Finding Text
2025-002 – Internal Control and Compliance Over Reporting (Significant Deficiency) Federal Assistance Listing Number: 14.251 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Economic Development Initiative, Community Project Funding, and Miscellaneous Grants Federal Award Identification Number: B-23-CP-CA-0130 Type of Finding: Significant Deficiency in Internal Control over Compliance – Reporting Criteria: Grant Agreement No. B-23-CP-CA-0130 Article VI. Program-Specific Reporting Requirements states: In addition to the general reporting requirements that apply under provisions of this Agreement, the following program-specific reporting requirements apply to the Grantee: A. The Grantee must submit a performance report in DRGR on a semi-annual basis and must include a completed Federal financial report as an attachment to each performance report in DRGR. Performance reports shall consist of a narrative of work accomplished during the reporting period. During the Period of Performance, the Grantee must submit these reports in DRGR no later than 30 calendar days after the end of the 6-month reporting period. The first of these reporting periods begins on the first of January or June (whichever occurs first) after the date this Grant Agreement is signed by HUD. Condition and Context: In our testing of the reporting requirements, we noted one instance of late reporting: 1) Performance and Financial Report for the 6-month period ended June 30, 2025 was due by July 30, 2025 but was submitted on February 19, 2026. Cause: Although the City maintains general grants administration procedures, the award was new to the City and internal controls over compliance were not timely updated to address the program-specific reporting requirements and deadlines. As a result, the City did not have an effective process to track report due dates, monitor timely review and approval, and ensure submission of required reports by the applicable deadlines. Effect: The City was not in compliance with the reporting requirements of Grant Agreement No. B-23-CP-CA-0130 Article VI. Program-Specific Reporting Requirements. Questioned Costs: None Repeat Finding: No