Finding Text
Finding – The City did not have adequate internal controls to ensure compliance with time and effort
requirements.
Identification of the Federal Program:
Assistance Listing Number and Title: 14.231, Emergency Solutions Grant Coronavirus Program
Federal Grantor Name: U.S. Department of Housing and Urban Development
Pass-through Entity Name: California Department of Housing and Community Development
Pass-through Award/Contract Number: 20-ESGCV-3-00002
Compliance Requirement – Allowable Costs/Cost Principles
Condition:
We reviewed payroll transactions to determine whether the City retained adequate time and effort
documentation for salaries and benefits charged to federal grants, as required by the granting agency.
Depending on the number and type of activities an employee works on, documentation can be a semi
annual certification or monthly personnel activity report, such as a timesheet. Our audit found that the
City did not design an effective process to monitor employees whose positions were funded with
federal grant funds to ensure all required time and effort documentation were completed in a timely
manner. We consider this deficiency in internal controls to be a significant deficiency.
Criteria:
2 CFR Part 200 in general and 2 CFR section 200.303(a) require non-Federal entities to establish and
maintain effective internal controls over Federal awards, including the requirements for allowable
costs, cost principles, and matching.
Cause:
The City did not have the time and effort documentation to support time worked on the program.
Effect:
Without proper time and effort documentation, federal grantors cannot be assured salaries and benefits
charged to their programs are accurate and valid. The City’s noncompliance with grant requirements
can jeopardize future federal funding and may require it to return federal funds to the grantor. Our audit
found that the City did not complete the required time and effort documentation for all employees who
were fully funded through this program.
Questioned Costs:
$308,013
Context:
See condition above for the context of the finding.
Identification of a repeat finding:
Not applicable.
Recommendation:
We recommend the City improve its monitoring process to ensure all employees paid through federal
grants submit required documentation to support time worked.
Views of responsible officials:
Management concurs with the finding.