Finding Text
Finding 2019-007 - Significant Deficiency - Maintenance of Financial Records
CFDA Number and Title: CDBG Entitlement Grants Cluster
14.218 Community Development Block Grants/Entitlement Grants
Applicable Compliance Requirements: Activities Allowed or Unallowed
Allowable Costs/Cost Principles
Criteria: Title 24 of the United States Department of Housing and Urban Development (“HUD”) of the
Code of Federal Regulations (“CFR”) §570.506(a) specifies that the grantee must keep records which
provide a full description of each activity that is selected for assistance, including its location, the amount of
funds budgeted, obligated and expended for the activity, and the provision of the regulations under which
the activity is eligible.
Condition: Our audit revealed that certain documentation supporting drawdown amounts for certain
expenditures were misplaced.
Cause: Constant turnover in personnel responsible for administering these programs and lack of
adequate training and cross training of personnel.
Effect or Potential Effect: The funding agency could disallow the costs that do not have the
appropriate supporting documentation and approvals.
Known Questioned Costs: $16,783
Likely Questioned Costs: Unable to determine given the significant deficiency on internal controls on
compliance for this program.
Recommendation: We recommend that the Agency maintain the supporting documentation for
expenditures as required by the federal guidelines. Further, documentation should be reviewed and
approved prior to payment.
Management’s Responses: See corrective action plan.