Equipment and Real Property Management (Significant Deficiency ? Equipment Management) Condition: During our equipment testing procedures, we noted the equipment listing provided was incomplete and a physical inventory had not been performed since 2014. Criteria: The Uniform Guidance 2 CFR ?200.313 states that records for equipment acquired with federal funds and federally owned equipment shall be maintained and include a description of the property, the source of funding, who holds title, the acquisition date, cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, any ultimate disposition data including the date of disposal and sales price of the property. Further, a physical inventory of all Federal equipment is required to be performed and results reconciled with the equipment records at least once every two years. Cause: Recent staff turnover in the department has hindered the City?s ability to keep equipment records up to date and track performance of physical inventories. Effect: Failure to maintain equipment records does not allow for proper tracking of equipment purchased with federal funds or proper disposition. Failure to perform physical inventories may create opportunity for fraud through misappropriation, damaged equipment may not be identified, and equipment may not be disposed of properly. Isolated Instance or Systematic Problem: Systematic problem. Repeat of Finding in the Immediately Prior Audit (with Prior Year Audit Finding Number (where applicable)): Yes ? 2021-002 Recommendation: The City should update the equipment records and ensure all equipment acquired with Federal funds is included on the listing and perform an inventory observation. The equipment listing should be maintained by several individuals in the event of any turnover and overseen by another member of management. We further recommend that management ensure that compliance with equipment is maintained within the department including updated lists and inventory observations as required.
Special Tests ? Required Certifications and HUD Approvals (Significant Deficiency ? Special Tests) Condition: During performing procedures and testing over compliance with Special Tests ? Required Certifications and HUD Approvals, we noted the City did not obtain the required certifications or approvals before obligating or expending funds. Criteria: The Uniform Guidance states that ?CDBG funds (and local funds to be reimbursed with CDBG funds) cannot be obligated or expended before receipt of HUD?s approval of a Request for Release of Funds (RROF) and environmental certification?. Cause: The design and operation of controls appear to be ineffective regarding ensuring proper certification and approval for CDBG expenditures. Effect: Potential unallowable costs being charged to the grant and noncompliance with HUD regulations. Isolated Instance or Systematic Problem: Systematic problem. Repeat of Finding in the Immediately Prior Audit (with Prior Year Audit Finding Number (where applicable)): Yes ? 2021-003 Recommendation: We recommend the City ensure that expenditures are approved only after obtaining proper certifications and approvals.
Reporting (Significant Deficiency ? Reporting) Condition: During testing over compliance with reporting requirements, we noted the CAPER had not been filed or approved by HUD by the required deadline. Criteria: The Consolidated Annual Performance and Evaluation Report (CAPER) is required to be submitted 90 days after the close of a jurisdiction?s program year. (24 CFR ?91.520) Cause: It is likely due to recent staff turnover within the department, the City was not able to submit the report on time. Effect: Noncompliance with requirements noted above and potential further noncompliance due to HUD not being able to perform a review on the information in the report and notify the City of any issues that could have been addressed and corrected to avoid further noncompliance. Isolated Instance or Systematic Problem: Isolated Instance ? It was noted that the City has not had a finding with performance reporting requirements within the last several years. Repeat of Finding in the Immediately Prior Audit (with Prior Year Audit Finding Number (where applicable)): No Recommendation: Management should ensure that policies and procedures pertaining to grant management, including program specific requirements, are communicated to all staff members and implement a process that provides oversight to departments in the event of any turnover to ensure compliance with reporting requirements.
