Finding Text
Program: Economic Development Initiative, Community Project Funding, and
Miscellaneous Grants
Financial Assistance Listing Number: 14.251
Federal Agency: U.S. Department of Housing and Urban Development
Award Year: 2024
Grant Award Number: B-23-CP-CA-0240
Compliance Requirements: Special Tests and Provisions
Type of Finding: Significant Deficiency in Internal Control over Compliance and Instance of Non-
Compliance
Criteria:
Per 2 CFR 200.303, the non-Federal entity must establish and maintain effective internal control
over the Federal awards in order to provide reasonable assurance that the non-Federal entity is
managing the Federal awards in compliance with Federal statutes, regulations, and the terms
and conditions of the Federal award.
Per the Economic Development Initiative Community Project Funding Grant Guide, the
requirements of Section 3 of the Housing and Urban Development Act of 1968 found at 24 CFR
Part 75 apply to all grant recipients that are awarded $200,000 or more for projects involving
housing construction, rehabilitation, or other public construction.
Condition:
We identified one (1) project, “Courtplace”, in which Section 3 requirements are applicable to
the City. The City was unable to provide supporting documentation to demonstrate that Section
3 requirements were communicated and followed by the applicable project contractor.
Cause:
The City did not have effective controls in place to ensure all compliance requirements were
met.
Effect:
The City is not in compliance with Section 3 of the Housing and Urban Development Act of 1968
found at 24 CFR Part 75.
Questioned Costs:
No questioned costs were identified as a result of our audit procedures.
Context/Sampling:
A sample of one (1) out of one (1) applicable contractor was selected for testing.
Repeat Finding from the Prior Year(s):
No.
Recommendation:
We recommend that the City implement additional policies and procedures to ensure that
Section 3 of the Housing and Urban Development Act of 1968 found at 24 CFR Part 75
requirements are complied with.
Views of Responsible Official:
Management agrees. See separately issued Corrective Action Plan.