Finding Text
Finding Reference Number: SA2022-004 - Financial Reporting 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-06-0042 COVID-19 ? B-20-MW-06-0042 CDBG Daly City Pass Through #Not Available Name of Pass-through Entity: City of Daly City 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. In addition, the City files a quarterly SF-425 Federal Financial Report (IDIS PR29 Cash on Hand Quarterly Report) that includes the quarterly IDIS program drawdowns and disbursements. Finally, section 15011 of the CARES Act requires that recipients of $150,000 or more of CARES Act funding (CDBG-CV) submit, not later than 10 days after the end of each calendar quarter, a report containing: information regarding the amount of funds received; the amount of funds obligated or expended for each project or activity; a detailed list of all such projects or activities, including a description of the project or activity; and detailed information on any subcontracts or subgrants awarded by the recipient. All of the above reports should include accurate information and reconcile to the amounts reported on the SEFA. Condition: We obtained the City?s PR26 ? CDBG Financial Summary Report and the PR26 ? CDBG-CV Financial Summary Report for program year 2021 (fiscal year ended June 30, 2022), which reported program expenditures of $628,872 and $549,498, respectively. We requested a reconciliation of the amounts reported on the PR26?s to the program expenditures reported on the SEFA of $707,133 and $106,354, respectively, but City staff could not reconcile the amounts reported. For the quarterly SF-425 Federal Financial Report (IDIS PR29 Cash on Hand Quarterly Report) for both the CDBG and CDBG-CV programs, we were also unable to reconcile the activity in the reports to the activity reported in the the SEFA As for the section 15011 reporting, City staff was not able to confirm whether the quarterly reports had been filed. Cause: We understand that City staff and consultants hired to assist City staff with the CDBG program have been working to reconcile the financial reports to the general ledger activity, but it has not been completed. We also understand that City staff was not aware of the section 15011 reporting requirement for the CDBG-CV program. Effect: The City is not in compliance with the financial reporting requirements of the CDBG 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 work with the grantor to determine if the delinquent section 15011 reports need to be filed, or if the reporting can be prepared prospectively. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.