2022-002 Internal Control over Compliance and Compliance ? Special Tests and Provisions Information of the Federal Program: United States Department of Housing and Urban Development AL Number: 14.267 AL Name: Continuum of Care Program Grant Award Number under the Uniform Guidance Requirements: Direct Award Number Award Period MD0147L3B142013 July 1, 2021 - June 30, 2022 MD0408L3G011902 October 1, 2020 - September 30, 2021 MD0408L3G012003 October 1, 2021 - September 30, 2022 Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR section 578.49(b)(1), ?Where grants are used to pay for rent for all or a part of a structure, the rent paid must be reasonable in relation to rents being charged in the area for comparable space. In addition, the rent may not exceed rents currently being charged by the same owner for comparable unassisted space.? Per 24 CFR sections 578.49(b)(2) and 578.51(g) and (j), ?Where grants are used to pay rent for individual housing units, the rent paid must be reasonable in relation to rents being charged for comparable units taking into account relevant features. In addition, the rents may not exceed rents currently being charged by the same owner for comparable unassisted units, and the portion of rents paid with grant funds may not exceed HUD-determined fair market rents. Grant funds in an amount up to one month?s rent may be used to pay the non-recipient landlord for any damages to leased units by homeless participants.? Condition: For 26 of 40 rental payments tested, the HUD Fair Market Rent (FMR) Documentation System data for the appropriate rental locations and rental periods was printed by Catholic Charities prior to paying the rent; however, neither the comparison between the actual monthly rental payment and the FMR, nor the review and approval of the control was documented. Additionally, no documentation was available to support controls over rent reasonableness compared to the rents being charged in the area for comparable space, rent reasonableness compared to rents currently being charged by the same owner for comparable unassisted space, or rent reasonableness of individual housing units in relation to rents being charged for comparable units taking into account relevant features. For 14 of 40 rental payments tested, the Rental Reasonableness Checklist and Certification to evidence the comparison between the actual monthly rental payment and the FMR as well as the rent reasonableness compared to the rents being charged in the area for comparable space was completed, however evidence of approval was not present. Additionally, no documentation was available to support controls over rent reasonableness compared to rents currently being charged by the same owner for comparable unassisted space or rent reasonableness of individual housing units in relation to rents being charged for comparable units taking into account relevant features. For 5 of 40 rental payments tested, the rent exceeds the HUD-determined fair market rents for the period for the zip code of the rental unit. The documented control over the FMR with the use of the Rent Reasonableness Checklist and Certification was not operating effectively as the checklist documented that the rent paid exceeded the FMR. Cause: Catholic Charities? controls, as designed, did not identify the instances identified in the condition above where HUD-determined fair market rents were exceeded. Effect: Insufficient or lack of review of the Rent Reasonableness Checklist and Certification resulted in rent reasonableness controls not operating effectively to identify rental amounts in excess of HUD-determined fair market rents. Failure to appropriately report expenditures on the SEFA could result in audit adjustments. Questioned Costs: There are $471 questioned costs related to the items described above. The five (5) rental assistance expenditures of $6,809 exceeded the HUD-determined fair market rents of $6,338 by $471. Of the 40 samples, the total charges on the five (5) rental assistance expenditures were $6,809 of the $44,364 total rent charges tested. The total rental assistance expenses during the year ended June 30, 2022 totaled $357,867. Context: The conditions outlined above are based on our testing of Catholic Charities? major programs and our overall testing of the accuracy of the SEFA. The nature of these findings is detailed in the condition section above. Any samples selected as part of the overall SEFA review and testing of expenses were performed using a non-statistical method. Repeat Finding: This is a repeat finding of finding number 2021-005. Recommendation: We recommend that Catholic Charities enforce existing policies and procedures to ensure the FMR is formally reconciled to the rent location data to evidence consideration of the required market data. Further, the Rent Reasonableness Checklist and Certification should have evidence of review and approval to substantiate adequate review has been performed. Views of Responsible Officials: Management agrees with the finding and recommendations set forth within and has developed a corrective action plan to address the instances of noncompliance identified and lapses in prescribed internal controls.
