12.15.21 Regular Meeting - Laserfiche WebLink

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City Council Meeting Minutes December 15, 2021 Kathryn Schwerdtfeger, Deliotte and Touche, LLP, provided an introduction on the Community Developmetn Block Grant - Disaster Recovery (CDBG-DR) Quarterly Internal Audit Report for third quarter of Fiscal Year 2021 including the design and operating effectiveness of internal controls of the Finance and Purchasing expenditures related to fundind from HUD for flooding remediation, compliance with Federal program and administrative regulations governing the CDBG-DR program, compliance with City policies and procedures governing the CDBG-DR program and compliance with the City's HUD Action Plan for Disaster Recovery and related amendments. She stated there were no new procurements or contracts occurring during this review period; there were a few change orders. She stated it is required by HUD to evaluate all prior HUD findings for remediation and it is reported that all HUD prior findings and concerns have been resolved. Ms. Schwerdtfeger provided the observations, which include the following: 1. Three instances that the General Ledger amount for construction invoices included the 5% retainage fee. This General Ledger amount was also used to draw down for Federal reimbursement. 2. Is a minor expense that was incorrectly coded to the CDBG-DR grant. 3. Seven instances that reimbursement from HUD to the CIty for monies that the city spend within the program were not reimbursement timely. 2. Receive the Community Development Block Grant - Disaster Recovery (CDBG-DR) Risk Assessment Presentation from the internal auditor Deloitte and Touche, LLP. Marie Kalka, Finance Director and introduced the speaker. Kathryn Schwerdtfeger, Deliotte and Touche, LLP, stated the risk assessment is required by the Housing Urban Development. It was planned to be performed every 2 years and planned risk assessment for November 2020 was postponed due to the pandemic and rescheduled for third quarter from April to June period. She stated the low risk areas that most CDBG-DR processes such as stakeholder engagement, communication, reporting, and the action plans, among others appear to be well designed and working as expected. Ms. Schwerdtfeger mentioned there were no high risk areas identified based on the interviews performed and review of program documentation. She mentioned Housing Programs and Recipients' Participation have not been reviewed in detail for more than a year but will be done later this fiscal year. She stated we will receive a detailed review in Quarter 1. She mentioned the performance monitoring and quality assurance policies and procedures continue to evolve and will be reviewed for effectiveness and federal compliance in Quarter 2. The City of San Marcos Page 3