Finding Text
Finding Reference Number: SA2021-002 - Grant Drawdowns and Accurate Reimbursement
Requests
Assistance Listing Numbers: 20.507, 20.526
Assistance Listing Title: COVID-19 – Federal Transit Cluster
Name of Federal Agency: Department of Transportation
Federal Award Identification Number: CA-2019-111-01, CA-2020-141-00
Criteria: When the City has multiple active grant agreements, City staff should ensure that grant drawdowns are made from the correct grant agreement and in accordance with the reimbursement rates of the grant award.
Condition: During fiscal year 2021, the City had two active grant awards related to the Federal Transit Cluster under which expenditures were incurred. The CA-2019-111-01 grant award was for both capital and operating costs, while CA-2020-141-00 was for operating costs related to COVID-19. Since the CA-2020-141-00 grant covered 100% of eligible operating costs, we understand the City only intended to use CA-2019-111-01 for eligible costs related to the purchase of two busses. Grant award CA-2019-111-01 was available to reimburse the City for up to 80% of eligible capital costs.
When the City requested reimbursement for the bus-related capital costs, the costs were drawn from grant award CA-2020-141-00 in error. When we made inquiries of City staff and they determined the error in the drawdown, City staff began working with the grantor to determine how the issue could be remedied.
In addition, when the City requested reimbursement for the bus-related capital costs from grant award CA-2020-141-00, the amount reimbursed was $630,653. That amount is comprised of the bus purchase of $626,490, which is 50.58% of the $1,238,715 of the cost of the busses, plus 100% of other related costs that totaled $4,163. As noted above, grant award CA-2019-111-01 only reimburses 80% of the City’s capital costs, so the other related costs should have been claimed in the amount of $3,330, a difference of $832.
Questioned Costs: Although the City did draw the capital costs from the operating grant, we are not questioning those costs, because they were eligible to the program as a whole. We do, however, question costs in the amount of $833, which represent the difference between the capital costs drawn down and the eligible maximum amount of 80% of the capital costs incurred.
Effect: The City is not in compliance with the allowable costs and matching requirements of the grant program.
Cause: We understand the error was caused by staff oversight when filing the grant drawdown in the FTA ECHO drawdown system.
Recommendation: The City must develop procedures to ensure that grant drawdowns are made from the correct grant award and continue to work with the grantor to make corrections to the erroneous grant drawdowns. In addition, the City should work with the grantor to determine if the drawdown in excess of eligible costs needs to be returned to the grantor or if it can be adjusted in a future drawdown, as well as to determine whether interest on the excess funds drawn needs to be paid to the grantor.
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.