Finding 1226198 (2025-001)

2025-001 U.S. Department of the Treasury COVID-19 – Coronavirus State and Local Fiscal Recovery Fund – ALN 21.027 Compliance Finding and Material Weakness in Internal Controls Over Compliance Criteria: 2 CFR section 200.332, provides the requirements for pass-through entities to communicate subaward information to the subrecipient and to monitor the activities of the subrecipient. Condition: The City did not maintain risk assessments to evaluate each subrecipients risk of noncompliance and level of monitoring required and did not maintain any documentation indicating that monitoring occurred for five subrecipients. Context: The above condition applied to each of the five subrecipients selected for testing. As a result, we were unable to determine the extent of any monitoring that may have occurred. The sample was not a statistically valid sample. Cause: The City experienced turnover in the grant administrator position and did not follow its documented internal controls for subrecipient monitoring. Effect: Lack of controls over subrecipient monitoring could result in the City’s noncompliance with grant requirements. Questioned Costs: None. Repeat Finding from Prior Year: No. Recommendation: The City should require all persons charged with managing federal grants to review the City’s documented internal controls for federal grant compliance. Regarding subrecipient monitoring, the City should ensure that risk assessments are performed to evaluate each subrecipients risk of noncompliance and to develop the appropriate subrecipient monitoring procedures to be employed. All records of subrecipient monitoring should be maintained to document grant compliance. Views of Responsible Official: Management agrees with the finding