New York City Department of Human Resources Administration (“HRA”)
Finding #: 2023-003
Funding Year(s): 9/13/2021 – 9/12/2023
Emergency Solutions Grants Program (FAL #14.231)
Contract Number: E21MC360104
Federal Agency: U.S. Department of Housing and Urban Development
Type of Finding: Special Tests and Provisions - Compliance and Internal Control (Control Deficiency)
Criteria:
Per 24 CFR Section 576.203(a)(2), within 180 days after the date that HUD signs the grant agreement with the metropolitan city, urban county, or territory, the recipient must obligate all the grant amount, except the amount for its administrative costs. Total grant award obligations are required to be reported to HUD through the Integrated Disbursement and Information System (“IDIS”), using a PR-91 ESG Financial Summary Report.
Condition/Context:
HUD signed HRA’s Emergency Solutions Grants Program (“ESG”) grant agreement #E21MC360104 on September 13, 2021, and as such the total grant amount was required to be obligated by March 12, 2022. Per the PR-91 ESG Financial Summary Report submitted by HRA through IDIS on February 2, 2023, none of the total $14,799,420 award had been obligated by the required due date.
Cause/Effect:
While HRA has policies and procedures in place regarding the review and approval of the PR-91 ESG Financial Report, this process did not include a comprehensive review to ensure that HRA obligated all grant funding within the required timeframe prior to submission. As such, this resulted in HRA’s non-compliance.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This finding is similar to finding #2022-003, included on page 236 of the Fiscal 2022 Single Audit report.
Recommendation:
We recommend that HRA strengthen their internal controls over the special tests and provisions process to ensure all grant amounts are obligated within the required 180-day timeframe, and that the obligation is properly reviewed prior to the PR-91 ESG Financial Report submission through IDIS.
New York City Human Resources Administration (“HRA”)
Finding #: 2023-002
Funding Year(s): 10/19/2017 - 9/1/2027
HOME Investment Partnerships Program (FAL #14.239)
Contract Numbers: M-17-MC-36-0204; M-18-MC-36-0204; M-19-MC-36-0204
Federal Agency: U.S. Department of Housing and Urban Development
Type of Finding: Allowable Costs and Eligibility - Material Noncompliance and Internal Control (Material Weakness)
Criteria:
In accordance with 23 CFR sections 1.9, 172.11(a), 420.113(a), and 630.106(a), costs incurred under federal awards are considered allowable and reimbursable when such costs are deemed necessary and reasonable; incurred subsequent to the date of authorization to proceed and in accordance with the conditions contained in the project agreement and the plans specifications; and, not included as costs used to meet cost sharing or matching requirements, among other things.
As stipulated by 24 CFR §92.209, tenant-based rental assistance (“TBRA”) may only be provided to very low- and low-income families. The participating jurisdiction must determine that the family is very low- or low-income before the assistance is provided. During the period of assistance, the participating jurisdiction must annually determine that the family continues to be low-income. Also, the maximum monthly assistance that a participating jurisdiction may pay to, or on behalf of, a family may not exceed the difference between a rent standard for the unit size established by the participating jurisdiction and 30% of the family's monthly adjusted income. Additionally, the participating jurisdiction must disapprove a lease if the rent is not reasonable, based on rents that are charged for comparable unassisted rental units.
Additionally, as stipulated by 2 CFR Section 200.303, recipients of federal awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers.
Condition/Context:
The New York City Human Resources Administration (“HRA”) utilizes the Current System to assess beneficiaries’ eligibility to receive tenant based rental assistance through the HOME Investment Partnerships Program (“HOME”). To assess eligibility, HRA program staff obtain income supporting documentation to determine if the household met the low-income requirement and to calculate the maximum subsidy amount to be paid by HRA. Additionally, a rent reasonableness valuation is performed which compares the current beneficiary’s rent to other rents charged for comparable units to ensure reasonableness. Upon the completion of the eligibility determination by an HRA staff member, a designated program supervisor reviews and approves the eligibility determination, subsidy amount, and tenant share within the Current System.
We selected a non-statistical sample of forty (40) rental assistance payments made on behalf of tenants during fiscal 2023 and found that eight (8) of the selections had errors as follows:
• For five (5) of the eight (8) selections, it was noted that HRA’s share of monthly rent was determined to be lower than the amounts actually paid on behalf of the tenants. For these selections, HRA’s share of monthly rent was calculated as $1,709, $1,293, $1,410, $1,078, and $1,363. However, due to manual input errors, the amounts actually paid on behalf of these tenants were $1,742, $1,320, $1,469, $1,096, and $1,521, respectively.
• For three (3) of the eight (8) selections, it was noted that HRA’s share of monthly rent was determined to be higher than the amounts actually paid on behalf of the tenants. For these selections, HRA’s share of monthly rent was calculated as $2,326, $1,240, and $1,740. However, due to manual input errors, the amounts actually paid on behalf of these tenants were $2,233, $1,210, and $1,640 respectively.
Total TBRA payments charged to the grant were $5,521,322 and total TBRA benefits subjected to testing were $60,087.
Cause/Effect:
While HRA has a process in place to assess the eligibility of tenants and calculate the monthly TBRA payments on behalf of those tenants to ensure allowability of costs incurred, a comprehensive review was not consistently performed to support those determinations and calculations. As a result, costs were incurred on behalf of certain tenants that may not have met the eligibility requirements, or an incorrect amount may have been paid on their behalf.
Questioned Costs:
Known questioned costs totaled $296.
Identification as a Repeat Finding:
This finding is similar to finding #2022-012, included on pages 253 through 255 of the Fiscal 2022 Single Audit report.
Recommendation:
We recommend that HRA strengthen their internal controls governing the eligibility determination and monthly TBRA payment calculation process, including creating a comprehensive review checklist to ensure each tenant meets every eligibility requirement and HRA’s portion of the TBRA payments are properly calculated, and that appropriate supervisory review and approval is consistently performed and documented prior to processing payments and charging costs to the grant.
New York City Department of Housing Preservation and Development (“HPD”)
Finding #: 2023-006
Funding Year(s): 10/19/2017 - 09/01/2029
HOME Investment Partnership Program (FAL #14.239)
Contract Number: M-17-MC-36-0204; M-18-MC-36-0204; M-19-MC-36-0204; M-20-MC-36-0204, M-21-MC-36-0204
Federal Agency: U.S. Department of Housing and Urban Development
Type of Finding: Special Tests and Provisions Compliance
Criteria:
During the period of affordability for which the non-federal entity must maintain subsidized housing for the HOME-assisted rental housing program, the participating jurisdiction must perform on-site inspections at least once every three (3) years to determine compliance with Housing Quality Standards (24 CFR sections 92.209(i), 92.251(f), and 92.504(d)). Furthermore, for any failed inspections, the appropriate repairs to bring the building into compliance must be performed timely.
Condition/Context:
HPD has policies and procedures in place to identify units which require Housing Quality Standards inspections and performs inspections of these units to help ensure that any needed repairs are completed within the stipulated timeframe. For those units in need of repairs, HPD’s policy requires that repairs be completed within 90 days after the initial inspection and supported by a Certificate of Repairs form. In accordance with the individual agreements between HPD and the Sponsors of the respective housing projects, the Sponsors are responsible for maintaining compliance with the Housing Quality Standards, and HPD inspections are conducted to help ensure the respective Sponsors are maintaining compliance. Additionally, there are clauses within the individual agreements between HPD and the Sponsor which allows HPD to exercise remedies such as restricting funding to Sponsors who do not comply with the Housing Quality Standards.
Our procedures identified six (6) instances from a sample of forty (40), where the necessary repairs were not made by the Sponsors within the stipulated 90-day period.
Cause/Effect:
While HPD conducts monitoring procedures to help ensure that Housing Quality Standards are maintained and, when necessary, related repairs are performed by the respective Sponsors within the prescribed 90-day timeframe, we noted that the necessary repairs were not consistently completed within the stipulated timeframe or not completed at all. Incomplete and/or repairs that do not meet the stipulated completion timeframe could result in Sponsored projects not maintaining the appropriate quality of living conditions for tenants and, therefore, not comply with the applicable Housing Quality Standards.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This finding is similar to finding #2022-008, included on pages 243 and 244 of the Fiscal 2022 Single Audit report.
Recommendation:
While contract provisions between HPD and the respective Sponsors permit HPD to exercise remedies, which may include the withdrawal of future funding, HPD did not elect to exercise any such remedies. Accordingly, we recommend that HPD continue to strengthen its monitoring of Sponsors in connection with housing quality inspections and determine, on a case-by-case basis, whether to exercise appropriate remedies in accordance with contract provisions or consider documenting its rationale for not doing so.