Real Property (Significant Deficiency ? Real Property Disposition) Condition: During testing of compliance over real property, we noted the City does not have a complete listing of real property either purchased with federal funds or managed under a federal program to assist with the primary objectives of providing housing to low-income residents. We also noted the City erroneously disposed of real property with an address of 294 Rhode Island Avenue, Woonsocket, RI, owned by the U.S. Department of Housing and Urban Development, which was intended to provide housing to low-income residents of the City of Woonsocket. Criteria: ? 24 CFR 570.505 Use of Real Property (24 CFR 570.502(a)(5) ? 24 CFR 570.201(b) Basic Eligible Activities - Disposition ? Uniform Guidance 2 CFR 200.303 Internal Controls states: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Cause: ? Insufficient and ineffective internal controls in place over real property dispositions. ? Real property records were not maintained in a way that the City can identify properties either owned or managed under the HUD Federal award programs. Effect: ? Improper recording and use of program income received from sale of real property. ? Improper reporting to HUD regarding changes in use of real property. ? Noncompliance with program requirements relating to primary objectives of providing lowincome housing. ? Failure to maintain real property records leading to inability to properly track properties owned or managed under Federal award programs. ? Possible displacement of low-income residents (ineligible activities). Isolated Instance or Systematic Problem: Systematic problem. Repeat of Finding in the Immediately Prior Audit (with Prior Year Audit Finding Number (where applicable)): No Recommendation: We recommend the City implement a system to ensure all Federal award program activities are tracked and program funds including program income, are used in accordance with all program requirements. We also recommend that the City maintain a list of properties either owned or maintained under federal award programs and supporting documentation for each property as required by Uniform Guidance and HUD regulations. We further recommend that a risk assessment be performed over Federal programs and implement additional controls to address identified risks. Oversight by another department may assist the City to mitigate risk associated with the recent turnover in the Planning and Development Department.
Equipment and Real Property Management (Significant Deficiency ? Equipment Management) Condition: During our equipment testing procedures, we noted the equipment listing provided was incomplete and a physical inventory had not been performed since 2014. Criteria: The Uniform Guidance 2 CFR ?200.313 states that records for equipment acquired with federal funds and federally owned equipment shall be maintained and include a description of the property, the source of funding, who holds title, the acquisition date, cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, any ultimate disposition data including the date of disposal and sales price of the property. Further, a physical inventory of all Federal equipment is required to be performed and results reconciled with the equipment records at least once every two years. Cause: Recent staff turnover in the department has hindered the City?s ability to keep equipment records up to date and track performance of physical inventories. Effect: Failure to maintain equipment records does not allow for proper tracking of equipment purchased with federal funds or proper disposition. Failure to perform physical inventories may create opportunity for fraud through misappropriation, damaged equipment may not be identified, and equipment may not be disposed of properly. Isolated Instance or Systematic Problem: Systematic problem. Repeat of Finding in the Immediately Prior Audit (with Prior Year Audit Finding Number (where applicable)): Yes ? 2021-002 Recommendation: The City should update the equipment records and ensure all equipment acquired with Federal funds is included on the listing and perform an inventory observation. The equipment listing should be maintained by several individuals in the event of any turnover and overseen by another member of management. We further recommend that management ensure that compliance with equipment is maintained within the department including updated lists and inventory observations as required.
Special Tests ? Required Certifications and HUD Approvals (Significant Deficiency ? Special Tests) Condition: During performing procedures and testing over compliance with Special Tests ? Required Certifications and HUD Approvals, we noted the City did not obtain the required certifications or approvals before obligating or expending funds. Criteria: The Uniform Guidance states that ?CDBG funds (and local funds to be reimbursed with CDBG funds) cannot be obligated or expended before receipt of HUD?s approval of a Request for Release of Funds (RROF) and environmental certification?. Cause: The design and operation of controls appear to be ineffective regarding ensuring proper certification and approval for CDBG expenditures. Effect: Potential unallowable costs being charged to the grant and noncompliance with HUD regulations. Isolated Instance or Systematic Problem: Systematic problem. Repeat of Finding in the Immediately Prior Audit (with Prior Year Audit Finding Number (where applicable)): Yes ? 2021-003 Recommendation: We recommend the City ensure that expenditures are approved only after obtaining proper certifications and approvals.
Reporting (Significant Deficiency ? Reporting) Condition: During testing over compliance with reporting requirements, we noted the CAPER had not been filed or approved by HUD by the required deadline. Criteria: The Consolidated Annual Performance and Evaluation Report (CAPER) is required to be submitted 90 days after the close of a jurisdiction?s program year. (24 CFR ?91.520) Cause: It is likely due to recent staff turnover within the department, the City was not able to submit the report on time. Effect: Noncompliance with requirements noted above and potential further noncompliance due to HUD not being able to perform a review on the information in the report and notify the City of any issues that could have been addressed and corrected to avoid further noncompliance. Isolated Instance or Systematic Problem: Isolated Instance ? It was noted that the City has not had a finding with performance reporting requirements within the last several years. Repeat of Finding in the Immediately Prior Audit (with Prior Year Audit Finding Number (where applicable)): No Recommendation: Management should ensure that policies and procedures pertaining to grant management, including program specific requirements, are communicated to all staff members and implement a process that provides oversight to departments in the event of any turnover to ensure compliance with reporting requirements.
