audit_findings: 9

This data as json

rowid	source	report_number	finding_number	muni_id	state	entity_name	entity_type	entity_ext_id	place_geoid	match_method	auditor	report_title	audit_type	fiscal_year	period_start	period_end	published_date	finding_category	severity	questioned_cost	cost_basis	finding_title	finding_text	report_url	fetched_at
9	wa-sao	1020019	2016-003	4	WA	City of Seattle	City/Town	0433	5363000	geoid_place	Washington State Auditor's Office	Financial and Federal audit — City of Seattle	Financial and Federal	2016	2016-01-01	2016-12-31	2019-08-19	federal_award_compliance	material_weakness	3291160.0	Questioned Cost Amount: $3,291,160	The City did not have adequate internal controls in place to ensure compliance with federal requirements over allowable costs and subrecipient monitoring. CFDA Number and Title: 14.218 Community Development Block Grants/Entitlement Grants Federal Grantor Name: U. S. Department of Housing and Urban Development Federal Award/Contract Number: B16MC530005, B14MC530005, B15MC530005,	The City did not have adequate internal controls in place to ensure compliance with federal requirements over allowable costs and subrecipient monitoring. CFDA Number and Title: 14.218 Community Development Block Grants/Entitlement Grants Federal Grantor Name: U. S. Department of Housing and Urban Development Federal Award/Contract Number: B16MC530005, B14MC530005, B15MC530005, B13MC530005, B10MC530005 Pass-through Entity Name: NA Pass-through Award/Contract NA Number: Questioned Cost Amount: $3,291,160 Des cripti on o f Con dit ion The objective of the Community Development Block Grant program is to develop viable urban communities by providi ng d ecent housing and a suitable living environment, and expanding economic opportunities, principally for persons of low and moderate income. During 2016, the City of Seattle spent $10,930,929 in federal grant funds under this program, of which $6,124,407 was passed to 17 subrecipients for 30 projects. The City must monitor subrecipients’ activities to ensure subawards are used for authorized purposes. This monitoring can be accomplished through collecting supporting documentation from subrecipients with requests for payment or reviewing supporting documentation during onsite monitoring vis its. The mon itoring, particularly the onsite visits, is important to ensure that a subrecipient’s administration of the program is appropriate and complies with federal requirements, including those relating to allowable costs and activities and rehabilitation requirements. For those Washington State Auditor's Office subawards funded under the Uniform Guidance, the City also must perform risk assessments to evaluate subrecipients’ risk of noncompliance and d etermine the appropriate level of monitoring. The City requires its subrecipients to submit detailed general ledger reports as part of the request for payment and has a policy that requires semiannual onsite visits to review supporting documentation to ensure costs charged to the program are allowable and supported. The City’s process for subrecipient monitoring and determining if costs are allowable and supported was not working as intended for projects funded under the Unif orm Guidance. During our audit, we reviewed 12 of 27 projects funded under the Uniform Guidance and found the Human Service Department did not:  Perform risk assessments for six subrecipients  Obtain ad equate supporting documentation wi th the requests for p ayment or perform an onsite fiscal v isit for four subrecipients, at whi ch a review of documentation to support the costs reimbursed would have been done  Perform an onsite assessment for one subrecipient to ensure compliance with rehabilitation requirements We consider these deficiencies in int ernal controls to be a material weakness. This issue was reported in the prior audit as finding 2015-001. Cau se o f Con diti on The grants and contracts specialists responsible for approving subrecipient requests for payments and performing onsite visits did not have the necessary tr aining and resources to perform adequate reviews. The Department was not aware that risk evaluations are required for all subrecipients receiving money from federal awards. During our 2016 audit, the Department was made aware of this requirement and developed and implemented a new subrecipient monitoring policy manual and trained grant and contract specialists in 2017. Eff ect of Con diti on a n d Qu e stion e d Costs Without adequate internal controls in place, the Department cannot ensure that the subrecipients used the program funds in accordance with the grant agreement and federal requirements. The Department paid $3,291,160 to four subrecipients without performing onsite visits or requiring adequate supporting do cumentation for incurred costs. Because of insufficient review of subrecipient expenditures, the City us ed federal funds to Washington State Auditor's Office reimburse its subrecipients for costs that were not supported as required. As a result,we are q uestioning the total amount paid to these subrecipients. In addition, the Department cannot ensure compliance with rehabilitation requirements for one subrecipient. Recom m en dation s We recommend the Department establish internal controls to ensure compliance with the subrecipient monitoring requirements. Specifically, the Department should:  Provide training and resources to grants and contracts specialists to ensure they have an adequate understanding of federal allowable costs and subr ecipient monitoring requirements  Evaluate each subrecipient’s risk of noncompliance to determine the appropriate level of monitoring activities  Perform adequate financial review required by City policies through:  Requiring subrecipients to provide adequate documentation to support the incurred costs incurred; and/or  Performing onsite visits that include a review of source documentation. Cit y’s Res pon s e The City agrees with the Auditor’s finding and had taken corrective actions to ensure compliance with federal requirements over allowable costs and subrecipient monitoring going forward. Au ditor’s Rem ark s We appreciate the City’s commitment to resolve this finding and thank the City for its cooperation and assistance during the audit. We will review the corrective action taken during our next regular audit. Applica ble Laws an d Regu lation s The American Institute of Certified Public A ccountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 303, Internal controls, establishes requirements for in ternal controls for non-federal entities. Washington State Auditor's Office Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 331, Requirements for p ass-through entities, establishes subrecipient monitoring and management requirements for pass- through entities. Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 516, Audit findings, establishes reporting requirements for audit findings. Washington State Auditor's Office	https://portal.sao.wa.gov/ReportSearch/Home/ViewReportFile?arn=1020019&isFinding=false&sp=false	2026-07-30 13:24:54