Finding 624763 — 2022-008

2022 ? 008 Reporting (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Emergency Rental Assistance Program Assistance Listing Number: 21.027, 21.023 Federal Award Identification Number and Year: ALN 21.027 ? Pub. L. No. 117-2 2021 ALN 21.023 ? ERA0335 - 2021 Award Period: ALN 21.027 ? 5/10/2021 - 12/31/2026 ALN 21.023 ? 1/20/2021 - 9/30/2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to ? 200.302 Financial management of 2 CFR Part 200, the non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the 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 ? 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. According to the Compliance Supplement 2022 Part 3, program income does not include interest earned on advances of federal funds. Condition: During our testing, it was noted that the City did not have effective internal controls in place to ensure accurate and complete reporting. Questioned costs: None Context: During our testing, we noted the following exceptions, which are detailed by ALN Number. ALN 21.027 ? For the interim report, support was not provided for Category 1.7 Capital Investments or Physical Plant Changes to Public Facilities that respond to the COVID-19 public health emergency Cumulative Obligations of approximately $280.2K. The City did, however, cancel this project after the initial reporting. 2022 ? 008 Reporting (Significant Deficiency and Noncompliance) (Continued) ALN 21.027 (continued) ? For the Project and Expenditure Report 1, we noted the following exceptions. o Project Name: Police Vehicles Total Cumulative Obligations of approximately $2,654,705. The City identified requisitions and purchase orders of approximately $2,655,183. Thus, a variance of $478. o Project Name: Police Vehicles Total Cumulative Obligations and Total Cumulative Expenditures of approximately $2,654,705 and $1,095,985, respectively, are listed twice in the project overview. Thus, the project is duplicated in the Total Obligations and Total Expenditures in the overview section. The City states this to be a glitch of the portal. However, there is no communication between the City and Treasury to evidence the Treasury's acknowledgment of this glitch in the portal. o Project Name: Eviction Prevention: New Mexico Legal Aid Total Cumulative Obligations of approximately $216K. The total should be approximately $26K. Thus, a variance of $190K. ? Subaward No: SUB-0034501 Period of Performance Start and End of 9/1/2021 to 12/31/2022. However, the subrecipient agreement signed by all parties early September 2021 has a Subaward Period of Performance Start and End Date 9/14/2021 to 3/31/2022. ? Subaward No: SUB-0034394 Period of Performance Start and End of 10/25/2021 to 12/31/2022. However, the contract control form approved by all parties late October 2021 has a contract term 10/20/2021 to 10/19/2022. ? Subaward No: SUB-0034455 Subaward Date of 3/11/2021. This date is the Federal Award Date of Award to the Recipient by the Federal Agency not the subaward start date of 9/1/2021. The subrecipient agreement signed by all parties 9/29/2021 and 10/1/2021. ? Subaward No: SUB-0034462 Subaward Date of 3/11/2021. This date is the Federal Award Date of Award to the Recipient by the Federal Agency not the subaward start date of 9/1/2021. The subrecipient agreement signed by all parties late December 2021. ? Expenditures for Awards more than $50,000 ? All projects have a Subaward Amount of 54405428.50. The City states this to be an error with the portal exporting. However, there is no communication between the City and Treasury to evidence the Treasury's acknowledgment of this error with portal exporting. ? Subaward Crossroads for Women amount of $750K with Subaward Period of Performance Start and End Date of 12/1/2021 to 12/31/2024 not included in the report. Agreement signed by all parties end December 2021. ? Contractual 2021 expenditures of approximately $122K not included in the report. o For the Project and Expenditure Report 2, we noted the following exceptions. ? Subaward No: SLFRP0013-RIVENROCK Subaward Obligation of $50K. However, total purchase order amount of approximately $74.5K. Thus, a variance of approximately $24.5K. ? Subaward No: 33-202200796 Subaward Date of 9/1/2021 and Period of Performance Start and End of 9/1/2021 to 12/31/2023. However, the subrecipient agreement signed by all parties end December 2021 has a Subaward Date of 12/1/2021 and Subaward Period of Performance Start and End Date 12/1/2021 to 12/31/2024. ? Payments To Individuals Expenditure: EN-00044853 Total Period Expenditure Amount of approximately $6.9 million. Amount includes approximately $128.1K of contractor payments not business grants. 2022 ? 008 Reporting (Significant Deficiency and Noncompliance) (Continued) ALN 21.023 ? For 3 of 5 financial reports, the City reported interest earned on advances of federal funds totaling approximately $380.8K as program income. However, interest earned on advances of federal funds is not program income. ? For 1 of 5 special quarterly reports, we noted the following exceptions. o The City did not provide support for any changes from the last report we had which was ERA 1 Quarter 3 2021 (July-September). o The City incorrectly reported cumulative expenditures to date of approximately $13.1 million The amount reported should have been approximately $17.1 million based on a reconciliation provided to us by the City. Thus, a variance of approximately $4 million. o The City incorrectly reported cumulative obligations to date of approximately $23.7 million. The amount reported should have been approximately $23.6 million based on a reconciliation provided to us by the City. Thus, a variance of approximately $151K. Cause: The City lacks effective internal controls and procedures over financial grant management to ensure submitted reports are complete and agree to supporting documentation. Effect: The auditor noted instances of noncompliance. Noncompliance results in inaccurate reporting. Recommendation: We recommend the City design controls to ensure compliance with federal financial management regulation. Management Response: The City agrees with the finding. The City will implement controls to ensure compliance with federal financial management regulations. The City recognizes that it needs to improve its procedures for preparing quarterly report for Treasury funds. Going forward, the Family and Community Services Department will work with the Grants Section to develop and implement standardized procedures for identifying and documenting expenditures, and for reviewing quarterly reports prior to submission. Timeline and Responsible Position: June 2023 ? City Controller/DFAS Deputy Director and Director of Family & Community Services

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

Finding 624763 (2022-008)

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