Finding Text
Criteria: The Federal Funding Accountability and Transparency Act (FFATA) and its implementing regulations at 2 CFR Part 170 require prime awardees to report first-tier (tier one) subawards that meet the reporting threshold in the FFATA Subaward Reporting System (FSRS). Specifically, 2 CFR 170.220(b) requires reporting of applicable first-tier subawards by the end of the month following the month in which the subaward is made (obligated) and to report any subsequent changes. In addition, 2 CFR 200.303 requires the prime awardee to establish and maintain effective internal control over federal award compliance. Condition: During our review of the City’s FFATA reporting related to first-tier subawards, we noted the City did not report five (5) tier one subawards related to the Community Development Block Grants Cluster in FSRS in accordance with FFATA requirements. As of audit fieldwork, the required FFATA subaward reports for these five subawards had not been submitted. Cause: The City’s internal controls were not sufficient to ensure FFATA reporting requirements were consistently identified and timely performed. Specifically, the City did not have adequate documented procedures and monitoring controls to: • identify all first-tier subawards subject to FFATA reporting, • assign responsibility for FSRS reporting and secondary review, and • track reporting deadlines to ensure timely submission. Effect: The City was not in compliance with FFATA reporting requirements for five first-tier subawards. This reduces transparency of federal award spending and may subject the City to increased federal oversight and other administrative actions (e.g., additional monitoring or enforcement actions). No questioned costs were identified for this finding. Management’s Response: The City concurs with the finding. The City will (1) submit the required FFATA subaward reports for the five unreported tier one subawards, (2) implement a formal FFATA compliance checklist to be completed at the time of subaward execution, (3) designate responsible personnel for FSRS reporting with a documented secondary review, and (4) provide training to applicable staff on FFATA reporting requirements and deadlines. The City expects these corrective actions to be implemented for all applicable subawards for awards effective July 1, 2025, and forward.