Finding Text
Finding 2025-005: Significant Deficiency - Control and Compliance Over Reporting Program: COVID-19 CDBG Cluster - Entitlement/Special Purpose Grants Assistance Listing Number: 14.218 Federal Agency: U.S. Department of Housing and Urban Development Criteria: Per 24 CFR Part 570 and the terms and conditions of the federal award, nonfederal entities are required to file the PR29 CDBG Cash on Hand Quarterly Report. All required reporting should be reviewed with proper detail, by someone other than the preparer, to ensure they are completed accurately and approved prior to submission. Condition/Context: The City does not have proper segregation of duties over the PR29 reporting as the same individual prepares and submits the reports. Of the two quarterly reports selected for testing, neither report had documentation of review and approval and neither report had an underlying reconciliation to the general ledger detail for the respective quarter. Our sample was not statistically valid. Cause: The City had not established adequate controls to ensure the reports were independently reviewed and to maintain the proper documentation of the underlying data to support the totals as reported. Questioned Costs: Not applicable. Effect: Without effective controls over the review and documentation of the reporting, there is an increased risk that required reports may contain incomplete, inaccurate, or unsupported information. Recommendation: We recommend that the City identifies an appropriate preparer separate from the personnel who reviews and submits the final report. Documentation of this review should be maintained. A checklist or tracking mechanism may assist in ensuring all required reports are completed and reviewed for accuracy along with a quarterly reconciliation between the report and underlying data. Views of Responsible Officials: The City acknowledges and agrees with the finding as presented and will implement processes to ensure the appropriate reporting is completed as outlined.