Auditor recommendation: We recommend the City strengthen policies and procedures to ensure program directors are following procedures and documenting review and approval as part of monitoring of subrecipients, and that subawards reported on the SEFA are verified against the characteristics of the agreement and the relationship with the other entity.
Views of Responsible Officials and Planned Corrective Action: The City agrees with this finding. Vacancies in key positions resulted in a lack of robust oversight of subrecipient monitoring during FY24. These key positions have now been filled. The Accounting Officer, Grants Manager and Accounting Financial Analyst positions in the Finance Department have been filled with qualified people who have extensive grant management experience, and the Grants Division is now fully staffed. More robust staffing is allowing Finance to work more closely with federal grant program managers throughout City government.
During the second half of FY24 the Finance team worked with our accounting consulting firm to develop and deploy Uniform Guidance training to over 50 employees City-wide. The AGA Recipient checklist for determining if the entity receiving funds has a contractor or subrecipient relationship was discussed and provided during this training and some City departments are now using it as part of the process to develop agreements that use federal funds. The Finance Director’s review of proposed agreements now includes an evaluation of the reasonableness of the subrecipient or contractor determination prior to the Finance Director signing the agreement.
In CY25 the Finance team will work to develop additional procedures to ensure that subawards reported on the SEFA are verified against the characteristics of the agreement and the relationship with the other entity. Additionally, the Finance Director, the Accounting Officer, and the Grants team will work to strengthen policies and procedures and deploy training to ensure program managers understand subrecipient monitoring procedures, including documenting review and approval as part of monitoring of subrecipients. The City plans to provide additional Uniform Guidance training for staff in CY25 which will include subrecipient monitoring requirements.
Responsible Official: Emily Oster, Finance Director, Matthew Bonifer, Accounting Officer, Erika Lujan, Grants Manager
Timeline and Estimated Completion Date: June 30, 2025