Finding 496754 (2023-002)

Material Weakness
Requirement
L
Questioned Costs
-
Year
2023
Accepted
2024-09-13
Audit: 319516
Organization: City of Gadsden, Alabama (AL)

AI Summary

  • Core Issue: The City submitted duplicate drawdown requests to HUD, resulting in excess funds of $31,296.
  • Impacted Requirements: The City failed to maintain effective internal controls over Federal awards as required by 2 CFR 200.303.
  • Recommended Follow-Up: Return the duplicate funds to HUD and ensure all drawdown requests are handled by trained staff with proper review and approval processes.

Finding Text

Criteria: Under 2 CFR 200.303, the City is required to establish and maintain effective internal controls over Federal awards that provide reasonable assurance that the City is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: Our audit procedures found that the City submitted drawdown requests to HUD for certain expenditures twice totaling $31,296. Cause: The City’s Community Development and Finance offices have experienced turnover in key positions responsible for reconciling and requesting the drawdowns during the fiscal year 2023. Training was needed for program and finance employees to fully understand the drawdown process. Effect: The City received excess funds totaling $31,296 for duplicate drawdown requests. Recommendation: We recommend that the City return the duplicate drawn funds to HUD. We recommend all drawdown requests are completed by appropriately trained employees and that all drawdowns are reviewed and approved by an appropriately personnel prior to submission to HUD. Views of Responsible Officials and Planned Corrective Action: The City agrees with this finding. The City will work with HUD to repay the duplicated funds and implement additional review and approval procedures for drawdown requests.

Corrective Action Plan

2023-002 – ALN #14.218 Community Development Block Grant/Entitlements Grant; Recommendation: We recommend that the City return the duplicate drawn funds to HUD. We recommend all drawdown requests are completed by appropriately trained employees and that all drawdowns are reviewed and approved by an appropriately personnel prior to submission to HUD. Corrective Action Planned: The City agrees with this finding. The City will work with HUD to repay the duplicated funds and implement additional review and approval procedures for drawdown requests. Person responsible for corrective action: Brandon Phillips, Finance Director Telephone: (256) 549-4715 Anticipated Completion Date: Corrective action will be implemented for the fiscal year ended September 30, 2024.

Categories

Cash Management HUD Housing Programs Internal Control / Segregation of Duties

Other Findings in this Audit

  • 1073196 2023-002
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
21.027 Coronavirus State and Local Fiscal Recovery Funds $5.09M
14.218 Community Development Block Grants/entitlement Grants $1.74M
20.507 Federal Transit_formula Grants $1.19M
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $400,000
20.219 Recreational Trails Program $168,845
20.205 Highway Planning and Construction $114,510
45.310 Grants to States $62,356
97.042 Emergency Management Performance Grants $55,804
16.738 Edward Byrne Memorial Justice Assistance Grant Program $25,995
93.045 Special Programs for the Aging_title Iii, Part C_nutrition Services $16,089
16.607 Bulletproof Vest Partnership Program $10,934
93.044 Special Programs for the Aging_title Iii, Part B_grants for Supportive Services and Senior Centers $2,544