Finding Text
Criteria or Specific Requirement: As a condition of receiving Federal awards, non-Federal entities agree to comply with laws, regulations, and the provisions of grant agreements and contracts, and to maintain internal control to provide reasonable assurance of compliance with these requirements. In accordance with 24 CFR 576.203(a)(1) and (2), metropolitan cities have up to 240 days from the date HUD signs the grant agreement to obligate ESG-CV funds. Condition: Of the $1,822,554 expenditures, $1,388,295 was distributed to subrecipients and of that, $237,361 was not obligated to the subrecipient until 271 days after the date of the signed agreement. Cause: Controls over the timely obligation of federal funds were not operating as designed over a portion of the ESG-CV funds. Effect: This portion of the ESG-CV funds were not obligated in a timely manner. Questioned Costs: None. Context: During our testing it was noted that a control was in place for review of the obligation date, however, the review related to obligation of funds was not set to occur within the required timeframe. Identification of a repeat finding: Not a repeat finding. Recommendation: We recommend that management establish and maintain effective internal control ensuring timely review in order to comply with the obligation requirements of the program. Management Response: See Corrective Action Plan.