Finding 478404 (2023-001)

Program: CDBG - Entitlement Grants Cluster Assistance Listing Number: 14.218 Compliance Requirement: Reporting Federal Agency: Department of Housing and Urban Development Criteria or Specific Requirement – Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred to as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). In addition, CDBG Reporting requirements are established under 24 CFR Part 570. Condition – The City did not report the subaward information for the fiscal year ended September 30, 2023. In addition, the City had material errors reported on the annual CDBG Financial Summary Report (PR26) and one PR29 – CDBG Cash on Hand Quarterly Report. Questioned Costs – None Context – The City’s only subaward more than $30,000 was selected for testing under the program. The City did not report the subaward information. In addition, 2 of the other 5 reports selected for testing had material errors on amounts reported. The sample was not intended to be, and was not, a statistically valid sample. Effect – The City did not report the subaward information as required by the Uniform Guidance. In addition, required reports for federal awards had material errors. Cause – The City did not have adequate controls or procedures in place to identify the applicable reporting requirements and ensure the required reports for federal awards include all activity of the reporting period, are supported by applicable accounting or performance records, and are fairly presented in accordance with the Uniform Guidance. Identification as a Repeat Finding – N/A Recommendation – Management should implement policies and procedures to ensure required reports are completed accurately and filed by their respective due dates in accordance with the grant agreements and Uniform Guidance. View of Responsible Officials and Planned Corrective Actions – We agree with the finding. See separate report for planned corrective actions.