Audit 25466

Condition: Recipients of ESG funding may use up to 7.5% of ESG program project costs for administration, and recipients of ESG-CV may use up to 10% of program costs for administration. However, 12% had been charged to the ESG and ESG-CV federal awards for administration. Criteria: Organizations operating the Emergency Solutions Grants Program are required to maintain sufficient internal controls to ensure compliance with earmarking requirements. Context: The testing found an overbilling of the administrative costs in the amount of $53,705. Effect: The administrative costs charged to the federal award are not in accordance with program regulations. Cause: Community Teamwork, Inc.?s internal controls were not operating effectively to prevent or detect the overbilling of the administrative costs. Auditor's Recommendation: Community Teamwork, Inc. implement additional internal control procedures to review contract terms and to ensure that administrative costs charged to the federal awards are made in accordance with program regulations. Views of Responsible Officials and Planned Corrective Action: The Director of Finance and Accounting will: ? Compare the indirect admin being charged on every state and federal contract to the most recent contract agreement and/or documents. ? Identify errors and inform the Director of Revenue and Reporting so that corrections can be made. Preventative Action to Prevent Future Recurrence: ? The Fiscal department is implementing a new ERP system (NetSuite) which includes a grants/contract module. This new software will allow for contract documents to be stored in a systematic manner for each federal; state, city and private contract, award or grant. ? The NetSuite System Administrators will ensure that contract documents for all active contracts are uploaded into NetSuite?s Grants Module and that relevant financial information is entered into the master record. ? Indirect admin revenue will be captured in the general ledger under a separate GL code to allow for visibility into the percentage of revenue billed. ? Reports will be generated identifying the funder type; name; contract number; allowable indirect admin rate; actual admin revenue and a calculation of the indirect rate based on indirect revenue and actual expenses for comparison purposes. ? The Director of Finance and Accounting/and or his or her designee will compare the level of indirect admin revenue billed to the funder against the contract stated indirect rate on a monthly basis.

Condition: Recipients of ESG funding may use up to 7.5% of ESG program project costs for administration, and recipients of ESG-CV may use up to 10% of program costs for administration. However, 12% had been charged to the ESG and ESG-CV federal awards for administration. Criteria: Organizations operating the Emergency Solutions Grants Program are required to maintain sufficient internal controls to ensure compliance with earmarking requirements. Context: The testing found an overbilling of the administrative costs in the amount of $53,705. Effect: The administrative costs charged to the federal award are not in accordance with program regulations. Cause: Community Teamwork, Inc.?s internal controls were not operating effectively to prevent or detect the overbilling of the administrative costs. Auditor's Recommendation: Community Teamwork, Inc. implement additional internal control procedures to review contract terms and to ensure that administrative costs charged to the federal awards are made in accordance with program regulations. Views of Responsible Officials and Planned Corrective Action: The Director of Finance and Accounting will: ? Compare the indirect admin being charged on every state and federal contract to the most recent contract agreement and/or documents. ? Identify errors and inform the Director of Revenue and Reporting so that corrections can be made. Preventative Action to Prevent Future Recurrence: ? The Fiscal department is implementing a new ERP system (NetSuite) which includes a grants/contract module. This new software will allow for contract documents to be stored in a systematic manner for each federal; state, city and private contract, award or grant. ? The NetSuite System Administrators will ensure that contract documents for all active contracts are uploaded into NetSuite?s Grants Module and that relevant financial information is entered into the master record. ? Indirect admin revenue will be captured in the general ledger under a separate GL code to allow for visibility into the percentage of revenue billed. ? Reports will be generated identifying the funder type; name; contract number; allowable indirect admin rate; actual admin revenue and a calculation of the indirect rate based on indirect revenue and actual expenses for comparison purposes. ? The Director of Finance and Accounting/and or his or her designee will compare the level of indirect admin revenue billed to the funder against the contract stated indirect rate on a monthly basis.

Condition: 1) One of the 40 clients selected for testing did not receive the entitled assistance payment for the utility in arrears. 2) There was an overpayment of the rental assistance arrears payment made on behalf of one out of 40 clients selected for testing. Criteria: Organizations operating the Emergency Rental Assistance Program are required to maintain sufficient internal controls to ensure compliance with eligibility requirement. Context: A sample of 40 clients with total assistance payment of $474,738 were selected for testing for the year. The testing found two files with incorrect utility and rental assistance payment amounts totaling $1,381. Effect: The assistance payments on behalf of the two clients noted above are not made in accordance with program regulations. Cause: Community Teamwork, Inc.?s internal controls were not operating effectively to prevent or detect incorrect assistance payments made on behalf of the clients participating in the program. Auditor's Recommendation: Community Teamwork, Inc. provide additional staff training and implement additional internal control procedures to ensure that utility and rental assistance payments made on behalf of the clients participating in the program are made in accordance with program regulations. Views of Responsible Officials and Planned Corrective Action: Community Teamwork, Inc. agrees with this finding and will provide policies and guidance trainings to all staff on a weekly basis. CTI staff will be required to attend DHCD bi-monthly trainings. In addition, CTI has finalized the hiring of a Quality Control Manager who will start on November 28, 2022, and the addition of the Quality Control Manager will help provide ongoing internal quality control.

