Finding Text
Reporting – Financial and Performance Assistance Listing Number 14.251 – Economic Development Initiative, Community Project Funding, and Miscellaneous Grants U.S. Department of Housing and Urban Development (HUD) Federal Award Identification Number(s): B-22-CP-CO-0165 and B-23-CP-CO-0280 Award Year – 2022 and 2023 Criteria or specific requirement: 2 CFR §§200.328 and 200.329 require recipients to submit timely financial and performance reports that are supported by underlying records and accurately reflect financial activity and program accomplishments. In addition, the grant agreement requires the grantee to submit a combined semiannual performance and financial report in the Disaster Recovery Grant Reporting (DRGR) system. The report must include a narrative describing accomplishments during the reporting period and must be submitted within 30 calendar days after the end of each six-month reporting period. Condition: During testing, we noted that the semiannual performance reports required to be submitted during calendar year 2025 were not submitted by the required deadlines. The reports, which were due in January 2025 and July 2025, were not submitted until September 2025. As a result, the Grantee did not submit required financial and performance reports within the timeframe prescribed by the grant agreement and 2 CFR §§ 200.328 and 200.329. Additionally, management could not provide evidence of review for one of the reports. Cause: Management was not aware of the semiannual reporting deadlines established by the grant agreement and did not maintain a process to track reporting due dates. As a result, required reports were not submitted within the prescribed timeframes. In addition, the documentation pertaining to the evidence of reviews and the evidence of report submission was not retained. Effect: Failure to submit required financial and performance reports timely reduced the ability of the federal awarding agency to monitor grant activities, evaluate program progress, and ensure compliance with award requirements. In addition, because the federal grant system does not permit drawdowns when required reports are overdue, the delayed submissions prevented the City from requesting reimbursement of eligible grant expenditures on a timely basis, which could adversely affect cash flow and delay project activities funded by the grant. The lack of retained review documentation prevents management from demonstrating that required reviews were performed and increases the risk that errors, omissions, or noncompliance may not be identified and corrected timely. Questioned Costs: None Context: We tested 2 of 4 required semiannual reports and found both were submitted late. A non-statistical sampling methodology was used to select the sample. Identification of a repeat finding, if applicable: N/A Recommendation: We recommend management establish and maintain a formal grant compliance tracking process that identifies all required financial and performance reports, their due dates, and responsible personnel. Management should monitor the tracking schedule throughout the year and implement reminder and review procedures to help ensure all required reports are submitted accurately and timely in accordance with federal requirements and the terms and conditions of the grant award. Additionally, management should retain documentation evidencing the review of reports and supporting records, including the reviewer and date of review, to demonstrate compliance with established review procedures. Views of responsible officials and planned corrective actions: Agree. See separate corrective action plan.