City and County of Denver

Federal Agency: U.S. Department of Treasury Federal Program Name: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (CSLFRF Program) Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP4316 - 2024, SLFRP0126 - 2024 Pass-Through Agency: Colorado Department of Local Affairs Pass-Through Number(s): CMS # 186974, CMS# 187546 Award Period: 03/03/2021 – 12/31/2026; 8/1/2024 – 6/30/2026 Compliance Requirement: Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to 2 CFR Section 180, non-Federal entities receiving Federal awards must verify that lower-tier entities, as defined in 2 CFR Section 180.995, are not suspended, debarred, or otherwise excluded from participating in transactions. Per 2 CFR 200.303, non-federal entities receiving federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: During testing over suspension and debarment, it was noted that proof of suspension and debarment verification could not be found for 6 out of 19 selections tested. Questioned costs: None. Context: Although verification records were not maintained, through audit procedures, it was confirmed that the 6 contractors were not suspended or debarred through checking the System for Award Management (SAM.gov) exclusions list. The City has an existing suspension and debarment policy, however, the unique nature of the funding and award segregation led to unclear compliance responsibilities among agencies at the City. Cause: The CSLFRF funds were distributed across multiple agencies at the City, making the responsibility for suspension and debarment verification unclear. Additionally, the contractors in question are also used for various non-federal projects within the City. Effect: Failure to perform suspension and debarment verification procedures before the procurement of good or services could result in the payment of federal funds to contractors that are ineligible to participate in federal assistance programs.Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the City incorporate specific language into its existing procurement process—particularly regarding suspension and debarment requirements—by clearly assigning responsibility for conducting these checks to the agency receiving and overseeing the federal award, both prior to any federal spending and on a recurring basis thereafter. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Child Care and Development Block Grant and Child Care Mandatory and Matching Funds of the Child Care and Development Fund (Child Care and Development Fund Cluster) Assistance Listing Number: 93.575 and 93.596 Federal Award Identification Number and Year: 2101COCCC5, 2101COCDC6, 2301COCCDD, 2302COCCDD, 2402COCCDD, 2302COCCDF, 2402COCCDF, 2301COCCDF, 2302COCCDF Pass-Through Agency: Colorado Department of Human Services Pass-Through Number(s): None provided Award Period: 10/1/2022 – 9/30/2026; 10/1/2023 – 9/30/2026, 7/1/2023 – 6/30/2024 Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures in place to ensure terminated employees are removed from the State system within a reasonable timeframe. Condition: During our testing, we noted 1 employee out of 3 employees selected for testing whose user access rights were not removed from the Colorado Benefits Management System (CBMS) within a reasonable timeframe after employment change at the City. Questioned costs: None. Context: During our evaluation of terminated users within CBMS, we identified a lack of compensating control for timely removal of employees due to IT Department turnover. One employee terminated in 2023 did not have their access formally revoked until February 2025. However, CBMS passwords are automatically locked after 30 days, disabled after 60 days, and deactivated after 90 days. Login records confirmed no system access post-termination. Cause: The City experienced turnover and did not have a compensating control to ensure that CBMS user access rights are revoked when employees separate from the City or change departments that do not require them to keep their CBMS access.Effect: Employees who are terminated or no longer require access to the system, who continue to have access after termination, could make changes within CBMS that impact the City’s federal program activities. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the City implement a control to ensure the CBMS user access rights are offboarded timely when employees separate employment or move departments that do not require them to keep CBMS access. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Community Development Block Grants/Entitlement Grants Assistance Listing Number: 14.218 Federal Award Identification Number and Year: B-19-MC-08-0005, 2019; B-20-MC-08-0005, 2020; B-21- MC-08-0005, 2021; B-20-MW-08-0005, 2020 Pass-Through Agency: None Pass-Through Number(s): N/A Award Period: 1/1/2019-9/1/2031 Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Under 2 CFR Part 170, recipients of federal awards are required to report subaward information to ensure transparency and accountability in the use of federal funds. This regulation, which implements the Federal Funding Accountability and Transparency Act of 2006 (as amended by the Digital Accountability and Transparency Act of 2014), mandates that recipients submit accurate data to the Federal Subaward Reporting System (FSRS) for publication on USAspending.gov. Specifically, 2 CFR Part 200, Part 3-L – Reporting specifically states: “…(b) Compare the award information accessed in step 2.a to the subaward/subcontract documents maintained by the recipient to assess if— (i) applicable subaward obligations /modifications have been reported, (ii) the key data elements (see above) were accurately reported and are supported by the source documentation, and (iii) the action was reported in FSRS no later than the last day of the month following the month in which the subaward/subaward amendment obligation was made or the subcontract award/subcontract modification was made.” Further, 2 CFR Part 200 § 200.303 requires non-Federal entities to: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.Condition: We were unable to obtain evidence confirming the timely submission of two out of six reports reviewed. Additionally, the review process for these reports was not formally documented, and no records of the review were retained. Questioned costs: None. Context: During testing of FFATA report submissions for six subawards, we identified two instances where the awards were obligated in November 2023, but the corresponding FFATA reports were not submitted until January 11, 2024, and January 17, 2024, eleven and seventeen dates after the due date, respectively. While the content of the reports appeared appropriate, the submissions were not timely. Additionally, there was no concrete documentation of the review process either before or after submission. Transactions Tested Subaward not reported Timeliness of report unable to be determined Subaward amount incorrect1 Subaward missing key elements1 6 0 2 0 0 Dollar Amount of Tested Transactions Subaward not reported Timeliness of report unable to be determined Subaward amount incorrect11 Subaward missing key elements $1,436,927 $0 $911,927 $0 $0 Cause: The City experienced staff turnover within the Denver Economic Development & Opportunity department, and the individuals responsible for submitting the reports are no longer employed. Additionally, the City lacked a formal process to document submission dates and retain evidence of report review and approval. Effect: Failure to submit the subaward reports to FSRS in a timely manner places the Department out of compliance with federal reporting requirements and exposes it to potential federal sanctions. Additionally, the absence of documented review and approval processes undermines accountability and makes it difficult to verify compliance, increasing the risk of further scrutiny or penalties from oversight bodies. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the City establish and implement a formal process to consistently retain documentation of FFATA report submission dates, as well as evidence of the review and approval of each report submitted. Views of responsible officials: There is no disagreement with the audit finding.

