EIN: 416005105
UEI: C93LN8QH7WY7
Audited by: CliftonLarsonAllen LLP
Oversight agency: 20 [Department of Transportation]
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Data as of September 2, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on June 18, 2026. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by December 18, 2026 (106 days from today).
What is a management decision? →The City of Duluth maintains a listing of equipment acquired with Community Development Block Grants/Entitlement Grant (CDBG) funds; however, the listing does not include all information required by Title 2 U.S. Code of Federal Regulations § 200.313 (d)(1). In the sample of six items tested from the CDBG equipment listing, one of the items tested was no longer in use. A review of the City’s governmental capital asset listing disclosed $142,000 of City park improvements partially funded from the 2016, 2017, and 2018 CDBG projects that were not listed on the CDBG equipment listing. Questioned Costs: Undetermined. Elements of the missing information, such as serial number and location, are not quantifiable as costs. Context: The City of Duluth maintains a listing of equipment; however, the listing does not include the serial number or other identification number, the FAIN, who holds title (City or subrecipient), acquisition date, the percentage of federal award participation, or the disposition data, including the date of disposal and sales price of the property, nor is the City’s CDBG equipment listing complete. The City’s CDBG equipment listing included 19 items totaling $518,355; a sample of six items totaling $178,885 was tested. The sample size was based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The City of Duluth is not in compliance with Title 2 U.S. Code of Federal Regulations §§ 200.313 (d) and (d)(1). Cause: Oversight by City staff. Recommendation: We recommend the City of Duluth implement procedures to ensure the equipment and real property listing includes all the required information. The City should also implement procedures to identify asset additions and disposals to ensure that they are properly identified, recorded, maintained, and safeguarded. View of Responsible Official: Concur
Show full finding ▾Hide full finding ▴2025-001 Equipment and Real Property Management Prior Year Finding Number: N/A Year of Finding Origination: 2025 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Housing and Urban Development Program: 14.218 Community Development Block Grants/Entitlement Grants Award Number and Year: B-25-MC-27-0002, 2025 Pass-Through Agency: N/A – Direct Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Title 2 U.S. Code of Federal Regulations § 200.313 (d) states that regardless of whether the equipment is acquired in part or its entirety under the federal award, the recipient or subrecipient must manage equipment (including replacement equipment). Specifically, Title 2 U.S. Code of Federal Regulations § 200.313 (d)(1) states that property records must include a description of the property, a serial number or another identification number, the source of funding for the property (including the federal award identification number (FAIN)), the title holder, the acquisition date, the cost of the property, the percentage of the federal agency contribution towards the original purchase, the location, use and condition of the property, and any disposition data including the date of disposal and sale price of the property. The recipient and subrecipient are responsible for maintaining and updating property records when there is a change in the status of the property. Condition: The City of Duluth maintains a listing of equipment acquired with Community Development Block Grants/Entitlement Grant (CDBG) funds; however, the listing does not include all information required by Title 2 U.S. Code of Federal Regulations § 200.313 (d)(1). In the sample of six items tested from the CDBG equipment listing, one of the items tested was no longer in use. A review of the City’s governmental capital asset listing disclosed $142,000 of City park improvements partially funded from the 2016, 2017, and 2018 CDBG projects that were not listed on the CDBG equipment listing. Questioned Costs: Undetermined. Elements of the missing information, such as serial number and location, are not quantifiable as costs. Context: The City of Duluth maintains a listing of equipment; however, the listing does not include the serial number or other identification number, the FAIN, who holds title (City or subrecipient), acquisition date, the percentage of federal award participation, or the disposition data, including the date of disposal and sales price of the property, nor is the City’s CDBG equipment listing complete. The City’s CDBG equipment listing included 19 items totaling $518,355; a sample of six items totaling $178,885 was tested. The sample size was based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The City of Duluth is not in compliance with Title 2 U.S. Code of Federal Regulations §§ 200.313 (d) and (d)(1). Cause: Oversight by City staff. Recommendation: We recommend the City of Duluth implement procedures to ensure the equipment and real property listing includes all the required information. The City should also implement procedures to identify asset additions and disposals to ensure that they are properly identified, recorded, maintained, and safeguarded. View of Responsible Official: Concur
