Finding Text
Federal Program Information: Assistance Listing Number (ALN): 14.251 Federal Program Name: Economic Development Initiative, Community Project Funding, and Miscellaneous Grants Federal Agency: U.S. Department of Housing and Urban Development Passed-through Entity: None Federal Award Number: B-23-CP-CA-0189 Federal Award Year: 12/29/2022 - 8/31/2031 Compliance Requirement: Reporting Criteria or Specific Requirements: Pursuant to 2 CFR 200.512(a), Report Submission, recipients and subrecipients expending $750,000 or more in federal awards must submit their audit report, data collection form, and the reporting package to the Federal Audit Clearinghouse (FAC) no later than the earlier of: • Thirty (30) calendar days after the receipt of the auditor’s report(s), or • Nine (9) months after the end of the auditee’s fiscal year. Additionally, pursuant to 2 CFR 200.329, Monitoring and reporting program performance, and the grant agreement, LYRIC is required to submit semi-annual performance reports no later than 30 calendar days after the end of each six-month reporting period to support effective federal oversight and monitoring. Failure to submit required performance reports constitutes noncompliance with federal reporting requirements. Condition: As reported in FS finding 2024-001, LYRIC did not timely identify that it was subject to the Single Audit requirements for the year ended June 30, 2024. Consequently, LYRIC did not complete and submit its Single Audit reporting package, including the Data Collection Form (DCF) for fiscal year 2024, by the required due date of March 31, 2025. Additionally, the Performance Reports for periods covering from January 1, 2023 to June 30, 2024 required by the grant agreement were not yet submitted as of the audit date. These reports are due on July 30, 2024. Questioned Costs: None. Cause: LYRIC did not have adequate procedures in place to monitor cumulative federal expenditures and timely determine its Single Audit reporting obligations. Effect: The non-submission of the reports mentioned resulted in noncompliance with federal reporting requirements and may lead to increased oversight, delays in funding, or other administrative sanctions by the federal awarding agencies. Recommendation: We recommend that management establish and implement control procedures to ensure the timely identification of the single audit requirements and compliance with related reporting deadlines. Such procedures should include monitoring cumulative federal expenditures throughout the year, maintaining a compliance calendar that identifies applicable reporting deadlines, assigning personnel, and monitoring progress through periodic management review to ensure compliance with submission requirements. Views of Responsible Officials and Planned Corrective Actions: Management accepts this finding. To prevent recurrence, LYRIC will: (1) assign a designated staff member and a contracts manager the responsibility for federal audit compliance monitoring, including tracking cumulative award expenditures throughout; (2) establish an annual federal expenditure calendar that flags when spending approaches the $750,000 threshold; (3) maintain a reporting timeline aligned with FAC submission deadlines, including the nine-month post-fiscal-year-end deadline; and (4) engage its audit firm at the start of each fiscal year to plan audit scope and timing, ensuring the Single Audit can be completed within the required timeframe. Uniform Guidance applicability training will be provided to staff as needed. Management also agrees with the non-submission of performance reports. LYRIC will take the following corrective actions: (1) develop a comprehensive grant reporting calendar for all active federal awards, identifying each required report type, submission deadline, and the staff member responsible for preparation and submission; (2) designate a program staff lead for the federal award reporting, with mandatory review by the Contracts Manager and Director of Finance prior to each submission; (3) implement an internal check-in to review upcoming reporting deadlines across all grants; and (4) submit any outstanding reports to the authorities as promptly as possible and proactively communicate with the assigned program officer regarding the delayed submissions to mitigate any compliance impact. Responsible Official and Position: Ana Rubio, Director of Finance, and Laura Chavez, Contracts Manager Expected Implementation Date: July 1, 2026