New York City Human Resources Administration (“HRA”)
Finding #: 2023-004
Funding Year(s): 9/13/2021 - 11/8/2026
Housing Opportunities for Persons with AIDS (HOPWA) (FAL #14.241)
Contract Numbers: NYH21F002; NYH22F002; NYH23F002
Federal Agency: U.S. Department of Housing and Urban Development
Type of Finding: Special Tests and Provisions - Internal Control (Significant Deficiency)
Criteria:
All housing that is assisted under specific HOPWA activities per CFR sections 574.300(b) (3), (4), (5), and (8) must meet specific applicable Housing Quality Standards (“HQS”) as outlined in 24 CFR section 574.310(b) determined by on-site inspections.
Additionally, as stipulated by 2 CFR Section 200.303, recipients of federal awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers.
Condition/Context:
Prior to providing rental assistance to landlords, HRA conducts on-site inspections to ensure each unit meets all applicable Housing Quality Standards. During each inspection, a HRA Case Manager would assign a Quality Assurance (“QA”) Inspector to complete an inspection checklist, which outlines each standard and documents if the unit passed or failed each requirement. The QA Inspector would sign off on the report and provide it to the landlord, noting if any repairs are required. In addition to the initial annual inspection, if there were any adverse findings identified, the Case Manager would conduct follow-up visits for that unit until the findings were remediated. Landlords are required to address any deficiencies and violations found through a Corrective Action Plan (CAP) within 30 days of the receipt of the failed inspection letter. HRA would then ensure a physical inspection was conducted prior to June 30, 2023. In accordance with the individual agreements between HRA and the landlords of the units receiving the rental assistance, the landlords are responsible for maintaining compliance with the HQS, and the HRA inspections are conducted to help ensure the respective landlords are maintaining compliance.
We selected a non-statistical sample of twenty-four (24) units that were subject to an initial inspection by HRA during fiscal 2023 and noted that for eight (8) selections, HRA was unable to provide a copy of the inspection checklist that was completed by the QA Inspector prior to assistance being provided for the unit.
Cause/Effect:
While HRA conducts monitoring procedures to help ensure that Housing Quality Standards are maintained and, when necessary, related repairs are performed by the respective landlords within the prescribed 30-day timeframe, we noted that the inspection checklists used to document such procedures were not consistently maintained. If controls aren’t in place to ensure each unit is properly inspected in accordance with the guidelines and HRA’s policies, there is a risk that some units may not meet the appropriate quality of living conditions for tenants and, therefore, not comply with the applicable Housing Quality Standards.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This finding is similar to finding #2022-014, included on pages 258 and 259 of the Fiscal 2022 Single Audit report.
Recommendation:
We recommend that HRA strengthen their internal controls governing the Housing Quality Standards inspection process, including that appropriate documentation is maintained for each inspection performed, to ensure compliance with the requirements is met for each unit under their supervision.
New York City Human Resources Administration (“HRA”)
Finding #: 2023-005
Funding Year(s): 9/13/2021 - 11/8/2026
Housing Opportunities for Persons with AIDS (HOPWA) (FAL #14.241)
Contract Numbers: NYH21F002; NYH22F002; NYH23F002
Federal Agency: U.S. Department of Housing and Urban Development
Type of Finding: Eligibility - Compliance and Internal Control (Significant Deficiency)
Criteria:
As stipulated by 24 CFR Section 574.3, to be eligible to receive HOPWA funded benefits, a participant must be diagnosed with an acquired immunodeficiency syndrome or related diseases and be a low-income individual, as determined by the Secretary of Housing and Urban Development. HRA utilizes the household income of eligible participants to calculate the monthly rental assistance payment to be made on their behalf. The amount of grant funds used to pay monthly assistance for an eligible person may not exceed the difference between the lower of the rent standard or reasonable rent. Per 24 CFR 574.320(a)(2) the rent standard shall be established by the grantee and shall be no more than the published section 8 fair market rent (FMR) or the HUD-approved community-wide exception rent for the unit size.
Additionally, as stipulated by 2 CFR Section 200.303, recipients of federal awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers.
Condition/Context:
From a non-statistical sample of sixty-five (65) rental assistance payments made on behalf of tenants during fiscal year 2023 that were selected for testing, we identified the following:
• For two (2) of the selections, HRA utilized household income that was lower than the participants’ actual income, which caused HRA’s monthly rental assistance payment for the selected period to be higher than it should have been. The excess monthly payments for these selections totaled $6.
• For one (1) of the selections, the participant’s share of the monthly rent was incorrectly recorded as $660 instead of $664, which caused HRA’s monthly rental assistance payment for the selected period to be higher than it should have been. The excess payments for this selection totaled $4.
Total rental assistance payments charged to the grant were $21,825,396 and total HOPWA rent subsidies subjected to testing were $83,509.
Cause/Effect:
While HRA has processes in place to assess the eligibility of tenants to receive HOPWA benefits and to calculate the monthly rental assistance payments to be made on their behalf, they did not consistently ensure that the inputs utilized to calculate the monthly rental assistance payment were accurate. As a result, an incorrect monthly rental assistance amount was paid on behalf of certain tenants.
Questioned Costs:
None noted.
Identification as a Repeat Finding:
This finding is similar to finding #2022-013, included on pages 256 and 257 of the Fiscal 2022 Single Audit report.
Recommendation:
We recommend that HRA strengthen their internal controls governing the eligibility process, including ensuring all inputs utilized to calculate the monthly rental assistance amount is accurate and that the review performed to verify that each participant’s rent is not above the FMR limit is appropriately documented, prior to processing payments and charging costs to the grant.
New York City Human Resources Administration (“HRA”)
Finding #: 2023-004
Funding Year(s): 9/13/2021 - 11/8/2026
Housing Opportunities for Persons with AIDS (HOPWA) (FAL #14.241)
Contract Numbers: NYH21F002; NYH22F002; NYH23F002
Federal Agency: U.S. Department of Housing and Urban Development
Type of Finding: Special Tests and Provisions - Internal Control (Significant Deficiency)
Criteria:
All housing that is assisted under specific HOPWA activities per CFR sections 574.300(b) (3), (4), (5), and (8) must meet specific applicable Housing Quality Standards (“HQS”) as outlined in 24 CFR section 574.310(b) determined by on-site inspections.
Additionally, as stipulated by 2 CFR Section 200.303, recipients of federal awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers.
Condition/Context:
Prior to providing rental assistance to landlords, HRA conducts on-site inspections to ensure each unit meets all applicable Housing Quality Standards. During each inspection, a HRA Case Manager would assign a Quality Assurance (“QA”) Inspector to complete an inspection checklist, which outlines each standard and documents if the unit passed or failed each requirement. The QA Inspector would sign off on the report and provide it to the landlord, noting if any repairs are required. In addition to the initial annual inspection, if there were any adverse findings identified, the Case Manager would conduct follow-up visits for that unit until the findings were remediated. Landlords are required to address any deficiencies and violations found through a Corrective Action Plan (CAP) within 30 days of the receipt of the failed inspection letter. HRA would then ensure a physical inspection was conducted prior to June 30, 2023. In accordance with the individual agreements between HRA and the landlords of the units receiving the rental assistance, the landlords are responsible for maintaining compliance with the HQS, and the HRA inspections are conducted to help ensure the respective landlords are maintaining compliance.
We selected a non-statistical sample of twenty-four (24) units that were subject to an initial inspection by HRA during fiscal 2023 and noted that for eight (8) selections, HRA was unable to provide a copy of the inspection checklist that was completed by the QA Inspector prior to assistance being provided for the unit.
Cause/Effect:
While HRA conducts monitoring procedures to help ensure that Housing Quality Standards are maintained and, when necessary, related repairs are performed by the respective landlords within the prescribed 30-day timeframe, we noted that the inspection checklists used to document such procedures were not consistently maintained. If controls aren’t in place to ensure each unit is properly inspected in accordance with the guidelines and HRA’s policies, there is a risk that some units may not meet the appropriate quality of living conditions for tenants and, therefore, not comply with the applicable Housing Quality Standards.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This finding is similar to finding #2022-014, included on pages 258 and 259 of the Fiscal 2022 Single Audit report.
Recommendation:
We recommend that HRA strengthen their internal controls governing the Housing Quality Standards inspection process, including that appropriate documentation is maintained for each inspection performed, to ensure compliance with the requirements is met for each unit under their supervision.