Finding Number: 2025-001 Finding Title: Equipment and Real Property Management Program: 14.218 Community Development Block Grants/Entitlement Grants Name of Contact Person Responsible for Corrective Action: Jenn Moses, Manager of Planning and Community Development Corrective Action Planned: • Conduct a training for community development staff on federal regulations related to equipment and real property management • Assign specific employees oversight of equipment inventory • Coordinate with the finance department to ensure all CDBG assets are appropriately categorized within inventory • Implement monitoring protocol for yearly audit of the inventory Anticipated Completion Date: November 30, 2026
In the sample of four transactions selected from the 2025 submitted FFATA subawards, two subawards were not submitted by the due date. One of these subaward reports was incorrectly entered in SAM.gov. Additionally, one sub-award issued during 2025 relating to the 2024 award year in the amount of $78,300, was not submitted in SAM.gov. Transactions Tested Subaward Not Reported Report Not Timely Subaward Amount Incorrect 4 1 2 1 Dollar Amount of Tested Transactions Subaward Not Reported Report Not Timely Subaward Amount Incorrect $ 505,480 $ 78,300 $ 75,480 $ 30,000 Questioned Costs: None. Context: For the subaward not reported, a subrecipient requested that safety improvements be incorporated in a City road project and requested federal funding from the City to pay for those improvements. The City originated an award in the amount of $78,300, provided federal funding to the subrecipient, and made the safety improvements. The subrecipient then reimbursed that funding to the City. For the two reports not reported timely, these were due in late January 2026 but were submitted a month late. For the subaward reported for the incorrect amount, the amount submitted to SAM.gov was $30,000 but the subaward was issued for $25,000 and, therefore, would be exempt from FFATA reporting requirements. The population included nine subawards reported in 2025 totaling $959,480, with the sample of four subawards totaling $505,480. The sample size was based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The City of Duluth is not in compliance with FFATA reporting requirements. Cause: The subaward not reported by the City was omitted from FFATA reporting under the mistaken assumption that the reimbursement received from the subrecipient exempted the transaction from compliance. City staff reported they had difficulties in January 2026 with accessing the SAM.gov website which delayed the submission of the subaward reports until February 27, 2026. The incorrect subaward in SAM.gov was the result of an entry error; the submissions to SAM.gov are not reviewed. Recommendation: We recommend the City of Duluth implement procedures to ensure reports are submitted as required by FFATA. View of Responsible Official: Concur
Show full finding ▾Hide full finding ▴2025-002 Reporting – Federal Funding Accountability and Transparency Act (FFATA) Prior Year Finding Number: N/A Year of Finding Origination: 2025 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Housing and Urban Development Program: 14.218 Community Development Block Grants/Entitlement Grants Award Number and Year: B-24-MC-27-0002, 2024 and B-25-MC-27-0002, 2025 Pass-Through Agency: N/A – Direct Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, that are codified in Title 2 U.S. Code of Federal Regulations, Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) or SAM.gov. Title 2 U.S. Code of Federal Regulations, Appendix A to Part 170, requires reporting a subaward, once issued, by the end of the subsequent month. Condition: In the sample of four transactions selected from the 2025 submitted FFATA subawards, two subawards were not submitted by the due date. One of these subaward reports was incorrectly entered in SAM.gov. Additionally, one sub-award issued during 2025 relating to the 2024 award year in the amount of $78,300, was not submitted in SAM.gov. Transactions Tested Subaward Not Reported Report Not Timely Subaward Amount Incorrect 4 1 2 1 Dollar Amount of Tested Transactions Subaward Not Reported Report Not Timely Subaward Amount Incorrect $ 505,480 $ 78,300 $ 75,480 $ 30,000 Questioned Costs: None. Context: For the subaward not reported, a subrecipient requested that safety improvements be incorporated in a City road project and requested federal funding from the City to pay for those improvements. The City originated an award in the amount of $78,300, provided federal funding to the subrecipient, and made the safety improvements. The subrecipient then reimbursed that funding to the City. For the two reports not reported timely, these were due in late January 2026 but were submitted a month late. For the subaward reported for the incorrect amount, the amount submitted to SAM.gov was $30,000 but the subaward was issued for $25,000 and, therefore, would be exempt from FFATA reporting requirements. The population included nine subawards reported in 2025 totaling $959,480, with the sample of four subawards totaling $505,480. The sample size was based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The City of Duluth is not in compliance with FFATA reporting requirements. Cause: The subaward not reported by the City was omitted from FFATA reporting under the mistaken assumption that the reimbursement received from the subrecipient exempted the transaction from compliance. City staff reported they had difficulties in January 2026 with accessing the SAM.gov website which delayed the submission of the subaward reports until February 27, 2026. The incorrect subaward in SAM.gov was the result of an entry error; the submissions to SAM.gov are not reviewed. Recommendation: We recommend the City of Duluth implement procedures to ensure reports are submitted as required by FFATA. View of Responsible Official: Concur
Finding Number: 2025-002 Finding Title: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Program: 14.218 Community Development Block Grants/Entitlement Grants Name of Contact Person Responsible for Corrective Action: Jenn Moses, Manager of Planning and Community Development Corrective Action Planned: • Update FFATA reporting by June 25, 2026 • Implement new procedures for monthly review of FFATA reporting with multiple team members Anticipated Completion Date: July 31, 2026
FAC accepted this audit on July 20, 2026 — management decision was due January 20, 2027.
The City of Duluth maintains a listing of equipment acquired with Community Development Block Grants/Entitlement Grant (CDBG) funds; however, the listing does not include all information required by Title 2 U.S. Code of Federal Regulations § 200.313 (d)(1). In the sample of six items tested from the CDBG equipment listing, one of the items tested was no longer in use. A review of the City’s governmental capital asset listing disclosed $142,000 of City park improvements partially funded from the 2016, 2017, and 2018 CDBG projects that were not listed on the CDBG equipment listing. Questioned Costs: Undetermined. Elements of the missing information, such as serial number and location, are not quantifiable as costs. Context: The City of Duluth maintains a listing of equipment; however, the listing does not include the serial number or other identification number, the FAIN, who holds title (City or subrecipient), acquisition date, the percentage of federal award participation, or the disposition data, including the date of disposal and sales price of the property, nor is the City’s CDBG equipment listing complete. The City’s CDBG equipment listing included 19 items totaling $518,355; a sample of six items totaling $178,885 was tested. The sample size was based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The City of Duluth is not in compliance with Title 2 U.S. Code of Federal Regulations §§ 200.313 (d) and (d)(1). Cause: Oversight by City staff. Recommendation: We recommend the City of Duluth implement procedures to ensure the equipment and real property listing includes all the required information. The City should also implement procedures to identify asset additions and disposals to ensure that they are properly identified, recorded, maintained, and safeguarded. View of Responsible Official: Concur
Show full finding ▾Hide full finding ▴2025-001 Equipment and Real Property Management Prior Year Finding Number: N/A Year of Finding Origination: 2025 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Housing and Urban Development Program: 14.218 Community Development Block Grants/Entitlement Grants Award Number and Year: B-25-MC-27-0002, 2025 Pass-Through Agency: N/A – Direct Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Title 2 U.S. Code of Federal Regulations § 200.313 (d) states that regardless of whether the equipment is acquired in part or its entirety under the federal award, the recipient or subrecipient must manage equipment (including replacement equipment). Specifically, Title 2 U.S. Code of Federal Regulations § 200.313 (d)(1) states that property records must include a description of the property, a serial number or another identification number, the source of funding for the property (including the federal award identification number (FAIN)), the title holder, the acquisition date, the cost of the property, the percentage of the federal agency contribution towards the original purchase, the location, use and condition of the property, and any disposition data including the date of disposal and sale price of the property. The recipient and subrecipient are responsible for maintaining and updating property records when there is a change in the status of the property. Condition: The City of Duluth maintains a listing of equipment acquired with Community Development Block Grants/Entitlement Grant (CDBG) funds; however, the listing does not include all information required by Title 2 U.S. Code of Federal Regulations § 200.313 (d)(1). In the sample of six items tested from the CDBG equipment listing, one of the items tested was no longer in use. A review of the City’s governmental capital asset listing disclosed $142,000 of City park improvements partially funded from the 2016, 2017, and 2018 CDBG projects that were not listed on the CDBG equipment listing. Questioned Costs: Undetermined. Elements of the missing information, such as serial number and location, are not quantifiable as costs. Context: The City of Duluth maintains a listing of equipment; however, the listing does not include the serial number or other identification number, the FAIN, who holds title (City or subrecipient), acquisition date, the percentage of federal award participation, or the disposition data, including the date of disposal and sales price of the property, nor is the City’s CDBG equipment listing complete. The City’s CDBG equipment listing included 19 items totaling $518,355; a sample of six items totaling $178,885 was tested. The sample size was based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The City of Duluth is not in compliance with Title 2 U.S. Code of Federal Regulations §§ 200.313 (d) and (d)(1). Cause: Oversight by City staff. Recommendation: We recommend the City of Duluth implement procedures to ensure the equipment and real property listing includes all the required information. The City should also implement procedures to identify asset additions and disposals to ensure that they are properly identified, recorded, maintained, and safeguarded. View of Responsible Official: Concur
Finding Number: 2025-001 Finding Title: Equipment and Real Property Management Program: 14.218 Community Development Block Grants/Entitlement Grants Name of Contact Person Responsible for Corrective Action: Jenn Moses, Manager of Planning and Community Development Corrective Action Planned: • Conduct a training for community development staff on federal regulations related to equipment and real property management • Assign specific employees oversight of equipment inventory • Coordinate with the finance department to ensure all CDBG assets are appropriately categorized within inventory • Implement monitoring protocol for yearly audit of the inventory Anticipated Completion Date: November 30, 2026
In the sample of four transactions selected from the 2025 submitted FFATA subawards, two subawards were not submitted by the due date. One of these subaward reports was incorrectly entered in SAM.gov. Additionally, one sub-award issued during 2025 relating to the 2024 award year in the amount of $78,300, was not submitted in SAM.gov. Transactions Tested Subaward Not Reported Report Not Timely Subaward Amount Incorrect 4 1 2 1 Dollar Amount of Tested Transactions Subaward Not Reported Report Not Timely Subaward Amount Incorrect $ 505,480 $ 78,300 $ 75,480 $ 30,000 Questioned Costs: None. Context: For the subaward not reported, a subrecipient requested that safety improvements be incorporated in a City road project and requested federal funding from the City to pay for those improvements. The City originated an award in the amount of $78,300, provided federal funding to the subrecipient, and made the safety improvements. The subrecipient then reimbursed that funding to the City. For the two reports not reported timely, these were due in late January 2026 but were submitted a month late. For the subaward reported for the incorrect amount, the amount submitted to SAM.gov was $30,000 but the subaward was issued for $25,000 and, therefore, would be exempt from FFATA reporting requirements. The population included nine subawards reported in 2025 totaling $959,480, with the sample of four subawards totaling $505,480. The sample size was based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The City of Duluth is not in compliance with FFATA reporting requirements. Cause: The subaward not reported by the City was omitted from FFATA reporting under the mistaken assumption that the reimbursement received from the subrecipient exempted the transaction from compliance. City staff reported they had difficulties in January 2026 with accessing the SAM.gov website which delayed the submission of the subaward reports until February 27, 2026. The incorrect subaward in SAM.gov was the result of an entry error; the submissions to SAM.gov are not reviewed. Recommendation: We recommend the City of Duluth implement procedures to ensure reports are submitted as required by FFATA. View of Responsible Official: Concur
