Finding 396654 (2023-002)

Section 3. Findings and Questioned Costs for Federal Awards Finding: 2023-002: Significant Deficiency in Internal Control Over Compliance - Timeliness Reporting- CDBG Quarterly Reports Program Assistance Listing Number: 14.218 Community Development Block Grant/Entitlement Grants Federal Agency: Department of Housing and Urban Development Applicable Compliance Requirement: Reporting Criteria: The May 2023 OMB Compliance Supplement requires the PR29-CDBG Cash on Hand Quarterly Report to be filed for all recipients of CDBG Entitlement Grants. Per the “Instructions for IDIS Cash on Hand Quarterly Report”, the reports are required to be submitted to the US Department of Housing and Urban Development within 30 days after the end of the reporting period. Condition and context: The City submitted 3 out of 4 Cash on Hand reports between 8 and 90 days late. Effect: Cash on Hand reports were not submitted timely. Cause: Insufficient control environment, experienced staff turnover, and changes in accounting software. Recommendation: We recommend the City of Fayetteville establish appropriate controls and hire appropriate staff to ensure timely submission of required reports. Management’s response: See Corrective Action Plan