Finding Text
Finding Reference Number: SA2022-003 - Financial Reporting and Retention of Grant Documentation Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grant ? Entitlement Grant COVID-19 - Community Development Block Grants/ Entitlement Grants-CV Name of Federal Agency: Department of Housing and Urban Development Federal Award Identification Number: B-21-MC-06-0009 COVID-19 ? BC-20-MW-06-0009 Criteria: Grantees may include reports generated by Integrated Disbursement and Information System (IDIS) as part of their annual performance and evaluation report that must be submitted for the CDBG Entitlement program 90 days after the end of a grantee?s program year. The reports to be included in the annual performance and evaluation report include the PR26 ? CDBG Financial Summary Report and the PR26 ? CDBG-CV Financial Summary Report. The reports should include accurate information and reconcile to the amounts reported on the SEFA. In addition, one component of the PR26 ? CDBG Financial Summary Report (line 02) and the PR26 ? CDBG-CV Financial Summary Report (line 01) is the grant award amount. That information is directly from the City?s annual Funding Approval/Agreement. Condition: We obtained the City?s PR26 ? CDBG Financial Summary Report for program year 2021 (fiscal year ended June 30, 2022), which reported program expenditures of $1,927,639. We requested a reconciliation of that amount on the PR26 to the program expenditures reported on the SEFA of $963,820, but City staff could not reconcile the amounts reported. It appears that the program expenditures in the PR26 ? CDBG Financial Summary Report were doubled, as the amount on the SEFA is exactly half of that amount. We were not able to test the components of the PR26 ? CDBG-CV Financial Summary Report for fiscal year 2022, because City staff did not retain a copy of the report and was not able to extract a copy from the Integrated Disbursement and Information System (IDIS). Finally, City staff was not able to locate copies of the Funding/Approval Agreements for CDBG and CDBG-CV for the periods starting July 1, 2021 and June 30, 2020, respectively. Those Agreements not only contain the grant award amount, they include special award terms and conditions. Cause: We understand that City staff had worked with the grantor to make corrections to the PR26 ? CDBG Financial Summary Report, but could not provide us with documentation to show that the corrections made were related to the program expenditures. For the PR26 ? CDBG-CV Financial Summary Report, we understand City staff did not retain a copy of the report and were unable to generate a copy of the report from the IDIS system. For the Funding/Approval Agreements, due to staff turnover, City staff could not locate copies of the award agreements. Effect: The City is not in compliance with the financial reporting requirements of the CDBG Program and may not be in compliance with special award terms and conditions of the program. Recommendation: The City should develop procedures to ensure that financial reports filed in the IDIS system reconcile with general ledger activity and amounts reported on the SEFA. The City should also ensure that grant reports and grant award information is retained in the City?s files. Finally, the City should obtain copies of the Funding/Approval Agreements for the program to ensure that it is aware of all special award terms and conditions. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.