Show full finding ▾Hide full finding ▴2025-002 Reporting – Federal Funding Accountability and Transparency Act (FFATA) Prior Year Finding Number: N/A Year of Finding Origination: 2025 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Housing and Urban Development Program: 14.218 Community Development Block Grants/Entitlement Grants Award Number and Year: B-24-MC-27-0002, 2024 and B-25-MC-27-0002, 2025 Pass-Through Agency: N/A – Direct Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, that are codified in Title 2 U.S. Code of Federal Regulations, Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) or SAM.gov. Title 2 U.S. Code of Federal Regulations, Appendix A to Part 170, requires reporting a subaward, once issued, by the end of the subsequent month. Condition: In the sample of four transactions selected from the 2025 submitted FFATA subawards, two subawards were not submitted by the due date. One of these subaward reports was incorrectly entered in SAM.gov. Additionally, one sub-award issued during 2025 relating to the 2024 award year in the amount of $78,300, was not submitted in SAM.gov. Transactions Tested Subaward Not Reported Report Not Timely Subaward Amount Incorrect 4 1 2 1 Dollar Amount of Tested Transactions Subaward Not Reported Report Not Timely Subaward Amount Incorrect $ 505,480 $ 78,300 $ 75,480 $ 30,000 Questioned Costs: None. Context: For the subaward not reported, a subrecipient requested that safety improvements be incorporated in a City road project and requested federal funding from the City to pay for those improvements. The City originated an award in the amount of $78,300, provided federal funding to the subrecipient, and made the safety improvements. The subrecipient then reimbursed that funding to the City. For the two reports not reported timely, these were due in late January 2026 but were submitted a month late. For the subaward reported for the incorrect amount, the amount submitted to SAM.gov was $30,000 but the subaward was issued for $25,000 and, therefore, would be exempt from FFATA reporting requirements. The population included nine subawards reported in 2025 totaling $959,480, with the sample of four subawards totaling $505,480. The sample size was based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The City of Duluth is not in compliance with FFATA reporting requirements. Cause: The subaward not reported by the City was omitted from FFATA reporting under the mistaken assumption that the reimbursement received from the subrecipient exempted the transaction from compliance. City staff reported they had difficulties in January 2026 with accessing the SAM.gov website which delayed the submission of the subaward reports until February 27, 2026. The incorrect subaward in SAM.gov was the result of an entry error; the submissions to SAM.gov are not reviewed. Recommendation: We recommend the City of Duluth implement procedures to ensure reports are submitted as required by FFATA. View of Responsible Official: Concur
Finding Number: 2025-002 Finding Title: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Program: 14.218 Community Development Block Grants/Entitlement Grants Name of Contact Person Responsible for Corrective Action: Jenn Moses, Manager of Planning and Community Development Corrective Action Planned: • Update FFATA reporting by June 25, 2026 • Implement new procedures for monthly review of FFATA reporting with multiple team members Anticipated Completion Date: July 31, 2026
FAC accepted this audit on July 21, 2025 — management decision was due January 21, 2026.
FAC accepted this audit on May 30, 2025 — management decision was due November 30, 2025.
FAC accepted this audit on July 31, 2024 — management decision was due January 31, 2025.
FAC accepted this audit on June 28, 2024 — management decision was due December 28, 2024.
FAC accepted this audit on July 26, 2023 — management decision was due January 26, 2024.
FAC accepted this audit on July 9, 2023 — management decision was due January 9, 2024.
FAC accepted this audit on July 17, 2022 — management decision was due January 17, 2023.
FAC accepted this audit on June 29, 2022 — management decision was due December 29, 2022.
FAC accepted this audit on June 10, 2021 — management decision was due December 10, 2021.
