Finding 1226440 (2025-002)

Material Weakness – Finding 2025-002 Federal Program: Community Development Block Grant (ALN 14.218) Compliance Requirement: Reporting - Federal Funding Accountability and Transparency Act Federal Awarding Agency: U.S. Department of Housing & Urban Development (HUD) Criteria: The Federal Funding Accountability and Transparency Act (“FFATA”), as implemented through 2 CFR Part 170, requires recipients of federal grants and cooperative agreements to report first-tier subawards that result in obligations of $30,000 or more in federal funds. The Compliance Supplement identifies FFATA reporting as a reporting compliance requirement applicable to recipients that make qualifying first-tier subawards, subject to limited exceptions. Condition: Will County (the “County”) received funding under the Community Development Block Grant (CDBG) program (ALN 14.218) and issued more than $1 million in first-tier subawards to subrecipients during the audit period. Several individual subawards exceeded $30,000. The County did not perform or document FFATA subaward reporting for these awards and does not have an applicable exemption from FFATA reporting requirements. Cause: Management did not establish procedures to evaluate FFATA reporting applicability for federal awards and did not maintain controls to identify and report qualifying first-tier subawards in accordance with federal requirements. Effect: Required FFATA subaward information may not have been reported to the federal government, resulting in noncompliance with federal reporting requirements and reducing transparency over the use of federal funds. FFATA reporting is intended to provide public visibility into federal awards and qualifying subawards. Questioned Costs: None. Recommendation: We recommend management: • Establish procedures to evaluate FFATA applicability for all federal awards. • Maintain a process to identify first-tier subawards that meet the reporting threshold. • Ensure timely reporting of qualifying subawards in accordance with 2 CFR Part 170 requirements. • Perform periodic monitoring of FFATA compliance and retain documentation evidencing reporting completion. Management’s Response: The County will report subawards, as required, under this program going forward. The County will create a tracking document that will reflect all subrecipients of the program and the amounts of first-tier subaward. For subawards exceeding $30,000, the document will indicate the date that the required reporting was performed.