New York City Human Resources Administration (“HRA”)
Finding #: 2023-005
Funding Year(s): 9/13/2021 - 11/8/2026
Housing Opportunities for Persons with AIDS (HOPWA) (FAL #14.241)
Contract Numbers: NYH21F002; NYH22F002; NYH23F002
Federal Agency: U.S. Department of Housing and Urban Development
Type of Finding: Eligibility - Compliance and Internal Control (Significant Deficiency)
Criteria:
As stipulated by 24 CFR Section 574.3, to be eligible to receive HOPWA funded benefits, a participant must be diagnosed with an acquired immunodeficiency syndrome or related diseases and be a low-income individual, as determined by the Secretary of Housing and Urban Development. HRA utilizes the household income of eligible participants to calculate the monthly rental assistance payment to be made on their behalf. The amount of grant funds used to pay monthly assistance for an eligible person may not exceed the difference between the lower of the rent standard or reasonable rent. Per 24 CFR 574.320(a)(2) the rent standard shall be established by the grantee and shall be no more than the published section 8 fair market rent (FMR) or the HUD-approved community-wide exception rent for the unit size.
Additionally, as stipulated by 2 CFR Section 200.303, recipients of federal awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers.
Condition/Context:
From a non-statistical sample of sixty-five (65) rental assistance payments made on behalf of tenants during fiscal year 2023 that were selected for testing, we identified the following:
• For two (2) of the selections, HRA utilized household income that was lower than the participants’ actual income, which caused HRA’s monthly rental assistance payment for the selected period to be higher than it should have been. The excess monthly payments for these selections totaled $6.
• For one (1) of the selections, the participant’s share of the monthly rent was incorrectly recorded as $660 instead of $664, which caused HRA’s monthly rental assistance payment for the selected period to be higher than it should have been. The excess payments for this selection totaled $4.
Total rental assistance payments charged to the grant were $21,825,396 and total HOPWA rent subsidies subjected to testing were $83,509.
Cause/Effect:
While HRA has processes in place to assess the eligibility of tenants to receive HOPWA benefits and to calculate the monthly rental assistance payments to be made on their behalf, they did not consistently ensure that the inputs utilized to calculate the monthly rental assistance payment were accurate. As a result, an incorrect monthly rental assistance amount was paid on behalf of certain tenants.
Questioned Costs:
None noted.
Identification as a Repeat Finding:
This finding is similar to finding #2022-013, included on pages 256 and 257 of the Fiscal 2022 Single Audit report.
Recommendation:
We recommend that HRA strengthen their internal controls governing the eligibility process, including ensuring all inputs utilized to calculate the monthly rental assistance amount is accurate and that the review performed to verify that each participant’s rent is not above the FMR limit is appropriately documented, prior to processing payments and charging costs to the grant.
New York City Housing Preservation & Development (“HPD”)
Finding #: 2023-014
Funding Year(s): 7/1/2022 – 6/30/2023
Section 8 Project-Based Cluster:
Section 8 Moderate Rehabilitation Single Room Occupancy (FAL #14.249)
Lower Income Housing Assistance Program – Section 8 Moderate Rehabilitation (FAL #14.856)
Contract Numbers: N/A
Federal Agency: U.S. Department of Housing and Urban Development (“HUD”)
Type of Finding: Eligibility and Special Tests and Provisions - Material Noncompliance and Internal Control (Material Weakness)
Criteria:
As stipulated by 24 CFR Section 880.603, prior to providing housing assistance payments (HAP) to participants, HPD must verify the eligibility of applicants by (a) obtaining signed applications; (b) conducting verifications of family income and other pertinent information; (c) documenting inspections and tenant certifications, as appropriate; and, (d) determining that tenant income did not exceed the maximum limit set by HUD. HPD must also reexamine family income and composition for each tenant at least once every 12 months to verify continued eligibility and adjust the HAP amount, as necessary. Further, HPD must maintain an up-to-date utility allowance schedule and establish procedures to properly apply the updated utility allowances to each tenant’s HAP calculations as part of the annual reexamination process.
Additionally, as stipulated by 2 CFR Section 200.303, recipients of Federal Awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers.
Condition/Context:
To assess eligibility, HPD’s policy is to conduct annual recertifications of family income and composition. As part of that process, HPD sends a recertification package to the head of household, which contains documentation that the tenant must complete for verification purposes. HPD then analyzes and verifies all information included in the recertification package to determine if the tenant is eligible to continue to receive HAPs and adjust the tenant rent and HAP amounts as necessary for the following 12-month period.
We selected a non-statistical sample of forty (40) tenants who received HAPs under the Section 8 Project-Based Cluster during fiscal year 2023. For twenty-five (25) of the tenants tested, HPD was not able to provide documentation to support that an eligibility recertification for the tenant, including a review of the utility allowance and HAP calculation, was performed within the previous 12 months, as required.
Cause/Effect:
While HPD has a process in place to assess the eligibility of tenants receiving HAPs under the Section 8 Project-Based Cluster, the reexamination of family income and composition and utility allowance was not consistently performed for each tenant at least once every 12 months to support the tenant’s continued eligibility to receive benefits through this program at the appropriate amounts.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that HPD strengthen their internal controls governing the eligibility requirements, including implementing a control to ensure recertifications of family income and composition are performed at least once every 12 months and the tenants HAP amount and tenant utility allowance is adjusted as necessary to meet the eligibility requirements per 24 CFR sections 880.603, 881.601, 882.514, 882.808, 833.701, 884.214, 886.119, and 886.318.
New York City Housing Preservation & Development (“HPD”)
Finding #: 2023-015
Funding Year(s): 7/1/2022 – 6/30/2023
Section 8 Project-Based Cluster:
Section 8 Moderate Rehabilitation Single Room Occupancy (FAL #14.249)
Lower Income Housing Assistance Program – Section 8 Moderate Rehabilitation (FAL #14.856)
Contract Numbers: N/A
Federal Agency: U.S. Department of Housing and Urban Development
Type of Finding: Special Tests and Provisions - Material Noncompliance and Internal Control (Material Weakness)
Criteria:
Per 24 CFR Section 5.705, a property must be inspected and meet specific Housing Quality Standards (“HQS”) before the property is approved for participation in any of the HUD housing programs. As stipulated in 24 CFR 882.516, in addition to the inspections required prior to the execution of the contract, HPD must inspect contract units at least annually, and at such other times as may be necessary to assure that the owner is meeting the obligations to maintain the units and provide the agreed upon utilities and other services. Further, as per HUD regulation 24 CFR 982.404(a)(3), for any failed inspections, HPD is required to verify that the HQS failure items have been repaired to bring the unit into compliance within 30 days.
Additionally, as stipulated by 2 CFR Section 200.303, recipients of Federal Awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers.
Condition/Context:
HPD has policies and procedures in place to identify units which require HQS inspections and performs inspections of these units to help ensure that any needed repairs are completed within the stipulated timeframe. For those units in need of repairs, HPD’s policy requires that those repairs be completed within thirty (30) days after the initial inspection.
From a non-statistical sample of forty (40) units that were selected for testing, we identified the following:
• For thirty-three (33) of the units tested, HPD was not able to provide documentation to support that an HQS inspection was performed for the unit under contract within the previous 12 months, as required.
• For eight (8) of the tenants tested where the unit under contract failed to meet HQS standards, HPD was not able to provide documentation to support that HPD verified the correction of the failed items through reinspection or alternative means.
Cause/Effect:
While HPD has a process in place to perform periodic HQS inspections for the units under contract that are part of the Section 8 Project-Based Cluster, a HQS inspection was not consistently performed at least once every 12 months to support that the owner is meeting the obligations to maintain the units and provide the agreed upon utilities and other services, as required.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that HPD strengthen their internal controls governing the HQS inspection requirements, including implementing controls to ensure inspections are performed annually for each unit under contract, and for any failed inspections, to verify that the HQS failure items have been repaired to bring the unit into compliance within thirty (30) days, as required.
