SECTION II ? FINDINGS - FINANCIAL STATEMENTS AUDIT No matters were reported. SECTION III ? FINDINGS AND QUESTIONED COSTS -MAJOR FEDERAL AWARD PROGRAM AUDIT 2022-001 Lack of Review Department of Housing and Urban Development AL #14.181 - Supportive Housing for Persons with Disabilities (Section 811) Material Weakness Category of Finding ? Eligibility Condition ? In 2022, Home Share did not have controls in place to ensure that eligibility criteria and rent calculations were being reviewed and/or approved by someone other than the individual making the initial determination or annual recertification. Criteria ? 2 CFR section 200.303 requires that organizations who receive federal awards establish and maintain effective internal controls over the federal award that provides reasonable assurance that the organization is managing the federal award in compliance with the federal statues, regulations, and terms and conditions of the award. It also states that controls "should" be in compliance with guidance in "standards for Internal Control in the Federal Government" issued by the Comptroller General of the United State (the Green Book) or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Illustrative specific design and implementation of control activates over eligibility include the following (excerpt from the Green Book): ? Proper design of control activities to ensure program compliance should include a process for management to identify and put into effect actions need to carry out specific responses to risks identified in the risk assessment process such as providing benefits to ineligible individuals, calculating amounts to be received for or on behalf of individuals incorrectly, unauthorized changes to system configurations, fraud, unauthorized payments, etc. ? Segregations of duties should exist between those determining a participant's eligibility and those reviewing/approving eligibility. Where segregation of duties is not practical, management should select and develop alternative control activities. Management should establish responsibility and accountability for control activities with management (or other designated personnel) of the unit or function in which the relevant risks reside. Responsible personnel should perform control activities in a timely manner as defined by policies and procedures. Cause ? Due to the limited number of staff employed by the Organization in the Housing department there is a lack of adequate segregation of duties in regards to review eligibility and rent calculations. Effect ? By not having proper implementation of controls to ensure that recertifications and rent calculations are reviewed and/or approved, there is a risk that individuals are allowed to continue in the program after becoming ineligible and that rent calculations do not determine the proper split between the tenant payment and the project rental assistance payment. Questioned Costs ? None. Recommendation ? We recommend controls be put in place to ensure the eligibility determinations and rent calculations (initial or recertifications) be reviewed and/or approved by someone other than the individual making the determination. Management?s Response and Corrective Action ? Management agrees with this finding. Beginning in January 2022, management has contracted out the eligibility determination process to a third-party contractor with significant experience in affordable housing and similar processes. Management is working with the contractor to include a second individual in this process so that there will be a review performed by someone other than the individual making the initial determination or annual recertification. Responsible party for corrective action: Robert Pickering, Chief Financial Officer Ernest Johnson, Housing Associate Director Repeat Finding: This is a repeat finding. A similar finding was reported as 2021-001 in 2021.
SECTION II ? FINDINGS - FINANCIAL STATEMENTS AUDIT No matters were reported. SECTION III ? FINDINGS AND QUESTIONED COSTS -MAJOR FEDERAL AWARD PROGRAM AUDIT 2022-001 Lack of Review Department of Housing and Urban Development AL #14.181 - Supportive Housing for Persons with Disabilities (Section 811) Material Weakness Category of Finding ? Eligibility Condition ? In 2022, Home Share did not have controls in place to ensure that eligibility criteria and rent calculations were being reviewed and/or approved by someone other than the individual making the initial determination or annual recertification. Criteria ? 2 CFR section 200.303 requires that organizations who receive federal awards establish and maintain effective internal controls over the federal award that provides reasonable assurance that the organization is managing the federal award in compliance with the federal statues, regulations, and terms and conditions of the award. It also states that controls "should" be in compliance with guidance in "standards for Internal Control in the Federal Government" issued by the Comptroller General of the United State (the Green Book) or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Illustrative specific design and implementation of control activates over eligibility include the following (excerpt from the Green Book): ? Proper design of control activities to ensure program compliance should include a process for management to identify and put into effect actions need to carry out specific responses to risks identified in the risk assessment process such as providing benefits to ineligible individuals, calculating amounts to be received for or on behalf of individuals incorrectly, unauthorized changes to system configurations, fraud, unauthorized payments, etc. ? Segregations of duties should exist between those determining a participant's eligibility and those reviewing/approving eligibility. Where segregation of duties is not practical, management should select and develop alternative control activities. Management should establish responsibility and accountability for control activities with management (or other designated personnel) of the unit or function in which the relevant risks reside. Responsible personnel should perform control activities in a timely manner as defined by policies and procedures. Cause ? Due to the limited number of staff employed by the Organization in the Housing department there is a lack of adequate segregation of duties in regards to review eligibility and rent calculations. Effect ? By not having proper implementation of controls to ensure that recertifications and rent calculations are reviewed and/or approved, there is a risk that individuals are allowed to continue in the program after becoming ineligible and that rent calculations do not determine the proper split between the tenant payment and the project rental assistance payment. Questioned Costs ? None. Recommendation ? We recommend controls be put in place to ensure the eligibility determinations and rent calculations (initial or recertifications) be reviewed and/or approved by someone other than the individual making the determination. Management?s Response and Corrective Action ? Management agrees with this finding. Beginning in January 2022, management has contracted out the eligibility determination process to a third-party contractor with significant experience in affordable housing and similar processes. Management is working with the contractor to include a second individual in this process so that there will be a review performed by someone other than the individual making the initial determination or annual recertification. Responsible party for corrective action: Robert Pickering, Chief Financial Officer Ernest Johnson, Housing Associate Director Repeat Finding: This is a repeat finding. A similar finding was reported as 2021-001 in 2021.
