City of Toledo

Criteria: The U.S. Department of Treasury established reporting requirements for local governments. These requirements established methods for reporting Emergency Rental Assistance (ERA) expenditures to the U.S. Department of Treasury. Condition: We performed tests to determine if the City was in compliance with reporting requirements for the federal program. The City is required to make both quarterly and monthly reporting related to the program. Context: The following instances of noncompliance were noted during our testing of the ERA program reporting: - 1 out of 4 quarterly reports tested reported cumulative expenditures reported that did not agree to City records. - 3 out of 4 quarterly reports tested reported current quarter obligations that did not agree to City records. - 1 out of 4 quarterly reports tested reported current quarter expenditures that did not agree to City records. - 3 out of 4 monthly reports tested were not filed timely. - 3 out of 4 monthly reports tested reported number of unique households that did not agree to City records. - 3 out of 4 monthly reports tested reported total expenditure amounts that did not agree to City records. Cause: Lack of sufficient internal controls over the reporting requirements of the ERA program. Effect: The City was not in compliance with reporting requirements in 2022. Recommendation: We recommend the City enhance its internal controls over the reporting requirements of the ERA program by reviewing the U.S. Department of Treasury?s federal guidance for reporting.

Criteria: The U.S. Department of Housing and Urban Development established reporting requirements for local governments. These requirements established methods for reporting Federal Funding Accountability and Transparency Act information. Condition: We performed tests to determine if the City was in compliance with reporting requirements for the federal program. The City is required to report specific data about subrecipients and subawards in the sub-award reporting system. Context: The City did not report any subrecipient (subaward) information during 2022. Cause: There was a misunderstanding by City program management. Program management did not file FFATA reports because HUD did not conduct monitoring of this requirement and program management thought this meant the requirement was not applicable to them. Effect: The City was not in compliance with reporting requirements in 2022. Recommendation: We recommend the City enhance its internal controls over the reporting requirements of the CDBG program by reviewing the U.S. Department of Housing and Urban Development?s federal guidance for reporting.

Criteria: 2 CFR 225, Appendix B requires where employees work on multiple activities or cost objectives, a distribution of their salaries and wages to be supported by personnel activity reports or equivalent documentation. Personnel activity reports are required under various circumstances, including when employees work on more than one federal award. Personnel activity reports must reflect after-the-fact distribution of actual activity of each employee, must account for the total activity for which each employee is compensated, must be prepared at least monthly and must be signed by the employee. 2 CFR 225, Appendix B goes on to state, budget estimates or other distribution percentages determined before the services are performed do not qualify as support for charges to Federal awards. Condition: We performed tests to determine if the City was in compliance with time and effort documentation requirements for payroll charged to the federal program. The City allocates payroll and benefits for certain employees working on the federal program. Employees spending less than 100% of their time on the program do not track actual time spent on the program, and instead their time is charged based on a budget estimate. Context: The timesheets were completed using budgeted hours instead of actual for the period from January 1, 2021 to December 31, 2021. Total payroll of $2,784,768 for that period was charged to CDBG. Cause: The Department of Neighborhoods had a number of employees working remotely during 2021 and controls over time and effort documentation deteriorated. In addition, the department suffered staff shortages which created delays in the budgeted payroll true up process at year end. Effect: Unallowable costs may have been charged to these programs due to the lack of tracking actual time instead of budgeted. As noted above, payroll costs charged to the programs were not properly supported and thus are considered questioned costs. Recommendation: The City should establish procedures to ensure that payroll charges to the grants are supported by accurately prepared and reviewed personnel activity reports or periodic time studies.

GSA_MIGRATION