{"database": "mytown-research", "table": "audit_findings", "rows": [[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 \u2014 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 \ncompliance with federal requirements over allowable costs and \nsubrecipient monitoring. \nCFDA Number and Title: 14.218 Community Development \nBlock Grants/Entitlement Grants \nFederal Grantor Name: U. S. Department of Housing and \nUrban Development \nFederal Award/Contract Number: B16MC530005, B14MC530005, \nB15MC530005, B13MC530005, \nB10MC530005 \nPass-through Entity Name: NA \nPass-through Award/Contract NA \nNumber: \nQuestioned Cost Amount: $3,291,160 \nDes cripti on o f Con dit ion \nThe objective of the Community Development Block Grant program is to develop \nviable urban communities by providi ng d ecent housing and a suitable living \nenvironment, and expanding economic opportunities, principally for persons of low and \nmoderate income. During 2016, the City of Seattle spent $10,930,929 in federal grant \nfunds under this program, of which $6,124,407 was passed to 17 subrecipients for 30 \nprojects. \nThe City must monitor subrecipients\u2019 activities to ensure subawards are used for \nauthorized purposes. This monitoring can be accomplished through collecting \nsupporting documentation from subrecipients with requests for payment or reviewing \nsupporting documentation during onsite monitoring vis its. The mon itoring, \nparticularly the onsite visits, is important to ensure that a subrecipient\u2019s administration \nof the program is appropriate and complies with federal requirements, including those \nrelating to allowable costs and activities and rehabilitation requirements. For those \nWashington State Auditor's Office \nsubawards funded under the Uniform Guidance, the City also must perform risk \nassessments to evaluate subrecipients\u2019 risk of noncompliance and d etermine the \nappropriate level of monitoring. \nThe City requires its subrecipients to submit detailed general ledger reports as part of \nthe request for payment and has a policy that requires semiannual onsite visits to review \nsupporting documentation to ensure costs charged to the program are allowable and \nsupported. \nThe City\u2019s process for subrecipient monitoring and determining if costs are allowable \nand supported was not working as intended for projects funded under the Unif orm \nGuidance. During our audit, we reviewed 12 of 27 projects funded under the Uniform \nGuidance and found the Human Service Department did not: \n\uf0b7 Perform risk assessments for six subrecipients\n\uf0b7 Obtain ad equate supporting documentation wi th the requests for p ayment or\nperform an onsite fiscal v isit for four subrecipients, at whi ch a review of\ndocumentation to support the costs reimbursed would have been done\n\uf0b7 Perform an onsite assessment for one subrecipient to ensure compliance with\nrehabilitation requirements\nWe consider these deficiencies in int ernal controls to be a material weakness. This \nissue was reported in the prior audit as finding 2015-001. \nCau se o f Con diti on \nThe grants and contracts specialists responsible for approving subrecipient requests for \npayments and performing onsite visits did not have the necessary tr aining and \nresources to perform adequate reviews. \nThe Department was not aware that risk evaluations are required for all subrecipients \nreceiving money from federal awards. During our 2016 audit, the Department was \nmade aware of this requirement and developed and implemented a new subrecipient \nmonitoring policy manual and trained grant and contract specialists in 2017. \nEff ect of Con diti on a n d Qu e stion e d Costs \nWithout adequate internal controls in place, the Department cannot ensure that the \nsubrecipients used the program funds in accordance with the grant agreement and \nfederal requirements. \nThe Department paid $3,291,160 to four subrecipients without performing onsite visits \nor requiring adequate supporting do cumentation for incurred costs. Because of \ninsufficient review of subrecipient expenditures, the City us ed federal funds to \nWashington State Auditor's Office \nreimburse its subrecipients for costs that were not supported as required. As a result,we \nare q uestioning the total amount paid to these subrecipients. In addition, the \nDepartment cannot ensure compliance with rehabilitation requirements for one \nsubrecipient. \nRecom m en dation s \nWe recommend the Department establish internal controls to ensure compliance with \nthe subrecipient monitoring requirements. Specifically, the Department should: \n\uf0b7 Provide training and resources to grants and contracts specialists to ensure they\nhave an adequate understanding of federal allowable costs and subr ecipient\nmonitoring requirements\n\uf0b7 Evaluate each subrecipient\u2019s risk of noncompliance to determine the\nappropriate level of monitoring activities\n\uf0b7 Perform adequate financial review required by City policies through:\n\uf0b7 Requiring subrecipients to provide adequate documentation to\nsupport the incurred costs incurred; and/or\n\uf0b7 Performing onsite visits that include a review of source\ndocumentation.\nCit y\u2019s Res pon s e \nThe City agrees with the Auditor\u2019s finding and had taken corrective actions to ensure \ncompliance with federal requirements over allowable costs and subrecipient \nmonitoring going forward. \nAu ditor\u2019s Rem ark s \nWe appreciate the City\u2019s commitment to resolve this finding and thank the City for its \ncooperation and assistance during the audit. We will review the corrective action taken \nduring our next regular audit. \nApplica ble Laws an d Regu lation s \nThe American Institute of Certified Public A ccountants defines significant \ndeficiencies and material weaknesses in its Codification of Statements on Auditing \nStandards, section 935, Compliance Audits, paragraph 11. \nTitle 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative \nRequirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform \nGuidance), Section 303, Internal controls, establishes requirements for in ternal \ncontrols for non-federal entities.\nWashington State Auditor's Office \nTitle 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative \nRequirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform \nGuidance), Section 331, Requirements for p ass-through entities, establishes \nsubrecipient monitoring and management requirements for pass- through entities. \nTitle 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative \nRequirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform \nGuidance), Section 516, Audit findings, establishes reporting requirements for audit \nfindings. \nWashington State Auditor's Office", "https://portal.sao.wa.gov/ReportSearch/Home/ViewReportFile?arn=1020019&isFinding=false&sp=false", "2026-07-30 13:24:54"]], "columns": ["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"], "primary_keys": ["rowid"], "primary_key_values": ["9"], "units": {}, "query_ms": 14.72511701285839, "source": "MyTown", "source_url": "https://mytown.theboringparts.com", "license": "CC BY 4.0", "license_url": "https://creativecommons.org/licenses/by/4.0/"}