCE (PRESIDENTIALLY DECLARED DISASTERS) $62.97M
14.218 COMMUNITY DEVELOPMENT BLOCK GRANTS/ENTITLEMENT GRANTS $62.47M
20.106 AIRPORT IMPROVEMENT PROGRAM, COVID-19 AIRPORTS PROGRAMS, AND INFRASTRUCTURE INVESTMENT AND JOBS ACT PROGRAMS $44.72M
66.458 CLEAN WATER STATE REVOLVING FUND $36.26M
66.468 DRINKING WATER STATE REVOLVING FUND $35.95M
93.323 EPIDEMIOLOGY AND LABORATORY CAPACITY FOR INFECTIOUS DISEASES (ELC) $33.91M
93.659 ADOPTION ASSISTANCE $32.26M
93.563 CHILD SUPPORT SERVICES $29.43M
93.914 HIV EMERGENCY RELIEF PROJECT GRANTS $25.57M
66.958 WATER INFRASTRUCTURE FINANCE AND INNOVATION (WIFIA) $24.34M
93.778 MEDICAL ASSISTANCE PROGRAM $18.73M
93.959 BLOCK GRANTS FOR PREVENTION AND TREATMENT OF SUBSTANCE ABUSE $15.19M
21.027 CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS $12.58M
93.940 HIV PREVENTION ACTIVITIES HEALTH DEPARTMENT BASED $11.52M
14.239 HOME INVESTMENT PARTNERSHIPS PROGRAM $9.88M
14.241 HOUSING OPPORTUNITIES FOR PERSONS WITH AIDS $8.82M
93.667 SOCIAL SERVICES BLOCK GRANT $8.76M
93.268 IMMUNIZATION COOPERATIVE AGREEMENTS $8.74M
21.023 EMERGENCY RENTAL ASSISTANCE PROGRAM $8.34M
84.181 SPECIAL EDUCATION-GRANTS FOR INFANTS AND FAMILIES $7.05M
93.788 OPIOID STR $5.89M
14.267 CONTINUUM OF CARE PROGRAM $5.63M
93.569 COMMUNITY SERVICES BLOCK GRANT $5.30M
93.224 HEALTH CENTER PROGRAM (COMMUNITY HEALTH CENTERS, MIGRANT HEALTH CENTERS, HEALTH CARE FOR THE HOMELESS, AND PUBLIC HOUSING PRIMARY CARE) $4.99M
93.527 GRANTS FOR NEW AND EXPANDED SERVICES UNDER THE HEALTH CENTER PROGRAM $4.96M
93.977 SEXUALLY TRANSMITTED DISEASES (STD) PREVENTION AND CONTROL GRANTS $4.31M
93.958 BLOCK GRANTS FOR COMMUNITY MENTAL HEALTH SERVICES $3.38M
93.090 GUARDIANSHIP ASSISTANCE $3.23M
97.083 STAFFING FOR ADEQUATE FIRE AND EMERGENCY RESPONSE (SAFER) $3.19M
97.067 HOMELAND SECURITY GRANT PROGRAM $2.85M
93.686 ENDING THE HIV EPIDEMIC: A PLAN FOR AMERICA — RYAN WHITE HIV/AIDS PROGRAM PARTS A AND B $2.74M
10.559 SUMMER FOOD SERVICE PROGRAM FOR CHILDREN $2.60M
93.994 MATERNAL AND CHILD HEALTH SERVICES BLOCK GRANT TO THE STATES $2.47M
14.905 LEAD HAZARD REDUCTION DEMONSTRATION GRANT PROGRAM $2.35M
97.025 NATIONAL URBAN SEARCH AND RESCUE (US&R) RESPONSE SYSTEM $2.34M
16.034 CORONAVIRUS EMERGENCY SUPPLEMENTAL FUNDING PROGRAM $2.19M
97.042 EMERGENCY MANAGEMENT PERFORMANCE GRANTS $2.13M
93.645 STEPHANIE TUBBS JONES CHILD WELFARE SERVICES PROGRAM $2.03M
93.391 ACTIVITIES TO SUPPORT STATE, TRIBAL, LOCAL AND TERRITORIAL (STLT) HEALTH DEPARTMENT RESPONSE TO PUBLIC HEALTH OR HEALTHCARE CRISES $2.02M
16.575 CRIME VICTIM ASSISTANCE $2.01M
14.251 ECONOMIC DEVELOPMENT INITIATIVE, COMMUNITY PROJECT FUNDING, AND MISCELLANEOUS GRANTS $2.00M
93.104 COMPREHENSIVE COMMUNITY MENTAL HEALTH SERVICES FOR CHILDREN WITH SERIOUS EMOTIONAL DISTURBANCES (SED) $1.96M
93.217 FAMILY PLANNING SERVICES $1.83M
66.001 AIR POLLUTION CONTROL PROGRAM SUPPORT $1.82M
93.556 MARYLEE ALLEN PROMOTING SAFE AND STABLE FAMILIES PROGRAM $1.67M
