Finding Text
Identification of the Federal Program - Coronavirus State and Local Fiscal Recovery Funds - Assistance Listing Number 21.027
Criteria - The criteria is based on the guidelines and regulations set forth by the funding agency, the Department of the Treasury, in the Compliance and Reporting Guidance: State and Local Fiscal Recovery Funds document. According to these requirements, recipients must include the total of both the current period expenditure and the cumulative expenditure as of the end of each quarter on each quarterly Project and Expenditure report. These amounts should agree to amounts recorded in the City’s trial balance and amounts reported on the SEFA. The recipients must also include detailed obligation and expenditure information for contracts and grants awarded.
2 CFR 200.303, Internal Controls, requires that recipients establish and maintain effective internal control over Federal awards that provides reasonable assurance that the recipient is managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards.
Condition - There was a lack of monitoring and appropriate review by the City of certain reports prepared by the grant department.
Effect - The following reporting errors were identified:
• For the reporting period ended September 30, 2023, current expenditures of $2,138,225 were excluded from the report.
• For the reporting period ended September 30, 2023, cumulative expenditures were understated by $4,286,504.
• For the reporting period ended September 30, 2023, there were subrecipients listed on the report that were not true subrecipients. The entities incorrectly listed as subrecipients had subawards totaling $7,098,989 incorrectly reported on the report.
• There were four reporting periods during the fiscal year under audit. The reports for two out of the four reporting periods were not submitted timely. The report for the period October to December 2022 was due on January 31, 2023 but was not submitted until February 28, 2023. The report for the period April to June 2023 was due on July 31, 2023, but it was not submitted until August 3, 2023.
• The City reported that they calculated their Actual General Revenue using fiscal year amounts while the City actually used calendar year amounts to calculate their Actual General Revenue.
• Six out of the nine projects reported have expected capital expenditures. Out of those six, four reported expected or actual capital expenditures of over $1,000,000 and required written justification of capital expenditures. Two of those four projects did not have written justification of capital expenditures.
Cause - The reporting errors attributed to a lack of understanding/interpretation of the reporting guidelines by the responsible personnel.
Recommendation - The City should ensure responsible personnel has a clear understanding of the reporting guidance. The City should implement policies and procedures to monitor and review all reports prepared and submitted by the grants department or its designee.
Views of Responsible Officials - The City agrees with the finding. The City will implement additional review procedures over grant reporting requirements, including more adequate review of reports prepared by third-party grant administrators.