2022-002 Internal Control over Compliance and Compliance ? Special Tests and Provisions Information of the Federal Program: United States Department of Housing and Urban Development AL Number: 14.267 AL Name: Continuum of Care Program Grant Award Number under the Uniform Guidance Requirements: Direct Award Number Award Period MD0147L3B142013 July 1, 2021 - June 30, 2022 MD0408L3G011902 October 1, 2020 - September 30, 2021 MD0408L3G012003 October 1, 2021 - September 30, 2022 Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR section 578.49(b)(1), ?Where grants are used to pay for rent for all or a part of a structure, the rent paid must be reasonable in relation to rents being charged in the area for comparable space. In addition, the rent may not exceed rents currently being charged by the same owner for comparable unassisted space.? Per 24 CFR sections 578.49(b)(2) and 578.51(g) and (j), ?Where grants are used to pay rent for individual housing units, the rent paid must be reasonable in relation to rents being charged for comparable units taking into account relevant features. In addition, the rents may not exceed rents currently being charged by the same owner for comparable unassisted units, and the portion of rents paid with grant funds may not exceed HUD-determined fair market rents. Grant funds in an amount up to one month?s rent may be used to pay the non-recipient landlord for any damages to leased units by homeless participants.? Condition: For 26 of 40 rental payments tested, the HUD Fair Market Rent (FMR) Documentation System data for the appropriate rental locations and rental periods was printed by Catholic Charities prior to paying the rent; however, neither the comparison between the actual monthly rental payment and the FMR, nor the review and approval of the control was documented. Additionally, no documentation was available to support controls over rent reasonableness compared to the rents being charged in the area for comparable space, rent reasonableness compared to rents currently being charged by the same owner for comparable unassisted space, or rent reasonableness of individual housing units in relation to rents being charged for comparable units taking into account relevant features. For 14 of 40 rental payments tested, the Rental Reasonableness Checklist and Certification to evidence the comparison between the actual monthly rental payment and the FMR as well as the rent reasonableness compared to the rents being charged in the area for comparable space was completed, however evidence of approval was not present. Additionally, no documentation was available to support controls over rent reasonableness compared to rents currently being charged by the same owner for comparable unassisted space or rent reasonableness of individual housing units in relation to rents being charged for comparable units taking into account relevant features. For 5 of 40 rental payments tested, the rent exceeds the HUD-determined fair market rents for the period for the zip code of the rental unit. The documented control over the FMR with the use of the Rent Reasonableness Checklist and Certification was not operating effectively as the checklist documented that the rent paid exceeded the FMR. Cause: Catholic Charities? controls, as designed, did not identify the instances identified in the condition above where HUD-determined fair market rents were exceeded. Effect: Insufficient or lack of review of the Rent Reasonableness Checklist and Certification resulted in rent reasonableness controls not operating effectively to identify rental amounts in excess of HUD-determined fair market rents. Failure to appropriately report expenditures on the SEFA could result in audit adjustments. Questioned Costs: There are $471 questioned costs related to the items described above. The five (5) rental assistance expenditures of $6,809 exceeded the HUD-determined fair market rents of $6,338 by $471. Of the 40 samples, the total charges on the five (5) rental assistance expenditures were $6,809 of the $44,364 total rent charges tested. The total rental assistance expenses during the year ended June 30, 2022 totaled $357,867. Context: The conditions outlined above are based on our testing of Catholic Charities? major programs and our overall testing of the accuracy of the SEFA. The nature of these findings is detailed in the condition section above. Any samples selected as part of the overall SEFA review and testing of expenses were performed using a non-statistical method. Repeat Finding: This is a repeat finding of finding number 2021-005. Recommendation: We recommend that Catholic Charities enforce existing policies and procedures to ensure the FMR is formally reconciled to the rent location data to evidence consideration of the required market data. Further, the Rent Reasonableness Checklist and Certification should have evidence of review and approval to substantiate adequate review has been performed. Views of Responsible Officials: Management agrees with the finding and recommendations set forth within and has developed a corrective action plan to address the instances of noncompliance identified and lapses in prescribed internal controls.
