2022-001 ALN: 93.568 LIHEAP/COVID-19 LIHEAP - Cash Management, Passthrough from Massachusetts Department of Housing and Community Development Condition: LIHEAP program are not adequately segregated from NEFWC?s general operating accounts. Cause: NEFWC has a centralized deposit account to receive all Commonwealth of Massachusetts electronic program payments, including LIHEAP. Electronic payments received for LIHEAP are then transferred to the respective LIHEAP checking accounts to be available for the programs? disbursements. We noted that transfers to the LIHEAP account are made, but not in the exact amount when the cash is received. Some LIHEAP cash receipts remain in the centralized deposit account and are transferred when program disbursements are made. Criteria: The LIHEAP program grant receipts should be immediately deposited directly into the respective program checking accounts upon receipt. Effect or Possible Effect: Cash from the LIHEAP program could be utilized for NEFWC?s other programs because it is not transferred from the centralized deposit account upon initial receipt. Recommendation: We recommend that management transfer the LIHEAP deposits immediately into the program?s checking account or investigate the ability to have LIHEAP electronic payments made directly into the program checking account. Views of Responsible Officials: Management agrees with the finding, see Corrective Action Plan.
2022-002 ALN: 93.568 LIHEAP/COVID-19 LIHEAP - Cash Management, Passthrough from Massachusetts Department of Housing and Community Development Condition: Funds in the restricted cash account at June 30, 2022 of $1,965,909 are deficient to the same program deferred revenue funds of $3,815,684 by $1,849,775 on June 31, 2022. Cause: Program funds were retained in the centralized deposit account and not transferred to the program checking account. Criteria: Restricted bank accounts should be equal to program funds on hand. Effect of Potential Effect: Non-transfers of program funds to the program checking account can result in non- compliant use of program funds. Recommendation: We recommend that management immediately transfer program funds to program restricted accounts and retain any unspent funds in the restricted accounts. Views of Responsible Officials: Management agrees with the finding, see Corrective Action Plan.
2022-007 (Repeat Finding) ALN: 93.568 LIHEAP/COVID-19 LIHEAP - Cash Management, Passthrough from Massachusetts Department of Housing and Community Development Condition: Management drawdowns of LIHEAP grant funds exceeded LIHEAP grant expenses during the fiscal year. Cause: There are two causes. First, management?s routine grant drawdowns include more funds than needed for the LIHEAP program for incidentals and anticipated future costs. Therefore some of these LIHEAP drawdowns were not completely disbursed and $1,915,052 remains in deferred revenue at June 30, 2022. Second, a substantial portion of the COVID-19 LIHEAP ARPA grant was for Supplemental Benefits to prior year program participants. A drawdown of $11,675,500 was deposited to NEFWC?s deposit account by Massachusetts DHCD in advance of the calculation and payment of client benefits related to these funds. The cash request was prepared and submitted by NEFWC on September 29, 2021 and approved by Massachusetts DHCD on September 29, 2021, and the receipt of funds by NEFWC was dated October 7, 2021. The calculation of the benefit amounts and recipients was subsequently performed by Massachusetts DHCD and NEFWC?s payment of the client benefits, totaling $9,567,374, was paid on a check run dated November 1, 2021. As a result, the check run was $2,108,126 less than the advance cash receipt resulting in excess LIHEAP funds on-hand (deferred revenue). The total of these two causes is a deferred LIHEAP revenue balance at June 30, 2022 of $3,815,684. Criteria: Grant drawdowns should be made on a cost reimbursement basis and disbursed in accordance with cash management principles. Effect of Potential Effect: Management did not comply with cash management principles and as a result has deferred LIHEAP revenue of $3,815,684 at June 30, 2022. Recommendation: We recommend that management follow cash management principles and only draw down funds sufficient to reimburse actual expenditures. If excess funds are received they should be returned or accounted for in a subsequent funds request. Views of Responsible Officials: Management agrees with the finding, see Corrective Action Plan.
