Finding Text
2023-003 – Activities Allowed/Unallowed and Allowable Costs/Cost Principles
Federal Program Information:
Funding Agency: U.S. Department of Housing and Urban Development
Title: Indian Community Development Block Grant (ICDBG)
Assistance Listing Number: 14.862
Award Period: October 1, 2022 – September 30, 2023
Criteria: The Entity received ICDBG Imminent Threat (IT) funding under American Rescue Plan Act of
2021. To be allowable under IT funding, expenditures must be used for emergencies that constitute threats
to health and safety and that are designed to prevent, prepare for, or respond to coronavirus.
Condition: We found five expenditures totaling $13,910 that were for rehabilitation and repair work on a
vacant housing unit owned by the Entity. There was no source documentation to support these expenditures
were used for an emergency threat in preventing, preparing or responding to coronavirus.
Questioned Costs: None.
Context: Five out of 27 non-payroll transactions tested for the ICGB program.
Cause and Effect: The Entity did not have effective internal controls to ensure expenditures charged to the
ICDBG program were appropriate and in accordance with ICDBG activities allowed/unallowed and
allowable costs/cost principles requirements. As a result, the Entity was not in compliance with these
federal requirements for the ICDBG program.
Auditor’s Recommendation: Improve internal controls to ensure that expenditures charged a federal award
are appropriate and permissible under the provisions of the award agreement. This includes reviewing
award agreements and program budgets/proposals that have been approved by the funding agency to ensure
expenditures charged to federal award are allowable.
Management’s Response: Management will improve its internal controls and procedures in place to ensure
that expenditures charged to federal award are appropriate and permissible under the provisions of the
award agreement.
Responsible Party: Interim Executive Director
Anticipated Completion: July 2024