The City reported police department payroll costs to the CRF program which included estimated benefit costs for holiday, vacation, personal, and sick leave based on a percentage calculation for each employee. The benefit cost percentage did not take into account actual use of vacation, holiday, personal, and sick leave paid within the expected time frame. Questioned Costs: $308,944 relating to estimated vacation, holiday, personal, and sick hours reported. Context: The City of Duluth identified $10,595,831 of grant expenditures, which exceeded the total grant award of $6,570,650. If grant expenditures were reduced by known and likely questioned costs, they would continue to exceed the total grant award. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The City identified expenditures as relating to the CRF program which are not in compliance with the activities allowed or unallowed, allowable costs/cost principles, and period of performance requirements. Cause: The City?s benefit calculation is based on a worksheet provided by the Federal Emergency Management Agency for the Presidentially Declared Disaster Grant, CFDA No. 97.036 and is calculated based on value of an employee. Recommendation: We recommend that the City implement procedures to follow the guidance related to the CRF, CFDA No. 21.019 and claim the actual costs incurred under the grant and within the covered period. View of Responsible Official: Acknowledged
Show full finding ▾Hide full finding ▴Finding Number: 2020-001 Prior Year Finding Number: N/A Repeat Finding Since: N/A Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Period of Performance Program: Coronavirus Relief Fund, CFDA No. 21.019, U. S. Department of the Treasury, SLT0016, 2020. Pass-Through Agency: The State of Minnesota Office of Management and Budget Criteria: Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Section 5001(d) of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provides the eligible purposes for which Coronavirus Relief Fund payments may be used and generally requires that payments are necessary expenditures incurred due to the public health emergency during the covered period. Additionally, the State of Minnesota Office of Management and Budget FAQs for Local Governments receiving Coronavirus Relief Funds (CRF) from the State of Minnesota (dated October 20, 2020) states in question 11 that, for cities: ??any aid amount remaining unexpended by an eligible city or town on November 15, 2020 must be sent to the home county in which the city or town is located?.? It also lists two exceptions, one of which is: ?CRF eligible payroll expenses incurred through Nov. 15 (for cities and towns) are allowed, even if not paid until after Nov. 15 (for cities and towns).? Federal guidance indicates it is generally expected payments will take place within 90 days of a cost being incurred. Condition: The City reported police department payroll costs to the CRF program which included estimated benefit costs for holiday, vacation, personal, and sick leave based on a percentage calculation for each employee. The benefit cost percentage did not take into account actual use of vacation, holiday, personal, and sick leave paid within the expected time frame. Questioned Costs: $308,944 relating to estimated vacation, holiday, personal, and sick hours reported. Context: The City of Duluth identified $10,595,831 of grant expenditures, which exceeded the total grant award of $6,570,650. If grant expenditures were reduced by known and likely questioned costs, they would continue to exceed the total grant award. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The City identified expenditures as relating to the CRF program which are not in compliance with the activities allowed or unallowed, allowable costs/cost principles, and period of performance requirements. Cause: The City?s benefit calculation is based on a worksheet provided by the Federal Emergency Management Agency for the Presidentially Declared Disaster Grant, CFDA No. 97.036 and is calculated based on value of an employee. Recommendation: We recommend that the City implement procedures to follow the guidance related to the CRF, CFDA No. 21.019 and claim the actual costs incurred under the grant and within the covered period. View of Responsible Official: Acknowledged
Finding Number: 2020-001 Finding Title: Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance Program: U.S. Department of the Treasury?s Coronavirus Relief Fund (CFDA # 21.019) Name of Contact Person Responsible for Corrective Action: Joshua Bailey ? City Auditor Corrective Action Planned: The City Finance department will not use the FEMA approved worksheet for staff time for future grants without first verifying the acceptance of that method with the federal agency. This was a new federal program that had ongoing changes in guidance. The City had public safety personnel expenditures of over $25 million during the period of the grant. The City used its best judgement and due diligence to narrow down those costs and reported expenditures of $10,595,831, which exceeded the total grant award of $6,570,650. In hindsight, the City of Duluth could have claimed a more broad interpretation of public safety costs resulting in several million more in eligible cost above what were reported. This would make the amount in question even more immaterial when compared to potential eligible costs. Anticipated Completion Date: Not applicable for this specific grant as it is fully drawn and closed out. Action on any future grants will be taken immediately.
FAC accepted this audit on June 30, 2021 — management decision was due December 30, 2021.