2022-008 ALN 93.568 LIHEAP/COVID-19 LIHEAP - Activities Allowed or Unallowed, Passthrough from Massachusetts Department of Housing and Community Development Condition: Receipts of LIHEAP grant funds exceeded LIHEAP grant expenses during the fiscal year, and LIHEAP restricted cash was deficient by $1,849,775 when comparing the June 30, 2022 LIHEAP restricted cash balance of $1,965,909 to the LIHEAP deferred revenue of $3,815,684, indicating unallowable use of LIHEAP program funds. The Activities Allowed or Unallowed compliance requirement is identified as not being subject to audit in the Compliance Supplement and auditors are not expected to test requirements. However, we became aware of the material cash deficiency and determined non-compliance with the general requirements of the Activities Allowed or Unallowed compliance requirement exists. Cause: LIHEAP program funds, including those identified in Finding 2022-007, were not immediately transferred to and held in the LIHEAP program checking account. Because the funds were not transferred they were utilized for non-LIHEAP programs resulting in unallowable activities related to the LIHEAP funds. Criteria: LIHEAP grant funds should only be utilized for allowable LIHEAP program activities. Effect of Potential Effect: Management did not comply with allowable activities compliance requirements for the LIHEAP program and has a LIHEAP cash deficiency of $1,849,775 at June 30, 2022. Recommendation: We recommend that management follow the compliance requirements for the LIHEAP program and only utilize LIHEAP program cash for allowable program activities. Additionally, we recommend that management correct the cash deficiency. Views of Responsible Officials: Management agrees with the finding, see Corrective Action Plan.
2022-001 ALN: 93.568 LIHEAP/COVID-19 LIHEAP - Cash Management, Passthrough from Massachusetts Department of Housing and Community Development Condition: LIHEAP program are not adequately segregated from NEFWC?s general operating accounts. Cause: NEFWC has a centralized deposit account to receive all Commonwealth of Massachusetts electronic program payments, including LIHEAP. Electronic payments received for LIHEAP are then transferred to the respective LIHEAP checking accounts to be available for the programs? disbursements. We noted that transfers to the LIHEAP account are made, but not in the exact amount when the cash is received. Some LIHEAP cash receipts remain in the centralized deposit account and are transferred when program disbursements are made. Criteria: The LIHEAP program grant receipts should be immediately deposited directly into the respective program checking accounts upon receipt. Effect or Possible Effect: Cash from the LIHEAP program could be utilized for NEFWC?s other programs because it is not transferred from the centralized deposit account upon initial receipt. Recommendation: We recommend that management transfer the LIHEAP deposits immediately into the program?s checking account or investigate the ability to have LIHEAP electronic payments made directly into the program checking account. Views of Responsible Officials: Management agrees with the finding, see Corrective Action Plan.
2022-002 ALN: 93.568 LIHEAP/COVID-19 LIHEAP - Cash Management, Passthrough from Massachusetts Department of Housing and Community Development Condition: Funds in the restricted cash account at June 30, 2022 of $1,965,909 are deficient to the same program deferred revenue funds of $3,815,684 by $1,849,775 on June 31, 2022. Cause: Program funds were retained in the centralized deposit account and not transferred to the program checking account. Criteria: Restricted bank accounts should be equal to program funds on hand. Effect of Potential Effect: Non-transfers of program funds to the program checking account can result in non- compliant use of program funds. Recommendation: We recommend that management immediately transfer program funds to program restricted accounts and retain any unspent funds in the restricted accounts. Views of Responsible Officials: Management agrees with the finding, see Corrective Action Plan.
2022-007 (Repeat Finding) ALN: 93.568 LIHEAP/COVID-19 LIHEAP - Cash Management, Passthrough from Massachusetts Department of Housing and Community Development Condition: Management drawdowns of LIHEAP grant funds exceeded LIHEAP grant expenses during the fiscal year. Cause: There are two causes. First, management?s routine grant drawdowns include more funds than needed for the LIHEAP program for incidentals and anticipated future costs. Therefore some of these LIHEAP drawdowns were not completely disbursed and $1,915,052 remains in deferred revenue at June 30, 2022. Second, a substantial portion of the COVID-19 LIHEAP ARPA grant was for Supplemental Benefits to prior year program participants. A drawdown of $11,675,500 was deposited to NEFWC?s deposit account by Massachusetts DHCD in advance of the calculation and payment of client benefits related to these funds. The cash request was prepared and submitted by NEFWC on September 29, 2021 and approved by Massachusetts DHCD on September 29, 2021, and the receipt of funds by NEFWC was dated October 7, 2021. The calculation of the benefit amounts and recipients was subsequently performed by Massachusetts DHCD and NEFWC?s payment of the client benefits, totaling $9,567,374, was paid on a check run dated November 1, 2021. As a result, the check run was $2,108,126 less than the advance cash receipt resulting in excess LIHEAP funds on-hand (deferred revenue). The total of these two causes is a deferred LIHEAP revenue balance at June 30, 2022 of $3,815,684. Criteria: Grant drawdowns should be made on a cost reimbursement basis and disbursed in accordance with cash management principles. Effect of Potential Effect: Management did not comply with cash management principles and as a result has deferred LIHEAP revenue of $3,815,684 at June 30, 2022. Recommendation: We recommend that management follow cash management principles and only draw down funds sufficient to reimburse actual expenditures. If excess funds are received they should be returned or accounted for in a subsequent funds request. Views of Responsible Officials: Management agrees with the finding, see Corrective Action Plan.
