FAC Explorer

Finding 619570 (2022-005)

Significant Deficiency
Requirement
A
Questioned Costs
-
Year
2022
Accepted
2023-01-31
Audit: 48606
Organization: City of Albuquerque (NM)
Auditor: Cliftonlarsonallen LLP

AI Summary

  • Core Issue: The City failed to follow its ARPA Program Plan, leading to significant deficiencies in internal controls and noncompliance with federal requirements.
  • Impacted Requirements: Lack of employment verification, secondary reviews, and timely reporting for grant applications; ineffective controls over timesheet preparation and payroll recording.
  • Recommended Follow-up: Establish a review process for grant applications, ensure timely submission of reports, and create a policy for timesheet management and reconciliation with the accounting system.

Finding Text

2022 ? 005 Allowable Activities and Costs/Cost Principals (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury U.S. Department of Housing U.S. Department of Transportation Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds HOME Investment Partnerships Program Federal Transit Cluster Assistance Listing Number: 21.027, 14.239, Multiple Federal Award Identification Number and Year: ALN 21.027: Pub. L. No. 117-2-2021 ALN 14.239 M-19-MC-35-0209 2019 & M-16-MC-35-0209 2016; ALN Multiple: NM-2020-010 Award Period: ALN 21.027 ? 5/10/2021 - 12/31/2026 ALN 14.239 ? 7/22/2016-9/1/2027 ALN Multiple ? 1/20/2020-12/31/2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to ? 200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Further, the financial management system of each non-Federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements. According to the City's ARPA Program Plan Memorandum, all applicants must have 50 or fewer full-time equivalent (FTE) employees. Once the application is complete, it will enter a secondary review for final decision. Once a business receives a grant they must submit a report six months after as detailed in the grant agreement. Condition: During single audit testwork over reporting, the following issues were noted which are detailed by ALN Number. ALN 21.027 ? The City did not obtain employment verification for one applicant, perform a secondary review for two applications, nor obtain the six-month report for six applications. ALN 14.239/Multiple ? The City did not have effective internal controls in place to ensure timesheets are prepared timely as well as payroll grant hours accurately recorded in the accounting system. 2022 ? 005 Allowable Activities and Costs/Cost Principals (Significant Deficiency and Noncompliance) (Continued) Questioned costs: ALN 21.027: $30,000 ALN 14.239: $69.63 ALN Multiple: None Context: During our testing, we noted the following exceptions, which are detailed by ALN Number. ALN 21.027 ? 1 of the 60 small business applications did not have the number of employees. ? 2 of the 60 small business grant applications did not have a secondary review for final decision. ? 6 of the 60 small businesses did not submit a report six months after receiving the grant. ALN 14.239 ? During our testing, we noted three instances in which an employee's timesheet was not signed by the employee and their supervisor until between 8-12 months after the pay period ended. Also, we noted three instances in which grant hours listed on timesheets did not agree to the hours recorded in the accounting system and charged to the grant. ALN Multiple ? During our testing, we noted two instances in which an employee's time was not approved by their supervisor. Cause: The City did not follow its ARPA Program Plan Memorandum. Additionally, the City lacks a policy and internal control related to the required timing of timesheet preparation, review and approval. Effect: The auditor noted instances of noncompliance and lack of effective internal controls. Noncompliance results in ineligible small businesses receiving grant funding and the City not receiving the required reporting by the small businesses. Recommendation: We recommend the City design controls to ensure an adequate review process is in place to review applications to determine the eligibility of small business for grant funding. Also, we recommend the City design controls to ensure any required reports are submitted by grantees. Additionally, we recommend the City create a policy related to timesheet preparation, review and approval as well as develop a procedure to ensure all grant hours listed on timesheets are reconciled to the accounting system. Management Response: Management agrees with the finding. The grants distributed by the Economic Development Department were a lifeline to small businesses that were just holding on. While a strong program was set up in a very short timeframe some reviews and follow-up were not completed. Additionally, the Family & Community Services Department will ensure timesheets are signed timely. Additionally, the department will work with the Grants Section to ensure timesheets, Kronos and Peoplesoft agree. Timeline and Responsible Position: June 2023 ? Department Directors, Economic Development, Family & Community Services and Transit

