Finding Text
Assistance Listing, Federal Agency, and Program Name - ALN 14.218, Department of Housing and Urban Development, Community Development Block Grants Federal Award Identification Number and Year - B24MC260070 2025 Pass through Entity - N/A Finding Type - Material weakness Repeat Finding - No Criteria - Per 2 CFR 200.303, the recipient must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should align with the guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition - The City initially reported $30,000 of expenditures on the SEFA that related to activity not related to fiscal year 2025. Questioned Costs - N/A If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported - N/A Identification of How Questioned Costs Were Computed - N/A Context - Recipients of federal awards must have controls in place to verify that costs being recorded in the appropriate period. Cause and Effect - The City did not properly allocate the expenditures over the term of the subsciption which led to expenses being improperly recorded in the City's initial SEFA sent to the auditors. Recommendation - We recommend that the City implement stronger internal controls to ensure the expenses are reviewed for cutoff and approved before they are charged to the grant. Views of Responsible Officials and Planned Corrective Actions - The City will ensure that all future expenses under this program go through stronger internal control review for cutoff.