2022-008 ALN 93.568 LIHEAP/COVID-19 LIHEAP - Activities Allowed or Unallowed, Passthrough from Massachusetts Department of Housing and Community Development Condition: Receipts of LIHEAP grant funds exceeded LIHEAP grant expenses during the fiscal year, and LIHEAP restricted cash was deficient by $1,849,775 when comparing the June 30, 2022 LIHEAP restricted cash balance of $1,965,909 to the LIHEAP deferred revenue of $3,815,684, indicating unallowable use of LIHEAP program funds. The Activities Allowed or Unallowed compliance requirement is identified as not being subject to audit in the Compliance Supplement and auditors are not expected to test requirements. However, we became aware of the material cash deficiency and determined non-compliance with the general requirements of the Activities Allowed or Unallowed compliance requirement exists. Cause: LIHEAP program funds, including those identified in Finding 2022-007, were not immediately transferred to and held in the LIHEAP program checking account. Because the funds were not transferred they were utilized for non-LIHEAP programs resulting in unallowable activities related to the LIHEAP funds. Criteria: LIHEAP grant funds should only be utilized for allowable LIHEAP program activities. Effect of Potential Effect: Management did not comply with allowable activities compliance requirements for the LIHEAP program and has a LIHEAP cash deficiency of $1,849,775 at June 30, 2022. Recommendation: We recommend that management follow the compliance requirements for the LIHEAP program and only utilize LIHEAP program cash for allowable program activities. Additionally, we recommend that management correct the cash deficiency. Views of Responsible Officials: Management agrees with the finding, see Corrective Action Plan.
2022-001 ALN: 93.568 LIHEAP/COVID-19 LIHEAP - Cash Management, Passthrough from Massachusetts Department of Housing and Community Development Condition: LIHEAP program are not adequately segregated from NEFWC?s general operating accounts. Cause: NEFWC has a centralized deposit account to receive all Commonwealth of Massachusetts electronic program payments, including LIHEAP. Electronic payments received for LIHEAP are then transferred to the respective LIHEAP checking accounts to be available for the programs? disbursements. We noted that transfers to the LIHEAP account are made, but not in the exact amount when the cash is received. Some LIHEAP cash receipts remain in the centralized deposit account and are transferred when program disbursements are made. Criteria: The LIHEAP program grant receipts should be immediately deposited directly into the respective program checking accounts upon receipt. Effect or Possible Effect: Cash from the LIHEAP program could be utilized for NEFWC?s other programs because it is not transferred from the centralized deposit account upon initial receipt. Recommendation: We recommend that management transfer the LIHEAP deposits immediately into the program?s checking account or investigate the ability to have LIHEAP electronic payments made directly into the program checking account. Views of Responsible Officials: Management agrees with the finding, see Corrective Action Plan.
2022-002 ALN: 93.568 LIHEAP/COVID-19 LIHEAP - Cash Management, Passthrough from Massachusetts Department of Housing and Community Development Condition: Funds in the restricted cash account at June 30, 2022 of $1,965,909 are deficient to the same program deferred revenue funds of $3,815,684 by $1,849,775 on June 31, 2022. Cause: Program funds were retained in the centralized deposit account and not transferred to the program checking account. Criteria: Restricted bank accounts should be equal to program funds on hand. Effect of Potential Effect: Non-transfers of program funds to the program checking account can result in non- compliant use of program funds. Recommendation: We recommend that management immediately transfer program funds to program restricted accounts and retain any unspent funds in the restricted accounts. Views of Responsible Officials: Management agrees with the finding, see Corrective Action Plan.