SPECIAL TESTS AND PROVISIONS- OBLIGATION, EXPENDITURE AND PAYMENT REQUIREMENTS Significant Deficiency in Internal Control Over Compliance ALN 14.231 – Emergency Solutions Grant Program Department of Housing and Urban Development Award Number: E-22-MC-08-0005 Award Year: 2022 Criteria or Specific Requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 24 CFR section 576.203(a)(2) states – Within 180 days after the date that HUD signs the grant agreement (or a grant amendment for reallocation of funds) with the metropolitan city, urban county, or territory, the recipient must obligate all the grant amount, except the amount for its administrative costs. This requirement is met by an agreement with, or a letter of award requiring payment to, a subrecipient; a procurement contract; or a written designation of a department within the government of the recipient to directly carry out an eligible activity. Condition: The City’s Department of Housing Stability (HOST) did not have controls in place to ensure funds were obligated within the required obligation period. Cause: Controls were not implemented to ensure funds received under the grant were obligated within the required time frame. Effect or Potential Effect: Funds could be obligated outside of the defined time limit per 24 CFR section 576.203(a)(2). Questioned Costs: Not applicable Context: The control finding was remediated in 2023. However, the control was not present when the City entered into the grant agreement prior to 2023. No control testing was performed because no controls were in operation at the time of the award. Identification as a Repeat Finding: This is a repeat finding from the prior year. This was reported as finding 2022-005 in the 2022 report. Recommendation: HOST has developed controls over the timely obligation of Emergency Solutions Grant Program funds. HOST should ensure implementation of such developed controls upon entering into a new signed agreement with HUD. Views of Responsible Officials: The City agrees with the finding. This has been remediated. For additional information, see the City’s separate report for planned corrective actions.

PROCUREMENT AND SUSPENSION AND DEBARMENT (FOR SUBRECIPIENTS) Significant Deficiency in Internal Control Over Compliance ALN 14.231 – Emergency Solutions Grant Program Department of Housing and Urban Development Award Number: E-20-MW-08-0005, E-20-MC-08-0005, E-21-MC-08-0005, E-22-MC-08-0005 Award Year: 2020, 2021, 2022 Criteria or Specific Requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: The City department of HOST did not have effectively operating controls in place to ensure policies and procedures were followed with respect to suspension and debarment. HOST did have a compensating control in place pertaining to review of contracts to ensure suspension and debarment certifications were present. This was a finding carried over from the prior period. There were no new contracts entered into with subrecipients during 2023. Cause: The department’s review control was not operating effectively to ensure suspension and debarment searches were being performed. No documentation was retained to support such review took place. Effect or Potential Effect: The Department could potentially enter into contracts with subrecipients or vendors who were included on the suspension and debarment listing at SAM.gov. Questioned Costs: Not applicable Context: The control finding was remediated in 2023. However, the control was not present at the time the City entered into agreements with its subrecipients prior to 2023. No control testing was performed because no controls were in operation at the time of award. Identification as a Repeat Finding: This is a repeat finding from the prior year. This was reported as finding 2022-008 in the 2022 report. Recommendation: HOST should follow their documented internal control procedures to ensure the SAM.gov search is performed, and documentation is retained to support compliance with internal policies and procedures related to suspension and debarment. A checklist or other tool should be developed to ensure this has been performed prior to contracting. Views of Responsible Officials: The City agrees with the finding. This has been remediated. For additional information, see the City’s separate report for planned corrective actions.

