Finding Text
Criteria:
Sound accounting policies suggest that the City is required to reconcile and compare information reported in its financial records to the underlying accounting records and reports provided to and from grantor and oversight agencies.
Condition:
Discrepancies exist in the general ledger of the City’s Community Development Block Grant (CDBG), Home Investment Partnership Grant (HOME), Housing Opportunities for Persons with AIDS (HOPWA) and Emergency Shelter Grant (ESG) funds, as compared to IDIS System reports.
Effect:
Amounts receivable and on reserve in the City’s CDBG, HOME and HOPWA general ledgers and disbursements could not be properly validated or were not traceable to or from IDIS and other related reports and required material adjustments.
Cause:
The remaining discrepancies were carried forward from prior years when the City did not reconcile the City’s financial records to the IDIS system.
Context:
The City has incorporated a process of reconciling IDIS System drawdowns to its general ledger. Whereas this finding has been repeated annually since 2011 as a material weakness, it has been reduced to a significant deficiency due to the addition of these processes. Additional reconciliation is required to correct the remaining discrepancies carried forward from prior years.
Recommendation:
The City should continue with reconciling IDIS System drawdowns and activity to its general and subsidiary ledgers. The City should investigate discrepancies carried forward from prior years for proper disposition.
Views of Responsible Officials of the City (unaudited):
The Chief Financial Officer will continue to oversee this project to close out the old accounts in a timely manner and make sure all systems are reconciled. Internal controls have been set into place to ensure future compliance. City Comptroller will train and continue to work closely with personnel in charge of reporting and processing IDIS and vouchers drawdowns. Accounts & Control grant accountant will continue to maintain manual sub-ledger to ensure IDIS and City Financial System tie out prior to the processing of any payments; each payment request will require an IDIS activity reference number in order to be processed. Monthly reconciliation of funds has already been put into place and copies are being sent to US HUD on a monthly basis for CY 2021. In addition, we have hired a 3rd party grant consultant to help navigate and strengthen our overall processes.