Finding Text
2024-007 – Special Tests and Provisions – Internal Control over Environmental Reviews 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-23-MC-06-0026 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): The OMB Compliance Supplement requires that recipients must perform environmental reviews in accordance with 24 CFR Part 58. The responsible entity must prepare and maintain an Environmental Review Record (ERR) that documents the environmental review and the decision-making process. Projects must have an environmental review unless they meet criteria specified in the regulations that would exempt or exclude them from RROF and environmental certification requirements (24 CFR sections 58.1, 58.22, 58.34, 58.35, and 570.604). Pursuant CDBG Grants Management Manual, Chapter 3, Environmental review, The environmental certifying officer “ECO” accepts full responsibility for the completeness and accuracy of the review and compliance with applicable laws and regulations. Local officials should review the municipal liability and indemnification statutes as well as the status and coverage of local liability insurance policies when accepting responsibility under environmental laws. The responsibilities of the ECO include making findings and signing required certifications. Condition: During testing of environmental review records, one (1) of twenty one (21) environmental review records tested did not include a signature from the responsible official. Although the environmental review documentation and supporting analysis were present, the ERR lacked the required signature from the certifying official, as required by HUD regulations. Cause: Lack of internal control over the ERR to ensure the forms were properly signed and reviewed prior to approving the project activities. Effect or Potential Effect: Without a signed Environmental Review Record, the City cannot demonstrate it is in compliance with the environmental review and certification requirements under 24 CFR Part 58. This omission could potentially place the City at risk of noncompliance with federal environmental requirements and jeopardize the eligibility of the related project funded by Community Development Block Grants/Entitlement Grants (“CDBG”). Questioned Costs: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend that the City strengthen its internal controls over environmental review documentation to ensure that all Environmental Review Records are fully completed, including the signature of the certifying official prior to project approval or commitment of CDBG funds. Views of Responsible Officials: Management concurs with the finding.