Finding Text
Federal Program Name: CDBG Entitlement Grants Cluster: Community Development Block Grant (CDBG)
Assistance Listing Number: 14.218
Federal Award Identification Number and Year: B-21-MC-06-0509; B-22-MC-06-0509; COVID-19 CDBG, Award Years 2021 and 2022
Award Period: Fiscal Year 2022-2023
Type of Finding:
• Material Weakness in Internal Control over Compliance (Allowable Costs)
• Other Matter (Allowable Costs)
Criteria or Specific Requirement: Allowable Costs: Uniform Guidance Title 2, Subtitle A, Chapter II, Part 200, Subpart E, §200.430 requires payroll records to support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and nonfederal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.
Condition: The City had incorrectly identified themselves as a subrecipient for four projects: Senior Outreach, Project SHUE, Summer Youth, and Family Resource Center. The monthly/quarterly invoices from the City that charged CDBG for these project costs included City employee payroll costs. The City employees did not document time spent on these projects on their City timesheets. Therefore, we were unable to verify the allowability of the hours charged to CDBG for these projects.
Questioned Costs: $144,219 of payroll and benefit costs.
Context: Each of the four City projects (Senior Outreach, Project SHUE, Summer Youth, and Family Resource Center) had monthly or quarterly invoices including payroll costs. All monthly or quarterly invoices were inspected and payroll costs were aggregated and included as questioned costs.
Cause: The City believed that these projects were subrecipients and that payroll charges did not require the same supporting documentation as City employees that directly charge their hours to CDBG throughout the year.
Effect: The amount of payroll charges relating to these projects may be overstated.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend the City implement policies and procedures to ensure that the City itself is not identified as a subrecipient and that all City payroll charges be supported by timesheets and other supporting documentation as required by the Uniform Guidance.