Finding Text
Section 3 Policy (Significant Deficiency) ALN No. 14.218 – Community Development Block Grants/Entitlement Grants Criteria: The CDBG program is subject to Section 3 requirements under 24 CFR Part 75 for applicable Section 3 projects. Effective internal controls should include written policies and procedures that identify when Section 3 applies, define responsible personnel, describe required worker certifications and supporting documentation, and establish monitoring and retention requirements. Condition: During testing of internal controls over compliance for the City’s CDBG program, we noted the City did not have an established set of policies and procedures related to Section 3 workers. As a result, the City did not have formal procedures to ensure documentation was established and maintained to demonstrate that workers on applicable Section 3 projects met the definition of a Section 3 worker or Targeted Section 3 worker at the time of hire or the f irst reporting period. Effect: Without established Section 3 policies and procedures, the City may not consistently identify applicable Section 3 projects, obtain required worker certifications, retain sufficient supporting documentation, or monitor compliance with Section 3 requirements. This increases the risk of noncompliance with CDBG program requirements. Cause: The City did not have adequate procedures in place to ensure Section 3 requirements were f ormally incorporated into its CDBG program administration process. Questioned Costs: $0 Recommendation: We recommend the City implement Section 3 policies and procedures to ensure compliance with applicable requirements. These procedures should identify applicable Section 3 projects, assign responsibility for compliance monitoring, require worker certifications and supporting documentation to be obtained at the time of hire or the first reporting period, establish documentation retention requirements, and include a review process to verify that required documentation is complete and retained. Repeat Finding from Prior Year(s): N/A Views of Responsible Officials: See management’s corrective action plan.