Finding 485986 (2023-005)

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: COVID-19 Community Development Block Grants/State’s Program and Non- Entitlement Grants in Hawaii Assistance Listing Number: 14.228 Federal Award Identification Number and Year: B-20-DW-27-0001, 2023 Pass-Through Agency: Minnesota Department of Employment and Economic Development, Business and Community Development Division Pass-Through Number: B-20-DW-27-0001 Compliance Requirement Affected: Reporting Award Period: Year Ended December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: Recipients of $150,000 or more of grant funds must submit a quarterly and annual report, no later than 7 days after the end of each calendar quarter and 15 days after the fiscal year end, respectively. Quarterly and annual reports must be in accordance with reporting requirements set forth in section 15011 of the CARES Act. The Grantee will monitor the activities of the sub-recipient according to 2 CFR §200.303 and 2 CFR §200.331 as necessary to ensure that the sub-award is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the sub-award; and that sub-award performance goals are achieved. This includes reviewing financial and programmatic reports required by the pass-through entity. Condition: There was no oversight by County management of the reports being submitted by the subrecipient to the State. Questioned Costs: None noted. Context: For two of two quarterly reports and one of one annual reports tested, it was noted that there was no review by County management of the reports submitted by the subrecipient and the County received a copy of the report at the same time as the submission was completed. Cause: Insufficient management oversight. Effect: Ineligible costs could be reported. Repeat Finding: No. Recommendation: We recommend that the County reviews their policies to ensure reporting requirements are met including a review of the subrecipient reports prior to submission. Views of responsible officials: There is no disagreement with the audit finding.