Finding Text
Finding: 2022-002 Cash Management ? Internal Control and Compliance over Drawdown Requests Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants / Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Identification Number: B-21-MC-06-0577/B-20-MW-06-0577 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Pursuant to the City?s Administrative Policy & Procedures Ref: APP-2022-002: Drawdowns: A drawdown is a request for payment against a grantee's line of credit. Grantees create a voucher in Integrated Disbursement and Information System (?IDIS?) Online to draw down funds. Grantees draw funds as required to pay for work that has occurred for an activity. Once the grantee creates and approves a drawdown voucher in IDIS Online, HUD will process the voucher request and wire-transfer the requested amount to the grantee in two to three business days. Drawdowns will be processed by two staff members, one to initiate and create the drawdown and the second to verify and approve. The City will complete drawdowns within 60 days of the end of each fiscal quarter with the exception of the last quarter to allow for the calculation of end-of-year expenses. Pursuant to the City?s Administrative Policy & Procedures Ref: APP-2013-003: Compliance with Grant Requirement: Request for reimbursement (drawdown) are accurate and submitted on scheduled (or as soon as possible after completion of related grant activities). Close out: Grants should be closed out when the grant has expired (reached the end date) and all open administrative, compliance, legal and audit issues have been resolved. Condition: During our audit, we noted that the Community Development Block Grants / Entitlement Grants drawdown requests were not performed timely. 1) July 2021 through May 2022 related expenditures drawdown request was requested on June 9, 2022 2) June 2022 related expenditures drawdown request was requested on January 31, 2023. Quarterly Reimbursement (End Date) Deadlines Requested Date September 30, 2021 November 30, 2021 June 9, 2022 December 31, 2021 February 28, 2022 June 9, 2022 March 31, 2022 May 30, 2022 June 9, 2022 June 30, 2022 After year-end accrual January 31, 2023 Cause: The City did not follow the grant management policies in place to ensure the reimbursement requests are being prepared for timely submission. Effect or Potential Effect: The City is not in compliance with its grant management policies. The delay in requesting the drawdown requests only impacts the City?s cashflow and it also resulted in filing the Consolidated Annual Performance and Evaluation Report late. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City follow its grant management policies to ensure drawdown requests and close outs are submitted and prepared timely. Views of Responsible Officials: Management concurs the finding.