93.967 CENTERS FOR DISEASE CONTROL AND PREVENTION COLLABORATION WITH ACADEMIA TO STRENGTHEN PUBLIC HEALTH $1.37M
16.922 EQUITABLE SHARING PROGRAM $1.29M
93.919 COOPERATIVE AGREEMENTS FOR STATE-BASED COMPREHENSIVE BREAST AND CERVICAL CANCER EARLY DETECTION PROGRAMS $1.26M
93.926 HEALTHY START INITIATIVE $1.22M
93.944 HUMAN IMMUNODEFICIENCY VIRUS (HIV)/ACQUIRED IMMUNODEFICIENCY VIRUS SYNDROME (AIDS) SURVEILLANCE $1.17M
93.069 PUBLIC HEALTH EMERGENCY PREPAREDNESS $1.03M
93.495 COMMUNITY HEALTH WORKERS FOR PUBLIC HEALTH RESPONSE AND RESILIENT $973,903
93.918 GRANTS TO PROVIDE OUTPATIENT EARLY INTERVENTION SERVICES WITH RESPECT TO HIV DISEASE $948,830
16.738 EDWARD BYRNE MEMORIAL JUSTICE ASSISTANCE GRANT PROGRAM $926,698
93.472 TITLE IV-E PREVENTION PROGRAM $914,477
10.558 CHILD AND ADULT CARE FOOD PROGRAM $908,156
14.276 YOUTH HOMELESSNESS DEMONSTRATION PROGRAM $886,125
94.006 AMERICORPS STATE AND NATIONAL 94.006 $836,914
17.235 SENIOR COMMUNITY SERVICE EMPLOYMENT PROGRAM $762,747
93.116 PROJECT GRANTS AND COOPERATIVE AGREEMENTS FOR TUBERCULOSIS CONTROL PROGRAMS $744,733
16.741 DNA BACKLOG REDUCTION PROGRAM $736,719
93.044 SPECIAL PROGRAMS FOR THE AGING, TITLE III, PART B, GRANTS FOR SUPPORTIVE SERVICES AND SENIOR CENTERS $678,356
97.024 EMERGENCY FOOD AND SHELTER NATIONAL BOARD PROGRAM $652,691
93.648 CHILD WELFARE RESEARCH TRAINING OR DEMONSTRATION $632,645
93.088 ADVANCING SYSTEM IMPROVEMENTS FOR KEY ISSUES IN WOMEN'S HEALTH $605,822
16.590 GRANTS TO ENCOURAGE ARREST POLICIES AND ENFORCEMENT OF PROTECTION ORDERS PROGRAM $562,618
93.435 THE INNOVATIVE CARDIOVASCULAR HEALTH PROGRAM $548,744
93.270 VIRAL HEPATITIS PREVENTION AND CONTROL $543,092
93.426 THE NATIONAL CARDIOVASCULAR HEALTH PROGRAM $482,629
14.231 EMERGENCY SOLUTIONS GRANT PROGRAM $470,034
93.153 COORDINATED SERVICES AND ACCESS TO RESEARCH FOR WOMEN, INFANTS, CHILDREN, AND YOUTH $454,923
93.150 PROJECTS FOR ASSISTANCE IN TRANSITION FROM HOMELESSNESS (PATH) $438,674
66.034 SURVEYS, STUDIES, RESEARCH, INVESTIGATIONS, DEMONSTRATIONS, AND SPECIAL PURPOSE ACTIVITIES RELATING TO THE CLEAN AIR ACT $412,094
93.243 SUBSTANCE ABUSE AND MENTAL HEALTH SERVICES PROJECTS OF REGIONAL AND NATIONAL SIGNIFICANCE $400,000
97.091 HOMELAND SECURITY BIOWATCH PROGRAM $370,947
93.197 CHILDHOOD LEAD POISONING PREVENTION PROJECTS, STATE AND LOCAL CHILDHOOD LEAD POISONING PREVENTION AND SURVEILLANCE OF BLOOD LEAD LEVELS IN CHILDREN $363,280
93.674 JOHN H. CHAFEE FOSTER CARE PROGRAM FOR SUCCESSFUL TRANSITION TO ADULTHOOD $340,071
16.812 SECOND CHANCE ACT REENTRY INITIATIVE $324,740
93.558 TEMPORARY ASSISTANCE FOR NEEDY FAMILIES $304,445
10.555 NATIONAL SCHOOL LUNCH PROGRAM $298,335
16.745 CRIMINAL AND JUVENILE JUSTICE AND MENTAL HEALTH COLLABORATION PROGRAM $296,889
97.111 REGIONAL CATASTROPHIC PREPAREDNESS GRANT PROGRAM (RCPGP) $222,784
93.870 MATERNAL, INFANT AND EARLY CHILDHOOD HOME VISITING GRANT $219,750
