Finding Text
Internal Controls and Compliance over Reporting
Identification of Federal Program: Coronavirus Relief Fund – Assistance Listing No. 21.019
Criteria: The City’s funding was passed through by DeKalb County (the “prime recipient”) and the
County required certain reporting from the City via its Contractor. The City, through its contracted
employee services, did not have proper internal controls in place to verify that all information was
reported accurately and in compliance with the grant requirements.
Cause/Condition: During our consideration and testing of reporting requirements, it was noted
that the City’s funding was passed through from DeKalb County and thus the City was not
determined to be a prime recipient of its CRF funding and therefore reporting requirements under
Uniform Guidance did not apply. However, in December 2020 and through March 2021 the
County requested reporting and supporting documentation for each of its municipalities’ use of
allotted funds. We noted that the City submitted report(s) initially in December 2021, then
additional data was transmitted in May 2024 and thus report(s) were not timely submitted to the
County. Reports submitted provided neither adequate support nor accounting records for the
expenditures reported to the County.
Effects or Potential Effects: Delay in filing and not filing reports resulted in noncompliance with
reporting requirements as stipulated by the County. Inadequate and incomplete reported data
also resulted in noncompliance with reporting requirements.
Questioned Costs: See 2021-004.
Recommendation: We recommend that the City strength controls surrounding its grants report
tracking and submission process and procedures to ensure all required (or requested) reports are
properly reviewed and approved and submitted timely. The City should also review each grant for
reporting requirements and perform reconciliations to amounts reported within the City’s general
ledger. Auditee’s Response: Grant funding related to the Coronavirus Relief Fund (CRF) was controlled
by the City contractor engaged by the City to provide management and related services to the
City. The consultant organized a committee to have oversite over the CRF after the Mayor and
City Council adopted a resolution for the contractor staff to set up protocols to manage the
program. The contractor staff was tasked with developing an educational component and to
create a committee to vet and select a program administrator. The committee met four times
between November 4, 2020, and December 22, 2020, however there is no evidence that the
program management plan, as outlined the resolution, was executed in accordance with the
resolution.
Significantly, on October 30, 2020, a contract was signed by a City contractor staff with a recently
organized not-for-profit organization to prepare disbursements to organizations using CARES Act
funds based on notifications by the City contractor staff. There were duties related to records and
accounting but no other performance and reporting requirements in the agreement. There were
no references in the City contractor approved agreement with the not-for-profit to grant
compliance requirements in the DeKalb County intergovernmental agreement that provided the
CRF amount to the City. In addition, the City contractor did not perform tasks as provided in
Exhibit A-Services of the Professional Services Agreement dated June 15, 2017, relating to
maintaining financial records and preparing routine reports on the status of City accounts.
The committee organized by the City contractor, nor the City contractor staff assigned with
financial management tasks provided information that could be used to comply with reporting
requirements in the DeKalb County intergovernmental agreement. The reports. submitted in
December 2021 and later in May 2024 were prepared using information obtained through a
subpoena issued to the not-for-product for accounting and bank information. The questioned
costs relate to the absence of records relating to program operations and support for
expenditures using those records provided by the not-for-profit.
The City agrees with the recommendations, and now that the contractor contract was terminated
December 31, 2021, City employed staff are monitoring grant program requirements and
preparing reports as required as more fully discussed in the Auditee’s Response to Finding 2021-
004