Finding Text
Federal Program Title: Community Development Block Grants / Entitlement Grants
Federal Catalog Number: 14.218
Federal Agency: U.S. Department of Housing and Urban Development
Category of Finding: Special Tests and Provisions
Criteria: Pursuant to the Office of Management and Budget (OMB) 2 CFR Part 200, Appendix XI,
Compliance Supplement May 2023, Part 4-14.218, CDBG funds (and local funds to be reimbursed with
CDBG funds) cannot be obligated or expended before receipt of HUD's approval of a Request for Release
of Funds (RROF) and environmental certification, except for exempt activities under 24 CFR section
58.34 and categorically excluded activities under section 58.35(b) (24 CFR section 58.22).
Also, on page 4-14.219-29, it states that projects must have an environmental review unless they meet
criteria specified in the regulations that would exempt or exclude them from RROF and environmental
certification requirements (24 CFR sections 58.1, 58.22, 58.34, 58.35, and 570.604).
Condition: During our audit the City was unable to provide evidence of HUD's approval of a Request for
Release of Funds and environmental certifications prior to expenditure of funds for fiscal year 2023.
Cause: Lack of appropriate control over special tests and provisions, mainly due to turn-over in City
personnel.
Effect or Potential Effect: Noncompliance may result in termination of the grant, reduction in future
payments or funding amounts, repayment of federal funds already received and spent, imposed fines
and penalties, reputational damage, special status for oversight and reviews, need for corrective action
plan, and/or suspension or debarment.
Questioned Cost: None
Context: The City was able to provide environmental reviews for three out of four projects. However, the City was unable to provide evidence of HUD's approval of a Request for Release of Funds, and
environmental certification for these four projects.
Repeat of a Prior-Year Finding: No
Recommendation: We recommend the City should design and establish internal control over special
tests and provisions, which should include maintaining copies of reports submitted for audit purposes.
Management Response and Corrective Action Plan
City's Response: The City concurs.
Corrective Action Plan: Departments will work together to document and verify all documents are
retained and centralized to ensure they are auditable.
Planned Implementation Date: January 2025
Responsible Person: Finance & Community Development Department