Finding 32061 (2022-002)

2022-002 U.S. Department of Housing and Urban Development, for the period July 1, 2021 through June 30, 2022, CFDA #14.218 Community Development Block Grant Criteria: Compliance under Reporting for CDBG requires the PR26 CDBG Financial Summary to be submitted annually. Also, there are PR 29 Cash on Hand reports due quarterly. Both reports include financial information that should be reported on a basis consistent with grant terms. Condition: Certain information related to the PR29 CDBG Cash on Hand report and the PR26 CDBG Financial Summary could not be reconciled to the City?s accounting system or to underlying documentation. Cause: The City utilizes several different systems to administer and track results of the CDBG program. The City?s Munis accounting system is utilized for most financial information, the Mortgage Office software is utilized to track outstanding loans, and the U.S. Department of Housing and Urban Development IDIS system is used to track project achievements. As such, information must be entered and logged on three different systems. Maintaining continuity of information on all three systems is burdensome and can lead to inaccuracies and data mismanagement. Effect: Failure to complete reports accurately and maintain proper supporting documentation for amounts reported could skew the financial position of the program and related projects. As such, measurement of results and management decisions for future projects could be based on inaccurate information. Recommendation: All information entered into Munis, the Mortgage Office software, and IDIS should be reconciled monthly to ensure that financial information and data is consistent across all platforms. Quarterly and year-end financial reporting should be prepared and reconciled to the Munis accounting system and supporting documentation should be maintained on file according to the City?s document retention policies. Questioned Costs: None