TESTS AND PROVISIONS- OBLIGATION, EXPENDITURE AND PAYMENT REQUIREMENTS Material Weakness in Internal Control Over Compliance and Material Noncompliance ALN 14.231 – Emergency Solutions Grant Program Department of Housing and Urban Development Award Number: E-20-MW-08-0005, E-20-MC-08-0005, E-21-MC-08-0005, E-22-MC-08-0005 Award Year: 2020, 2021, 2022 Criteria or Specific Requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 24 CFR 576.203(c) states – The recipient must pay each subrecipient for allowable costs within 30 days after receiving the subrecipient's complete payment request. Condition: HOST did not have adequate controls in place to ensure subrecipients were timely paid after receiving complete payment requests. HOST did not make payments to its subrecipients within 30 days after receiving complete payment requests. Cause: HOST did not have adequate internal controls in place to ensure payments were made timely to subrecipients. All four of the exceptions had to do with pending budget amendments needing to be made prior to payment, which resulted in payment delays. One exception was submitted to the Controller’s Office for payment prior to the 30-day requirement. However, the payment was still made past the deadline. Effect or Potential Effect: HOST is out of compliance with 24 CFR 576.203(c) regarding payments to subrecipients. Questioned Costs: None reported Context: BDO selected a sample of 13 payments to subrecipients totaling to $383,191 from a population of 101 payments totaling to $1,706,909. There were two payments totaling to $4,015 in which the invoice was not paid within 30 days of receipt of a complete payment request. The compliance sample was expanded and another 11 payments to subrecipients were selected totaling to $176,478. There were an additional two compliance deviations totaling to $24,937. This is a condition identified per review of the City’s compliance with specified requirements using a sample that was not statistically valid. Identification as a Repeat Finding: This is a repeat finding from the prior year. This was reported as finding 2022-006 in the 2022 report. Recommendation: HOST should improve upon its implemented controls to ensure subrecipients who submit complete invoices for payment are paid within 30 days. Improvements should include documenting when complete subrecipient pay requests have been received and the subsequent 30-day deadline. Steps should be taken to reduce the frequency and time associated with budget modifications to ensure payments are made timely. Finally, communication should take place between HOST and the Controller’s Office to expedite payments to subrecipients and prevent unnecessary delays. Views of Responsible Officials: The City agrees with the finding and internal policies have been updated to require finance budget review prior to contract execution to avoid budget modifications during the payment process. HOST is also engaged in an application upgrade that is in the final user acceptance phase to incorporate changes that now include status tracking for vendor invoice submissions and reimbursement payments. For additional information, see the City’s separate report for planned corrective actions.

MONITORING Significant Deficiency in Internal Control Over Compliance and Noncompliance ALN 93.391 – Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises Department of Health and Human Services Award Number: NH75OT0000010 Award Year: 2021 Criteria or Specific Requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The Uniform Guidance in 2 CFR Section 200.332 states- All pass-through entities must ensure that every subaward is clearly identified to the subrecipient and includes the following information at the time of the subaward as follows: (1) Federal award identification, (2) All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and terms and conditions of the Federal award; (3) Any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports, (4) A requirement that the subrecipient permit the pass-through entity and auditors to have access to the subrecipient’s records and financial statements as necessary for the pass-through entity to meet the requirements of this part; and (5) Appropriate terms and conditions concerning the closeout of the subaward. Condition: For all four subrecipients tested, subaward agreements did not include the award information required under 2 CFR 200.332. This was a finding carried over from the prior period. There were no new contracts entered into with subrecipients during 2023. Cause: Subaward agreements were not properly written and appropriately reviewed to ensure all required award information was included. Effect or Potential Effect: Denver Department of Public Health and Environment (DDPHE) was not in compliance with subrecipient requirements outlined in 2 CFR Section 200.332. Furthermore, not communicating proper compliance requirements and other information may increase the likelihood of noncompliance on the part of the subrecipient and non-fulfillment of program goals and objectives. In addition, this also increases the risk the subrecipient may not understand they are receiving Federal funds, which could result in subrecipients failing to comply with the Uniform Guidance or pass-through entity requirements for the award. Questioned Costs: Not applicable Context: The control finding was remediated in 2023. However, the control was not present when DDPHE entered into agreements with its subrecipients. These were the same contracts in existence in the prior period. The grant ended on May 31, 2023, and was closed out. Identification as a Repeat Finding: This is a repeat finding from the prior year. This was reported as finding 2022-007 in the 2022 report. Recommendation: DDPHE should revise future subaward agreements to include specific Federal award identification information and language clearly stating applicable audit requirements subrecipients must comply with to ensure all agreements comply with the requirements in 2 CFR Section 200.332. Views of Responsible Officials: This has been remediated. For additional information, see the City’s separate report for planned corrective actions.

