Finding 1227376 (2025-003)

Material Weakness Repeat Finding
Requirement
L
Questioned Costs
-
Year
2025
Accepted
2026-08-19

AI Summary

  • Core Issue: Section 3 quarterly reports were submitted late, violating grant agreement requirements.
  • Impacted Requirements: Reports due on the 10th of the month following each quarter were not submitted on time, affecting compliance.
  • Recommended Follow-Up: Strengthen controls with a reporting calendar, assign responsibilities, and cross-train staff to prevent future delays.

Finding Text

Criteria and Condition: As outlined in the grant agreements, 24 CFR 75.25 requires quarterly reports to be submitted documenting the actions taken to comply with the employment, training and contracting requirements of Section 3 of the Housing and Urban Development Act of 1968. Section 3 quarterly reports are due on the 10th day of the month following the quarter close. We noted the following Section 3 quarterly reports were not submitted timely: Contract No. Quarter Due Date Date Submitted 22-082-005-D200 Sep – Nov 12/10/2024 10/23/2025 22-082-005-D200 Dec – Feb 03/10/2025 10/23/2025 22-082-005-D200 Mar – May 06/10/2025 10/23/2025 22-082-005-D200 Jun – Aug 09/10/2025 10/23/2025 22-083-004-D209 Sep – Nov 12/10/2024 09/24/2025 22-083-004-D209 Dec – Feb 03/10/2025 09/24/2025 22-083-004-D209 Mar – May 06/10/2025 09/24/2025 22-083-004-D209 Jun – Aug 09/10/2025 09/24/2025 Cause and Effect: Personnel turnover contributed to the delay in the submission of Section 3 quarterly reports. As the reports were not submitted by their required due dates, Hidalgo County Urban County was not in compliance with the conditions of its grant agreements. Questioned Costs: None noted. Repeat Finding from Prior Year(s): N/A Recommendation: We recommend controls be strengthened to ensure all reports are submitted by the required due dates. These controls should include a reporting calendar with all applicable due dates, assigning responsibility for report preparation, review and submission. In addition, we recommend cross training personnel to mitigate the impact of personnel turnover and ensure continuity in compliance activities. Views of Responsible Officials: See management’s corrective action plan.

Corrective Action Plan

Corrective Action Plan – Hidalgo County Urban County Program (UCP) concurs with the recommendation and has taken steps to strengthen its internal controls to ensure the timely preparation, review, submission, and documentation of Section 3 quarterly reports and other State Program reporting requirements. The untimely reports identified in the finding occurred during a period of significant personnel turnover within the State Division. Management recognizes that regulatory compliance and reporting continuity should not depend upon the knowledge or availability of any one employee.Accordingly, UCP has begun transitioning from individually maintained deadline tracking to a more centralized and transparent reporting-control process. Approximately six months ago, UCP implemented a requirement that State Programs staff enter all grant-related reporting deadlines and other critical compliance dates into the County/Urban County shared electronic calendar. This calendar is accessible to State Programs staff and management and provides department-wide visibility of upcoming deadlines, thereby reducing reliance on individual calendars or institutional memory. In addition to this existing control, UCP will implement the following measures specifically for Section 3 reporting: • Establish internal preparation deadlines at least 5 calendar days before each required Section 3 submission date. • Assign primary responsibility for preparation and submission of each Section 3 report to the applicable State Grant Coordinator, with supervisory review by the State Programs Manager/Coordinator or other designated supervisor prior to submission. • Designate and cross-train at least one additional State Programs employee as backup personnel for Section 3 reporting to ensure continuity during vacancies, leave, employee transitions, or other absences. • Maintain a centralized reporting log for each applicable grant documenting the reporting period, regulatory or contractual due date, internal preparation deadline, responsible employee, supervisory review date, actual submission date, and confirmation or other evidence of submission. • Maintain supporting Section 3 reporting documentation within the applicable grant's official administrative file in accordance with applicable record-retention requirements. • Include upcoming reporting deadlines as a standing compliance item during State Programs staff meetings so that approaching deadlines, assignments, and outstanding reporting requirements can be reviewed collectively. • Require supervisory follow-up when a report has not reached the review stage by its established internal deadline, allowing management sufficient time to intervene before the external submission deadline. • Periodically review the shared reporting calendar and reporting log to verify that required reports have been submitted timely and that supporting documentation has been retained. These controls are intended to establish multiple levels of accountability—deadline visibility, assigned responsibility, supervisory review, backup coverage, documentation of submission, and management oversight—so that required reporting continues timely despite employee turnover or other staffing changes. UCP will also incorporate Section 3 reporting procedures into written State Programs standard operating procedures and employee cross-training materials so that the reporting process becomes documented institutional knowledge available to current and future staff. Proposed Completion Date - Existing shared calendar control (implemented and currently in use); Remaining corrective measures (September 30, 2026 - Implementation will begin immediately and be incorporated into State Program operating procedures and reporting practices). Contact Person - Steven De La Cruz, Assistant Director, Urban County Program