Categories

Eligibility Reporting Significant Deficiency Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 43122 2022-009
    Significant Deficiency
  • 43123 2022-009
    Significant Deficiency
  • 43124 2022-005
    Significant Deficiency
  • 43125 2022-009
    Significant Deficiency
  • 43126 2022-009
    Significant Deficiency
  • 43127 2022-009
    Significant Deficiency
  • 43128 2022-005
    Significant Deficiency
  • 43129 2022-009
    Significant Deficiency
  • 43130 2022-009
    Significant Deficiency
  • 43131 2022-009
    Significant Deficiency
  • 43132 2022-009
    Significant Deficiency
  • 43133 2022-009
    Significant Deficiency
  • 43134 2022-009
    Significant Deficiency
  • 43135 2022-009
    Significant Deficiency
  • 43136 2022-005
    Significant Deficiency
  • 48311 2022-004
    Significant Deficiency Repeat
  • 48312 2022-006
    Significant Deficiency Repeat
  • 48313 2022-006
    Significant Deficiency Repeat
  • 48314 2022-006
    Significant Deficiency Repeat
  • 48315 2022-006
    Significant Deficiency Repeat
  • 48316 2022-008
    Significant Deficiency
  • 48317 2022-004
    Significant Deficiency Repeat
  • 48318 2022-005
    Significant Deficiency
  • 48319 2022-006
    Significant Deficiency Repeat
  • 48320 2022-007
    Significant Deficiency Repeat
  • 48321 2022-008
    Significant Deficiency
  • 619564 2022-009
    Significant Deficiency
  • 619565 2022-009
    Significant Deficiency
  • 619566 2022-005
    Significant Deficiency
  • 619567 2022-009
    Significant Deficiency
  • 619568 2022-009
    Significant Deficiency
  • 619569 2022-009
    Significant Deficiency
  • 619571 2022-009
    Significant Deficiency
  • 619572 2022-009
    Significant Deficiency
  • 619573 2022-009
    Significant Deficiency
  • 619574 2022-009
    Significant Deficiency
  • 619575 2022-009
    Significant Deficiency
  • 619576 2022-009
    Significant Deficiency
  • 619577 2022-009
    Significant Deficiency
  • 619578 2022-005
    Significant Deficiency
  • 624753 2022-004
    Significant Deficiency Repeat
  • 624754 2022-006
    Significant Deficiency Repeat
  • 624755 2022-006
    Significant Deficiency Repeat
  • 624756 2022-006
    Significant Deficiency Repeat
  • 624757 2022-006
    Significant Deficiency Repeat
  • 624758 2022-008
    Significant Deficiency
  • 624759 2022-004
    Significant Deficiency Repeat
  • 624760 2022-005
    Significant Deficiency
  • 624761 2022-006
    Significant Deficiency Repeat
  • 624762 2022-007
    Significant Deficiency Repeat
  • 624763 2022-008
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
21.027 Coronavirus State and Local Fiscal Recovery Funds $54.19M
21.023 Emergency Rental Assistance Program $19.60M
20.205 Highway Planning and Construction $4.46M
20.507 Federal Transit_formula Grants $2.99M
21.019 Coronavirus Relief Fund $2.39M
14.239 Home Investment Partnerships Program $2.34M
20.526 Buses and Bus Facilities Formula, Competitive, and Low Or No Emissions Programs $2.17M
11.307 Economic Adjustment Assistance $1.20M
93.045 Special Programs for the Aging_title Iii, Part C_nutrition Services $1.10M
93.575 Child Care and Development Block Grant $1.02M
93.137 Community Programs to Improve Minority Health Grant Program $1.01M
97.U01 Tsa Law Enforcement Officer Reimbursement Program $682,666
93.044 Special Programs for the Aging_title Iii, Part B_grants for Supportive Services and Senior Centers $673,670
20.106 Airport Improvement Program $637,381
10.559 Summer Food Service Program for Children $537,363
16.034 Coronavirus Emergency Supplemental Funding Program $509,513
97.067 Homeland Security Grant Program $437,844
97.083 Staffing for Adequate Fire and Emergency Response (safer) $419,435
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $396,423
93.997 Assisted Outpatient Treatment $305,689
93.052 National Family Caregiver Support, Title Iii, Part E $270,329
66.001 Air Pollution Control Program Support $250,473
97.072 National Explosives Detection Canine Team Program $211,723
93.053 Nutrition Services Incentive Program $181,544
97.U02 Tsa Law Enforcement Officer Reimbursement Program $153,300
16.738 Edward Byrne Memorial Justice Assistance Grant Program $130,768
94.011 Foster Grandparent Program $123,280
97.024 Emergency Food and Shelter National Board Program $110,839
66.034 Surveys, Studies, Research, Investigations, Demonstrations, and Special Purpose Activities Relating to the Clean Air Act $101,680
11.805 Mbda Business Center $99,476
97.042 Emergency Management Performance Grants $97,120
16.833 National Sexual Assault Kit Initiative $86,265
20.608 Minimum Penalties for Repeat Offenders for Driving While Intoxicated $77,339
16.741 Dna Backlog Reduction Program $70,122
16.838 Comprehensive Opioid Abuse Site-Based Program $64,373
97.039 Hazard Mitigation Grant $60,673
94.016 Senior Companion Program $57,073
16.575 Crime Victim Assistance $56,207
20.215 Highway Training and Education $56,203
10.558 Child and Adult Care Food Program $55,648
93.600 Head Start $52,964
95.001 High Intensity Drug Trafficking Areas Program $52,821
94.002 Retired and Senior Volunteer Program $51,949
14.231 Emergency Solutions Grant Program $44,459
93.043 Special Programs for the Aging_title Iii, Part D_disease Prevention and Health Promotion Services $44,105
16.001 Law Enforcement Assistance_narcotics and Dangerous Drugs_laboratory Analysis $42,422
20.500 Federal Transit_capital Investment Grants $42,070
20.600 State and Community Highway Safety $38,965
14.267 Continuum of Care Program $30,132
16.734 Special Data Collections and Statistical Studies $26,018
16.710 Public Safety Partnership and Community Policing Grants $17,942
94.013 Volunteers in Service to America $15,000
16.742 Paul Coverdell Forensic Sciences Improvement Grant Program $10,015
81.106 Transport of Transuranic Wastes to the Waste Isolation Pilot Plant: States and Tribal Concerns, Proposed Solutions $7,000
93.074 Hospital Preparedness Program (hpp) and Public Health Emergency Preparedness (phep) Aligned Cooperative Agreements $6,706
66.717 Source Reduction Assistance $4,311
15.904 Historic Preservation Fund Grants-in-Aid $3,022
93.213 Research and Training in Complementary and Integrative Health $3,011
14.218 Community Development Block Grants/entitlement Grants $2,483
16.301 Law Enforcement Assistance_fbi Crime Laboratory Support $486
16.588 Violence Against Women Formula Grants $185