Finding Text
Finding Reference Number: SA 2023-001 Cash Management
Assistance Listing Number: 14.218
Assistance Listing Title: Community Development Block Grant – Entitlement Grant
COVID-19 - Community Development Block Grants/Entitlement
Grants-CV
Federal Agency: Department of Housing and Urban Development
Federal Award Identification Number: B-22-MC-06-0042
COVID-19 - B-20-MW-06-0042
CDBG Daly City Pass Through # Not Available
Name of Pass-through Entity: City of Daly City
Criteria: :24 CFR 570.902 indicates that the Department of Housing and Urban Development will review the performance of each entitlement, HUD-administered small cities, and Insular Areas recipient to determine whether each recipient is carrying out its CDBG-assisted activities in a timely manner. One of the factors in determining timeliness is the timing of the use of entitlement grant funds and the amount of undisbursed entitlement grant funds that remain in the Integrated Disbursement Information System (IDIS).
Therefore, the City should submit drawdown requests in the IDIS system throughout the fiscal year as costs are incurred. Those drawdown requests should be completed at least quarterly, depending on the volume of program activity, to improve the cash management for the program and to match expenditures with associated revenues throughout the fiscal year.
Condition: During our testing of CDBG grant drawdown requests during fiscal year 2023, we noted that a drawdown made in February 2023 was for September 2022 expenditures and an August 2023 drawdown was for February 2023 expenditures. The City submitted the drawdown requests in the IDIS well over three months after the program expenditures were incurred. We also noted that the City did not submit a drawdown for fiscal year 2023 for program expenditures we tested totaling $121,242.
Effect: The City is not matching expenditures with associated revenues throughout the fiscal year as expenditures are incurred and is at risk of being out of compliance with the provisions of 24 CFR 570.902.
Cause: We understand that the drawdowns were delayed due to staff turnover.
Recommendation: The City should develop procedures to ensure that drawdown requests are submitted more frequently, at least on a quarterly basis, and should requests reimbursement for the program expenditures noted above as soon as possible.
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.