2022-007 (Repeat Finding) ALN: 93.568 LIHEAP/COVID-19 LIHEAP - Cash Management, Passthrough from Massachusetts Department of Housing and Community Development Condition: Management drawdowns of LIHEAP grant funds exceeded LIHEAP grant expenses during the fiscal year. Cause: There are two causes. First, management?s routine grant drawdowns include more funds than needed for the LIHEAP program for incidentals and anticipated future costs. Therefore some of these LIHEAP drawdowns were not completely disbursed and $1,915,052 remains in deferred revenue at June 30, 2022. Second, a substantial portion of the COVID-19 LIHEAP ARPA grant was for Supplemental Benefits to prior year program participants. A drawdown of $11,675,500 was deposited to NEFWC?s deposit account by Massachusetts DHCD in advance of the calculation and payment of client benefits related to these funds. The cash request was prepared and submitted by NEFWC on September 29, 2021 and approved by Massachusetts DHCD on September 29, 2021, and the receipt of funds by NEFWC was dated October 7, 2021. The calculation of the benefit amounts and recipients was subsequently performed by Massachusetts DHCD and NEFWC?s payment of the client benefits, totaling $9,567,374, was paid on a check run dated November 1, 2021. As a result, the check run was $2,108,126 less than the advance cash receipt resulting in excess LIHEAP funds on-hand (deferred revenue). The total of these two causes is a deferred LIHEAP revenue balance at June 30, 2022 of $3,815,684. Criteria: Grant drawdowns should be made on a cost reimbursement basis and disbursed in accordance with cash management principles. Effect of Potential Effect: Management did not comply with cash management principles and as a result has deferred LIHEAP revenue of $3,815,684 at June 30, 2022. Recommendation: We recommend that management follow cash management principles and only draw down funds sufficient to reimburse actual expenditures. If excess funds are received they should be returned or accounted for in a subsequent funds request. Views of Responsible Officials: Management agrees with the finding, see Corrective Action Plan.
2022-008 ALN 93.568 LIHEAP/COVID-19 LIHEAP - Activities Allowed or Unallowed, Passthrough from Massachusetts Department of Housing and Community Development Condition: Receipts of LIHEAP grant funds exceeded LIHEAP grant expenses during the fiscal year, and LIHEAP restricted cash was deficient by $1,849,775 when comparing the June 30, 2022 LIHEAP restricted cash balance of $1,965,909 to the LIHEAP deferred revenue of $3,815,684, indicating unallowable use of LIHEAP program funds. The Activities Allowed or Unallowed compliance requirement is identified as not being subject to audit in the Compliance Supplement and auditors are not expected to test requirements. However, we became aware of the material cash deficiency and determined non-compliance with the general requirements of the Activities Allowed or Unallowed compliance requirement exists. Cause: LIHEAP program funds, including those identified in Finding 2022-007, were not immediately transferred to and held in the LIHEAP program checking account. Because the funds were not transferred they were utilized for non-LIHEAP programs resulting in unallowable activities related to the LIHEAP funds. Criteria: LIHEAP grant funds should only be utilized for allowable LIHEAP program activities. Effect of Potential Effect: Management did not comply with allowable activities compliance requirements for the LIHEAP program and has a LIHEAP cash deficiency of $1,849,775 at June 30, 2022. Recommendation: We recommend that management follow the compliance requirements for the LIHEAP program and only utilize LIHEAP program cash for allowable program activities. Additionally, we recommend that management correct the cash deficiency. Views of Responsible Officials: Management agrees with the finding, see Corrective Action Plan.
2022-001 ALN: 93.568 LIHEAP/COVID-19 LIHEAP - Cash Management, Passthrough from Massachusetts Department of Housing and Community Development Condition: LIHEAP program are not adequately segregated from NEFWC?s general operating accounts. Cause: NEFWC has a centralized deposit account to receive all Commonwealth of Massachusetts electronic program payments, including LIHEAP. Electronic payments received for LIHEAP are then transferred to the respective LIHEAP checking accounts to be available for the programs? disbursements. We noted that transfers to the LIHEAP account are made, but not in the exact amount when the cash is received. Some LIHEAP cash receipts remain in the centralized deposit account and are transferred when program disbursements are made. Criteria: The LIHEAP program grant receipts should be immediately deposited directly into the respective program checking accounts upon receipt. Effect or Possible Effect: Cash from the LIHEAP program could be utilized for NEFWC?s other programs because it is not transferred from the centralized deposit account upon initial receipt. Recommendation: We recommend that management transfer the LIHEAP deposits immediately into the program?s checking account or investigate the ability to have LIHEAP electronic payments made directly into the program checking account. Views of Responsible Officials: Management agrees with the finding, see Corrective Action Plan.