New York City Housing Preservation & Development (“HPD”)
Finding #: 2023-014
Funding Year(s): 7/1/2022 – 6/30/2023
Section 8 Project-Based Cluster:
Section 8 Moderate Rehabilitation Single Room Occupancy (FAL #14.249)
Lower Income Housing Assistance Program – Section 8 Moderate Rehabilitation (FAL #14.856)
Contract Numbers: N/A
Federal Agency: U.S. Department of Housing and Urban Development (“HUD”)
Type of Finding: Eligibility and Special Tests and Provisions - Material Noncompliance and Internal Control (Material Weakness)
Criteria:
As stipulated by 24 CFR Section 880.603, prior to providing housing assistance payments (HAP) to participants, HPD must verify the eligibility of applicants by (a) obtaining signed applications; (b) conducting verifications of family income and other pertinent information; (c) documenting inspections and tenant certifications, as appropriate; and, (d) determining that tenant income did not exceed the maximum limit set by HUD. HPD must also reexamine family income and composition for each tenant at least once every 12 months to verify continued eligibility and adjust the HAP amount, as necessary. Further, HPD must maintain an up-to-date utility allowance schedule and establish procedures to properly apply the updated utility allowances to each tenant’s HAP calculations as part of the annual reexamination process.
Additionally, as stipulated by 2 CFR Section 200.303, recipients of Federal Awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers.
Condition/Context:
To assess eligibility, HPD’s policy is to conduct annual recertifications of family income and composition. As part of that process, HPD sends a recertification package to the head of household, which contains documentation that the tenant must complete for verification purposes. HPD then analyzes and verifies all information included in the recertification package to determine if the tenant is eligible to continue to receive HAPs and adjust the tenant rent and HAP amounts as necessary for the following 12-month period.
We selected a non-statistical sample of forty (40) tenants who received HAPs under the Section 8 Project-Based Cluster during fiscal year 2023. For twenty-five (25) of the tenants tested, HPD was not able to provide documentation to support that an eligibility recertification for the tenant, including a review of the utility allowance and HAP calculation, was performed within the previous 12 months, as required.
Cause/Effect:
While HPD has a process in place to assess the eligibility of tenants receiving HAPs under the Section 8 Project-Based Cluster, the reexamination of family income and composition and utility allowance was not consistently performed for each tenant at least once every 12 months to support the tenant’s continued eligibility to receive benefits through this program at the appropriate amounts.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that HPD strengthen their internal controls governing the eligibility requirements, including implementing a control to ensure recertifications of family income and composition are performed at least once every 12 months and the tenants HAP amount and tenant utility allowance is adjusted as necessary to meet the eligibility requirements per 24 CFR sections 880.603, 881.601, 882.514, 882.808, 833.701, 884.214, 886.119, and 886.318.
New York City Housing Preservation & Development (“HPD”)
Finding #: 2023-015
Funding Year(s): 7/1/2022 – 6/30/2023
Section 8 Project-Based Cluster:
Section 8 Moderate Rehabilitation Single Room Occupancy (FAL #14.249)
Lower Income Housing Assistance Program – Section 8 Moderate Rehabilitation (FAL #14.856)
Contract Numbers: N/A
Federal Agency: U.S. Department of Housing and Urban Development
Type of Finding: Special Tests and Provisions - Material Noncompliance and Internal Control (Material Weakness)
Criteria:
Per 24 CFR Section 5.705, a property must be inspected and meet specific Housing Quality Standards (“HQS”) before the property is approved for participation in any of the HUD housing programs. As stipulated in 24 CFR 882.516, in addition to the inspections required prior to the execution of the contract, HPD must inspect contract units at least annually, and at such other times as may be necessary to assure that the owner is meeting the obligations to maintain the units and provide the agreed upon utilities and other services. Further, as per HUD regulation 24 CFR 982.404(a)(3), for any failed inspections, HPD is required to verify that the HQS failure items have been repaired to bring the unit into compliance within 30 days.
Additionally, as stipulated by 2 CFR Section 200.303, recipients of Federal Awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers.
Condition/Context:
HPD has policies and procedures in place to identify units which require HQS inspections and performs inspections of these units to help ensure that any needed repairs are completed within the stipulated timeframe. For those units in need of repairs, HPD’s policy requires that those repairs be completed within thirty (30) days after the initial inspection.
From a non-statistical sample of forty (40) units that were selected for testing, we identified the following:
• For thirty-three (33) of the units tested, HPD was not able to provide documentation to support that an HQS inspection was performed for the unit under contract within the previous 12 months, as required.
• For eight (8) of the tenants tested where the unit under contract failed to meet HQS standards, HPD was not able to provide documentation to support that HPD verified the correction of the failed items through reinspection or alternative means.
Cause/Effect:
While HPD has a process in place to perform periodic HQS inspections for the units under contract that are part of the Section 8 Project-Based Cluster, a HQS inspection was not consistently performed at least once every 12 months to support that the owner is meeting the obligations to maintain the units and provide the agreed upon utilities and other services, as required.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that HPD strengthen their internal controls governing the HQS inspection requirements, including implementing controls to ensure inspections are performed annually for each unit under contract, and for any failed inspections, to verify that the HQS failure items have been repaired to bring the unit into compliance within thirty (30) days, as required.
New York City Housing Preservation & Development (“HPD”)
Finding #: 2023-016
Funding Year(s): 7/1/2022 – 6/30/2023
Housing Voucher Cluster:
Section 8 Housing Choice Vouchers (FAL #14.871)
Contract Numbers: N/A
Federal Agency: U.S. Department of Housing and Urban Development
Type of Finding: Eligibility and Special Tests and Provisions - Material Noncompliance and Internal Control (Material Weakness)
Criteria:
As stipulated by 24 CFR Section 982.201, prior to providing housing assistance payments (HAP) to participants, HPD must verify the eligibility of applicants based on their family income and composition. Per 24 CFR section 982.516, HPD must also reexamine family income and composition for each tenant at least once every 12 months to verify continued eligibility and adjust the HAP amount, as necessary. Further, as stipulated by 24 CFR Section 982.517, HPD must maintain an up-to-date utility allowance schedule and establish procedures to properly apply the updated utility allowances to each tenant’s HAP calculations as part of the annual reexamination process.
Additionally, as stipulated by 2 CFR Section 200.303, recipients of Federal Awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers.
Condition/Context:
To assess eligibility, HPD’s policy is to conduct annual recertifications of family income and composition. As part of that process, HPD sends a recertification package to the head of household, which contains documentation that the tenant must complete for verification purposes. HPD then analyzes and verifies all information included in the recertification package to determine if the tenant is eligible to continue to receive HAPs and adjust the tenant rent and HAP amounts as necessary for the following 12-month period.
We selected a non-statistical sample of forty (40) tenants who received HAPs under the Housing Voucher Cluster during fiscal year 2023. For eighteen (18) of the tenants tested, HPD was not able to provide documentation to support that an eligibility recertification for the tenant, including a review of the utility allowance and HAP calculation, was performed within the previous 12 months, as required.
Cause/Effect:
While HPD has a process in place to assess the eligibility of tenants receiving HAPs under the Housing Voucher Cluster, the reexamination of family income and composition and utility allowance was not consistently performed at least once every 12 months to support the tenant’s continued eligibility to receive benefits through this program at the appropriate amounts.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that HPD strengthen their internal controls governing the eligibility requirements, including implementing a control to ensure recertifications of family income and composition are performed at least once every 12 months and the tenants HAP amount and tenant utility allowance is adjusted as necessary to meet the eligibility requirements per 24 CFR sections 5.230, 5.609, 982.201 and 982.516.
New York City Department of Investigation (“DOI”)
Finding #: 2023-009
Funding Year(s): 7/1/2022 – 6/30/2023
Equitable Sharing Program (FAL #16.922)
Contract Numbers: N/A
Federal Agency: U.S. Department of Justice
Type of Finding: Equipment and Real Property Management - Compliance and Internal Control (Significant Deficiency)
Criteria:
As stipulated by 2 CFR section 200.313(d)(2), a physical inventory of property and equipment acquired under a federal award must be taken, and the results reconciled with the property records, at least once every two years.
Also, as stipulated by 2 CFR Section 200.303, recipients of federal awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers.
Condition/Context:
From a non-statistical sample of forty (40) pieces of equipment subjected to testing, DOI was unable to provide supporting documentation for two (2) of the selections, that a review and approval of the inventory had taken place at the time the inventory was conducted.
Cause/Effect:
While DOI had certain procedures in place to monitor their equipment purchased with federal funding, such procedures were not adequate to ensure that each aspect of the equipment and real property management compliance requirements were performed and documented within the requirement timeframe, which resulted in the findings noted above. Without the appropriate internal controls and monitoring procedures in place, federally funded equipment could be inaccurately recorded on inventory records and not discovered and corrected timely, inventory could be misplaced, misappropriated, or otherwise disposed of outside of the requirements of the federal guidelines
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This finding is similar to finding #2022-009, included on pages 245 through 247 of the Fiscal 2022 Single Audit report.
