FAC Explorer

Finding 498271 (2023-003)

Significant Deficiency
Requirement
N
Questioned Costs
-
Year
2023
Accepted
2024-09-25
Audit: 321037
Organization: City of Seattle (WA)
Auditor: Office of the Washington State Auditor

AI Summary

  • Core Issue: The City lacked adequate internal controls to ensure timely reimbursement of subrecipients under the Emergency Solutions Grant Program.
  • Impacted Requirements: Federal regulations mandate that reimbursements be made within 30 days of receiving complete payment requests; the City failed to meet this for at least two subrecipients.
  • Recommended Follow-up: The City should implement and adhere to improved internal controls to ensure compliance with reimbursement timelines and monitor effectiveness regularly.

Finding Text

2023-003 The City did not have adequate internal controls for ensuring compliance with program requirements for reimbursing subrecipients. Assistance Listing Number and Title: 14.231 – Emergency Solutions Grant Program 14.231 – COVID 19 Emergency Solutions Grant Program Federal Grantor Name: U.S. Department of Housing and Urban Development Federal Award/Contract Number: E-20-MC-53-0005, E-21-MC-53- 0005, E-22-MC-53-0005, COVID- 19 E-20-MW-53-0005 Pass-through Entity Name: N/A Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The City spent $2,681,349 in Emergency Solutions Grant Program (ESG) award funds in 2023. The ESG Program provides grants to states, metropolitan cities, urban counties, and territories for (1) rehabilitating or converting buildings for use as emergency homeless shelters, (2) paying certain expenses related to operating emergency shelters, (3) providing essential services related to emergency shelters and street outreach for the homeless, and (4) preventing homelessness and providing rapid rehousing assistance. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Reimbursement payments The City must pay ESG Program subrecipients for allowable costs within 30 days after receiving their complete payment requests. The City did not follow its established controls and did not reimburse at least two subrecipients’ payment requests within the required 30 days. We consider this to be a significant deficiency in internal controls. Cause of Condition The City human services department (HSD) received the two invoices from the subrecipient past the City’s required submission date and after the 2022 fiscal year end. Department staff had to consider how to process the payments after the fiscal year had closed, which led to delaying payment past the 30-day deadline. In addition, there was turnover in the department and newer staff took longer when reviewing invoice submissions. Effect of Condition We tested four out of seven subrecipient payment requests. We found two requests, totaling $263,062, that the City paid between 34 days and 56 days after it had received them. Failure to comply with these program requirements may jeopardize the City’s eligibility for future federal assistance. Recommendation We recommend the City establish and follow internal controls to ensure compliance with federal requirements for reimbursing subrecipients within established timeframes. City’s Response HSD acknowledges the identified weakness and implemented an updated Accounts Payable control procedure in 2024, that includes an additional standard monthly report and review process to ensure that reimbursements are processed with the required 30-day period. Auditor’s Remarks We thank the City for its response and consideration in this matter and the steps it is taking to address this issue. We will review the status of the City’s corrective action during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 24 CFR Part 576, Uniform Guidance, section 203, Obligation, expenditure, and payment requirements, describes the requirements for obligation of funds, expenditures, and payments to subrecipients.

Corrective Action Plan

HSD acknowledges the identified weakness and implemented an updated Accounts Payable control procedure in 2024, that includes an additional standard monthly report and review process to ensure that reimbursements are processed with the required 30-day period.

Categories

Subrecipient Monitoring Allowable Costs / Cost Principles Cash Management Eligibility Material Weakness Reporting Significant Deficiency