Real Property (Significant Deficiency ? Real Property Disposition) Condition: During testing of compliance over real property, we noted the City does not have a complete listing of real property either purchased with federal funds or managed under a federal program to assist with the primary objectives of providing housing to low-income residents. We also noted the City erroneously disposed of real property with an address of 294 Rhode Island Avenue, Woonsocket, RI, owned by the U.S. Department of Housing and Urban Development, which was intended to provide housing to low-income residents of the City of Woonsocket. Criteria: ? 24 CFR 570.505 Use of Real Property (24 CFR 570.502(a)(5) ? 24 CFR 570.201(b) Basic Eligible Activities - Disposition ? Uniform Guidance 2 CFR 200.303 Internal Controls states: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Cause: ? Insufficient and ineffective internal controls in place over real property dispositions. ? Real property records were not maintained in a way that the City can identify properties either owned or managed under the HUD Federal award programs. Effect: ? Improper recording and use of program income received from sale of real property. ? Improper reporting to HUD regarding changes in use of real property. ? Noncompliance with program requirements relating to primary objectives of providing lowincome housing. ? Failure to maintain real property records leading to inability to properly track properties owned or managed under Federal award programs. ? Possible displacement of low-income residents (ineligible activities). Isolated Instance or Systematic Problem: Systematic problem. Repeat of Finding in the Immediately Prior Audit (with Prior Year Audit Finding Number (where applicable)): No Recommendation: We recommend the City implement a system to ensure all Federal award program activities are tracked and program funds including program income, are used in accordance with all program requirements. We also recommend that the City maintain a list of properties either owned or maintained under federal award programs and supporting documentation for each property as required by Uniform Guidance and HUD regulations. We further recommend that a risk assessment be performed over Federal programs and implement additional controls to address identified risks. Oversight by another department may assist the City to mitigate risk associated with the recent turnover in the Planning and Development Department.
Recordkeeping and Documentation for the HOME Investment Partnerships Program (Material Weakness ? Eligibility & Special Tests) Condition: Sufficient records were not maintained to support projects assisted with HOME funds in accordance with 24 CFR ?92.508 Recordkeeping. The City does not maintain a complete schedule of all HOME assisted projects including the necessary information in order to comply with continuing compliance requirements on outstanding loans. We noted several loans not listed on either the HOME Rehab or Homebuyer Down Payment Assistance schedules. We noted loans listed on the incorrect schedule. Home Rehab loans and Homebuyer Down Payment Assistance loans have different continuing compliance requirements. We also noted properties listed on the schedules but were missing information (for example: IDIS #, forgivable loan amount, deferred loan amount). The loan amounts are necessary for reporting the total amount of outstanding loans with continuing compliance requirements on the SEFA. Eligibility: Documentation to support eligibility determinations for new loans issued is incomplete. Special Tests - Continuing Compliance Requirements: Housing Quality Standards Reviews, Income Reverifications, Proof of Residency Verifications, and other Continuing Compliance monitoring requirements were not completed during fiscal year 2022. Criteria: ? Records demonstrating that each project meets the property standards of ?92.251 and the leadbased paint requirements of ?92.355. (?92.508 (a)(3)(iv)) ? Records demonstrating that each family is income eligible in accordance with ?92.203. (?92.508 (a)(3)(v)) ? Records demonstrating that each rental housing project meets the affordability and income targeting requirements of ?92.252 for the required period. Records must be kept for each family assisted. (?92.508 (a)(3)(vii)) ? Records demonstrating that each homeownership project meets the affordability requirements of ?92.254 for the required period. (?92.508 (a)(3)(xi)) Cause: 1) Documentation required to support eligibility determinations is not maintained in applicant files. 2) The City does not maintain a complete listing of all HOME assisted projects including the information necessary to support that eligibility determinations were completed according to compliance requirements and to ensure continuing compliance requirements are met during the period of affordability for outstanding loans. 3) Housing quality inspections, income reverifications, and other continuing compliance requirement monitoring were not completed during FY22 due to recent staff turnover. Effect: The City was unable to identify the projects completed during the fiscal year which can lead to noncompliance with recordkeeping regulations (24 CFR ?92.508), eligibility requirements (24 CFR ?92.2, ?92.1, & ?92.203), and other continuing compliance requirements throughout the period of affordability as noted above. Isolated Instance or Systemic Problem: We consider this to be a ?systemic? problem. Repeat of Finding in the Immediately Prior Audit (with Prior Year Audit Finding Number (where applicable)): Yes. (Prior Year Finding Number 2021-001) Recommendation: We recommend that the City establish and maintain sufficient records in accordance with 24 CFR ?92.508 as well as maintain a complete listing of all HOME assisted projects to also include the program each project received funding through (Homebuyer Down Payment Assistance and Home Rehab Assistance in FY22), the period of affordability and due dates of required verifications or inspections, indication of whether the continuing compliance requirements were met, and any other information or data that would be useful to ensure sufficient tracking of funds provided through the HOME program and compliance with related requirements mentioned above.
