Finding 524188 (2022-003)

Material Weakness Repeat Finding

Requirement

Questioned Costs

Year

2022

Accepted

2025-02-21

Audit: 343362

Organization: City of Harrisburg (PA)

Auditor: Boyer & Ritter LLC

AI Summary

Core Issue: The City is not keeping an inventory of equipment and real property bought with CDBG grant funds.
Impacted Requirements: Federal regulations require detailed records and a physical inventory every two years for compliance.
Recommended Follow-Up: The City should establish procedures to maintain accurate records and conduct regular inventories to meet federal requirements.

Finding Text

U.S. Department of Housing and Urban Development - Community Development Block Grants/ Entitlement Grants Cluster (ALN #14.218) Condition: During the audit, it was noted that the City was not conducting an inventory of equipment and real property purchased with CDBG grants funds. Criteria: The Code of Federal Regulations [2 CFR section 200.313(d)(1) and 200.313(d)(2)] requires equipment and real property records must be maintained that include a description of the property or equipment, a serial or identification number (if applicable), the source of funding, acquisition date, cost of the property or equipment, location, and condition. In addition, the Code of Federal Regulations requires that a physical inventory of equipment and real property must be taken, and the results reconciled with the records at least once every two years. Cause: The City does not have controls in place to ensure that an inventory of equipment and real property purchased with grant funds is being conducted and maintained. Effect: The City is not in compliance with the Equipment and Real Property federal requirements. Failure to comply with grant award requirements could jeopardize future funding. Questioned Costs: This finding does not result in questioned costs. Recommendations: We recommend that the City implement procedures to ensure that all federal equipment and real property requirements are followed, including maintaining an accurate and complete listing of equipment and real property purchased with grant funds and conducting an inventory on those items at least every two years. Views of Responsible Officials: Expenditures of CDBG grant funding for capital outlays on equipment and real property are readily identifiable within the City’s fixed assets module of the accounting system, including subsequent retirements of any such capital assets. The Department acknowledges related physical inventory observations to identify these assets have not been consistently performed. The Department will work to formalize such inventory procedures working off of an available assets listing generated from within the fixed assets system. The City will look to complete such process as soon as is feasibly possible.

Corrective Action Plan

January 31, 2025 To Whom it May Concern: The City of Harrisburg, Pennsylvania respectfully submits the following summarized corrective action plan for the Fiscal year ending December 31, 2022. The Audit Report was prepared by Boyer & Ritter LLC, Certified Public Accountants and Consultants, 211 House Avenue Camp Hill, PA 17011. Related findings are described in detail as contained within the City’s Single Audit Report, schedule of findings and questioned costs, and such are numbered in the corrective action plan in accordance with that assigned in the schedule. Any questions regarding this plan can be directed to Bryan McCutcheon, Accounting Manager at bmccutcheon@harrisburgpa.gov. Bryan McCutcheon, Accounting Manager City of Harrisburg Building and Housing Development Director of Housing and Economic Development, and Accounting Manager By or before 12/31/20025 Expenditures of CDBG grant funding for capital outlays on equipment and real property are readily identifiable within the City’s fixed assets module of the accounting system, including subsequent retirements of any such capital assets. The Department acknowledges related physical inventory observations to identify these assets have not been consistently performed and will work to formalize such inventory procedures. The City will look to complete such process as soon as is feasibly possible.

Other Findings in this Audit

524189 2022-004

Material Weakness Repeat
524190 2022-005

Material Weakness Repeat
524191 2022-004

Material Weakness Repeat
524192 2022-005

Material Weakness Repeat
1100630 2022-003

Material Weakness Repeat
1100631 2022-004

Material Weakness Repeat
1100632 2022-005

Material Weakness Repeat
1100633 2022-004

Material Weakness Repeat
1100634 2022-005

Material Weakness Repeat

Programs in Audit

ALN	Program Name	Expenditures
21.027	Coronavirus State and Local Fiscal Recovery Funds	$11.54M
14.218	Community Development Block Grants/entitlement Grants	$2.00M
14.905	Lead Hazard Reduction Demonstration Grant Program	$1.24M
14.231	Emergency Solutions Grant Program	$987,139
14.239	Home Investment Partnerships Program	$558,204
16.034	Coronavirus Emergency Supplemental Funding Program	$161,333
14.900	Lead-Based Pain Hazard Control in Privately-Owned Housing	$76,155
16.012	Alcohol, Tobacco, and Firearms_training Assistance	$12,080
16.607	Bulletproof Vest Partnership Program	$2,668
93.103	Food and Drug Administration Research	$1,675