Recommendation:
We recommend that DOI strengthen controls over the inventory process to ensure biennial inventory counts are consistently performed over all equipment within the required timeframe, and that the review and approval of each inventory performed is appropriately documented.
New York City Department of Education (“DOE”)
Finding #: 2023-001
Funding Year(s): 7/1/2021 – 8/31/2022
Title I Grants to Local Educational Agencies (FAL #84.010)
Contract Numbers: 2R1251N01, 2R1251A01, 2R1264A01, 2R1240A01
Twenty-First Century Community Learning Centers (FAL #84.287)
Contract Numbers: 2R3901A01, 2R3911A01, 2R3913A01, 2R3916A01, 2R3922A01, 2R3931A01, 2R3903A01, 2R3904A01
English Language Acquisition Grants (FAL #84.365)
Contract Number: 2R4164A01
Supporting Effective Instruction State Grant (FAL #84.367)
Contract Numbers: 2R2664A01
Pass-Through Agency: New York State Department of Education
Federal Agency: U.S. Department of Education
Type of Finding: Reporting Compliance
Criteria:
As stipulated by the New York State Education Department (“NYSED”) Fiscal Guidelines for Federal and State Grants, program recipients are required to submit to NYSED a signed copy of the Final Expenditure Report for a Federal Project (“FS-10F”) within 90 days following the end of the grant award period.
Condition/Context:
Of the thirty-five (35) FS-10F reports submitted by the DOE during fiscal year 2023, we selected a sample of fourteen (14) FS-10F reports and found that fourteen (14) of the reports tested were submitted after the required due date, as follows:
• Title I Grants to Local Educational Agencies (FAL #84.010): of the four (4) FS-10F reports tested, such reports were submitted between 23 and 160 days late.
• Twenty-First Century Community Learning Centers (FAL #84.287): of the eight (8) FS-10F reports tested, such reports were submitted between 85 and 103 days late.
• English Language Acquisition Grants (FAL #84.365): of the one (1) FS-10F report tested, such report was submitted 167 days late.
• Supporting Effective Instruction State Grants (FAL #84.367): of the one (1) FS-10F report tested, such report was submitted 169 days late.
Cause/Effect:
We were informed that due to open encumbrances which had not been fully liquidated by the FS-10F due date, the DOE was unable to complete and submit the FS-10F financial reports within the stipulated 90-day period, thus resulting in late-filed reports.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This finding is similar to finding #2022-001, included on pages 232 and 233 of the Fiscal 2022 Single Audit report.
Recommendation:
We recommend the DOE consider establishing procedures and operational practices whereby disposition of open encumbrances is accelerated such that all FS-10F expenditure reports are prepared and submitted within the required 90-day timeframe.
New York City Department of Education (“DOE”)
Finding #: 2023-001
Funding Year(s): 7/1/2021 – 8/31/2022
Title I Grants to Local Educational Agencies (FAL #84.010)
Contract Numbers: 2R1251N01, 2R1251A01, 2R1264A01, 2R1240A01
Twenty-First Century Community Learning Centers (FAL #84.287)
Contract Numbers: 2R3901A01, 2R3911A01, 2R3913A01, 2R3916A01, 2R3922A01, 2R3931A01, 2R3903A01, 2R3904A01
English Language Acquisition Grants (FAL #84.365)
Contract Number: 2R4164A01
Supporting Effective Instruction State Grant (FAL #84.367)
Contract Numbers: 2R2664A01
Pass-Through Agency: New York State Department of Education
Federal Agency: U.S. Department of Education
Type of Finding: Reporting Compliance
Criteria:
As stipulated by the New York State Education Department (“NYSED”) Fiscal Guidelines for Federal and State Grants, program recipients are required to submit to NYSED a signed copy of the Final Expenditure Report for a Federal Project (“FS-10F”) within 90 days following the end of the grant award period.
Condition/Context:
Of the thirty-five (35) FS-10F reports submitted by the DOE during fiscal year 2023, we selected a sample of fourteen (14) FS-10F reports and found that fourteen (14) of the reports tested were submitted after the required due date, as follows:
• Title I Grants to Local Educational Agencies (FAL #84.010): of the four (4) FS-10F reports tested, such reports were submitted between 23 and 160 days late.
• Twenty-First Century Community Learning Centers (FAL #84.287): of the eight (8) FS-10F reports tested, such reports were submitted between 85 and 103 days late.
• English Language Acquisition Grants (FAL #84.365): of the one (1) FS-10F report tested, such report was submitted 167 days late.
• Supporting Effective Instruction State Grants (FAL #84.367): of the one (1) FS-10F report tested, such report was submitted 169 days late.
Cause/Effect:
We were informed that due to open encumbrances which had not been fully liquidated by the FS-10F due date, the DOE was unable to complete and submit the FS-10F financial reports within the stipulated 90-day period, thus resulting in late-filed reports.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This finding is similar to finding #2022-001, included on pages 232 and 233 of the Fiscal 2022 Single Audit report.
Recommendation:
We recommend the DOE consider establishing procedures and operational practices whereby disposition of open encumbrances is accelerated such that all FS-10F expenditure reports are prepared and submitted within the required 90-day timeframe.
New York City Department of Education (“DOE”)
Finding #: 2023-001
Funding Year(s): 7/1/2021 – 8/31/2022
Title I Grants to Local Educational Agencies (FAL #84.010)
Contract Numbers: 2R1251N01, 2R1251A01, 2R1264A01, 2R1240A01
Twenty-First Century Community Learning Centers (FAL #84.287)
Contract Numbers: 2R3901A01, 2R3911A01, 2R3913A01, 2R3916A01, 2R3922A01, 2R3931A01, 2R3903A01, 2R3904A01
English Language Acquisition Grants (FAL #84.365)
Contract Number: 2R4164A01
Supporting Effective Instruction State Grant (FAL #84.367)
Contract Numbers: 2R2664A01
Pass-Through Agency: New York State Department of Education
Federal Agency: U.S. Department of Education
Type of Finding: Reporting Compliance
Criteria:
As stipulated by the New York State Education Department (“NYSED”) Fiscal Guidelines for Federal and State Grants, program recipients are required to submit to NYSED a signed copy of the Final Expenditure Report for a Federal Project (“FS-10F”) within 90 days following the end of the grant award period.
Condition/Context:
Of the thirty-five (35) FS-10F reports submitted by the DOE during fiscal year 2023, we selected a sample of fourteen (14) FS-10F reports and found that fourteen (14) of the reports tested were submitted after the required due date, as follows:
• Title I Grants to Local Educational Agencies (FAL #84.010): of the four (4) FS-10F reports tested, such reports were submitted between 23 and 160 days late.
• Twenty-First Century Community Learning Centers (FAL #84.287): of the eight (8) FS-10F reports tested, such reports were submitted between 85 and 103 days late.
• English Language Acquisition Grants (FAL #84.365): of the one (1) FS-10F report tested, such report was submitted 167 days late.
• Supporting Effective Instruction State Grants (FAL #84.367): of the one (1) FS-10F report tested, such report was submitted 169 days late.
Cause/Effect:
We were informed that due to open encumbrances which had not been fully liquidated by the FS-10F due date, the DOE was unable to complete and submit the FS-10F financial reports within the stipulated 90-day period, thus resulting in late-filed reports.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This finding is similar to finding #2022-001, included on pages 232 and 233 of the Fiscal 2022 Single Audit report.
Recommendation:
We recommend the DOE consider establishing procedures and operational practices whereby disposition of open encumbrances is accelerated such that all FS-10F expenditure reports are prepared and submitted within the required 90-day timeframe.
New York City Department of Education (“DOE”)
Finding #: 2023-001
Funding Year(s): 7/1/2021 – 8/31/2022
Title I Grants to Local Educational Agencies (FAL #84.010)
Contract Numbers: 2R1251N01, 2R1251A01, 2R1264A01, 2R1240A01
Twenty-First Century Community Learning Centers (FAL #84.287)
Contract Numbers: 2R3901A01, 2R3911A01, 2R3913A01, 2R3916A01, 2R3922A01, 2R3931A01, 2R3903A01, 2R3904A01
English Language Acquisition Grants (FAL #84.365)
Contract Number: 2R4164A01
Supporting Effective Instruction State Grant (FAL #84.367)
Contract Numbers: 2R2664A01
Pass-Through Agency: New York State Department of Education
Federal Agency: U.S. Department of Education
Type of Finding: Reporting Compliance
Criteria:
As stipulated by the New York State Education Department (“NYSED”) Fiscal Guidelines for Federal and State Grants, program recipients are required to submit to NYSED a signed copy of the Final Expenditure Report for a Federal Project (“FS-10F”) within 90 days following the end of the grant award period.
