Finding 1224096 (2025-001)

Program: COVID-19 Community Development Block Grant Cluster Entitlement/Special Purpose Grants Federal Financial Assistance Listing Number: 14.218 Federal Grantor: U.S. Department of Housing and Urban Development Award No. and Year: B23-MC-20-0004 and 2023, B24-MC-20-0004 and 2024, B-25-MC-20-0004 and 2025 Program: COVID-19 Housing Voucher Center Cluster Federal Financial Assistance Listing Number: 14.871, 14.879 Federal Grantor: U.S. Department of Housing and Urban Development Award No. and Year: KS004VO0127 and 2025, EHV KS004 and 2025, KS004DV0001 and 2025 Compliance Requirements: Activities Allowable or Unallowed and Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria: 2 CFR Section 200.303(a), Internal Controls, state 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 terms and conditions of the Federal award. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During our testing, we identified the following instances where the timesheet was not reviewed and approved by the employee’s supervisor: • One (1) timesheet charged to the Community Development Block Grant (CDBG) program • Two (2) timesheets charged to the Housing Voucher Center Cluster (HVC) Cause: The City's internal control procedures permitted certain timesheets to be processed without documented supervisory approval. Effect: Because the City's internal control procedures permitted an exception to documented supervisory approval for the timesheets tested, evidence of review and approval was not available. As a result, the operation of the review control could not be verified for those timesheets.Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sampling of forty (40) timesheets were selected for testing for the CDBG program. A nonstatistical sampling or forty (40) timesheets were selected for testing for the HVC program. The condition above was identified during our procedures related to activities allowed or unallowed and allowable costs/cost principles. Repeat Finding from Prior Years: No Recommendation: We recommend that management strengthen controls over payroll processing by ensuring that all timesheets charged to federal programs are reviewed and approved by an independent supervisor prior to payroll processing. Management should also periodically monitor compliance to confirm that approval controls are operating as designed. View of Responsible Officials: See separately issued Corrective Action Plan.