Eligibility Determinations for the HOME Program (Material Weakness ? Eligibility) Condition: During testing of compliance with Eligibility requirements, we noted the City issued loans to applicants through the SAFE AT HOME Repair Cost Assistance Program, without completing the eligibility determination process including obtaining the required documentation to support the City?s eligibility determination and performing sufficient reviews and approvals for each project. Criteria: Per the Homeowner Rehabilitation Program Application and Compliance Manual ?Written Agreement? section, the following was noted: ?Before the City provides HOME funds to support homeowner rehabilitation projects, the homeowner(s) must sign a written agreement that meets the requirements of 24 CFR 92.504(c). For homeowners accessing HOME funds for rehabilitation projects, this written agreement will include the following: ? The estimated value of the property, after rehabilitation, will not exceed 95 percent of the median purchase price for the area ? The housing unit will be used as the principal residence of the owner whose family qualifies as a low-income family at the time HOME funds are committed to the project ? The amount and form of HOME assistance ? The rehabilitation work that will be undertaken ? The date for completion ? And the property standards to be met ? The City?s Recapture Policy? The Manual also lists several specific requirements in order for households and individuals to be considered an eligible beneficiary, including income eligibility (25 CFR 5.609). Completed income certifications require review and approval by the City?s HOME Program Compliance Officer. Cause: Required eligibility determinations were not completed (including obtaining required documentation, verifications, reviews and approvals) before providing funding to homeowners. Effect: ? Noncompliance with eligibility compliance requirements per Uniform Guidance and HUD. ? Providing funding to households or individuals that do not meet the eligibility requirements. ? Potential loss or deduction of federal funding in the future due to noncompliance. Isolated Instance or Systematic Problem: We consider this to be a ?systemic? problem. Repeat of Finding in the Immediately Prior Audit (with Prior Year Audit Finding Number (where applicable)): No Recommendation: We recommend that the City implement a quality control process to ensure that controls are in place and effective and that they help to lower the risk of noncompliance with eligibility requirements per Uniform Guidance and HUD requirements.
Housing Quality Standards Inspections for the HOME Program (Significant Deficiency ? Special Tests) Condition: During testing compliance with Housing Quality Standards requirements, it was noted that no inspections or reviews were performed during fiscal year 2022 for properties which received HOME funds and were within the period of affordability. Criteria: Per the HOME Program Compliance Supplement: During the period of affordability (i.e., the period for which the nonfederal entity must maintain subsidized housing) for HOME assisted rental housing, the participating jurisdiction must perform on-site inspections to determine compliance with property standards and verify the information submitted by the owners no less than (a) every three years for projects containing one to four units, (b) every two years for projects containing five to 25 units, and (c) every year for projects containing 26 or more units. The participating jurisdiction must perform on-site inspections of rental housing occupied by tenants receiving HOME/HOME-ARP-assisted tenant-based rental assistance to determine compliance with housing quality standards (24 CFR sections 92.209(i), 92.251(f), and 92.504(d)). Cause: Required inspections were not completed during the fiscal year 2022 for properties within the period of affordability. Effect: ? Noncompliance with Housing Quality Standards requirements per Uniform Guidance and HUD. ? Providing funding to households or individuals that do not meet the continuing compliance requirements. ? Potential loss or reduction of federal funding in the future due to noncompliance. Isolated Instance or Systematic Problem: Systematic problem. Repeat of Finding in the Immediately Prior Audit (with Prior Year Audit Finding Number (where applicable)): No Recommendation: We recommend that the City implement a system to track required inspections on all properties that are within the period of affordability to ensure continuing compliance requirements are met.
