Maricopa County

Cluster name(s): CDBG – Entitlement/Special Purpose Grants Cluster Assistance Listings number(s) and name(s): 14.218 Community Development Block Grants/Entitlement Grants Award number(s) and year(s): B-20-UW-04-0501 July 1, 2023 through September 1, 2027 B-23-UC-04-0501 July 1, 2023 through September 1, 2030 B-24-UC-04-0501 July 1, 2024 through September 1, 2031 Federal agency: U.S. Department of Housing and Urban Development Compliance requirement(s): Reporting Questioned costs: Not applicable Condition Contrary to federal laws and regulations and County policies, the County’s Human Services Department (Department) failed to report complete and accurate information on the federal government’s reporting system for nearly $3 million in subawards it made to subrecipients during fiscal year 2025 for the Community Development Block Grants/Entitlement Grants (CDBG) program. As shown in the bullets below and Table 1 on page 9, we tested a total sample of 5 subawards for the program at the Department and found that, for the 5 subawards, the Department failed to report the following: X Any required information about the subaward amendments, including the amended amounts and terms, for 2 subawards tested, totaling nearly $1.1 million of the total nearly $3 million of subawards we tested in our sample. X Required information within the time frame for all 5 subawards tested, totaling nearly $2.5 million, resulting in the reports being submitted between 2 and 13 months late. X Accurate key elements for 4 subawards tested, totaling $1.7 million, that included incorrect subaward obligation/action dates, changes in funding sources, and subaward project descriptions. Furthermore, for 1 of these 4 subawards, the same information for 1 amendment totaling $766,648 was entered into the federal government’s reporting system 3 separate times. FEDERAL AWARD FINDING AND QUESTIONED COSTS: 2025-101 [the auditor] Maricopa County | Year Ended June 30, 2025 10 Effect The County’s stakeholders and the public did not have access to transparent and timely information about the Department’s federal award spending decisions on USAspending.gov as required by federal laws and regulations. Additionally, the Department is at risk that this finding applies to other federal programs it administers. During fiscal year 2025, the Department is at risk of not transparently reporting its subaward information related to nearly $2.2 million of federal monies it spent related to the subrecipient expenditures, or 54% of the Department’s total of nearly $4.1 million reported on the schedule of expenditures of federal awards for the CDBG Cluster. Cause The Department experienced turnover in the contract manager position, and neither contract manager employed during fiscal year 2025 updated the tracking list used in prior fiscal years to monitor grants and report information on the federal government’s reporting system, including grants contracted through other departments and amendments. In addition, the Department did not require independent reviews of the reports for accuracy and completeness prior to uploading subaward data to the federal government’s reporting system. Table 1 The Department failed to report complete and accurate information on the federal government’s reporting system for nearly $3 million in subawards related to the CDBG program June 30, 2025 Subaward issue Number of subawards Associated error amount Not reported timely1 5 $2,475,127 Incorrect key elements 4 1,734,748 Amendments not reported1 2 1,051,900 Total distinct subawards tested and total error amount2 5 $2,975,127 1 These rows include overlapping information for 2 subawards as these subawards, original amounts were reported; however, they had multiple amendments during the fiscal year that were either not reported or not reported timely. As a result, $551,900 was included as an associated error amount in both rows because of multiple amendments for the same subaward and amount. 2 Number of subawards with issues and associated error amounts might overlap, but the totals show the distinct number of subawards tested and their total associated error amount. Source: Auditor General staff review of subaward contracts provided by the Department on September 5, 2025. [the auditor] Maricopa County | Year Ended June 30, 2025 11 Criteria The Federal Funding Accountability and Transparency Act (FFATA) and federal Uniform Guidance regulations require the Department, as a direct recipient of federal awards, to report certain information about each subaward action equaling or exceeding $30,000 in federal monies on the federal government’s reporting system no later than month-end of the month following the subaward action so that the information can be displayed to the public on USAspending.gov.1 Specifically, the federal Uniform Guidance requires the Department to report the subrecipient organization’s name, award amount, award term, and other information about the subaward, if applicable, for each subaward action equaling or exceeding the $30,000 threshold (2 Code of Federal Regulations [CFR] §170.320 and Appendix A to part 170). Additionally, the County’s grant policies and procedures and the Department’s FFATA Reporting Policy require the Department to perform this reporting for federal awards.2,3 Also, an update to the Department’s FFATA Reporting Policy in March 2025 requires Department personnel to review and update, on a monthly basis, the tracking list used to monitor grants and report information to the federal government’s reporting system, ensuring all grants contracted through other departments and amendments are included and accurately reported.2 Further, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that the federal program is being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations to the Department 1. Immediately report on the federal government’s reporting system the required information for its subawards, including reviewing, correcting, and/or resubmitting any inaccurate reported information. 2. Follow the County’s grant policies and procedures and the Department’s FFATA Reporting policy for reporting subaward actions equaling or exceeding $30,000 no later than monthend of the month following the subaward action, as required by the FFATA and federal Uniform Guidance, which may include providing training to Department staff responsible for reporting the Department’s subaward actions to the federal government’s reporting system. 3. Implement the Department’s FFATA Reporting policy requirements to review and update the tracking list used to monitor grants and report information to the federal government’s reporting system, ensuring all grants contracted through other departments and amendments are included and accurately reported. 4. Develop and implement procedures requiring independent reviews to ensure the subaward data is complete and accurate prior to uploading it to the federal government’s reporting system. 1 The FFATA of 2006 (Public Law 109-282), as amended by section 6202 of Public Law 110-252, was enacted to provide the public with transparency on federal award spending to hold the recipient government accountable for each spending decision and to help reduce wasteful spending of federal monies. As such, federal Uniform Guidance requires reporting on the FFATA Subaward Reporting System at https://sam.gov/. 2 Maricopa County. (2025). Maricopa County Human Services Federal Funding Accountability and Transparency Act (FFATA Reporting APP0220). 3 Maricopa