Condition/Context:
Of the thirty-five (35) FS-10F reports submitted by the DOE during fiscal year 2023, we selected a sample of fourteen (14) FS-10F reports and found that fourteen (14) of the reports tested were submitted after the required due date, as follows:
• Title I Grants to Local Educational Agencies (FAL #84.010): of the four (4) FS-10F reports tested, such reports were submitted between 23 and 160 days late.
• Twenty-First Century Community Learning Centers (FAL #84.287): of the eight (8) FS-10F reports tested, such reports were submitted between 85 and 103 days late.
• English Language Acquisition Grants (FAL #84.365): of the one (1) FS-10F report tested, such report was submitted 167 days late.
• Supporting Effective Instruction State Grants (FAL #84.367): of the one (1) FS-10F report tested, such report was submitted 169 days late.
Cause/Effect:
We were informed that due to open encumbrances which had not been fully liquidated by the FS-10F due date, the DOE was unable to complete and submit the FS-10F financial reports within the stipulated 90-day period, thus resulting in late-filed reports.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This finding is similar to finding #2022-001, included on pages 232 and 233 of the Fiscal 2022 Single Audit report.
Recommendation:
We recommend the DOE consider establishing procedures and operational practices whereby disposition of open encumbrances is accelerated such that all FS-10F expenditure reports are prepared and submitted within the required 90-day timeframe.
New York City Department for the Aging (“DFTA”)
Finding #: 2023-010
Funding Year(s): 07/01/2022 - 06/30/2023
New York City Department for the Aging:
Aging Cluster (FAL #93.044, 93.045 & 93.053)
Contract Number: N/A
Pass-Through Agency: New York State Office for the Aging
Type of Finding: Subrecipient Monitoring Compliance and Internal Control (Significant Deficiency)
Criteria:
As stipulated in 2 CFR 200.332(f) pass-through entities should verify that every subrecipient that expends $750,000 or more in federal awards during their fiscal year has a single or program-specific audit conducted for that fiscal year in accordance with 2 CFR 200.501. Additionally, per 2 CFR 200.512(a)(1) the audit must be completed and the data collection form along with the reporting package must be submitted to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the auditor’s report(s), or nine months after the end of the audit period.
Condition/Context:
Of the forty (40) subrecipients under the Aging Cluster that were selected for testing, four (4) of the single audit report dates were beyond the nine-month required submission date required by 2 CFR 200.512(a)(1). For these four (4) selections, DFTA was unable to provide supporting documentation of notification by the subrecipient of the late submission and acknowledgment of the notification by DFTA.
Cause/Effect:
While DFTA has established subrecipient monitoring procedures, we noted that monitoring of subrecipient compliance with federal statues, regulations and terms and conditions of the federal award were not consistently performed and documented. Missing or incomplete monitoring procedures could result in subrecipients not complying with Uniform Guidance reporting and/or other program specific compliance requirements.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that DFTA create a comprehensive internal control structure which ensures that all subrecipient compliance requirements stipulated by 2 CFR 200.332 are being met, including following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient detected through audits, on-site reviews, and written confirmation from the subrecipient.
New York City Department for the Aging (“DFTA”)
Finding #: 2023-010
Funding Year(s): 07/01/2022 - 06/30/2023
New York City Department for the Aging:
Aging Cluster (FAL #93.044, 93.045 & 93.053)
Contract Number: N/A
Pass-Through Agency: New York State Office for the Aging
Type of Finding: Subrecipient Monitoring Compliance and Internal Control (Significant Deficiency)
Criteria:
As stipulated in 2 CFR 200.332(f) pass-through entities should verify that every subrecipient that expends $750,000 or more in federal awards during their fiscal year has a single or program-specific audit conducted for that fiscal year in accordance with 2 CFR 200.501. Additionally, per 2 CFR 200.512(a)(1) the audit must be completed and the data collection form along with the reporting package must be submitted to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the auditor’s report(s), or nine months after the end of the audit period.
Condition/Context:
Of the forty (40) subrecipients under the Aging Cluster that were selected for testing, four (4) of the single audit report dates were beyond the nine-month required submission date required by 2 CFR 200.512(a)(1). For these four (4) selections, DFTA was unable to provide supporting documentation of notification by the subrecipient of the late submission and acknowledgment of the notification by DFTA.
Cause/Effect:
While DFTA has established subrecipient monitoring procedures, we noted that monitoring of subrecipient compliance with federal statues, regulations and terms and conditions of the federal award were not consistently performed and documented. Missing or incomplete monitoring procedures could result in subrecipients not complying with Uniform Guidance reporting and/or other program specific compliance requirements.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that DFTA create a comprehensive internal control structure which ensures that all subrecipient compliance requirements stipulated by 2 CFR 200.332 are being met, including following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient detected through audits, on-site reviews, and written confirmation from the subrecipient.
New York City Department for the Aging (“DFTA”)
Finding #: 2023-010
Funding Year(s): 07/01/2022 - 06/30/2023
New York City Department for the Aging:
Aging Cluster (FAL #93.044, 93.045 & 93.053)
Contract Number: N/A
Pass-Through Agency: New York State Office for the Aging
Type of Finding: Subrecipient Monitoring Compliance and Internal Control (Significant Deficiency)
Criteria:
As stipulated in 2 CFR 200.332(f) pass-through entities should verify that every subrecipient that expends $750,000 or more in federal awards during their fiscal year has a single or program-specific audit conducted for that fiscal year in accordance with 2 CFR 200.501. Additionally, per 2 CFR 200.512(a)(1) the audit must be completed and the data collection form along with the reporting package must be submitted to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the auditor’s report(s), or nine months after the end of the audit period.
Condition/Context:
Of the forty (40) subrecipients under the Aging Cluster that were selected for testing, four (4) of the single audit report dates were beyond the nine-month required submission date required by 2 CFR 200.512(a)(1). For these four (4) selections, DFTA was unable to provide supporting documentation of notification by the subrecipient of the late submission and acknowledgment of the notification by DFTA.
Cause/Effect:
While DFTA has established subrecipient monitoring procedures, we noted that monitoring of subrecipient compliance with federal statues, regulations and terms and conditions of the federal award were not consistently performed and documented. Missing or incomplete monitoring procedures could result in subrecipients not complying with Uniform Guidance reporting and/or other program specific compliance requirements.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that DFTA create a comprehensive internal control structure which ensures that all subrecipient compliance requirements stipulated by 2 CFR 200.332 are being met, including following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient detected through audits, on-site reviews, and written confirmation from the subrecipient.
New York City Department for the Aging (“DFTA”)
Finding #: 2023-010
Funding Year(s): 07/01/2022 - 06/30/2023
New York City Department for the Aging:
Aging Cluster (FAL #93.044, 93.045 & 93.053)
Contract Number: N/A
Pass-Through Agency: New York State Office for the Aging
Type of Finding: Subrecipient Monitoring Compliance and Internal Control (Significant Deficiency)
Criteria:
As stipulated in 2 CFR 200.332(f) pass-through entities should verify that every subrecipient that expends $750,000 or more in federal awards during their fiscal year has a single or program-specific audit conducted for that fiscal year in accordance with 2 CFR 200.501. Additionally, per 2 CFR 200.512(a)(1) the audit must be completed and the data collection form along with the reporting package must be submitted to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the auditor’s report(s), or nine months after the end of the audit period.
Condition/Context:
Of the forty (40) subrecipients under the Aging Cluster that were selected for testing, four (4) of the single audit report dates were beyond the nine-month required submission date required by 2 CFR 200.512(a)(1). For these four (4) selections, DFTA was unable to provide supporting documentation of notification by the subrecipient of the late submission and acknowledgment of the notification by DFTA.
Cause/Effect:
While DFTA has established subrecipient monitoring procedures, we noted that monitoring of subrecipient compliance with federal statues, regulations and terms and conditions of the federal award were not consistently performed and documented. Missing or incomplete monitoring procedures could result in subrecipients not complying with Uniform Guidance reporting and/or other program specific compliance requirements.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that DFTA create a comprehensive internal control structure which ensures that all subrecipient compliance requirements stipulated by 2 CFR 200.332 are being met, including following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient detected through audits, on-site reviews, and written confirmation from the subrecipient.