Other Findings in this Audit

  • 498263 2023-001
    Material Weakness
  • 498264 2023-001
    Material Weakness
  • 498265 2023-001
    Material Weakness
  • 498266 2023-001
    Material Weakness
  • 498267 2023-002
    Material Weakness
  • 498268 2023-002
    Material Weakness
  • 498269 2023-002
    Material Weakness
  • 498270 2023-002
    Material Weakness
  • 498272 2023-003
    Significant Deficiency
  • 498273 2023-003
    Significant Deficiency
  • 498274 2023-003
    Significant Deficiency
  • 498275 2023-003
    Significant Deficiency
  • 498276 2023-004
    - Repeat
  • 498277 2023-004
    - Repeat
  • 498278 2023-004
    - Repeat
  • 498279 2023-004
    - Repeat
  • 498280 2023-004
    - Repeat
  • 498281 2023-004
    - Repeat
  • 498282 2023-004
    - Repeat
  • 498283 2023-004
    - Repeat
  • 498284 2023-004
    - Repeat
  • 498285 2023-005
    Material Weakness Repeat
  • 498286 2023-005
    Material Weakness Repeat
  • 498287 2023-005
    Material Weakness Repeat
  • 498288 2023-005
    Material Weakness Repeat
  • 498289 2023-005
    Material Weakness Repeat
  • 498290 2023-005
    Material Weakness Repeat
  • 498291 2023-005
    Material Weakness Repeat
  • 498292 2023-005
    Material Weakness Repeat
  • 498293 2023-005
    Material Weakness Repeat
  • 498294 2023-006
    Significant Deficiency
  • 1074705 2023-001
    Material Weakness
  • 1074706 2023-001
    Material Weakness
  • 1074707 2023-001
    Material Weakness
  • 1074708 2023-001
    Material Weakness
  • 1074709 2023-002
    Material Weakness
  • 1074710 2023-002
    Material Weakness
  • 1074711 2023-002
    Material Weakness
  • 1074712 2023-002
    Material Weakness
  • 1074713 2023-003
    Significant Deficiency
  • 1074714 2023-003
    Significant Deficiency
  • 1074715 2023-003
    Significant Deficiency
  • 1074716 2023-003
    Significant Deficiency
  • 1074717 2023-003
    Significant Deficiency
  • 1074718 2023-004
    - Repeat
  • 1074719 2023-004
    - Repeat
  • 1074720 2023-004
    - Repeat
  • 1074721 2023-004
    - Repeat
  • 1074722 2023-004
    - Repeat
  • 1074723 2023-004
    - Repeat
  • 1074724 2023-004
    - Repeat
  • 1074725 2023-004
    - Repeat
  • 1074726 2023-004
    - Repeat
  • 1074727 2023-005
    Material Weakness Repeat
  • 1074728 2023-005
    Material Weakness Repeat
  • 1074729 2023-005
    Material Weakness Repeat
  • 1074730 2023-005
    Material Weakness Repeat
  • 1074731 2023-005
    Material Weakness Repeat
  • 1074732 2023-005
    Material Weakness Repeat
  • 1074733 2023-005
    Material Weakness Repeat
  • 1074734 2023-005
    Material Weakness Repeat
  • 1074735 2023-005
    Material Weakness Repeat
  • 1074736 2023-006
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
21.027 Coronavirus State and Local Fiscal Recovery Funds $36.45M
66.958 Water Infrastructure Finance and Innovation (wifia) (e) $34.24M
93.778 Medical Assistance Program $10.54M
66.458 Capitalization Grants for Clean Water State Revolving Funds $9.00M
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $8.69M
21.023 Emergency Rental Assistance Program $5.19M
21.016 Equitable Sharing $3.94M
93.045 Special Programs for the Aging_title Iii, Part C_nutrition Services $2.48M
93.045 Special Programs for the Aging, Title Iii, Part C, Nutrition Services $2.42M
97.091 Homeland Security Biowatch Program $1.66M
93.044 Special Programs for the Aging_title Iii, Part B_grants for Supportive Services and Senior Centers $1.39M
14.239 Home Investment Partnerships Program $1.31M
16.922 Equitable Sharing Program $1.14M
93.052 National Family Caregiver Support, Title Iii, Part E $738,424
97.108 Homeland Security, Research, Testing, Evaluation, and Demonstration of Technologies $721,140
97.047 Bric: Building Resilient Infrastructure and Communities $716,410
10.558 Child and Adult Care Food Program $666,904
14.241 Housing Opportunities for Persons with Aids $637,090
14.881 Moving to Work Demonstration Program $630,550
16.543 Missing Children's Assistance $592,392
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $510,428
93.564 Child Support Enforcement Research $485,553
93.053 Nutrition Services Incentive Program $480,821
97.042 Emergency Management Performance Grants $451,101
20.500 Federal Transit_capital Investment Grants $447,835
16.738 Edward Byrne Memorial Justice Assistance Grant Program $415,453
45.024 Promotion of the Arts_grants to Organizations and Individuals $410,500
97.044 Assistance to Firefighters Grant $409,141
20.525 State of Good Repair Grants Program $367,832
10.559 Summer Food Service Program for Children $247,016
14.218 Community Development Block Grants/entitlement Grants $226,417
16.320 Services for Trafficking Victims $208,391
93.569 Community Services Block Grant $180,466
84.047 Trio_upward Bound $166,434
93.568 Low-Income Home Energy Assistance $149,721
15.916 Outdoor Recreation_acquisition, Development and Planning $132,765
16.835 Body Worn Camera Policy and Implementation $128,368
16.582 Crime Victim Assistance/discretionary Grants $127,953
97.111 Regional Catastrophic Preparedness Grant Program (rcpgp) $126,276
16.590 Grants to Encourage Arrest Policies and Enforcement of Protection Orders Program $123,832
93.969 Pphf Geriatric Education Centers $118,077
97.067 Homeland Security Grant Program $85,998
20.941 Strengthening Mobility and Revolutionizing Transportation (smart) Grants Program $80,794
16.710 Public Safety Partnership and Community Policing Grants $78,414
16.575 Crime Victim Assistance $70,143
20.616 National Priority Safety Programs $50,203
93.043 Special Programs for the Aging_title Iii, Part D_disease Prevention and Health Promotion Services $45,852
93.493 Congressional Directives $40,521
14.231 Emergency Solutions Grant Program $38,052
16.838 Comprehensive Opioid Abuse Site-Based Program $29,516
20.600 State and Community Highway Safety $27,030
81.042 Weatherization Assistance for Low-Income Persons $26,498
14.251 Economic Development Initiative, Community Project Funding, and Miscellaneous Grants $24,000
11.438 Pacific Coast Salmon Recovery_pacific Salmon Treaty Program $22,518
20.205 Highway Planning and Construction $21,301
97.039 Hazard Mitigation Grant $21,062
93.041 Special Programs for the Aging_title Vii, Chapter 3_programs for Prevention of Elder Abuse, Neglect, and Exploitation $16,994
10.576 Senior Farmers Market Nutrition Program $7,025
16.034 Coronavirus Emergency Supplemental Funding Program $5,232
45.310 Grants to States $4,451
20.507 Federal Transit_formula Grants $3,634
97.056 Port Security Grant Program $1,777
32.011 Affordability Connectivity Outreach Grant Program $1,707