SPECIAL TESTS AND PROVISIONS- OBLIGATION, EXPENDITURE AND PAYMENT REQUIREMENTS Significant Deficiency in Internal Control Over Compliance and Noncompliance ALN 14.231 – Emergency Solutions Grant Program Department of Housing and Urban Development Award Number: E-22-MC-08-0005 Award Year: 2022 Criteria or Specific Requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 24 CFR 576.203(b) states - All of the recipient’s grant must be expended for eligible activity costs within 24 months after HUD signs the grant agreement with the recipient. Condition: Controls in place at the City’s Department of Housing Stability (HOST) were not effective in preventing expenditures from being incurred outside of the 24-month requirement. There was one instance where the existence of a control failed to prevent grant charges being made to the grant outside of the 24-month period. Cause: Personnel reviewing expenditures did not adequately review to ensure expenditures for the Emergency Solutions Grant Program were incurred within the 24-month period. Effect or Potential Effect: Funds were expended outside of the 24-month time limit outlined per 24 CFR section 576.203(b). Questioned Costs: $2,427 Context: BDO selected a sample of seven expenditures totaling to $74,735 from a population of 19 expenditures totaling to $128,803. There was one expenditure in the amount of $2,427 that was incurred outside of the 24-month period. The compliance sample was expanded, and another three expenditures were selected totaling to $17,060. There were no additional compliance deviations noted. This is a condition identified per review of the City’s compliance with specified requirements using a sample that was not statistically valid. Identification as a Repeat Finding: N/A Recommendation: HOST should improve existing review controls to ensure Emergency Solutions Grant Program annual grants expiring are monitored to ensure expenditures are not charged to grants outside of the 24-month period. Grants should be monitored, and prior to grant expiration, special instructions should be distributed to personnel reviewing expenses informing them of the grant cutoff and items potentially charged outside of the period of performance. Views of Responsible Officials: The City agrees with the finding. The Division of Operations and Impact has established policies and procedures that seek to ensure internal controls are in place to ensure that eligible expenditures are within a grant’s period of performance. For additional information, see the City’s separate report for planned corrective actions.

ACTIVITIES ALLOWED OR UNALLOWED AND ALLOWABLE COSTS/COST PRINCIPLES Significant Deficiency in Internal Control Over Compliance and Noncompliance ALN 93.391 – Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises Department of Health and Human Services Award Number: NH75OT0000010 Award Year: 2021 Criteria or Specific Requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The Uniform Guidance in 2 CFR Section 200.403(g) states that for costs to be allowable under Federal awards, they must be adequately documented. Condition: Controls in place at the City’s Department of Public Health and Environment (DDPHE) were not effective in preventing incorrect expenditures from being charged to the grant. There was one instance where the existence of a control failed to detect an error within an invoice selected, which resulted in an overpayment to the subrecipient. Cause: Personnel reviewing expenditures did not adequately review to ensure invoices were correct prior to payment. Effect or Potential Effect: An invoice to a subrecipient was overpaid. Questioned Costs: $431 Context: BDO selected a sample of 20 expenditures totaling to $216,560 from a population of 162 expenditures totaling to $625,782. There was one expenditure in the amount of $4,101 that was overpaid. The compliance sample was expanded, and another 12 expenditures were selected totaling to $29,975. There were no additional compliance deviations noted. This is a condition identified per review of the City’s compliance with specified requirements using a sample that was not statistically valid. Identification as a Repeat Finding: N/A Recommendation: DDPHE should improve existing review controls to ensure the mathematical accuracy of invoices has been checked, especially with respect to payments to subrecipients. Payroll and other costs reported on the face of the invoice should agree to supporting payroll documentation received. Views of Responsible Officials: The City agrees with the finding. DDPHE will implement additional trainings and is encouraging a standard template in Excel to avoid calculation errors. For additional information, see the City’s separate report for planned corrective actions.

