2024-006 – Reporting – Internal Control and Compliance over Reporting Information of the Federal Program(s): Assistance Listing Number: 14.218 Assistance Listing Title: CDBG - Entitlement/Special Purpose Grants Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Identification Number: B-20-MW-06-0026 Assistance Listing Number: 21.027 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of the Treasury Pass-Through Entity: N/A Federal Award Identification Number: N/A Assistance Listing Number: 66.958 Assistance Listing Title: Water Infrastructure Finance and Innovation Federal Agency: U.S. Environmental Protection Agency Pass-Through Entity: N/A Federal Award Identification Number: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): The OMB Compliance Supplement requires that reports submitted to the Federal awarding agency include all activity of the reporting period, are supported by underlying accounting information and are presented in accordance with program requirements. Community Development Block Grants-Entitlement Grants Cluster Pursuant to Guidance on Section 15011 of the CARES Act requires that recipients of $150,000 or more of CARES Act funding submit, not later than 10 days after the end of each calendar quarter, a report containing: information regarding the amount of funds received; the amount of funds obligated or expended for each project or activity; a detailed list of all such projects or activities, including a description of the project or activity; and detailed information on any subcontracts or subgrants awarded by the recipient. This report is limited to Community Development Block Grants/Entitlement Grants Cluster - COVID-19 funding and does not include other Community Development Block Grants/Entitlement Grants Cluster funds that may be used to address coronavirus. Grantees and subrecipients have reported data meeting the Section 15011 requirements at usaspending.gov. The Pandemic Response Accountability Committee (PRAC), an independent oversight committee within the Council of the Inspectors General on Integrity and Efficiency, has determined that the data reported in usaspending.gov has fulfilled these reporting requests. (“Section 15011 Report”). Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation) (Continued): Coronavirus State and Local Fiscal Recovery Funds Quarterly Project and Expenditure Reports (QP&E) – All metropolitan cities and counties with a population that exceeds 250,000 residents that receive Coronavirus State and Local Fiscal Recovery Funds (“SLFRF”) are required to submit Project and Expenditure Reports. For these recipients, a quarterly Project and Expenditure Report must be submitted to U.S. Department of the Treasury by the last day of the month following the end of the period covered. The due dates of each quarterly reports is noted below: Reporting Period Grantee QP&E Covered Submission Deadlines July 1 - September 31, 2023 October 31, 2023 October 1 - December 31, 2023 January 31, 2024 January 1 - March 31, 2024 April 30, 2024 April 1 - June 30, 2024 July 31, 2024 The recipients are also required to disclose all current period obligations, cumulative obligations, current period expenditures, and cumulative expenditures in Quarterly Project and Expenditure Reports, as a part of the obligations and expenditures requirement. Water Infrastructure Finance and Innovation In accordance with Section 16, Annual Financial Statements, of the WIFIA Loan Agreement, the City is required to deliver to the WIFIA Lender, as soon as available but no later than one hundred eighty (180) days after the end of each City Fiscal Year, a copy of the audited income statement and balance sheet of the City, along with related audited statements of operations and cash flows for the fiscal year. Condition: CDBG - Entitlement/Special Purpose Grants Cluster (CDBG) We noted that the City did not submit any of the four (4) quarterly Section 15011 Reports for the year ended June 30, 2024. Coronavirus State and Local Fiscal Recovery Funds (ARPA) During testing of the City’s reporting under the ARPA Revenue Loss category, we noted that the City recorded $3,570,000 in expenditures related to revenue loss that were not reported in the quarterly Project and Expenditure (P&E) reports. Additionally, the April–June 2024 P&E report, which is also included in the annual performance report, incorrectly recorded an amount in 2023 revenue loss that duplicated the same amounts reported for 2022, resulting in a change to the reported revenue loss from the previous quarter. We also noted that two out of four quarterly P&E reports required for the year ended June 30, 2024 were submitted after the required due dates as follows: Grant / Project Period Covered Due Date Submitted SLT-3028-P&E Report-Q3 2023 July- Sept 2023 10/31/2023 11/5/2023 SLT-3028-P&E Report-Q1 2024 Jan- March 2024 4/30/2024 5/1/2024 Furthermore, the P&E report covering April–June 2024 did not include current period expenditure amounts for all projects. During our audit, we found that the City reported only $11,867,558 in the P&E reports instead of the actual $15,225,289 in expenditures incurred during year ended June 30, 2024. Water Infrastructure Finance and Innovation (WIFIA) During testing, we noted that the Annual Comprehensive Financial Report for year ending June 30, 2024 was dated on September 17, 2025, which was after the 180 days submission deadline (December 27, 2024). Cause: The City was not aware of the Section 15011 CARES reporting. Lack of monitoring to ensure the timely submission of the required reports with appropriate support. The delay in financial reporting also led to the incompliance with the WIFIA reporting requirement. Effect or Potential Effect: Delay in filing and not filing the reports resulted in noncompliance with the compliance requirements, and the errors had led to potential misstatements on the SEFA. Questioned Costs: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Yes. See prior year finding 2023-005. Recommendation: We recommend that the City conduct thorough research on the reports needed to be submitted and contact the grantor if there is any confusion. When a report cannot be submitted by the due date, the City should request an extension from the funding agency and maintain a record of the approval. Views of Responsible Officials: Management concurs with the finding.