Equipment and Real Property Management (Significant Deficiency ? Equipment Management) Condition: During our equipment testing procedures, we noted the equipment listing provided was incomplete and a physical inventory had not been performed since 2014. Criteria: The Uniform Guidance 2 CFR ?200.313 states that records for equipment acquired with federal funds and federally owned equipment shall be maintained and include a description of the property, the source of funding, who holds title, the acquisition date, cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, any ultimate disposition data including the date of disposal and sales price of the property. Further, a physical inventory of all Federal equipment is required to be performed and results reconciled with the equipment records at least once every two years. Cause: Recent staff turnover in the department has hindered the City?s ability to keep equipment records up to date and track performance of physical inventories. Effect: Failure to maintain equipment records does not allow for proper tracking of equipment purchased with federal funds or proper disposition. Failure to perform physical inventories may create opportunity for fraud through misappropriation, damaged equipment may not be identified, and equipment may not be disposed of properly. Isolated Instance or Systematic Problem: Systematic problem. Repeat of Finding in the Immediately Prior Audit (with Prior Year Audit Finding Number (where applicable)): Yes ? 2021-002 Recommendation: The City should update the equipment records and ensure all equipment acquired with Federal funds is included on the listing and perform an inventory observation. The equipment listing should be maintained by several individuals in the event of any turnover and overseen by another member of management. We further recommend that management ensure that compliance with equipment is maintained within the department including updated lists and inventory observations as required.
Special Tests ? Required Certifications and HUD Approvals (Significant Deficiency ? Special Tests) Condition: During performing procedures and testing over compliance with Special Tests ? Required Certifications and HUD Approvals, we noted the City did not obtain the required certifications or approvals before obligating or expending funds. Criteria: The Uniform Guidance states that ?CDBG funds (and local funds to be reimbursed with CDBG funds) cannot be obligated or expended before receipt of HUD?s approval of a Request for Release of Funds (RROF) and environmental certification?. Cause: The design and operation of controls appear to be ineffective regarding ensuring proper certification and approval for CDBG expenditures. Effect: Potential unallowable costs being charged to the grant and noncompliance with HUD regulations. Isolated Instance or Systematic Problem: Systematic problem. Repeat of Finding in the Immediately Prior Audit (with Prior Year Audit Finding Number (where applicable)): Yes ? 2021-003 Recommendation: We recommend the City ensure that expenditures are approved only after obtaining proper certifications and approvals.
Reporting (Significant Deficiency ? Reporting) Condition: During testing over compliance with reporting requirements, we noted the CAPER had not been filed or approved by HUD by the required deadline. Criteria: The Consolidated Annual Performance and Evaluation Report (CAPER) is required to be submitted 90 days after the close of a jurisdiction?s program year. (24 CFR ?91.520) Cause: It is likely due to recent staff turnover within the department, the City was not able to submit the report on time. Effect: Noncompliance with requirements noted above and potential further noncompliance due to HUD not being able to perform a review on the information in the report and notify the City of any issues that could have been addressed and corrected to avoid further noncompliance. Isolated Instance or Systematic Problem: Isolated Instance ? It was noted that the City has not had a finding with performance reporting requirements within the last several years. Repeat of Finding in the Immediately Prior Audit (with Prior Year Audit Finding Number (where applicable)): No Recommendation: Management should ensure that policies and procedures pertaining to grant management, including program specific requirements, are communicated to all staff members and implement a process that provides oversight to departments in the event of any turnover to ensure compliance with reporting requirements.
