Finding Text
Finding 2025-003: Grant Account Reconciliation Procedures
Type of Finding: Control
U.S Department of Housing and Urban Development
Direct program
Assistance Listing Number: 14.251
Award Numbers: B-24-CP-MI-1149
Award Year End: August 31, 2032
Specific Requirement: (C.) Cash Management
Criteria: Section 200.302(b)(3) of the Cost Principles of the Title 2 U.S. Code of Federal Regulations Part 200—Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) indicates that a non-federal entity must provide records that adequately identify the source and application of funds for federally-funded activities. These records must contain information pertaining to federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation.
Questioned Costs: None.
Condition: During our review of the Township’s controls over the monitoring of grant activity, we noted that the Township did not have adequate procedures to track disbursements by grant.
Context: The Township has multiple grants for a single project. While examining eligible grant disbursements, we noted that the Township does not have adequate controls in place to allocate these disbursements to the various grants.
Effect: Inadequate controls surrounding the allocation of eligible grant expenditures could cause the Township to inadvertently allocate the same disbursement to multiple grants.
Cause: The Township is a small entity with limited experience in handling large federal grants and overseeing capital asset activity of this size with multiple funding sources.
Repeat Finding: This is not a repeat finding.
Recommendation: The Township should establish procedures to verify that expenditures are properly tracked by individual grant to ensure that individual disbursements are not allocated to more than one grant.
Views of Responsible Officials: The Township agrees with this finding.