Finding Text
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Economic Development Initiative, Community Project Funding, and Miscellaneous Grants Assistance Listing Number: 14.251 Pass-Through Agency: N/A Pass-Through Numbers: N/A Award Period: 8/13/2024 – 8/31/2032 Type of Finding: Material Weakness in Internal Control over Compliance Condition: The Organization did not maintain formal policies and procedures governing Federal grant reporting. Additionally, the Organization was unable to provide evidence that required reports were independently reviewed prior to submission or documentation demonstrating that reports were submitted within required deadlines. Criteria: Pursuant to 2 CFR § 200.329, non-Federal entities are responsible for monitoring activities under Federal awards to ensure compliance with applicable Federal requirements and performance expectations. Effective monitoring includes establishing controls over the preparation, review, submission, and retention of required financial and performance reports. Cause: The Organization has not established or implemented formal policies and procedures for the administration and oversight of Federal award reporting requirements. Effect: Without documented review and submission procedures, the Organization cannot demonstrate compliance with Federal reporting requirements, including the accuracy, completeness, and timely submission of required reports. The lack of supporting documentation also limits the Organization's ability to evidence compliance during monitoring activities or audits. Repeat Finding: No Recommendation: We recommend that management establish and implement formal policies and procedures for Federal award reporting. Such procedures should require: (1) preparation and independent review of all required reports prior to submission, (2) retention of documentation evidencing the review and approval process, and (3) maintenance of proof of submission to demonstrate compliance with reporting deadlines. Implementing these controls will strengthen oversight and provide support for compliance with Federal reporting requirements. Views of responsible officials: There is no disagreement with the audit finding.