Finding Text
Finding 2024-001: Federal Funding Accountability and Transparency Act – Significant Deficiency
Program: Community Development Block Grants/Entitlement Grants Program
Assistance Listing No.: 14.218
Federal Agency: U.S. Department of Housing and Urban Development
Award No.: B-23-MC-06-0542
Category of Finding: Reporting
Criteria or Specific Requirement: As a condition of receiving Federal awards, non-Federal entities agree
to comply with laws, regulations, and the provisions of grant agreements and contracts, and to maintain
internal control to provide reasonable assurance of compliance with these requirements. 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, hereafter referred as the “Transparency Act” 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 (FSRS). In addition, Title 2 CFR Appendix A to Part 170
a.2.ii. requires that for subaward information, [the City] needs to report no later than the end of the month
following the month in which the obligation was made.
Condition: For the Community Development Block Grants/Entitlement Grants Program, the City did not
submit the required key data elements in FSRS in a timely manner. The City did not comply with the
requirement to report the information no later than the last day of the month following the month in which
the subaward/subaward amendment obligation was made or the subcontract award modification was made.
The total amount of thirty-one subawards not reported timely was $7,616,069. We selected four subawards
for compliance testing noting the wrong obligation date was reported for each subaward tested. The date
recorded as the obligation date in FSRS was July 1, 2023 for all four subawards, while based on source
documents the obligation dates are August 7, 2023, September 12, 2023, September 19, 2023, and
October 3, 2023.
Cause: Management’s understanding of reporting of Federal Funding Accountability and Transparency Act
relied on expectations from the federal awarding agency (HUD) to ensure timely and accurate submission
of the reports.
Based on conversations with management, there was a staff vacancy in 2023 of the individual who had
access to the FFATA reporting system (FSRS.gov). Management indicated that CDBG guidance regarding
the FSRS Roles and Responsibilities found on www.hud.gov states that the HUD Program Office enters
the grant award in FSRS and is expected to communicate FSRS reporting timelines and send deadline
reminders to grantee recipients. Additionally, this guidance indicates a “prime recipient of a HUD grant” is
responsible for reporting subrecipient data in FSRS.gov in accordance with the reporting deadlines
communicated for the HUD program office. This was the information available to any new staff intending to
understand the reporting process.
Controls to ensure timely and accurate submission of reports in the event that the awarding federal agency
communications were not provided or received were not designed and implemented to meet the timeliness
requirements of the Act. Effect: The City did not have effective controls in place to timely submit report information no later than
the last day of the month following the month in which the subaward/subaward amendment obligation
was made or the subcontract award/subcontract modification was made.
Questioned Costs: None.
Context: During our walkthrough of the internal control assessment of the Federal Funding Accountability
and Transparency Act (FFATA) reporting for the grant, we had noted there were no evidence of internal
control in place to ensure the FFATA reporting was reported timely in the FSRS portal. We requested
submission information for all thirty-one new or amended subrecipient agreements executed during FY24.
Further, we sampled four of the thirty-one submissions for accuracy of reporting.
Identification of a repeat finding: Not a repeat finding.
Recommendation: We recommend that management establish and maintain effective internal control
ensuring timely and accurate submission required under the Federal Funding Accountability and
Transparency Act.
Management Response: Management believes that the intent of transparency was met with the data staff
entered into IDIS and made available on the city’s website and SAM.gov. The fact that the FSRS.gov
system has since been retired and integrated into the SAM.gov system acknowledges the need for reducing
duplicate recording in favor of an integrated system. Staff’s understanding of the process was in line with
available guidance currently still posted on HUD’s website
(https://www.hud.gov/sites/dfiles/CPD/documents/CPD_FSRS_Learning_Session_Final_8.26.21.pdf).
The City of San Diego did not receive notification of the FSRS deadline from HUD for Fiscal Year (FY)
2024. With regard to the dates entered in the FSRS.gov system, the agreements’ effective dates cover the
entire fiscal year, and the awards were approved by our City Council to be in effect for the full fiscal year.
Hence, staff entered the date July 1, 2023.
Management accepts that going forward, dates should be entered based on the date the agreements are
fully executed. Management agrees to include specific FFATA training and procedures in all CDBG
manuals and checklists including procedures for compliance, if and when federal agency communication is
late or lacking.