2022-002 Internal Control over Compliance and Compliance ? Special Tests and Provisions Information of the Federal Program: United States Department of Housing and Urban Development AL Number: 14.267 AL Name: Continuum of Care Program Grant Award Number under the Uniform Guidance Requirements: Direct Award Number Award Period MD0147L3B142013 July 1, 2021 - June 30, 2022 MD0408L3G011902 October 1, 2020 - September 30, 2021 MD0408L3G012003 October 1, 2021 - September 30, 2022 Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR section 578.49(b)(1), ?Where grants are used to pay for rent for all or a part of a structure, the rent paid must be reasonable in relation to rents being charged in the area for comparable space. In addition, the rent may not exceed rents currently being charged by the same owner for comparable unassisted space.? Per 24 CFR sections 578.49(b)(2) and 578.51(g) and (j), ?Where grants are used to pay rent for individual housing units, the rent paid must be reasonable in relation to rents being charged for comparable units taking into account relevant features. In addition, the rents may not exceed rents currently being charged by the same owner for comparable unassisted units, and the portion of rents paid with grant funds may not exceed HUD-determined fair market rents. Grant funds in an amount up to one month?s rent may be used to pay the non-recipient landlord for any damages to leased units by homeless participants.? Condition: For 26 of 40 rental payments tested, the HUD Fair Market Rent (FMR) Documentation System data for the appropriate rental locations and rental periods was printed by Catholic Charities prior to paying the rent; however, neither the comparison between the actual monthly rental payment and the FMR, nor the review and approval of the control was documented. Additionally, no documentation was available to support controls over rent reasonableness compared to the rents being charged in the area for comparable space, rent reasonableness compared to rents currently being charged by the same owner for comparable unassisted space, or rent reasonableness of individual housing units in relation to rents being charged for comparable units taking into account relevant features. For 14 of 40 rental payments tested, the Rental Reasonableness Checklist and Certification to evidence the comparison between the actual monthly rental payment and the FMR as well as the rent reasonableness compared to the rents being charged in the area for comparable space was completed, however evidence of approval was not present. Additionally, no documentation was available to support controls over rent reasonableness compared to rents currently being charged by the same owner for comparable unassisted space or rent reasonableness of individual housing units in relation to rents being charged for comparable units taking into account relevant features. For 5 of 40 rental payments tested, the rent exceeds the HUD-determined fair market rents for the period for the zip code of the rental unit. The documented control over the FMR with the use of the Rent Reasonableness Checklist and Certification was not operating effectively as the checklist documented that the rent paid exceeded the FMR. Cause: Catholic Charities? controls, as designed, did not identify the instances identified in the condition above where HUD-determined fair market rents were exceeded. Effect: Insufficient or lack of review of the Rent Reasonableness Checklist and Certification resulted in rent reasonableness controls not operating effectively to identify rental amounts in excess of HUD-determined fair market rents. Failure to appropriately report expenditures on the SEFA could result in audit adjustments. Questioned Costs: There are $471 questioned costs related to the items described above. The five (5) rental assistance expenditures of $6,809 exceeded the HUD-determined fair market rents of $6,338 by $471. Of the 40 samples, the total charges on the five (5) rental assistance expenditures were $6,809 of the $44,364 total rent charges tested. The total rental assistance expenses during the year ended June 30, 2022 totaled $357,867. Context: The conditions outlined above are based on our testing of Catholic Charities? major programs and our overall testing of the accuracy of the SEFA. The nature of these findings is detailed in the condition section above. Any samples selected as part of the overall SEFA review and testing of expenses were performed using a non-statistical method. Repeat Finding: This is a repeat finding of finding number 2021-005. Recommendation: We recommend that Catholic Charities enforce existing policies and procedures to ensure the FMR is formally reconciled to the rent location data to evidence consideration of the required market data. Further, the Rent Reasonableness Checklist and Certification should have evidence of review and approval to substantiate adequate review has been performed. Views of Responsible Officials: Management agrees with the finding and recommendations set forth within and has developed a corrective action plan to address the instances of noncompliance identified and lapses in prescribed internal controls.