New York City Department for the Aging (“DFTA”)
Finding #: 2023-010
Funding Year(s): 07/01/2022 - 06/30/2023
New York City Department for the Aging:
Aging Cluster (FAL #93.044, 93.045 & 93.053)
Contract Number: N/A
Pass-Through Agency: New York State Office for the Aging
Type of Finding: Subrecipient Monitoring Compliance and Internal Control (Significant Deficiency)
Criteria:
As stipulated in 2 CFR 200.332(f) pass-through entities should verify that every subrecipient that expends $750,000 or more in federal awards during their fiscal year has a single or program-specific audit conducted for that fiscal year in accordance with 2 CFR 200.501. Additionally, per 2 CFR 200.512(a)(1) the audit must be completed and the data collection form along with the reporting package must be submitted to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the auditor’s report(s), or nine months after the end of the audit period.
Condition/Context:
Of the forty (40) subrecipients under the Aging Cluster that were selected for testing, four (4) of the single audit report dates were beyond the nine-month required submission date required by 2 CFR 200.512(a)(1). For these four (4) selections, DFTA was unable to provide supporting documentation of notification by the subrecipient of the late submission and acknowledgment of the notification by DFTA.
Cause/Effect:
While DFTA has established subrecipient monitoring procedures, we noted that monitoring of subrecipient compliance with federal statues, regulations and terms and conditions of the federal award were not consistently performed and documented. Missing or incomplete monitoring procedures could result in subrecipients not complying with Uniform Guidance reporting and/or other program specific compliance requirements.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that DFTA create a comprehensive internal control structure which ensures that all subrecipient compliance requirements stipulated by 2 CFR 200.332 are being met, including following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient detected through audits, on-site reviews, and written confirmation from the subrecipient.
New York City Department of Health and Mental Hygiene (“DOHMH”)
Finding #: 2023-008
Funding Year(s): 8/1/2019 - 7/31/2024
Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (FAL #93.323)
Contract Number: 5 NU50CK000517, 6 NU50CK000517
Federal Agency: U.S. Department of Health and Human Services
Type of Finding: Reporting – Internal Control (Significant Deficiency)
Criteria:
In accordance with the U.S Department of Health and Human Services (“HHS”) Grants Policy Statement, reports of expenditures are required as documentation of the financial status of grants according to the official accounting records of the recipient. Financial or expenditure reporting is accomplished using the Financial Status Report (“FSR”) (SF 269 or SF 269A). The FSR is required annually, and the report must be submitted for each budget period no later than 90 days after the close of the budget period or applicable 12-month period. Additionally, special reports are required by the terms and conditions of the federal awards.
As stipulated by 2 CFR Section 200.303, recipients of federal awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers.
Condition/Context:
From a non-statistical sample of four (4) annual FSRs subject to testing, we identified one (1) FSR that was submitted after the required reporting deadline of within 90 days following the end of the budget period.
In addition, we selected a non-statistical sample of twenty-four (24) special performance reports required to be filed. While the reports were prepared and submitted promptly in accordance with the reporting deadlines, for all twenty-four (24) selections, DOHMH was unable to provide supporting documentation that a review was performed to verify that the performance report was accurately prepared and submitted.
Cause/Effect:
While DOHMH has established policies and procedures to ensure that the required reports are accurately
completed and submitted on a timely basis, we noted the appropriate reviews were not consistently performed and documented for both financial and performance reporting thus resulting in one (1) FSR that was submitted after the required reporting deadline of within 90 days following the end of the budget period.
Questioned Costs:
None noted.
Identification as a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that DOHMH strengthen their internal controls over the reporting process to include documented review and approval all financial and special performance reports prior to submission within the required timeframe.
New York City Department of Health and Mental Hygiene (“DOHMH”)
Finding #: 2023-008
Funding Year(s): 8/1/2019 - 7/31/2024
Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (FAL #93.323)
Contract Number: 5 NU50CK000517, 6 NU50CK000517
Federal Agency: U.S. Department of Health and Human Services
Type of Finding: Reporting – Internal Control (Significant Deficiency)
Criteria:
In accordance with the U.S Department of Health and Human Services (“HHS”) Grants Policy Statement, reports of expenditures are required as documentation of the financial status of grants according to the official accounting records of the recipient. Financial or expenditure reporting is accomplished using the Financial Status Report (“FSR”) (SF 269 or SF 269A). The FSR is required annually, and the report must be submitted for each budget period no later than 90 days after the close of the budget period or applicable 12-month period. Additionally, special reports are required by the terms and conditions of the federal awards.
As stipulated by 2 CFR Section 200.303, recipients of federal awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers.
Condition/Context:
From a non-statistical sample of four (4) annual FSRs subject to testing, we identified one (1) FSR that was submitted after the required reporting deadline of within 90 days following the end of the budget period.
In addition, we selected a non-statistical sample of twenty-four (24) special performance reports required to be filed. While the reports were prepared and submitted promptly in accordance with the reporting deadlines, for all twenty-four (24) selections, DOHMH was unable to provide supporting documentation that a review was performed to verify that the performance report was accurately prepared and submitted.
Cause/Effect:
While DOHMH has established policies and procedures to ensure that the required reports are accurately
completed and submitted on a timely basis, we noted the appropriate reviews were not consistently performed and documented for both financial and performance reporting thus resulting in one (1) FSR that was submitted after the required reporting deadline of within 90 days following the end of the budget period.
Questioned Costs:
None noted.
Identification as a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that DOHMH strengthen their internal controls over the reporting process to include documented review and approval all financial and special performance reports prior to submission within the required timeframe.
New York City Department of Health and Mental Hygiene (“DOHMH”)
Finding #: 2023-008
Funding Year(s): 8/1/2019 - 7/31/2024
Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (FAL #93.323)
Contract Number: 5 NU50CK000517, 6 NU50CK000517
Federal Agency: U.S. Department of Health and Human Services
Type of Finding: Reporting – Internal Control (Significant Deficiency)
Criteria:
In accordance with the U.S Department of Health and Human Services (“HHS”) Grants Policy Statement, reports of expenditures are required as documentation of the financial status of grants according to the official accounting records of the recipient. Financial or expenditure reporting is accomplished using the Financial Status Report (“FSR”) (SF 269 or SF 269A). The FSR is required annually, and the report must be submitted for each budget period no later than 90 days after the close of the budget period or applicable 12-month period. Additionally, special reports are required by the terms and conditions of the federal awards.
As stipulated by 2 CFR Section 200.303, recipients of federal awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers.
Condition/Context:
From a non-statistical sample of four (4) annual FSRs subject to testing, we identified one (1) FSR that was submitted after the required reporting deadline of within 90 days following the end of the budget period.
In addition, we selected a non-statistical sample of twenty-four (24) special performance reports required to be filed. While the reports were prepared and submitted promptly in accordance with the reporting deadlines, for all twenty-four (24) selections, DOHMH was unable to provide supporting documentation that a review was performed to verify that the performance report was accurately prepared and submitted.
Cause/Effect:
While DOHMH has established policies and procedures to ensure that the required reports are accurately
completed and submitted on a timely basis, we noted the appropriate reviews were not consistently performed and documented for both financial and performance reporting thus resulting in one (1) FSR that was submitted after the required reporting deadline of within 90 days following the end of the budget period.
Questioned Costs:
None noted.
Identification as a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that DOHMH strengthen their internal controls over the reporting process to include documented review and approval all financial and special performance reports prior to submission within the required timeframe.
Administration for Children’s Services (“ACS”) and New York City Human Resources Administration (“HRA”)
Finding #: 2023-013
Funding Year(s): 10/1/2021 - 9/30/2023
CCDF Cluster: Child Care and Development Block Grant (FAL #93.575)
Contract Numbers: 22-OCFS-LCM-08, 23-OCFS-LCM-12-R1
Pass-Through Agency: NYS Office of Children and Family Services
Federal Agency: U.S. Department of Health and Human Services
Type of Finding: Eligibility - Material Noncompliance and Internal Control (Material Weakness)
Criteria:
As stipulated by the 45 CFR Part 98 Subpart C, to be eligible for services under the Child Care and Development Block Grant (“CCDBG”), a child shall (1) be under the age of thirteen (13) years of age or be under the age of nineteen (19) and physically or mentally incapable of caring for himself or herself; (2) Reside with a family whose income does not exceed 85 percent of the State's median income (SMI) and whose family assets do not exceed $1,000,000; and (3) reside with a parent or parents who are working or attending a job training or educational program; or receive, or need to receive, protective services.
Additionally, as stipulated by 2 CFR Section 200.303, recipients of federal awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers.