SECTION II ? FINDINGS - FINANCIAL STATEMENTS AUDIT No matters were reported. SECTION III ? FINDINGS AND QUESTIONED COSTS -MAJOR FEDERAL AWARD PROGRAM AUDIT 2022-001 Lack of Review Department of Housing and Urban Development AL #14.181 - Supportive Housing for Persons with Disabilities (Section 811) Material Weakness Category of Finding ? Eligibility Condition ? In 2022, Home Share did not have controls in place to ensure that eligibility criteria and rent calculations were being reviewed and/or approved by someone other than the individual making the initial determination or annual recertification. Criteria ? 2 CFR section 200.303 requires that organizations who receive federal awards establish and maintain effective internal controls over the federal award that provides reasonable assurance that the organization is managing the federal award in compliance with the federal statues, regulations, and terms and conditions of the award. It also states that controls "should" be in compliance with guidance in "standards for Internal Control in the Federal Government" issued by the Comptroller General of the United State (the Green Book) or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Illustrative specific design and implementation of control activates over eligibility include the following (excerpt from the Green Book): ? Proper design of control activities to ensure program compliance should include a process for management to identify and put into effect actions need to carry out specific responses to risks identified in the risk assessment process such as providing benefits to ineligible individuals, calculating amounts to be received for or on behalf of individuals incorrectly, unauthorized changes to system configurations, fraud, unauthorized payments, etc. ? Segregations of duties should exist between those determining a participant's eligibility and those reviewing/approving eligibility. Where segregation of duties is not practical, management should select and develop alternative control activities. Management should establish responsibility and accountability for control activities with management (or other designated personnel) of the unit or function in which the relevant risks reside. Responsible personnel should perform control activities in a timely manner as defined by policies and procedures. Cause ? Due to the limited number of staff employed by the Organization in the Housing department there is a lack of adequate segregation of duties in regards to review eligibility and rent calculations. Effect ? By not having proper implementation of controls to ensure that recertifications and rent calculations are reviewed and/or approved, there is a risk that individuals are allowed to continue in the program after becoming ineligible and that rent calculations do not determine the proper split between the tenant payment and the project rental assistance payment. Questioned Costs ? None. Recommendation ? We recommend controls be put in place to ensure the eligibility determinations and rent calculations (initial or recertifications) be reviewed and/or approved by someone other than the individual making the determination. Management?s Response and Corrective Action ? Management agrees with this finding. Beginning in January 2022, management has contracted out the eligibility determination process to a third-party contractor with significant experience in affordable housing and similar processes. Management is working with the contractor to include a second individual in this process so that there will be a review performed by someone other than the individual making the initial determination or annual recertification. Responsible party for corrective action: Robert Pickering, Chief Financial Officer Ernest Johnson, Housing Associate Director Repeat Finding: This is a repeat finding. A similar finding was reported as 2021-001 in 2021.
SECTION II ? FINDINGS - FINANCIAL STATEMENTS AUDIT No matters were reported. SECTION III ? FINDINGS AND QUESTIONED COSTS -MAJOR FEDERAL AWARD PROGRAM AUDIT 2022-001 Lack of Review Department of Housing and Urban Development AL #14.181 - Supportive Housing for Persons with Disabilities (Section 811) Material Weakness Category of Finding ? Eligibility Condition ? In 2022, Home Share did not have controls in place to ensure that eligibility criteria and rent calculations were being reviewed and/or approved by someone other than the individual making the initial determination or annual recertification. Criteria ? 2 CFR section 200.303 requires that organizations who receive federal awards establish and maintain effective internal controls over the federal award that provides reasonable assurance that the organization is managing the federal award in compliance with the federal statues, regulations, and terms and conditions of the award. It also states that controls "should" be in compliance with guidance in "standards for Internal Control in the Federal Government" issued by the Comptroller General of the United State (the Green Book) or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Illustrative specific design and implementation of control activates over eligibility include the following (excerpt from the Green Book): ? Proper design of control activities to ensure program compliance should include a process for management to identify and put into effect actions need to carry out specific responses to risks identified in the risk assessment process such as providing benefits to ineligible individuals, calculating amounts to be received for or on behalf of individuals incorrectly, unauthorized changes to system configurations, fraud, unauthorized payments, etc. ? Segregations of duties should exist between those determining a participant's eligibility and those reviewing/approving eligibility. Where segregation of duties is not practical, management should select and develop alternative control activities. Management should establish responsibility and accountability for control activities with management (or other designated personnel) of the unit or function in which the relevant risks reside. Responsible personnel should perform control activities in a timely manner as defined by policies and procedures. Cause ? Due to the limited number of staff employed by the Organization in the Housing department there is a lack of adequate segregation of duties in regards to review eligibility and rent calculations. Effect ? By not having proper implementation of controls to ensure that recertifications and rent calculations are reviewed and/or approved, there is a risk that individuals are allowed to continue in the program after becoming ineligible and that rent calculations do not determine the proper split between the tenant payment and the project rental assistance payment. Questioned Costs ? None. Recommendation ? We recommend controls be put in place to ensure the eligibility determinations and rent calculations (initial or recertifications) be reviewed and/or approved by someone other than the individual making the determination. Management?s Response and Corrective Action ? Management agrees with this finding. Beginning in January 2022, management has contracted out the eligibility determination process to a third-party contractor with significant experience in affordable housing and similar processes. Management is working with the contractor to include a second individual in this process so that there will be a review performed by someone other than the individual making the initial determination or annual recertification. Responsible party for corrective action: Robert Pickering, Chief Financial Officer Ernest Johnson, Housing Associate Director Repeat Finding: This is a repeat finding. A similar finding was reported as 2021-001 in 2021.