AgdaPkt 2020-05-18 Joint SA PFA - Laserfiche WebLink

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6.A. - Page 9 of 52 SECTION II — FINANCIAL STATEMENT FINDINGS Our audit did not disclose any significant deficiencies, or material weaknesses or instances of noncompliance material to the basic financial statements. We have also issued a separate Memorandum on Internal Control dated November 25, 2019 which is an integral part of our audits and should be read in conjunction with this report. SECTION III — FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Our audit disclosed the following findings required to be reported in accordance with Uniform Guidance. Finding# SA 2019-001: Monitoring CDBG Program Activities for Compliance with Program Rules & Regulations CFDA Number: 14.218 CFDA Title: Community Development Block Grants/Entitlement Grants (CDBG) Federal Agency: Department of Housing and Urban Development Federal Award Identification Number: B -18 -MC -06-0014 Criteria: The audit cost charged to the CDBG program must be a proportionate share of the cost. [2 CFR 200.425(a); 24 CFR 570.502]. Additionally, the City utilized a standard loan agreement for CDBG and HOME. Under 24 CFR 92.504(c), HOME written agreement must be a stand-alone document that included all required provisions. Condition: The City underwent a monitoring review by the grantor in July 2019 related to the fiscal year 2017 CDBG and HOME Programs, the results of which were issued in December 2019. The monitoring review results included two findings related to the CDBG program and one concern pertaining to the City not having separate funds for CDBG and HOME. The first finding for the CDBG program was related to the City overcharging its CDBG program. The City received other federal funding. However, the City charged the cost of the single audit to the CDBG program only. The second fmding for the CDBG and HOME program, wherein the City utilized its standard loan agreement and affordability restriction document to convey HOME requirements. The City used the same agreement to provide the City's AHF, CDBG, and HOME funding to HHDC. The HOME agreement does not contain all the HOME provisions, and some provisions lack sufficient detail. The reported concern is the City keeps track of CDBG and HOME in the same fund. Under the combined entitlement fund, each CDBG and HOME activity is assigned a unique department number. The CDBG and HOME program income is also set up in the same fund: Fund 258 — Federal Community Development Block Grant (CDBG & HOME) Fund 257 — Rental Income Fund (CDBG and HOME) 2 15