The City reported police department payroll costs to the CRF program which included estimated benefit costs for holiday, vacation, personal, and sick leave based on a percentage calculation for each employee. The benefit cost percentage did not take into account actual use of vacation, holiday, personal, and sick leave paid within the expected time frame. Questioned Costs: $308,944 relating to estimated vacation, holiday, personal, and sick hours reported. Context: The City of Duluth identified $10,595,831 of grant expenditures, which exceeded the total grant award of $6,570,650. If grant expenditures were reduced by known and likely questioned costs, they would continue to exceed the total grant award. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The City identified expenditures as relating to the CRF program which are not in compliance with the activities allowed or unallowed, allowable costs/cost principles, and period of performance requirements. Cause: The City?s benefit calculation is based on a worksheet provided by the Federal Emergency Management Agency for the Presidentially Declared Disaster Grant, CFDA No. 97.036 and is calculated based on value of an employee. Recommendation: We recommend that the City implement procedures to follow the guidance related to the CRF, CFDA No. 21.019 and claim the actual costs incurred under the grant and within the covered period. View of Responsible Official: Acknowledged
Show full finding ▾Hide full finding ▴Finding Number: 2020-001 Prior Year Finding Number: N/A Repeat Finding Since: N/A Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Period of Performance Program: Coronavirus Relief Fund, CFDA No. 21.019, U. S. Department of the Treasury, SLT0016, 2020. Pass-Through Agency: The State of Minnesota Office of Management and Budget Criteria: Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Section 5001(d) of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provides the eligible purposes for which Coronavirus Relief Fund payments may be used and generally requires that payments are necessary expenditures incurred due to the public health emergency during the covered period. Additionally, the State of Minnesota Office of Management and Budget FAQs for Local Governments receiving Coronavirus Relief Funds (CRF) from the State of Minnesota (dated October 20, 2020) states in question 11 that, for cities: ??any aid amount remaining unexpended by an eligible city or town on November 15, 2020 must be sent to the home county in which the city or town is located?.? It also lists two exceptions, one of which is: ?CRF eligible payroll expenses incurred through Nov. 15 (for cities and towns) are allowed, even if not paid until after Nov. 15 (for cities and towns).? Federal guidance indicates it is generally expected payments will take place within 90 days of a cost being incurred. Condition: The City reported police department payroll costs to the CRF program which included estimated benefit costs for holiday, vacation, personal, and sick leave based on a percentage calculation for each employee. The benefit cost percentage did not take into account actual use of vacation, holiday, personal, and sick leave paid within the expected time frame. Questioned Costs: $308,944 relating to estimated vacation, holiday, personal, and sick hours reported. Context: The City of Duluth identified $10,595,831 of grant expenditures, which exceeded the total grant award of $6,570,650. If grant expenditures were reduced by known and likely questioned costs, they would continue to exceed the total grant award. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The City identified expenditures as relating to the CRF program which are not in compliance with the activities allowed or unallowed, allowable costs/cost principles, and period of performance requirements. Cause: The City?s benefit calculation is based on a worksheet provided by the Federal Emergency Management Agency for the Presidentially Declared Disaster Grant, CFDA No. 97.036 and is calculated based on value of an employee. Recommendation: We recommend that the City implement procedures to follow the guidance related to the CRF, CFDA No. 21.019 and claim the actual costs incurred under the grant and within the covered period. View of Responsible Official: Acknowledged
Finding Number: 2020-001 Finding Title: Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance Program: U.S. Department of the Treasury?s Coronavirus Relief Fund (CFDA # 21.019) Name of Contact Person Responsible for Corrective Action: Joshua Bailey ? City Auditor Corrective Action Planned: The City Finance department will not use the FEMA approved worksheet for staff time for future grants without first verifying the acceptance of that method with the federal agency. This was a new federal program that had ongoing changes in guidance. The City had public safety personnel expenditures of over $25 million during the period of the grant. The City used its best judgement and due diligence to narrow down those costs and reported expenditures of $10,595,831, which exceeded the total grant award of $6,570,650. In hindsight, the City of Duluth could have claimed a more broad interpretation of public safety costs resulting in several million more in eligible cost above what were reported. This would make the amount in question even more immaterial when compared to potential eligible costs. Anticipated Completion Date: Not applicable for this specific grant as it is fully drawn and closed out. Action on any future grants will be taken immediately.
FAC accepted this audit on May 26, 2020 — management decision was due November 26, 2020.
FAC accepted this audit on July 27, 2020 — management decision was due January 27, 2021.
FAC accepted this audit on June 6, 2019 — management decision was due December 6, 2019.
GSA_MIGRATION
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FAC accepted this audit on June 18, 2019 — management decision was due December 18, 2019.
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FAC accepted this audit on May 16, 2018 — management decision was due November 16, 2018.
FAC accepted this audit on June 10, 2018 — management decision was due December 10, 2018.
FAC accepted this audit on June 6, 2017 — management decision was due December 6, 2017.
FAC accepted this audit on May 29, 2017 — management decision was due November 29, 2017.
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