2022-002 ALN: 93.568 LIHEAP/COVID-19 LIHEAP - Cash Management, Passthrough from Massachusetts Department of Housing and Community Development Condition: Funds in the restricted cash account at June 30, 2022 of $1,965,909 are deficient to the same program deferred revenue funds of $3,815,684 by $1,849,775 on June 31, 2022. Cause: Program funds were retained in the centralized deposit account and not transferred to the program checking account. Criteria: Restricted bank accounts should be equal to program funds on hand. Effect of Potential Effect: Non-transfers of program funds to the program checking account can result in non- compliant use of program funds. Recommendation: We recommend that management immediately transfer program funds to program restricted accounts and retain any unspent funds in the restricted accounts. Views of Responsible Officials: Management agrees with the finding, see Corrective Action Plan.
2022-007 (Repeat Finding) ALN: 93.568 LIHEAP/COVID-19 LIHEAP - Cash Management, Passthrough from Massachusetts Department of Housing and Community Development Condition: Management drawdowns of LIHEAP grant funds exceeded LIHEAP grant expenses during the fiscal year. Cause: There are two causes. First, management?s routine grant drawdowns include more funds than needed for the LIHEAP program for incidentals and anticipated future costs. Therefore some of these LIHEAP drawdowns were not completely disbursed and $1,915,052 remains in deferred revenue at June 30, 2022. Second, a substantial portion of the COVID-19 LIHEAP ARPA grant was for Supplemental Benefits to prior year program participants. A drawdown of $11,675,500 was deposited to NEFWC?s deposit account by Massachusetts DHCD in advance of the calculation and payment of client benefits related to these funds. The cash request was prepared and submitted by NEFWC on September 29, 2021 and approved by Massachusetts DHCD on September 29, 2021, and the receipt of funds by NEFWC was dated October 7, 2021. The calculation of the benefit amounts and recipients was subsequently performed by Massachusetts DHCD and NEFWC?s payment of the client benefits, totaling $9,567,374, was paid on a check run dated November 1, 2021. As a result, the check run was $2,108,126 less than the advance cash receipt resulting in excess LIHEAP funds on-hand (deferred revenue). The total of these two causes is a deferred LIHEAP revenue balance at June 30, 2022 of $3,815,684. Criteria: Grant drawdowns should be made on a cost reimbursement basis and disbursed in accordance with cash management principles. Effect of Potential Effect: Management did not comply with cash management principles and as a result has deferred LIHEAP revenue of $3,815,684 at June 30, 2022. Recommendation: We recommend that management follow cash management principles and only draw down funds sufficient to reimburse actual expenditures. If excess funds are received they should be returned or accounted for in a subsequent funds request. Views of Responsible Officials: Management agrees with the finding, see Corrective Action Plan.
2022-008 ALN 93.568 LIHEAP/COVID-19 LIHEAP - Activities Allowed or Unallowed, Passthrough from Massachusetts Department of Housing and Community Development Condition: Receipts of LIHEAP grant funds exceeded LIHEAP grant expenses during the fiscal year, and LIHEAP restricted cash was deficient by $1,849,775 when comparing the June 30, 2022 LIHEAP restricted cash balance of $1,965,909 to the LIHEAP deferred revenue of $3,815,684, indicating unallowable use of LIHEAP program funds. The Activities Allowed or Unallowed compliance requirement is identified as not being subject to audit in the Compliance Supplement and auditors are not expected to test requirements. However, we became aware of the material cash deficiency and determined non-compliance with the general requirements of the Activities Allowed or Unallowed compliance requirement exists. Cause: LIHEAP program funds, including those identified in Finding 2022-007, were not immediately transferred to and held in the LIHEAP program checking account. Because the funds were not transferred they were utilized for non-LIHEAP programs resulting in unallowable activities related to the LIHEAP funds. Criteria: LIHEAP grant funds should only be utilized for allowable LIHEAP program activities. Effect of Potential Effect: Management did not comply with allowable activities compliance requirements for the LIHEAP program and has a LIHEAP cash deficiency of $1,849,775 at June 30, 2022. Recommendation: We recommend that management follow the compliance requirements for the LIHEAP program and only utilize LIHEAP program cash for allowable program activities. Additionally, we recommend that management correct the cash deficiency. Views of Responsible Officials: Management agrees with the finding, see Corrective Action Plan.