Finding Text
Federal Grantor: Department of Housing and Urban Development Program: COVID-19 Community Development Block Grants/Entitlement Grants (CDBG) Program Award No. and Year: B20-MW-19-0003 and 2020, B23-MC-19-0003 and 2023, B24-MC-19-0003 and 2024, B25-MC-19-0003 and 2025 Federal Financial Assistance Listing Number: 14.218 Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CFR Appendix A to Part 170I(a)(2), Reporting Requirements, states the recipient must report each subaward to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) no later than the end of the month following the month in which the subaward was issued. Condition: During our testing of the City’s compliance with reporting requirements, we noted the City did not have any formal controls in place over the review and approval of reports. Reports were prepared, certified and submitted by the same individual. Additionally, during our testing, we noted for two (2) subaward reports submitted to FSRS, the information was not submitted timely. Cause: The City did not have a formal review process in place over the reports under the program. Additionally, the City did not have a process in place to ensure reports were submitted to FSRS timely. Effect: Reports could be submitted with inaccurate information. Additionally, reports were not submitted to FSRS in accordance with the reporting requirements per Appendix A to Part 170I(a)(2). Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of six (6) of eleven (11) reports were selected. The condition above was identified during our testwork of the City’s internal controls over reporting. Repeat Finding from Prior Years: No. Recommendation: We recommend that the City adhere to their policies and procedures in accordance with 2 CFR 200.332 to ensure compliance with subrecipient monitoring requirements. Views of Responsible Officials: Management agrees with the finding. See separate corrective action plan.