20.941 STRENGTHENING MOBILITY AND REVOLUTIONIZING TRANSPORTATION (SMART) GRANTS PROGRAM $200,000
93.991 PREVENTIVE HEALTH AND HEALTH SERVICES BLOCK GRANT $195,486
42.001 BOOKS FOR THE BLIND AND PHYSICALLY HANDICAPPED $193,171
10.553 SCHOOL BREAKFAST PROGRAM $192,962
93.945 ASSISTANCE PROGRAMS FOR CHRONIC DISEASE PREVENTION AND CONTROL $192,697
93.478 PREVENTING MATERNAL DEATHS: SUPPORTING MATERNAL MORTALITY REVIEW COMMITTEES $185,485
14.000 HUD HOME INSPECTION SERVICES $177,562
16.582 CRIME VICTIM ASSISTANCE/DISCRETIONARY GRANTS $154,778
93.439 STATE PHYSICAL ACTIVITY AND NUTRITION (SPAN $148,154
14.235 SUPPORTIVE HOUSING PROGRAM $145,910
93.421 STRENGTHENING PUBLIC HEALTH SYSTEMS AND SERVICES THROUGH NATIONAL PARTNERSHIPS TO IMPROVE AND PROTECT THE NATION’S HEALTH $137,871
93.387 NATIONAL AND STATE TOBACCO CONTROL PROGRAM $136,868
16.753 CONGRESSIONALLY RECOMMENDED AWARDS $134,468
16.836 INDIGENT DEFENSE $132,818
94.011 AMERICORPS SENIORS FOSTER GRANDPARENT PROGRAM (FGP) 94.011 $129,890
95.007 RESEARCH AND DATA ANALYSIS $128,447
93.928 SPECIAL PROJECTS OF NATIONAL SIGNIFICANCE $108,373
16.746 CAPITAL CASE LITIGATION INITIATIVE $108,281
95.001 HIGH INTENSITY DRUG TRAFFICKING AREAS PROGRAM $105,057
93.946 COOPERATIVE AGREEMENTS TO SUPPORT STATE-BASED SAFE MOTHERHOOD AND INFANT HEALTH INITIATIVE PROGRAMS $103,735
93.136 INJURY PREVENTION AND CONTROL RESEARCH AND STATE AND COMMUNITY BASED PROGRAMS $102,450
96.006 SUPPLEMENTAL SECURITY INCOME $101,700
21.032 LOCAL ASSISTANCE AND TRIBAL CONSISTENCY FUND $100,000
20.600 STATE AND COMMUNITY HIGHWAY SAFETY $98,544
30.002 EMPLOYMENT DISCRIMINATION_STATE AND LOCAL FAIR EMPLOYMENT PRACTICES AGENCY CONTRACTS $80,571
97.045 COOPERATING TECHNICAL PARTNERS $80,000
21.016 EQUITABLE SHARING $74,892
93.837 CARDIOVASCULAR DISEASES RESEARCH $72,170
93.988 COOPERATIVE AGREEMENTS FOR DIABETES CONTROL PROGRAMS $69,925
20.505 METROPOLITAN TRANSPORTATION PLANNING AND STATE AND NON-METROPOLITAN PLANNING AND RESEARCH $57,834
14.900 LEAD HAZARD REDUCTION GRANT PROGRAM $55,750
16.710 PUBLIC SAFETY PARTNERSHIP AND COMMUNITY POLICING GRANTS $50,124
93.791 MONEY FOLLOWS THE PERSON REBALANCING DEMONSTRATION $47,380
10.935 URBAN AGRICULTURE AND INNOVATIVE PRODUCTION $46,465
97.056 PORT SECURITY GRANT PROGRAM $34,530
93.526 GRANTS FOR CAPITAL DEVELOPMENT IN HEALTH CENTERS $30,005
16.044 FORENSICS TRAINING AND TECHNICAL ASSISTANCE PROGRAM $28,072
20.933 NATIONAL INFRASTRUCTURE INVESTMENTS $13,853
20.205 HIGHWAY PLANNING AND CONSTRUCTION $6,271
16.588 VIOLENCE AGAINST WOMEN FORMULA GRANTS $5,436
21.019 CORONAVIRUS RELIEF FUND $5,399
15.608 FISH AND AQUATIC CONSERVATION - AQUATIC INVASIVE SPECIES $4,338
93.354 PUBLIC HEALTH EMERGENCY RESPONSE: COOPERATIVE AGREEMENT FOR EMERGENCY RESPONSE: PUBLIC HEALTH CRISIS RESPONSE $2,594
16.540 JUVENILE JUSTICE AND DELINQUENCY PREVENTION $2,044
93.008 MEDICAL RESERVE CORPS SMALL GRANT PROGRAM $1,756
20.616 NATIONAL PRIORITY SAFETY PROGRAMS $1,590