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GCD Did Not Ensure That Green Communities Documented the Need for $46,471 of Designation Grant Fund Expenditures.

Lack of supporting documents for expenses mean GCD cannot ensure administrative expenses were consistent with the designation grants’ requirements.

Table of Contents

Overview

During our audit period, GCD did not obtain documentation to justify $46,471 of administrative expenses for which 8 of the 21 green communities in our sample requested reimbursement through the Green Communities Designation and Grant Program. Without this documentation, GCD cannot ensure that the administrative expenses were consistent with the designation grants’ requirements.

Authoritative Guidance

GCD’s Green Community and Grant Program Guidance states,

If any funds are to be used for administrative costs, justification to demonstrate that Green Community grant administration would not proceed without administrative funds must be provided. In no case shall more than 10 percent of grant awards be used to fund administrative costs.

Section 2.07(1) of Title 815 of the Code of Massachusetts Regulations states,

Grantees are required to report to the Grantor Department [in this case, DOER] on the use of Grant funds as prescribed in the Standard Contract Form, or as otherwise provided in a Grant Application or Grant terms. If a formula Grant, Subsidy or other disbursement is made to a recipient, that recipient shall be required to provide any information related to the use of the Grant or Subsidy Funds provided by the Department.

Reasons for Issue

Although GCD has policies and procedures for the administration of Green Communities Designation and Grant Program funding that include requiring grantees to submit documentation to support the use of designation grant funds for administrative expenses, it has not established monitoring controls to ensure that agency personnel adhere to these policies and procedures.

Recommendation

GCD should establish monitoring controls over the use of Green Communities Designation and Grant Program funding to ensure that funds used by grantees to pay for administrative expenses are properly documented.

Auditee’s Response

GCD has controls in place regarding how grant funds are used that are largely effective, which is why the Auditor’s finding represents only .5% of the total grant funds distributed in fiscal year 2019. In response to the recommendation, GCD has bolstered controls focused on administrative costs to ensure that funds paid to grantees for management or administration are properly documented. Specifically, GCD will require grantees to submit invoices delineating administrative tasks completed by municipal staff and associated costs and expenses which will require DOER approval prior to grant funding disbursement.

Auditor’s Reply

Based on its response, DOER is taking measures to address our concerns on this matter.

Date published: November 10, 2021

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