Real Property (Significant Deficiency ? Real Property Disposition) Condition: During testing of compliance over real property, we noted the City does not have a complete listing of real property either purchased with federal funds or managed under a federal program to assist with the primary objectives of providing housing to low-income residents. We also noted the City erroneously disposed of real property with an address of 294 Rhode Island Avenue, Woonsocket, RI, owned by the U.S. Department of Housing and Urban Development, which was intended to provide housing to low-income residents of the City of Woonsocket. Criteria: ? 24 CFR 570.505 Use of Real Property (24 CFR 570.502(a)(5) ? 24 CFR 570.201(b) Basic Eligible Activities - Disposition ? Uniform Guidance 2 CFR 200.303 Internal Controls states: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Cause: ? Insufficient and ineffective internal controls in place over real property dispositions. ? Real property records were not maintained in a way that the City can identify properties either owned or managed under the HUD Federal award programs. Effect: ? Improper recording and use of program income received from sale of real property. ? Improper reporting to HUD regarding changes in use of real property. ? Noncompliance with program requirements relating to primary objectives of providing lowincome housing. ? Failure to maintain real property records leading to inability to properly track properties owned or managed under Federal award programs. ? Possible displacement of low-income residents (ineligible activities). Isolated Instance or Systematic Problem: Systematic problem. Repeat of Finding in the Immediately Prior Audit (with Prior Year Audit Finding Number (where applicable)): No Recommendation: We recommend the City implement a system to ensure all Federal award program activities are tracked and program funds including program income, are used in accordance with all program requirements. We also recommend that the City maintain a list of properties either owned or maintained under federal award programs and supporting documentation for each property as required by Uniform Guidance and HUD regulations. We further recommend that a risk assessment be performed over Federal programs and implement additional controls to address identified risks. Oversight by another department may assist the City to mitigate risk associated with the recent turnover in the Planning and Development Department.
Equipment and Real Property Management (Significant Deficiency ? Equipment Management) Condition: During our equipment testing procedures, we noted the equipment listing provided was incomplete and a physical inventory had not been performed since 2014. Criteria: The Uniform Guidance 2 CFR ?200.313 states that records for equipment acquired with federal funds and federally owned equipment shall be maintained and include a description of the property, the source of funding, who holds title, the acquisition date, cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, any ultimate disposition data including the date of disposal and sales price of the property. Further, a physical inventory of all Federal equipment is required to be performed and results reconciled with the equipment records at least once every two years. Cause: Recent staff turnover in the department has hindered the City?s ability to keep equipment records up to date and track performance of physical inventories. Effect: Failure to maintain equipment records does not allow for proper tracking of equipment purchased with federal funds or proper disposition. Failure to perform physical inventories may create opportunity for fraud through misappropriation, damaged equipment may not be identified, and equipment may not be disposed of properly. Isolated Instance or Systematic Problem: Systematic problem. Repeat of Finding in the Immediately Prior Audit (with Prior Year Audit Finding Number (where applicable)): Yes ? 2021-002 Recommendation: The City should update the equipment records and ensure all equipment acquired with Federal funds is included on the listing and perform an inventory observation. The equipment listing should be maintained by several individuals in the event of any turnover and overseen by another member of management. We further recommend that management ensure that compliance with equipment is maintained within the department including updated lists and inventory observations as required.
Special Tests ? Required Certifications and HUD Approvals (Significant Deficiency ? Special Tests) Condition: During performing procedures and testing over compliance with Special Tests ? Required Certifications and HUD Approvals, we noted the City did not obtain the required certifications or approvals before obligating or expending funds. Criteria: The Uniform Guidance states that ?CDBG funds (and local funds to be reimbursed with CDBG funds) cannot be obligated or expended before receipt of HUD?s approval of a Request for Release of Funds (RROF) and environmental certification?. Cause: The design and operation of controls appear to be ineffective regarding ensuring proper certification and approval for CDBG expenditures. Effect: Potential unallowable costs being charged to the grant and noncompliance with HUD regulations. Isolated Instance or Systematic Problem: Systematic problem. Repeat of Finding in the Immediately Prior Audit (with Prior Year Audit Finding Number (where applicable)): Yes ? 2021-003 Recommendation: We recommend the City ensure that expenditures are approved only after obtaining proper certifications and approvals.
Reporting (Significant Deficiency ? Reporting) Condition: During testing over compliance with reporting requirements, we noted the CAPER had not been filed or approved by HUD by the required deadline. Criteria: The Consolidated Annual Performance and Evaluation Report (CAPER) is required to be submitted 90 days after the close of a jurisdiction?s program year. (24 CFR ?91.520) Cause: It is likely due to recent staff turnover within the department, the City was not able to submit the report on time. Effect: Noncompliance with requirements noted above and potential further noncompliance due to HUD not being able to perform a review on the information in the report and notify the City of any issues that could have been addressed and corrected to avoid further noncompliance. Isolated Instance or Systematic Problem: Isolated Instance ? It was noted that the City has not had a finding with performance reporting requirements within the last several years. Repeat of Finding in the Immediately Prior Audit (with Prior Year Audit Finding Number (where applicable)): No Recommendation: Management should ensure that policies and procedures pertaining to grant management, including program specific requirements, are communicated to all staff members and implement a process that provides oversight to departments in the event of any turnover to ensure compliance with reporting requirements.