2022-002 Internal Control over Compliance and Compliance ? Special Tests and Provisions Information of the Federal Program: United States Department of Housing and Urban Development AL Number: 14.267 AL Name: Continuum of Care Program Grant Award Number under the Uniform Guidance Requirements: Direct Award Number Award Period MD0147L3B142013 July 1, 2021 - June 30, 2022 MD0408L3G011902 October 1, 2020 - September 30, 2021 MD0408L3G012003 October 1, 2021 - September 30, 2022 Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR section 578.49(b)(1), ?Where grants are used to pay for rent for all or a part of a structure, the rent paid must be reasonable in relation to rents being charged in the area for comparable space. In addition, the rent may not exceed rents currently being charged by the same owner for comparable unassisted space.? Per 24 CFR sections 578.49(b)(2) and 578.51(g) and (j), ?Where grants are used to pay rent for individual housing units, the rent paid must be reasonable in relation to rents being charged for comparable units taking into account relevant features. In addition, the rents may not exceed rents currently being charged by the same owner for comparable unassisted units, and the portion of rents paid with grant funds may not exceed HUD-determined fair market rents. Grant funds in an amount up to one month?s rent may be used to pay the non-recipient landlord for any damages to leased units by homeless participants.? Condition: For 26 of 40 rental payments tested, the HUD Fair Market Rent (FMR) Documentation System data for the appropriate rental locations and rental periods was printed by Catholic Charities prior to paying the rent; however, neither the comparison between the actual monthly rental payment and the FMR, nor the review and approval of the control was documented. Additionally, no documentation was available to support controls over rent reasonableness compared to the rents being charged in the area for comparable space, rent reasonableness compared to rents currently being charged by the same owner for comparable unassisted space, or rent reasonableness of individual housing units in relation to rents being charged for comparable units taking into account relevant features. For 14 of 40 rental payments tested, the Rental Reasonableness Checklist and Certification to evidence the comparison between the actual monthly rental payment and the FMR as well as the rent reasonableness compared to the rents being charged in the area for comparable space was completed, however evidence of approval was not present. Additionally, no documentation was available to support controls over rent reasonableness compared to rents currently being charged by the same owner for comparable unassisted space or rent reasonableness of individual housing units in relation to rents being charged for comparable units taking into account relevant features. For 5 of 40 rental payments tested, the rent exceeds the HUD-determined fair market rents for the period for the zip code of the rental unit. The documented control over the FMR with the use of the Rent Reasonableness Checklist and Certification was not operating effectively as the checklist documented that the rent paid exceeded the FMR. Cause: Catholic Charities? controls, as designed, did not identify the instances identified in the condition above where HUD-determined fair market rents were exceeded. Effect: Insufficient or lack of review of the Rent Reasonableness Checklist and Certification resulted in rent reasonableness controls not operating effectively to identify rental amounts in excess of HUD-determined fair market rents. Failure to appropriately report expenditures on the SEFA could result in audit adjustments. Questioned Costs: There are $471 questioned costs related to the items described above. The five (5) rental assistance expenditures of $6,809 exceeded the HUD-determined fair market rents of $6,338 by $471. Of the 40 samples, the total charges on the five (5) rental assistance expenditures were $6,809 of the $44,364 total rent charges tested. The total rental assistance expenses during the year ended June 30, 2022 totaled $357,867. Context: The conditions outlined above are based on our testing of Catholic Charities? major programs and our overall testing of the accuracy of the SEFA. The nature of these findings is detailed in the condition section above. Any samples selected as part of the overall SEFA review and testing of expenses were performed using a non-statistical method. Repeat Finding: This is a repeat finding of finding number 2021-005. Recommendation: We recommend that Catholic Charities enforce existing policies and procedures to ensure the FMR is formally reconciled to the rent location data to evidence consideration of the required market data. Further, the Rent Reasonableness Checklist and Certification should have evidence of review and approval to substantiate adequate review has been performed. Views of Responsible Officials: Management agrees with the finding and recommendations set forth within and has developed a corrective action plan to address the instances of noncompliance identified and lapses in prescribed internal controls.