REPORTING Significant Deficiency in Internal Control Over Compliance and Noncompliance ALN 21.023 – Emergency Rental Assistance Program Department of the Treasury Award Number: ERAE0436; ERAE0437 Award Year: 2021 Criteria or Specific Requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. ERA Reporting Guidance v 3.4 identifies quarterly reports required to be submitted for the Emergency Rental Assistance Program (ERAP). Key line items for these reports are outlined within the Compliance Supplement and include (1) administrative costs ratio, (2) housing stability services ratio, (3) system for prioritizing assistance, and (4) participant households at certain income levels of eligibility. Condition: Controls over reviews of quarterly reports in place at the City’s Department of Housing Stability (HOST) were not effective in detecting an error in expenditures reported on a quarterly report. Cause: The Department’s supervisory and review control was not operating effectively to ensure that all key line items reported in the quarterly reports were properly supported. Effect or Potential Effect: The quarterly report for the fourth quarter contained an error pertaining to total expenditures. Ineffective controls could result in ratios such as the administrative costs and housing stability services to be incorrect. Questioned Costs: Not applicable Context: We tested a sample of three reports from a population of four. We identified exceptions in one of the reports tested. The exception was as follows:  ERA2 Quarter 4 Report- Total expenditures reported for the period differed from what was reported on HOST supporting spreadsheets. This difference was between housing stability services expenditures, which were reported as $52,154 as opposed to $40,484, which was a difference of $11,659. This is a condition identified per review of the City’s compliance with specified requirements using a sample that was not statistically valid. Identification as a Repeat Finding: This is a repeat finding from the prior year. This was reported as finding 2022-011 in the 2022 report. Recommendation: Reviews of reports should be more thorough, which will increase the probability that such reporting errors are detected. The reviews can be improved by implementing a reporting checklist, which contains steps outlined in reviewing a report, including determining whether the report is mathematically accurate and agrees to underlying documentation. Underlying documentation should also be reviewed to determine if any errors exist within that documentation that could cause errors within the report. Views of Responsible Officials: The City disagrees with the finding. Review of the ERA2 administration costs did not consider the timing of the static report submission. The report was prior to monthly close/reconciliation, which occurred the following month. For additional information, see the City’s separate report for planned corrective actions.

REPORTING Material Weakness in Internal Control Over Compliance and Noncompliance ALN 93.600 – Head Start Program Administration for Children and Families Award Number: 08CH010552; 08HE000797 Award Year: 2021; 2022; 2023 Criteria or Specific Requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The Federal Funding Accountability and Transparency Act (FFATA), codified under 2 CFR Part 170, requires recipients of grants or cooperative agreements to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Recipients must report each first-tier subaward or subaward amendment that results in an obligation of $30,000 or more in Federal funds. These actions must be reported in FSRS no later than the last day of the month following the month in which the subaward/subaward amendment obligation was made. Condition: Testing of FFATA reporting indicated all reports submitted had the incorrect obligation amounts reported. Reports to FSRS were also not submitted timely and in some cases no report was submitted. Cause: Personnel administering the grant had an incorrect understanding of the reporting requirements under FFATA. Effect or Potential Effect: The Federal government is not receiving accurate and up to date information on subawards and changes in subaward obligations made to first-tier subrecipients by the City. Questioned Costs: Not applicable Context: BDO selected a sample of three subrecipients with nine contracts and related amendments totaling to $16,650,842. There were nine instances of noncompliance in which the obligations/modifications totaling $16,650,842 were either not reported or reported incorrectly. There were three instances of noncompliance in which required key data elements for contracts totaling $958,676 were not reported or were reported incorrectly. There were nine instances of noncompliance where the reporting to FSRS was not submitted timely. This is a condition identified per review of the City’s compliance with specified requirements using a sample that was not statistically valid. Identification as a Repeat Finding: N/A Recommendation: An understanding of FFATA reporting requirements should be obtained through training and continuing education. This will enable more effective controls to be implemented to ensure such reporting requirements are followed. Views of Responsible Officials: The City agrees with the finding. The department is updating internal procedures for reporting for FFATA amounts in the period of obligation rather than when the expense was incurred. For additional information, see the City’s separate report for planned corrective actions.