Real Property (Significant Deficiency ? Real Property Disposition) Condition: During testing of compliance over real property, we noted the City does not have a complete listing of real property either purchased with federal funds or managed under a federal program to assist with the primary objectives of providing housing to low-income residents. We also noted the City erroneously disposed of real property with an address of 294 Rhode Island Avenue, Woonsocket, RI, owned by the U.S. Department of Housing and Urban Development, which was intended to provide housing to low-income residents of the City of Woonsocket. Criteria: ? 24 CFR 570.505 Use of Real Property (24 CFR 570.502(a)(5) ? 24 CFR 570.201(b) Basic Eligible Activities - Disposition ? Uniform Guidance 2 CFR 200.303 Internal Controls states: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Cause: ? Insufficient and ineffective internal controls in place over real property dispositions. ? Real property records were not maintained in a way that the City can identify properties either owned or managed under the HUD Federal award programs. Effect: ? Improper recording and use of program income received from sale of real property. ? Improper reporting to HUD regarding changes in use of real property. ? Noncompliance with program requirements relating to primary objectives of providing lowincome housing. ? Failure to maintain real property records leading to inability to properly track properties owned or managed under Federal award programs. ? Possible displacement of low-income residents (ineligible activities). Isolated Instance or Systematic Problem: Systematic problem. Repeat of Finding in the Immediately Prior Audit (with Prior Year Audit Finding Number (where applicable)): No Recommendation: We recommend the City implement a system to ensure all Federal award program activities are tracked and program funds including program income, are used in accordance with all program requirements. We also recommend that the City maintain a list of properties either owned or maintained under federal award programs and supporting documentation for each property as required by Uniform Guidance and HUD regulations. We further recommend that a risk assessment be performed over Federal programs and implement additional controls to address identified risks. Oversight by another department may assist the City to mitigate risk associated with the recent turnover in the Planning and Development Department.
Recordkeeping and Documentation for the HOME Investment Partnerships Program (Material Weakness ? Eligibility & Special Tests) Condition: Sufficient records were not maintained to support projects assisted with HOME funds in accordance with 24 CFR ?92.508 Recordkeeping. The City does not maintain a complete schedule of all HOME assisted projects including the necessary information in order to comply with continuing compliance requirements on outstanding loans. We noted several loans not listed on either the HOME Rehab or Homebuyer Down Payment Assistance schedules. We noted loans listed on the incorrect schedule. Home Rehab loans and Homebuyer Down Payment Assistance loans have different continuing compliance requirements. We also noted properties listed on the schedules but were missing information (for example: IDIS #, forgivable loan amount, deferred loan amount). The loan amounts are necessary for reporting the total amount of outstanding loans with continuing compliance requirements on the SEFA. Eligibility: Documentation to support eligibility determinations for new loans issued is incomplete. Special Tests - Continuing Compliance Requirements: Housing Quality Standards Reviews, Income Reverifications, Proof of Residency Verifications, and other Continuing Compliance monitoring requirements were not completed during fiscal year 2022. Criteria: ? Records demonstrating that each project meets the property standards of ?92.251 and the leadbased paint requirements of ?92.355. (?92.508 (a)(3)(iv)) ? Records demonstrating that each family is income eligible in accordance with ?92.203. (?92.508 (a)(3)(v)) ? Records demonstrating that each rental housing project meets the affordability and income targeting requirements of ?92.252 for the required period. Records must be kept for each family assisted. (?92.508 (a)(3)(vii)) ? Records demonstrating that each homeownership project meets the affordability requirements of ?92.254 for the required period. (?92.508 (a)(3)(xi)) Cause: 1) Documentation required to support eligibility determinations is not maintained in applicant files. 2) The City does not maintain a complete listing of all HOME assisted projects including the information necessary to support that eligibility determinations were completed according to compliance requirements and to ensure continuing compliance requirements are met during the period of affordability for outstanding loans. 3) Housing quality inspections, income reverifications, and other continuing compliance requirement monitoring were not completed during FY22 due to recent staff turnover. Effect: The City was unable to identify the projects completed during the fiscal year which can lead to noncompliance with recordkeeping regulations (24 CFR ?92.508), eligibility requirements (24 CFR ?92.2, ?92.1, & ?92.203), and other continuing compliance requirements throughout the period of affordability as noted above. Isolated Instance or Systemic Problem: We consider this to be a ?systemic? problem. Repeat of Finding in the Immediately Prior Audit (with Prior Year Audit Finding Number (where applicable)): Yes. (Prior Year Finding Number 2021-001) Recommendation: We recommend that the City establish and maintain sufficient records in accordance with 24 CFR ?92.508 as well as maintain a complete listing of all HOME assisted projects to also include the program each project received funding through (Homebuyer Down Payment Assistance and Home Rehab Assistance in FY22), the period of affordability and due dates of required verifications or inspections, indication of whether the continuing compliance requirements were met, and any other information or data that would be useful to ensure sufficient tracking of funds provided through the HOME program and compliance with related requirements mentioned above.
