Finding Text
2021-001 – Claimed CRF Expenditures Also Claimed from CDBG (NC/MW)
Federal Program Title: Coronavirus Relief Fund
Federal Catalog Number: 20.019
Federal Agency: U.S. Department of Treasury
Category of Finding: Activities Allowed or Unallowed/ Allowable Costs/Cost Principles
Criteria: Pursuant to the Office of Management and Budget (OMB) 2 CFR Part 200, Appendix XI,
Compliance Supplement July 2021 Part 4 20.019 Coronavirus Relief Fund (page 21.019-4), recipients
may not use payments from the fund to cover expenditures for which they will receive reimbursement
from other sources.
Condition: During our audit, we noted that certain expenditures reported as CRF expenditures were also
reported as CDBG expenditures.
Cause: Lack of appropriate control over review and approval of allowable costs.
Effect or Potential Effect: The City may have received reimbursement for the same costs from two
different sources. This may result in repayment of funds already received and spent. In addition,
noncompliance may result in reduction in future payments or funding amounts, imposed fines and
penalties, or termination of the grant. More often than not, noncompliance may also result in reputational
damage, special status for oversight and reviews, need for corrective action plan, and/or suspension or
debarment.
Questioned Cost: $95,500.
Context: We selected 25 invoiced, non-payroll expenditures from a detailed listing provided by the City.
Out of 25 items, we noted 10 items totaling $40,500 were also emergency housing or business assistance
related to CDBG program. Upon review of the detailed listing, we found a total of $95,500 expenditures
related to CDBG emergency housing or business assistance.
Statistical Sampling Validity: Yes
Repeat of a Prior-Year Finding: No
Recommendation: We recommend that the City should thoroughly review all expenditures charged to
federal grants to ensure that any cost claimed for one grant is not also claimed in another. The City should
establish procedures to avoid double counting of allowable costs.
Management Response and Corrective Action Plan:
City’s Response: The City concurs with the finding. Staff responsible for this control during FY
2021 are no longer employed by the City.
Corrective Action Plan: CDBG staff worked with program auditors to resolve the issues. Finance
Staff and related CDBG staff have been trained to ensure there is not duplication of expenditures in
multiple programs. In addition, the City has hired third-party consultants to provide guidance and
oversight.