Finding Text
Federal Agency: United States Department of Housing and Urban Development Federal Program Name: CDBG Entitlement Grants Cluster: Community Development Block Grant (CDBG) Assistance Listing Number: 14.218 Federal Award Identification Number and Year: B-21-MC-06-0593; B-20-MC-06-0593; B-19-MC-06-0593; B-18-MC-06-0593; B-17-MC-06-0593; B-16-MC-06-0593; Award Years 2021, 2020, 2019, 2018, 2017, and 2016 Award Period: Fiscal Year 2021-2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance (Allowable Costs) ? Other Matter (Allowable Costs) Criteria or Specific Requirement: 2 CFR Part 200, section 200.303 of the Uniform states that a 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. Condition: The City has specific CDBG grant personnel that are responsible for reviewing all grant expenditures to ensure they are allowable. However, the designated grant personnel are reviewing the expenditures after the disbursement has been made instead of prior to authorizing the disbursement and charging to the grant. In addition, there is no formal documentation retained to illustrate that all disbursements were reviewed. Internal controls over federal awards should include authorization by appropriate grant personnel prior to such disbursements occurring. Questioned Costs: None noted. Context: All disbursements are reviewed in the same manner. Cause: The City will correct any unallowed expenditures identified by grant personnel by moving such expenditures to an appropriate fund and revenue source. These procedures were deemed by the City to be adequate. Effect: Without formal documentation of the review process, the review might not occur without management's knowledge. In addition, internal controls should have a preventative as well as detective aspect to ensure timely identification of any unallowable costs or activities. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the City either utilize the electronic authorization capabilities of the accounting system or manually initial or sign invoices to have approvals of all grants expenditures by the designated grant personnel prior to disbursing the funds.