Finding 406457 (2022-006)

- Repeat Finding
Requirement
L
Questioned Costs
-
Year
2022
Accepted
2024-07-03

AI Summary

  • Core Issue: The City has ongoing discrepancies in its financial records, particularly with CDBG, HOME, HOPWA, and ESG funds, due to improper reconciliation with the IDIS system.
  • Impacted Requirements: The City must reconcile financial records with grantor reports to ensure accurate accounting and compliance, addressing legacy account balances from prior years.
  • Recommended Follow-Up: Continue reconciling IDIS drawdowns to ledgers, investigate old discrepancies, and ensure all systems are aligned to prevent future issues.

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. Conditon: General ledgers for 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 do not always close certain current activity accounts to grant reserves for proper carryforward. In addition, certain general ledger receivable and other accounts remain from prior years that should be investigated for proper disposition. Effect: Accounts in the CDBG Trust Fund may require adjustments and possibly funding to reconcile and adjust for prior year remnant discrepancy. 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 current year IDIS System drawdowns and activity to its general ledger. Certain legacy receivable and other account balances remain in the City’s general ledger, carrying forward from prior year activity when the City did not properly reconcile general ledgers to IDIS System activity (previously reported as material weaknesses in significant deficiencies). Whereas this finding has been repeated annually from 2011 to 2020 as a material weakness and 2021 as a significant deficiency, it has been downgraded to a matter of compliance and other. 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. The Comptroller will train and continue to work closely with personnel in charge of reporting and processing IDIS and vouchers drawdowns. The Division of Accounts & Control will continue to maintain a sub-ledger to ensure IDIS and the City’s financial system tie out prior to the processing of any payments, and each payment request will require an IDIS activity reference number in order to be processed. Monthly reconciliation of funds has been implemented and copies are sent to US HUD on a monthly basis. In addition, the City has hired a 3rd party grant consultant to help navigate and strengthen our overall processes.

Categories

Internal Control / Segregation of Duties Cash Management HUD Housing Programs Material Weakness Reporting Significant Deficiency

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
97.036 Covid-19 - Disaster Grants - Public Assistance (presidentially Declared Disasters) $8.73M
14.218 Community Development Block Grants/entitlement Grants $8.53M
97.067 Homeland Security Grant Program $2.52M
14.241 Housing Opportunities for Persons with Aids $1.95M
21.023 Emergency Rental Assistance Program 2 $1.86M
21.023 Covid-19: - Emergency Rental Assistance Program 1 $1.82M
14.231 Covid-19: Esg-Cv1 - Emergency Solutions Grant Program $1.47M
93.045 Special Programs for the Aging_title Iii, Part C_nutrition Services $1.27M
14.239 Home Investment Partnerships Program $1.20M
10.557 Special Supplemental Nutrition Program for Women, Infants, and Children $1.10M
21.016 Equitable Sharing $1.08M
21.027 Covid-19: Coronavirus State and Local Fiscal Recovery Funds $816,818
93.569 Community Services Block Grant $756,979
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $696,952
14.231 Emergency Solutions Grant Program $596,130
93.569 Covid-19: Community Services Block Grant $588,900
14.218 Covid-19: Cdbg-Cv1 - Community Development Block Grants/entitlement Grants $486,440
16.585 Drug Court Discretionary Grant Program $465,206
10.559 Summer Food Service Program for Children $301,896
14.231 Covid-19: Esg-Cv2 - Emergency Solutions Grant Program $219,479
20.205 Highway Planning and Construction $217,398
17.258 Wia Adult Program $197,674
17.259 Wia Youth Activities $193,976
93.940 Hiv Prevention Activities_health Department Based $167,987
97.056 Port Security Grant Program $155,560
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $131,388
14.241 Covid-19: Hopwa-Cv - Housing Opportunities for Persons with Aids $105,043
17.278 Wia Dislocated Worker Formula Grants $93,349
93.243 Substance Abuse and Mental Health Services_projects of Regional and National Significance $5,300
93.917 Hiv Care Formula Grants $4,067
14.272 National Resilient Disaster Recovery Competition $863
10.576 Senior Farmers Market Nutrition Program $778