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Federal Agency: United States Department of Housing and Urban Development Pass-Through Entity: Texas Department of Housing and Community Affairs Assistance Listing Number: 14.231 Federal Program Name: Emergency Solutions Grants Program (“ESG”) Subrecipient Contract Number: 42246070038 Award Number: E24-DC-48-0001 Criteria Per the grant agreement and regulation 10 TAC §7.5, the Center is required to submit timely, complete, and accurate performance and expenditure reports in accordance with ESG contract requirements. The contract requires submission of monthly reports no later than the last day of each month following the preceding month during the contract term. Condition During our testing of reporting compliance for the fiscal year ended August 31, 2025, we selected a sample of four reports. Two of the four reports tested were not submitted by the required due dates, resulting in noncompliance with the grant reporting requirements. Cause Delays in reporting were caused by staff shortage in the accounting department due to employee leave of absence, which limited the Center’s ability to process billings and prepare and submit required grant reports timely. Effect Failure to submit required reports in a timely manner may result in noncompliance with grant requirements and could impact the federal agency’s ability to effectively monitor the program. Continued noncompliance could result in potential sanctions, including delayed funding or additional oversight. Questioned Costs None. Recommendation We recommend that management strengthen internal controls over grant reporting by implementing a formal tracking system to monitor reporting deadlines, assigning clear responsibility for report preparation and submission, and establishing a review process to ensure timely compliance with reporting requirements.