Finding Text
Information on the Federal Program(s): 14.228 Community Development Block Grants/State’s Program Compliance Requirements: Allowable Activities. Type of Finding: Material Weakness in Internal Control Over Compliance. Criteria: Internal controls should be in place to provide reasonable assurance that federal awards are expended only for allowable activities. Condition: The City lacks sufficient controls over allowable activities to ensure that federal awards are expended only for allowable activities. Cause: The City did not design and implement controls over compliance with allowable activities. Effect or Potential Effect: Failure to have adequate internal controls over compliance with allowable activities could result in program assets used for activities that are not allowed by the programs requirements. Questioned Costs: There are no questioned costs. Recommendation: We recommend that the City design and implement controls to: ensure that applicable award agreements and contracts are reviewed by appropriate personnel for specific allowable activities requirements, budget parameters, and those activities/costs which require pre-approval by the awarding agency and documents such features; and ensure appropriate personnel review and approve invoices for allowability, adherence to cost principles, accuracy and completeness. Views of Responsible Officials and Planned Corrective Action: Management concurs with the audit finding. The City will design and implement controls to ensure that federal awards are expended only for allowable activities.