Cluster name(s): Section 8 Project-Based Cluster Assistance Listings number(s) and name(s): 14.195 Project-Based Rental Assistance Award number(s) and year(s): AZ99RD00001 January 1, 2024 through December 31, 2024; January 1, 2025 through December 31, 2025 Federal agency: U.S. Department of Housing and Urban Development Compliance requirement(s): Eligibility, Reporting, and Special tests and provisions Questioned costs: Unknown Condition Our testing of 25 participant files noted the following: X No electronic income verification (EIV) was done within the required time period for 25 of 25 participant selections. X Annual inspections were not performed for 3 of 25 participant selections. X 1 of 25 tenant files were not provided. X No social security support was provided for tenants for 3 of 25 participant selections. X Income was incorrectly calculated for tenants for 5 of 25 participant selections. X Annual recertifications were not completed timely for 2 of 25 participant selections [the auditor] Maricopa County | Year Ended June 30, 2025 14 Effect The Housing Authority of Maricopa County is not in compliance with federal requirements regarding Eligibility, Reporting, and Special Tests and Provisions. Cause Due to high staff turnover during the fiscal year, certain documentation was not maintained in accordance with HAMC policies and procedures. Criteria In accordance with Uniform Guidance, internal controls are required to be in place to ensure compliance with federal requirements and to maintain complete and accurate participant files as noted in 24 CFR sections 5.233, 5.657, 880.603, 881.601, 882.515, 883.701, 884.218, 886.124, and 886.324. Recommendations The Housing Authority of Maricopa County should maintain complete and accurate participant files to ensure compliance with federal requirements.

Cluster name: CDBG – Entitlement/Special Purpose Grants Cluster Assistance Listings number and name: 14.218 Community Development Block Grants/Entitlement Grants Award numbers and years: B-20-UW-04-0501, July 1, 2023 through September 1, 2027; B-23-UC-04-0501, July 1, 2023 through September 1, 2030 Federal agency: U.S. Department of Housing and Urban Development Compliance requirement: Reporting Questioned costs: Not applicable

Condition—Contrary to federal laws and regulations and County policies, the Maricopa County Human Services Department (Department) failed to report certain information on the federal government’s reporting system for $953,103 in subawards it made to 4 subrecipients during fiscal year 2024 for the program. Specifically, for 4 of 9 subawards tested, the Department did not report any required information about the subawards, including subaward organizations’ names and subaward amounts and terms. During fiscal year 2024, the Department spent $953,103 of federal monies related to these subawards, or 30.5 percent of the Department’s total $3.13 million expended, for this program.

Effect—The County’s stakeholders and the public did not have access to transparent and timely information about the Department’s federal award spending decisions on USAspending.gov as required by federal laws and regulations. Additionally, the Department is at risk that this finding applies to other federal programs it administers.

Cause—The Department’s contract specialist did not include these 4 subawards on the tracking list used to monitor grants and report information to the federal government’s reporting system as required, because 3 of the subawards were contracted by the Office of Procurement Services rather than directly through the Department and 1 subaward amendment was not included due to error.

Criteria—The Federal Funding Accountability and Transparency Act (FFATA) and federal Uniform Guidance regulations require the Department, as a direct recipient of federal awards, to report certain information about each subaward action equaling or exceeding $30,000 in federal monies on the FFATA Subaward Reporting System no later than month-end of the month following the subaward action so that the information can be displayed to the public on the website, USAspending.gov.1 Specifically, the federal Uniform Guidance requires the Department to report the subrecipient organization’s name, award amount, award term, and other information about the subaward, if applicable, for each subaward action equaling or exceeding the $30,000 threshold (2 Code of Federal Regulations [CFR], §170.320 and Appendix A to part 170). Additionally, the County’s grant policies and procedures require the Department to perform this reporting for federal awards (Maricopa County Grants Manual [2023], Section K, page 31). Further, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that the federal program is being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303).

Recommendations—The Department should:

1. Immediately report on the FFATA Subaward Reporting System the required information for its subawards for this program, including the 4 that were not previously reported. 2. Follow the County’s grant policies and procedures for reporting subaward actions equaling or exceeding $30,000 no later than month-end of the month following the subaward action, as required by the FFATA and federal Uniform Guidance, which may require providing training to Department staff responsible for reporting the Department’s subaward actions to the federal government’s reporting system. 3. Review and update the tracking list used to monitor grants and report information to the federal government’s reporting system, ensuring all grants contracted through other departments and amendments are included.

The County’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.

1 The FFATA of 2006 (Public Law 109-282), as amended by section 6202 of Public Law 110-252, was enacted to provide the public with transparency on federal award spending to hold the recipient government accountable for each spending decision and to help reduce wasteful spending of federal monies. As such, federal Uniform Guidance requires reporting on the FFATA Subaward Reporting System at https://www.fsrs.gov.