Finding 369498 (2023-002)

Finding 2023-002; Federal Emergency Management, Assistance Listing no. 97.036 Allowable Costs Criteria: Controls should be sufficient to ensure that only allowable costs are charged to a federal program. Condition: Instances of unallowable costs being charged to the federal program were noted. Cause: City employees that assisted with disaster recovery efforts were eligible for reimbursement. Procedures were in place to identify and report these eligible employee costs but not appropriately followed or reviewed. Effect: Costs charged to the federal program may be disallowed. Questioned Costs: $2,521 Context: A sample of 31 charges regarding payroll costs totaling $8,077 was selected for audit from a population of approximately 1,000 items totaling $390,500. Our test found nine charges that were incorrectly included as a charge to the federal program totaling $2,521. Our sample was not a statistically valid sample. Recommendation: We recommend that the City ensure controls are in place to charge only costs allowable under the program. Views of Responsible Officials and Planned Corrective Actions: In fiscal year 23-24 the City moved all grant administration to a designated grant department. The duties of the grant administration department are to track, vet and confirm compliance with applicable guidelines on the grants the City applies for. Additionally, the grant administration department will actively assist with submission and seek new grant opportunities, and will be available to train City employees on proper grant documentation and substantiation. The City engages outside consultants to review grant submission and the City is engaging this outside consultant to review the grant submissions more often throughout the year than previously engaged to allow more time to adequately review and obtain all necessary information for grant compliance.