CITY OF WESLACO

Reference Number: 2025-003 Late submission of Project and Expenditure Reports ALN 21.027 Coronavirus State and Local Fiscal Recovery Fund Federal Award Agreement Number: 74-6002544 Award Year: 2024-2025 Federal Agency: U.S. Department of Treasury Criteria: Non-federal entities are required to establish and maintain effective internal controls over compliance in accordance with 2 CFR 200.328 and 31 CFR section 35.4 (c), states metropolitan cities and counties with a population below 250,000 residents that are allocated more than $10 million in SLFRF funding are required to submit quarterly Project and Expenditure Reports. Condition Found: During our review of the quarterly reporting process, CRI identified two quarterly reports that were not submitted timely, ranging from 6 to 10 days late. Cause: Timely submission regarding Q1 and Q3 2025 project and expenditure reports were not maintained. Effect: The Department of Treasury uses the reports internally for oversight purposes and to fulfill Treasury’s transparency and legal obligations. The results of the City not submitting a report timely could lead to a finding of non-compliance, which could result in development of corrective action plan or other consequences. Questioned Cost: $0 Recommendation: We recommend the City to document and maintain all proper controls and review of all quarterly reports that are submitted through the portal to ensure complete and timely reports. Views of Responsible Officials: Management agrees with the findings. See corrective plan beginning on page 11.

Reference Number: 2024-002 I. Procurement, Suspension and Debarment Compliance Requirement ALN 21.027 Coronavirus State and Local Fiscal Recovery Fund Federal Award Agreement Number: 17460025442 / ARPA-24-121-354 Award Year: 2023-2024 Federal Agency: U.S. Department of Treasury Pass-through Entity: Hidalgo County Criteria: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Condition Found: During our review of the procurement process, CRI identified no documentation was maintained to support evidence that the vendor was verified as not suspended or debarred. Cause: Documentation regarding suspension and debarment was not maintained for entire sample of 4 vendors. Effect: The City could potentially enter into transactions with parties that are suspended or debarred. Questioned Cost: $0 Recommendation: We recommend the City to document their search on sam.gov for vendors on a periodic basis to ensure they are not suspended or debarred. Views of Responsible Officials: Management agrees with the findings. See corrective action plan beginning on page 230.

Reference Number: 2024-003 L. Reporting Compliance Requirement ALN 21.027 Coronavirus State and Local Fiscal Recovery Fund Federal Award Agreement Number: 17460025442 Award Year: 2023-2024 Federal Agency: U.S. Department of Treasury Criteria: Non-federal entities are required to establish and maintain effective internal controls over compliance in accordance with 2 CFR 200.328 and 31 CFR section 35.4 (c), states metropolitan cities and counties with a population below 250,000 residents that are allocated more than $10 million in SLFRF funding are required to submit quarterly Project and Expenditure Reports. Condition Found: During our review of the quarterly reporting process, CRI identified two quarterly reports that did not reflect current quarterly activity and no documentation was maintained to support evidence that the report was reviewed. Cause: Documentation of review and accurate submission regarding Q1 and Q2 2024 project and expenditure reports were not maintained. Effect: The Department of Treasury uses the reports internally for oversight purposes and to fulfill Treasury’s transparency and legal obligations. The results of the City not correctly submitting a report timely could lead to a finding of non-compliance, which could result in development of corrective action plan or other consequences. Questioned Cost: $0 Recommendation: We recommend the City to document and maintain all proper controls and review of all quarterly reports that are submitted through the portal to ensure complete and accurate reports. Views of Responsible Officials: Management agrees with the findings. See corrective action plan beginning on page 230.

2023-001 L Reporting Compliance Requirement (Significant Deficiency in Internal Controls over Compliance and Noncompliance) Reference Number: 2023-001 L. Reporting Compliance Requirement ALN 21.027 Coronavirus State and Local Fiscal Recovery Fund Federal Award Agreement Number: 17460025442 Award Year: 2022-2023 Federal Agency: U.S. Department of Treasury Criteria: Non‐federal entities are required to establish and maintain effective internal controls over compliance in accordance with 2 CFR 200.328 and 31 CFR section 35.4 (c), states metropolitan cities and counties with a population below 250,000 residents that are allocated more than $10 million in SLFRF funding are required to submit quarterly Project and Expenditure Reports. Condition Found: During our review of the quarterly reporting process, CRI identified one quarterly report was not submitted and no documentation was maintained to support evidence that the report was reviewed and submitted. Cause: Documentation regarding Q1 2023 project and expenditure report was not maintained. Effect: The Department of Treasury uses the reports internally for oversight purposes and to fulfill Treasury’s transparency and legal obligations. The results of the City not submitting a report timely could lead to a finding of non‐compliance, which could result in development of corrective action plan or other consequences. Questioned Cost: $0 Recommendation: We recommend the City to document and maintain all quarterly reports that are submitted through the portal and include a printout of all reports submitted. Views of Responsible Officials: Management agrees with the findings. See corrective action plan beginning on page 228.

Reference Number: (2020-003) Review of Reimbursement Request Forms and Supporting Documentation CFDA 21.019 COVID-19 Coronavirus Relief Fund Passed through identifying number: 2020-HID-CRF-WES-05 Award Year: 2019-2020 Federal Agency: U.S. Department of Treasury Passed through Hidalgo County Criteria: Non-federal entities are required to establish and maintain effective internal controls over compliance in accordance with 2 CFR 200.303 Condition Found: During testing of payroll costs charged to the program, CRI identified several instances where the amounts requested on the Reimbursement Request Forms did not match the support provided. Daily Activity Reports (DARs) submitted for reimbursement did not match actual supporting documentation such as check stubs. Differences were identified in both fringe benefits, and classification of time card hours. Cause: Although the City did use the appropriate DARs provided by the County, the City relied on the form?s automatic calculation for certain fringe benefits. Other differences were a result of oversight of the Request for reimbursements and the supporting documentation. Effect: The noted oversight resulted in various adjustments made by the County in their review of the reimbursement requests. The adjustment detail was not provided to the City for reconciliation of total costs charged to the program. Questioned Cost: $972 Recommendation: CRI recommends that the support for the grant reimbursements be reviewed in detail by the Accountant and Finance Director prior to submitting expenditures for reimbursement. The amounts requested should be crossed checked with the supporting expenditure detail to ensure only amounts paid by the City are being requested for reimbursement. Views: Management agrees with the findings. See corrective action plan beginning on page 210.