Finding Text
Information on the Federal Program: Assistance Listing Number 14.251— Economic Development Initiative, Community Project Funding, And Miscellaneous Grants, United States Department of Housing and Urban Development. Pass-Through Entity: Not applicable. Award Number: B-22-CP-CA-0071. Compliance Requirements: Reporting. Type of Finding: Significant deficiency in internal control over the major federal program. Criteria: Grant requirements specify that semi-annual performance reports must be submitted to the U.S. Department of Housing and Urban Development. These reports should be reviewed and approved by someone other than the individual who prepared them. Condition: For the year ended June 30, 2025, although the report selected for testing was complete and accurately presented, our review found that it was not reviewed by a designated individual other than the preparer prior to submission to the U.S. Department of Housing and Urban Development. Cause: At the time of submission, key program management personnel had turned over, and an additional key individual was on extended leave, resulting in limited availability for proper review. Effect: The reports were submitted to the U.S. Department of Housing and Urban Development for the year ended June 30, 2025, without independent review by someone other than the preparer. Questioned Costs: None Context: Management, concerned about further delays and potential noncompliance with reporting deadlines, chose to submit the report without independent review. Repeat Finding: No Recommendation: To ensure compliance with grant requirements, management should establish and implement a formal process that assigns responsibility for the independent review and approval of reports prior to submission. This process should include designating backup personnel to perform reviews in the event of staff turnover or extended absences, thereby maintaining oversight and accountability. Views of Responsible Official: Management acknowledges the deficiency in internal controls related to independent review and approval of reports prior to submission. A policy will be put into place identifying the Board Treasurer as the responsible person to review and review the reports. Should the Board Treasurer not be available, the Finance Committee Chair will assume those responsibilities.