Condition: Recipients of ESG funding may use up to 7.5% of ESG program project costs for administration, and recipients of ESG-CV may use up to 10% of program costs for administration. However, 12% had been charged to the ESG and ESG-CV federal awards for administration. Criteria: Organizations operating the Emergency Solutions Grants Program are required to maintain sufficient internal controls to ensure compliance with earmarking requirements. Context: The testing found an overbilling of the administrative costs in the amount of $53,705. Effect: The administrative costs charged to the federal award are not in accordance with program regulations. Cause: Community Teamwork, Inc.?s internal controls were not operating effectively to prevent or detect the overbilling of the administrative costs. Auditor's Recommendation: Community Teamwork, Inc. implement additional internal control procedures to review contract terms and to ensure that administrative costs charged to the federal awards are made in accordance with program regulations. Views of Responsible Officials and Planned Corrective Action: The Director of Finance and Accounting will: ? Compare the indirect admin being charged on every state and federal contract to the most recent contract agreement and/or documents. ? Identify errors and inform the Director of Revenue and Reporting so that corrections can be made. Preventative Action to Prevent Future Recurrence: ? The Fiscal department is implementing a new ERP system (NetSuite) which includes a grants/contract module. This new software will allow for contract documents to be stored in a systematic manner for each federal; state, city and private contract, award or grant. ? The NetSuite System Administrators will ensure that contract documents for all active contracts are uploaded into NetSuite?s Grants Module and that relevant financial information is entered into the master record. ? Indirect admin revenue will be captured in the general ledger under a separate GL code to allow for visibility into the percentage of revenue billed. ? Reports will be generated identifying the funder type; name; contract number; allowable indirect admin rate; actual admin revenue and a calculation of the indirect rate based on indirect revenue and actual expenses for comparison purposes. ? The Director of Finance and Accounting/and or his or her designee will compare the level of indirect admin revenue billed to the funder against the contract stated indirect rate on a monthly basis.

Condition: Recipients of ESG funding may use up to 7.5% of ESG program project costs for administration, and recipients of ESG-CV may use up to 10% of program costs for administration. However, 12% had been charged to the ESG and ESG-CV federal awards for administration. Criteria: Organizations operating the Emergency Solutions Grants Program are required to maintain sufficient internal controls to ensure compliance with earmarking requirements. Context: The testing found an overbilling of the administrative costs in the amount of $53,705. Effect: The administrative costs charged to the federal award are not in accordance with program regulations. Cause: Community Teamwork, Inc.?s internal controls were not operating effectively to prevent or detect the overbilling of the administrative costs. Auditor's Recommendation: Community Teamwork, Inc. implement additional internal control procedures to review contract terms and to ensure that administrative costs charged to the federal awards are made in accordance with program regulations. Views of Responsible Officials and Planned Corrective Action: The Director of Finance and Accounting will: ? Compare the indirect admin being charged on every state and federal contract to the most recent contract agreement and/or documents. ? Identify errors and inform the Director of Revenue and Reporting so that corrections can be made. Preventative Action to Prevent Future Recurrence: ? The Fiscal department is implementing a new ERP system (NetSuite) which includes a grants/contract module. This new software will allow for contract documents to be stored in a systematic manner for each federal; state, city and private contract, award or grant. ? The NetSuite System Administrators will ensure that contract documents for all active contracts are uploaded into NetSuite?s Grants Module and that relevant financial information is entered into the master record. ? Indirect admin revenue will be captured in the general ledger under a separate GL code to allow for visibility into the percentage of revenue billed. ? Reports will be generated identifying the funder type; name; contract number; allowable indirect admin rate; actual admin revenue and a calculation of the indirect rate based on indirect revenue and actual expenses for comparison purposes. ? The Director of Finance and Accounting/and or his or her designee will compare the level of indirect admin revenue billed to the funder against the contract stated indirect rate on a monthly basis.

Condition: 1) One of the 40 clients selected for testing did not receive the entitled assistance payment for the utility in arrears. 2) There was an overpayment of the rental assistance arrears payment made on behalf of one out of 40 clients selected for testing. Criteria: Organizations operating the Emergency Rental Assistance Program are required to maintain sufficient internal controls to ensure compliance with eligibility requirement. Context: A sample of 40 clients with total assistance payment of $474,738 were selected for testing for the year. The testing found two files with incorrect utility and rental assistance payment amounts totaling $1,381. Effect: The assistance payments on behalf of the two clients noted above are not made in accordance with program regulations. Cause: Community Teamwork, Inc.?s internal controls were not operating effectively to prevent or detect incorrect assistance payments made on behalf of the clients participating in the program. Auditor's Recommendation: Community Teamwork, Inc. provide additional staff training and implement additional internal control procedures to ensure that utility and rental assistance payments made on behalf of the clients participating in the program are made in accordance with program regulations. Views of Responsible Officials and Planned Corrective Action: Community Teamwork, Inc. agrees with this finding and will provide policies and guidance trainings to all staff on a weekly basis. CTI staff will be required to attend DHCD bi-monthly trainings. In addition, CTI has finalized the hiring of a Quality Control Manager who will start on November 28, 2022, and the addition of the Quality Control Manager will help provide ongoing internal quality control.