2022-002 Internal Control over Compliance and Compliance ? Special Tests and Provisions Information of the Federal Program: United States Department of Housing and Urban Development AL Number: 14.267 AL Name: Continuum of Care Program Grant Award Number under the Uniform Guidance Requirements: Direct Award Number Award Period MD0147L3B142013 July 1, 2021 - June 30, 2022 MD0408L3G011902 October 1, 2020 - September 30, 2021 MD0408L3G012003 October 1, 2021 - September 30, 2022 Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR section 578.49(b)(1), ?Where grants are used to pay for rent for all or a part of a structure, the rent paid must be reasonable in relation to rents being charged in the area for comparable space. In addition, the rent may not exceed rents currently being charged by the same owner for comparable unassisted space.? Per 24 CFR sections 578.49(b)(2) and 578.51(g) and (j), ?Where grants are used to pay rent for individual housing units, the rent paid must be reasonable in relation to rents being charged for comparable units taking into account relevant features. In addition, the rents may not exceed rents currently being charged by the same owner for comparable unassisted units, and the portion of rents paid with grant funds may not exceed HUD-determined fair market rents. Grant funds in an amount up to one month?s rent may be used to pay the non-recipient landlord for any damages to leased units by homeless participants.? Condition: For 26 of 40 rental payments tested, the HUD Fair Market Rent (FMR) Documentation System data for the appropriate rental locations and rental periods was printed by Catholic Charities prior to paying the rent; however, neither the comparison between the actual monthly rental payment and the FMR, nor the review and approval of the control was documented. Additionally, no documentation was available to support controls over rent reasonableness compared to the rents being charged in the area for comparable space, rent reasonableness compared to rents currently being charged by the same owner for comparable unassisted space, or rent reasonableness of individual housing units in relation to rents being charged for comparable units taking into account relevant features. For 14 of 40 rental payments tested, the Rental Reasonableness Checklist and Certification to evidence the comparison between the actual monthly rental payment and the FMR as well as the rent reasonableness compared to the rents being charged in the area for comparable space was completed, however evidence of approval was not present. Additionally, no documentation was available to support controls over rent reasonableness compared to rents currently being charged by the same owner for comparable unassisted space or rent reasonableness of individual housing units in relation to rents being charged for comparable units taking into account relevant features. For 5 of 40 rental payments tested, the rent exceeds the HUD-determined fair market rents for the period for the zip code of the rental unit. The documented control over the FMR with the use of the Rent Reasonableness Checklist and Certification was not operating effectively as the checklist documented that the rent paid exceeded the FMR. Cause: Catholic Charities? controls, as designed, did not identify the instances identified in the condition above where HUD-determined fair market rents were exceeded. Effect: Insufficient or lack of review of the Rent Reasonableness Checklist and Certification resulted in rent reasonableness controls not operating effectively to identify rental amounts in excess of HUD-determined fair market rents. Failure to appropriately report expenditures on the SEFA could result in audit adjustments. Questioned Costs: There are $471 questioned costs related to the items described above. The five (5) rental assistance expenditures of $6,809 exceeded the HUD-determined fair market rents of $6,338 by $471. Of the 40 samples, the total charges on the five (5) rental assistance expenditures were $6,809 of the $44,364 total rent charges tested. The total rental assistance expenses during the year ended June 30, 2022 totaled $357,867. Context: The conditions outlined above are based on our testing of Catholic Charities? major programs and our overall testing of the accuracy of the SEFA. The nature of these findings is detailed in the condition section above. Any samples selected as part of the overall SEFA review and testing of expenses were performed using a non-statistical method. Repeat Finding: This is a repeat finding of finding number 2021-005. Recommendation: We recommend that Catholic Charities enforce existing policies and procedures to ensure the FMR is formally reconciled to the rent location data to evidence consideration of the required market data. Further, the Rent Reasonableness Checklist and Certification should have evidence of review and approval to substantiate adequate review has been performed. Views of Responsible Officials: Management agrees with the finding and recommendations set forth within and has developed a corrective action plan to address the instances of noncompliance identified and lapses in prescribed internal controls.
