Finding Text
Criteria: The Office of Management and Budget (OMB) 2 CFR Part 200, Appendix XI, Compliance
Supplement 2017, sections 3.2-B-12 and 3.2-B-14, respectively, state:
"The individual State/local government/Indian tribe departments or agencies (also known as
"operating agencies") are responsible for the performance or administration of Federal awards. In order to receive cost reimbursement under Federal awards, the department or agency usually
submits claims asserting that allowable and eligible costs (direct and indirect) have been incurred in accordance with 2 CFR part 200, subpart E."
"Costs did not consist of improper payments, including (1) payments that should not have been made or that were made in incorrect amounts (including overpayments and underpayments) under statutory, contractual, administrative, or other legally applicable requirements" and "costs
were adequately documented."
Condition: The City does not maintain adequate supporting documentation for its IDIS drawdown
requests to explain and support program reimbursement requests. The City does not have a system in
place for the ongoing tracking of drawdowns in line with a regular review and reconciliation of the general
ledger. We noted a difference of $84,286 between City recorded expenditures per the general ledger and
the total drawdowns for the current program year in IDIS. Upon further review, we noted a difference of
$33,086 between the IDIS drawdowns and the total award expenditures per the general ledger that could
not be reconciled. In addition, the City was not able to provide adequate documentation for administrative
costs of $37,727.
Cause: Lack of internal controls over the logging of drawdown records prior to processing the vouchers
for reimbursement in IDIS.
Effect or Potential Effect: The oversight of the drawn voucher in IDIS for Federal grant reimbursement
exposes the City to underlying implications that such transactions may get through without appropriate
review and authorization. This may lead to the posting of unallowed transactions that would be
noncompliant to the program requirements.
Questioned Cost: CDBG Administration drawdown of $70,813.
Context: Upon the review of the current year IDIS drawdowns to the actual award expenditures per the
general ledger, an irreconcilable difference of $33,086 was noted related to administrative costs. Further
review led to a voucher submitted to IDIS for administrative costs that did not get recorded in the City's
internal running log of drawdowns and did not have supporting documentation. A form of support was
provided not in a timely manner, i.e. a month after initial request, indicating a lack of internal controls
over the maintenance and reconciliation of actual IDIS drawdowns and the running drawdown log.
Repeat of a Prior-Year Finding: No