Eligibility Determinations for the HOME Program (Material Weakness ? Eligibility) Condition: During testing of compliance with Eligibility requirements, we noted the City issued loans to applicants through the SAFE AT HOME Repair Cost Assistance Program, without completing the eligibility determination process including obtaining the required documentation to support the City?s eligibility determination and performing sufficient reviews and approvals for each project. Criteria: Per the Homeowner Rehabilitation Program Application and Compliance Manual ?Written Agreement? section, the following was noted: ?Before the City provides HOME funds to support homeowner rehabilitation projects, the homeowner(s) must sign a written agreement that meets the requirements of 24 CFR 92.504(c). For homeowners accessing HOME funds for rehabilitation projects, this written agreement will include the following: ? The estimated value of the property, after rehabilitation, will not exceed 95 percent of the median purchase price for the area ? The housing unit will be used as the principal residence of the owner whose family qualifies as a low-income family at the time HOME funds are committed to the project ? The amount and form of HOME assistance ? The rehabilitation work that will be undertaken ? The date for completion ? And the property standards to be met ? The City?s Recapture Policy? The Manual also lists several specific requirements in order for households and individuals to be considered an eligible beneficiary, including income eligibility (25 CFR 5.609). Completed income certifications require review and approval by the City?s HOME Program Compliance Officer. Cause: Required eligibility determinations were not completed (including obtaining required documentation, verifications, reviews and approvals) before providing funding to homeowners. Effect: ? Noncompliance with eligibility compliance requirements per Uniform Guidance and HUD. ? Providing funding to households or individuals that do not meet the eligibility requirements. ? Potential loss or deduction of federal funding in the future due to noncompliance. Isolated Instance or Systematic Problem: We consider this to be a ?systemic? problem. Repeat of Finding in the Immediately Prior Audit (with Prior Year Audit Finding Number (where applicable)): No Recommendation: We recommend that the City implement a quality control process to ensure that controls are in place and effective and that they help to lower the risk of noncompliance with eligibility requirements per Uniform Guidance and HUD requirements.
Housing Quality Standards Inspections for the HOME Program (Significant Deficiency ? Special Tests) Condition: During testing compliance with Housing Quality Standards requirements, it was noted that no inspections or reviews were performed during fiscal year 2022 for properties which received HOME funds and were within the period of affordability. Criteria: Per the HOME Program Compliance Supplement: During the period of affordability (i.e., the period for which the nonfederal entity must maintain subsidized housing) for HOME assisted rental housing, the participating jurisdiction must perform on-site inspections to determine compliance with property standards and verify the information submitted by the owners no less than (a) every three years for projects containing one to four units, (b) every two years for projects containing five to 25 units, and (c) every year for projects containing 26 or more units. The participating jurisdiction must perform on-site inspections of rental housing occupied by tenants receiving HOME/HOME-ARP-assisted tenant-based rental assistance to determine compliance with housing quality standards (24 CFR sections 92.209(i), 92.251(f), and 92.504(d)). Cause: Required inspections were not completed during the fiscal year 2022 for properties within the period of affordability. Effect: ? Noncompliance with Housing Quality Standards requirements per Uniform Guidance and HUD. ? Providing funding to households or individuals that do not meet the continuing compliance requirements. ? Potential loss or reduction of federal funding in the future due to noncompliance. Isolated Instance or Systematic Problem: Systematic problem. Repeat of Finding in the Immediately Prior Audit (with Prior Year Audit Finding Number (where applicable)): No Recommendation: We recommend that the City implement a system to track required inspections on all properties that are within the period of affordability to ensure continuing compliance requirements are met.