2022-002 Internal Control over Compliance and Compliance ? Special Tests and Provisions Information of the Federal Program: United States Department of Housing and Urban Development AL Number: 14.267 AL Name: Continuum of Care Program Grant Award Number under the Uniform Guidance Requirements: Direct Award Number Award Period MD0147L3B142013 July 1, 2021 - June 30, 2022 MD0408L3G011902 October 1, 2020 - September 30, 2021 MD0408L3G012003 October 1, 2021 - September 30, 2022 Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR section 578.49(b)(1), ?Where grants are used to pay for rent for all or a part of a structure, the rent paid must be reasonable in relation to rents being charged in the area for comparable space. In addition, the rent may not exceed rents currently being charged by the same owner for comparable unassisted space.? Per 24 CFR sections 578.49(b)(2) and 578.51(g) and (j), ?Where grants are used to pay rent for individual housing units, the rent paid must be reasonable in relation to rents being charged for comparable units taking into account relevant features. In addition, the rents may not exceed rents currently being charged by the same owner for comparable unassisted units, and the portion of rents paid with grant funds may not exceed HUD-determined fair market rents. Grant funds in an amount up to one month?s rent may be used to pay the non-recipient landlord for any damages to leased units by homeless participants.? Condition: For 26 of 40 rental payments tested, the HUD Fair Market Rent (FMR) Documentation System data for the appropriate rental locations and rental periods was printed by Catholic Charities prior to paying the rent; however, neither the comparison between the actual monthly rental payment and the FMR, nor the review and approval of the control was documented. Additionally, no documentation was available to support controls over rent reasonableness compared to the rents being charged in the area for comparable space, rent reasonableness compared to rents currently being charged by the same owner for comparable unassisted space, or rent reasonableness of individual housing units in relation to rents being charged for comparable units taking into account relevant features. For 14 of 40 rental payments tested, the Rental Reasonableness Checklist and Certification to evidence the comparison between the actual monthly rental payment and the FMR as well as the rent reasonableness compared to the rents being charged in the area for comparable space was completed, however evidence of approval was not present. Additionally, no documentation was available to support controls over rent reasonableness compared to rents currently being charged by the same owner for comparable unassisted space or rent reasonableness of individual housing units in relation to rents being charged for comparable units taking into account relevant features. For 5 of 40 rental payments tested, the rent exceeds the HUD-determined fair market rents for the period for the zip code of the rental unit. The documented control over the FMR with the use of the Rent Reasonableness Checklist and Certification was not operating effectively as the checklist documented that the rent paid exceeded the FMR. Cause: Catholic Charities? controls, as designed, did not identify the instances identified in the condition above where HUD-determined fair market rents were exceeded. Effect: Insufficient or lack of review of the Rent Reasonableness Checklist and Certification resulted in rent reasonableness controls not operating effectively to identify rental amounts in excess of HUD-determined fair market rents. Failure to appropriately report expenditures on the SEFA could result in audit adjustments. Questioned Costs: There are $471 questioned costs related to the items described above. The five (5) rental assistance expenditures of $6,809 exceeded the HUD-determined fair market rents of $6,338 by $471. Of the 40 samples, the total charges on the five (5) rental assistance expenditures were $6,809 of the $44,364 total rent charges tested. The total rental assistance expenses during the year ended June 30, 2022 totaled $357,867. Context: The conditions outlined above are based on our testing of Catholic Charities? major programs and our overall testing of the accuracy of the SEFA. The nature of these findings is detailed in the condition section above. Any samples selected as part of the overall SEFA review and testing of expenses were performed using a non-statistical method. Repeat Finding: This is a repeat finding of finding number 2021-005. Recommendation: We recommend that Catholic Charities enforce existing policies and procedures to ensure the FMR is formally reconciled to the rent location data to evidence consideration of the required market data. Further, the Rent Reasonableness Checklist and Certification should have evidence of review and approval to substantiate adequate review has been performed. Views of Responsible Officials: Management agrees with the finding and recommendations set forth within and has developed a corrective action plan to address the instances of noncompliance identified and lapses in prescribed internal controls.