Categories

Reporting

Other Findings in this Audit

  • 1227375 2025-003
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
10.558 CHILD AND ADULT CARE FOOD PROGRAM $860,048
16.575 CRIME VICTIM ASSISTANCE $761,197
93.967 CENTERS FOR DISEASE CONTROL AND PREVENTION COLLABORATION WITH ACADEMIA TO STRENGTHEN PUBLIC HEALTH $627,654
93.569 COMMUNITY SERVICES BLOCK GRANT $500,000
95.001 HIGH INTENSITY DRUG TRAFFICKING AREAS PROGRAM $447,828
93.778 GRANTS TO STATES FOR MEDICAID $421,573
14.231 EMERGENCY SOLUTIONS GRANT PROGRAM $403,810
15.916 OUTDOOR RECREATION ACQUISITION, DEVELOPMENT AND PLANNING $336,683
93.568 LOW-INCOME HOME ENERGY ASSISTANCE $333,387
93.600 HEAD START $200,165
93.069 PUBLIC HEALTH EMERGENCY PREPAREDNESS $173,810
14.239 HOME INVESTMENT PARTNERSHIPS PROGRAM $136,811
10.557 WIC SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN $125,523
93.116 PROJECT GRANTS AND COOPERATIVE AGREEMENTS FOR TUBERCULOSIS CONTROL PROGRAMS $105,193
16.812 SECOND CHANCE ACT REENTRY INITIATIVE $87,326
16.593 RESIDENTIAL SUBSTANCE ABUSE TREATMENT FOR STATE PRISONERS $57,625
97.067 HOMELAND SECURITY GRANT PROGRAM $54,048
93.268 IMMUNIZATION COOPERATIVE AGREEMENTS $50,027
97.137 STATE AND LOCAL CYBERSECURITY GRANT PROGRAM TRIBAL CYBERSECURITY GRANT PROGRAM $44,857
10.561 STATE ADMINISTRATIVE MATCHING GRANTS FOR THE SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM $35,887
16.588 VIOLENCE AGAINST WOMEN FORMULA GRANTS $32,132
93.563 CHILD SUPPORT SERVICES $32,076
16.738 EDWARD BYRNE MEMORIAL JUSTICE ASSISTANCE GRANT PROGRAM $28,429
90.404 HAVA ELECTION SECURITY GRANTS $26,230
14.218 COMMUNITY DEVELOPMENT BLOCK GRANTS/ENTITLEMENT GRANTS $25,960
93.323 EPIDEMIOLOGY AND LABORATORY CAPACITY FOR INFECTIOUS DISEASES (ELC) $24,336
93.008 MEDICAL RESERVE CORPS SMALL GRANT PROGRAM $23,444
14.228 COMMUNITY DEVELOPMENT BLOCK GRANTS/STATE'S PROGRAM AND NON-ENTITLEMENT GRANTS IN HAWAII $17,792
93.991 PREVENTIVE HEALTH AND HEALTH SERVICES BLOCK GRANT $17,497
20.616 NATIONAL PRIORITY SAFETY PROGRAMS $17,490
93.658 FOSTER CARE TITLE IV-E $15,810
16.922 EQUITABLE SHARING PROGRAM $10,244
21.027 CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS $9,057
94.016 AMERICORPS SENIORS SENIOR COMPANION PROGRAM (SCP) 94.016 $6,791
94.011 AMERICORPS SENIORS FOSTER GRANDPARENT PROGRAM (FGP) 94.011 $5,792
21.016 EQUITABLE SHARING $4,805
16.606 STATE CRIMINAL ALIEN ASSISTANCE PROGRAM $3,483
93.297 TEENAGE PREGNANCY PREVENTION PROGRAM $3,000
93.391 ACTIVITIES TO SUPPORT STATE, TRIBAL, LOCAL AND TERRITORIAL (STLT) HEALTH DEPARTMENT RESPONSE TO PUBLIC HEALTH OR HEALTHCARE CRISES $451
94.002 AMERICORPS SENIORS RETIRED AND SENIOR VOLUNTEER PROGRAM (RSVP) 94.002 $131
97.036 DISASTER GRANTS - PUBLIC ASSISTANCE (PRESIDENTIALLY DECLARED DISASTERS) $0
20.205 HIGHWAY PLANNING AND CONSTRUCTION $0