Finding 500101 (2023-003)

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Community Development Block Grants/Entitlement Grants Assistance Listing Number: 14.218 Federal Award Identification Number and Year: B-19-MC-55-0017, 2019; B-20-MC-55-0017, 2020; B-20-MW-55-0017, 2020; B-21-MC-55-0017, 2021; B-22MC-55-0017, 2022; B-23MC-55-0017, 2023 Award Period: 1/1/2019 – 9/1/2030 Compliance Requirements: Reporting Type of Finding: • Material Weakness in Internal Control over Compliance • Other Matters Criteria or specific requirement: Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System. In addition, 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires the City to implement and maintain a system of internal controls over federal grants. Condition: The City did not report any first tier subawards related to the CDBG grant program to the required federal reporting system for grant funds awarded during 2023. Questioned costs: None Context: The City did not report any of the subawards that required disclosure under the Federal Funding Accountability and Transparency Act. We noted that the City’s Community Development Department did not have procedures or documentation to ensure that this procedure was performed. Effect: The City failed to report first-tier subawards as required by federal law. Cause: The City had not performed a periodic evaluation of the requirements and internal controls surrounding the grant program to identify the requirement of the annual FFATA reporting requirement. Repeat Finding: No Recommendation: We recommend the City review the various grant requirements and laws surrounding the CDBG grant program and ensure that any written internal control or procedure manuals include all of the required compliance requirements. We also recommend that the City ensure multiple individuals are trained on the administration of the grant. Views of responsible officials: There is no disagreement with the audit finding.