2022-002 Internal Control over Compliance and Compliance ? Special Tests and Provisions Information of the Federal Program: United States Department of Housing and Urban Development AL Number: 14.267 AL Name: Continuum of Care Program Grant Award Number under the Uniform Guidance Requirements: Direct Award Number Award Period MD0147L3B142013 July 1, 2021 - June 30, 2022 MD0408L3G011902 October 1, 2020 - September 30, 2021 MD0408L3G012003 October 1, 2021 - September 30, 2022 Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR section 578.49(b)(1), ?Where grants are used to pay for rent for all or a part of a structure, the rent paid must be reasonable in relation to rents being charged in the area for comparable space. In addition, the rent may not exceed rents currently being charged by the same owner for comparable unassisted space.? Per 24 CFR sections 578.49(b)(2) and 578.51(g) and (j), ?Where grants are used to pay rent for individual housing units, the rent paid must be reasonable in relation to rents being charged for comparable units taking into account relevant features. In addition, the rents may not exceed rents currently being charged by the same owner for comparable unassisted units, and the portion of rents paid with grant funds may not exceed HUD-determined fair market rents. Grant funds in an amount up to one month?s rent may be used to pay the non-recipient landlord for any damages to leased units by homeless participants.? Condition: For 26 of 40 rental payments tested, the HUD Fair Market Rent (FMR) Documentation System data for the appropriate rental locations and rental periods was printed by Catholic Charities prior to paying the rent; however, neither the comparison between the actual monthly rental payment and the FMR, nor the review and approval of the control was documented. Additionally, no documentation was available to support controls over rent reasonableness compared to the rents being charged in the area for comparable space, rent reasonableness compared to rents currently being charged by the same owner for comparable unassisted space, or rent reasonableness of individual housing units in relation to rents being charged for comparable units taking into account relevant features. For 14 of 40 rental payments tested, the Rental Reasonableness Checklist and Certification to evidence the comparison between the actual monthly rental payment and the FMR as well as the rent reasonableness compared to the rents being charged in the area for comparable space was completed, however evidence of approval was not present. Additionally, no documentation was available to support controls over rent reasonableness compared to rents currently being charged by the same owner for comparable unassisted space or rent reasonableness of individual housing units in relation to rents being charged for comparable units taking into account relevant features. For 5 of 40 rental payments tested, the rent exceeds the HUD-determined fair market rents for the period for the zip code of the rental unit. The documented control over the FMR with the use of the Rent Reasonableness Checklist and Certification was not operating effectively as the checklist documented that the rent paid exceeded the FMR. Cause: Catholic Charities? controls, as designed, did not identify the instances identified in the condition above where HUD-determined fair market rents were exceeded. Effect: Insufficient or lack of review of the Rent Reasonableness Checklist and Certification resulted in rent reasonableness controls not operating effectively to identify rental amounts in excess of HUD-determined fair market rents. Failure to appropriately report expenditures on the SEFA could result in audit adjustments. Questioned Costs: There are $471 questioned costs related to the items described above. The five (5) rental assistance expenditures of $6,809 exceeded the HUD-determined fair market rents of $6,338 by $471. Of the 40 samples, the total charges on the five (5) rental assistance expenditures were $6,809 of the $44,364 total rent charges tested. The total rental assistance expenses during the year ended June 30, 2022 totaled $357,867. Context: The conditions outlined above are based on our testing of Catholic Charities? major programs and our overall testing of the accuracy of the SEFA. The nature of these findings is detailed in the condition section above. Any samples selected as part of the overall SEFA review and testing of expenses were performed using a non-statistical method. Repeat Finding: This is a repeat finding of finding number 2021-005. Recommendation: We recommend that Catholic Charities enforce existing policies and procedures to ensure the FMR is formally reconciled to the rent location data to evidence consideration of the required market data. Further, the Rent Reasonableness Checklist and Certification should have evidence of review and approval to substantiate adequate review has been performed. Views of Responsible Officials: Management agrees with the finding and recommendations set forth within and has developed a corrective action plan to address the instances of noncompliance identified and lapses in prescribed internal controls.
