Single Audit – Report on City’s Use of Federal and State Grants for Fiscal Year 2020

Audit Date: July 13, 2022
Audit Categories
  • Annual,
  • Financial
Controller: Rebecca Rhynhart
Audit Tags
  • Grant Compliance,
  • Grants,
  • Single Audit

The Office of the City Controller released its report on compliance for federal grant programs and review of internal controls over compliance for fiscal year 2020 (FY20). The report, which must be completed annually, was transmitted to the Kenney Administration and for submission to the Federal Audit Clearinghouse, as required.  The report details six instances of non-compliance for the City’s major federal programs, including one material weakness and five significant deficiencies.

Inappropriate grant administration can result in a failure to meet grant requirements, which can lead to some or all of the grant resources needing to be returned to the grantor, according to the Government Finance Officers Association (GFOA).

Key report findings are as follows:

  • Material Weakness and Noncompliance over Reporting – The Philadelphia Police Department (PPD) was unable to provide copies of the quarterly Federal Financial Reports (SF-425s), the Quarterly Performance Metrics, and Semi-annual Progress Reports for the Edward Byrne Memorial Justice Assistance Grant Program for audit. Without these documents, our office was unable to audit compliance with reporting requirements for this grant program.
  • Significant Deficiency and Noncompliance over Reporting – The Finance Office’s Grants Accounting and Administrative Unit (GAAU) improperly reported prior period expenditures in the current year SEFA (FY20) for two grant programs, Emergency Solutions Grant Program and Choice Neighborhoods Implementation Grants. The GAAU reported in the FY20 SEFA $462,391 and $1,372,835, respectively, in expenditures occurred in FY19, but were not reported in the FY19 SEFA.
  • Significant Deficiency and Noncompliance over Reporting – The GAAU did not accurately disclose the total payments to subrecipients in the SEFA provided for audit. The Office of the Controller’s review of records indicated that subrecipient expenditures for major programs, including Emergency Solutions Grant Program, Home Investment Partnerships Program, Choice Neighborhoods Implementation Grants. Community Services Block Grant, and Block Grants for Prevention and Treatment of Substance Abuse, were understated by $18.3 million. The GAAU concurred with our finding and and corrected the amounts reported for subrecipients. The inaccurate reporting of payments to subrecipients has been a finding for four consecutive years without remediation.

“The review of compliance with federal grant programs serves as an important check on internal control over grant administration and management. Non-compliance with federal grant requirements puts at risk critical funding the City needs,” said City Controller Rebecca Rhynhart. “The FY20 findings are severe – more severe than the previous year’s report – and highlight serious underlying issues in the City’s grant administration and management. I especially want to call attention to the findings related to the Grants Accounting and Administrative Unit – I strongly encourage the Finance Office to provide appropriate oversight and support to the Grants Accounting and Administrative Unit to address these findings.”