Finding Text
Information on the Federal Program: Assistance Listing Number 14.228 - Community Development Block Grants/State's program and Non-Entitlement Grants in Hawaii. Pass-Through Entity: Texas General Land Office. Award Number: 20-065-140-C594. Compliance Requirements: Reporting. Type of Finding: Significant Deficiency in Internal Control Over Compliance.
Criteria: Program requirements state that the City is to submit monthly monitoring reports that contain the total grant funds expended to date. In addition, the City’s contract with the Texas General Land Office (“GLO”) requires grant expenditures to be submitted for reimbursement within 120 days of incurring the expenditure.
Condition: For the year ended September 30, 2023, we reviewed the current period grant expenditures and found the HUD monthly monitoring reports to be incomplete. In addition, several material grant expenditures were not submitted for reimbursement within 120 days following the date of expenditure.
Cause: Several expenditures relating to the grant were not properly captured by the grant administrators and therefore not submitted for reimbursement or included in monthly reporting.
Effect or Potential Effect: As a result, the City risks being denied reimbursement by the GLO and may rely on inaccurate budget to actual data regarding grant expenditures to date.
Questioned Costs: $290,692.
Recommendation: The City should address this matter by implementing additional control activities over the review of draw requests and monthly reports by reconciling them to the detail grant expenditures contained in the City’s financial accounting system.
Views of Responsible Official: Management of the City of Orange, Texas, concurs with the audit finding.