2022-002 Internal Control over Compliance and Compliance ? Special Tests and Provisions Information of the Federal Program: United States Department of Housing and Urban Development AL Number: 14.267 AL Name: Continuum of Care Program Grant Award Number under the Uniform Guidance Requirements: Direct Award Number Award Period MD0147L3B142013 July 1, 2021 - June 30, 2022 MD0408L3G011902 October 1, 2020 - September 30, 2021 MD0408L3G012003 October 1, 2021 - September 30, 2022 Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR section 578.49(b)(1), ?Where grants are used to pay for rent for all or a part of a structure, the rent paid must be reasonable in relation to rents being charged in the area for comparable space. In addition, the rent may not exceed rents currently being charged by the same owner for comparable unassisted space.? Per 24 CFR sections 578.49(b)(2) and 578.51(g) and (j), ?Where grants are used to pay rent for individual housing units, the rent paid must be reasonable in relation to rents being charged for comparable units taking into account relevant features. In addition, the rents may not exceed rents currently being charged by the same owner for comparable unassisted units, and the portion of rents paid with grant funds may not exceed HUD-determined fair market rents. Grant funds in an amount up to one month?s rent may be used to pay the non-recipient landlord for any damages to leased units by homeless participants.? Condition: For 26 of 40 rental payments tested, the HUD Fair Market Rent (FMR) Documentation System data for the appropriate rental locations and rental periods was printed by Catholic Charities prior to paying the rent; however, neither the comparison between the actual monthly rental payment and the FMR, nor the review and approval of the control was documented. Additionally, no documentation was available to support controls over rent reasonableness compared to the rents being charged in the area for comparable space, rent reasonableness compared to rents currently being charged by the same owner for comparable unassisted space, or rent reasonableness of individual housing units in relation to rents being charged for comparable units taking into account relevant features. For 14 of 40 rental payments tested, the Rental Reasonableness Checklist and Certification to evidence the comparison between the actual monthly rental payment and the FMR as well as the rent reasonableness compared to the rents being charged in the area for comparable space was completed, however evidence of approval was not present. Additionally, no documentation was available to support controls over rent reasonableness compared to rents currently being charged by the same owner for comparable unassisted space or rent reasonableness of individual housing units in relation to rents being charged for comparable units taking into account relevant features. For 5 of 40 rental payments tested, the rent exceeds the HUD-determined fair market rents for the period for the zip code of the rental unit. The documented control over the FMR with the use of the Rent Reasonableness Checklist and Certification was not operating effectively as the checklist documented that the rent paid exceeded the FMR. Cause: Catholic Charities? controls, as designed, did not identify the instances identified in the condition above where HUD-determined fair market rents were exceeded. Effect: Insufficient or lack of review of the Rent Reasonableness Checklist and Certification resulted in rent reasonableness controls not operating effectively to identify rental amounts in excess of HUD-determined fair market rents. Failure to appropriately report expenditures on the SEFA could result in audit adjustments. Questioned Costs: There are $471 questioned costs related to the items described above. The five (5) rental assistance expenditures of $6,809 exceeded the HUD-determined fair market rents of $6,338 by $471. Of the 40 samples, the total charges on the five (5) rental assistance expenditures were $6,809 of the $44,364 total rent charges tested. The total rental assistance expenses during the year ended June 30, 2022 totaled $357,867. Context: The conditions outlined above are based on our testing of Catholic Charities? major programs and our overall testing of the accuracy of the SEFA. The nature of these findings is detailed in the condition section above. Any samples selected as part of the overall SEFA review and testing of expenses were performed using a non-statistical method. Repeat Finding: This is a repeat finding of finding number 2021-005. Recommendation: We recommend that Catholic Charities enforce existing policies and procedures to ensure the FMR is formally reconciled to the rent location data to evidence consideration of the required market data. Further, the Rent Reasonableness Checklist and Certification should have evidence of review and approval to substantiate adequate review has been performed. Views of Responsible Officials: Management agrees with the finding and recommendations set forth within and has developed a corrective action plan to address the instances of noncompliance identified and lapses in prescribed internal controls.