Condition/Context:
We selected a non-statistical sample of forty (40) individuals who received services under CCDBG during fiscal year 2023 and found that five (5) of the individuals tested had errors as follows:
• One (1) of the individuals tested from HRA did not meet some or all of the eligibility criteria as stipulated in 45 CFR Part 98 Subpart C;
• For four (4) of the individuals, HRA was not able to provide documentation to support that the individual met all the eligibility criteria as stipulated in 45 CFR Part 98 Subpart C; and,
Total CCDBG Benefits charged to the grant were $532,211,608 and total CCDBG benefits subjected to testing were $37,776.
Cause/Effect:
While ACS and HRA have a process in place to assess the eligibility of children, a comprehensive review was not consistently performed and documented to ensure the appropriate evidence and related approvals were maintained to support those determinations. As a result, costs were incurred on behalf of certain children that did not meet all of the eligibility requirements or were not supported by appropriate documentation.
Questioned Costs:
Known questioned costs of $520.
Identification as a Repeat Finding:
This finding is similar to finding #2022-015, included on pages 260 and 261 of the Fiscal 2022 Single Audit report.
Recommendation:
We recommend that ACS and HRA strengthen their internal controls governing the eligibility requirements, including implementing a review checklist to ensure the child meets every eligibility requirement per 45 CFR Part 98 Subpart C during the eligibility determination process.
Administration for Children’s Services (“ACS”) and New York City Human Resources Administration (“HRA”)
Finding #: 2023-013
Funding Year(s): 10/1/2021 - 9/30/2023
CCDF Cluster: Child Care and Development Block Grant (FAL #93.575)
Contract Numbers: 22-OCFS-LCM-08, 23-OCFS-LCM-12-R1
Pass-Through Agency: NYS Office of Children and Family Services
Federal Agency: U.S. Department of Health and Human Services
Type of Finding: Eligibility - Material Noncompliance and Internal Control (Material Weakness)
Criteria:
As stipulated by the 45 CFR Part 98 Subpart C, to be eligible for services under the Child Care and Development Block Grant (“CCDBG”), a child shall (1) be under the age of thirteen (13) years of age or be under the age of nineteen (19) and physically or mentally incapable of caring for himself or herself; (2) Reside with a family whose income does not exceed 85 percent of the State's median income (SMI) and whose family assets do not exceed $1,000,000; and (3) reside with a parent or parents who are working or attending a job training or educational program; or receive, or need to receive, protective services.
Additionally, as stipulated by 2 CFR Section 200.303, recipients of federal awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers.
Condition/Context:
We selected a non-statistical sample of forty (40) individuals who received services under CCDBG during fiscal year 2023 and found that five (5) of the individuals tested had errors as follows:
• One (1) of the individuals tested from HRA did not meet some or all of the eligibility criteria as stipulated in 45 CFR Part 98 Subpart C;
• For four (4) of the individuals, HRA was not able to provide documentation to support that the individual met all the eligibility criteria as stipulated in 45 CFR Part 98 Subpart C; and,
Total CCDBG Benefits charged to the grant were $532,211,608 and total CCDBG benefits subjected to testing were $37,776.
Cause/Effect:
While ACS and HRA have a process in place to assess the eligibility of children, a comprehensive review was not consistently performed and documented to ensure the appropriate evidence and related approvals were maintained to support those determinations. As a result, costs were incurred on behalf of certain children that did not meet all of the eligibility requirements or were not supported by appropriate documentation.
Questioned Costs:
Known questioned costs of $520.
Identification as a Repeat Finding:
This finding is similar to finding #2022-015, included on pages 260 and 261 of the Fiscal 2022 Single Audit report.
Recommendation:
We recommend that ACS and HRA strengthen their internal controls governing the eligibility requirements, including implementing a review checklist to ensure the child meets every eligibility requirement per 45 CFR Part 98 Subpart C during the eligibility determination process.
Administration for Children’s Services (“ACS”)
Finding #: 2023-007
Funding Year(s): 10/1/2018 - 9/30/2028
Foster Care – Title IV - E (FAL #93.658)
Contract Numbers: 1901NYFOST, 2001NYFOST, 2301NYFOST
Federal Agency: U.S. Department of Health and Human Services
Type of Finding: Eligibility - Compliance and Internal Control (Significant Deficiency)
Criteria:
A child’s removal from the home (unless removal is pursuant to a voluntary placement agreement) must be in accordance with a judicial determination to the effect that continuation in the home would be contrary to the child’s welfare, or that placement in foster care would be in the best interest of the child. The judicial determination must be explicitly stated in the court order and made on a case-by-case basis. The precise language “contrary to the welfare” does not have to be included in the removal court order, but the order must include language to the effect that remaining in the home will be contrary to the child’s welfare, safety, or best interest (45 CFR section 1356.21(c)). The judicial determination of contrary to the welfare must be in the first court ruling that sanctions the child’s removal from home (45 CFR section 1356.21(c)). Acceptable documentation is a court order containing a judicial determination regarding contrary to the welfare or a transcript of the court proceedings reflecting this determination (45 CFR section 1356.21(d)).
Additionally, as stipulated by 2 CFR Section 200.303, recipients of federal awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers.
Condition/Context:
The New York City Administration for Children’s Services (“ACS”) utilizes an eligibility checklist mandated by the State of New York (“NY State”) to assess beneficiaries’ eligibility to receive benefits through the Foster Care program. Upon the completion of the eligibility checklist by an ACS staff member, ACS’ policies and procedures require that a designated supervisor review and approve the checklist prior to ACS determining a child to be IV-E eligible. From a non-statistical sample of forty (40) eligibility files subject to testing, we identified one (1) eligibility redetermination checklist that did not include evidence of the required approval by a supervisor and two (2) redetermination checklists with untimely approval by a supervisor. In addition, those same two (2) files did not contain a copy of the court order until a year after the judicial finding was made.
Cause/Effect:
While ACS has established policies and procedures to help ensure eligibility requirements are met, we noted the appropriate reviews were not consistently performed, which could result in an ineligible individual receiving benefits. However, with respect to the forty (40) sampled files referred to above, ACS personnel were able to demonstrate that all such individuals were in fact eligible for Foster Care benefits, and accordingly, program eligibility requirements were satisfied for these sampled files.
Questioned Costs:
None noted.
Identification as a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that ACS strengthen controls over the foster care eligibility process to ensure the appropriate supervisory review and approval is consistently performed.
Administration for Children’s Services (“ACS”)
Finding #: 2023-007
Funding Year(s): 10/1/2018 - 9/30/2028
Foster Care – Title IV - E (FAL #93.658)
Contract Numbers: 1901NYFOST, 2001NYFOST, 2301NYFOST
Federal Agency: U.S. Department of Health and Human Services
Type of Finding: Eligibility - Compliance and Internal Control (Significant Deficiency)
Criteria:
A child’s removal from the home (unless removal is pursuant to a voluntary placement agreement) must be in accordance with a judicial determination to the effect that continuation in the home would be contrary to the child’s welfare, or that placement in foster care would be in the best interest of the child. The judicial determination must be explicitly stated in the court order and made on a case-by-case basis. The precise language “contrary to the welfare” does not have to be included in the removal court order, but the order must include language to the effect that remaining in the home will be contrary to the child’s welfare, safety, or best interest (45 CFR section 1356.21(c)). The judicial determination of contrary to the welfare must be in the first court ruling that sanctions the child’s removal from home (45 CFR section 1356.21(c)). Acceptable documentation is a court order containing a judicial determination regarding contrary to the welfare or a transcript of the court proceedings reflecting this determination (45 CFR section 1356.21(d)).
Additionally, as stipulated by 2 CFR Section 200.303, recipients of federal awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers.
Condition/Context:
The New York City Administration for Children’s Services (“ACS”) utilizes an eligibility checklist mandated by the State of New York (“NY State”) to assess beneficiaries’ eligibility to receive benefits through the Foster Care program. Upon the completion of the eligibility checklist by an ACS staff member, ACS’ policies and procedures require that a designated supervisor review and approve the checklist prior to ACS determining a child to be IV-E eligible. From a non-statistical sample of forty (40) eligibility files subject to testing, we identified one (1) eligibility redetermination checklist that did not include evidence of the required approval by a supervisor and two (2) redetermination checklists with untimely approval by a supervisor. In addition, those same two (2) files did not contain a copy of the court order until a year after the judicial finding was made.
Cause/Effect:
While ACS has established policies and procedures to help ensure eligibility requirements are met, we noted the appropriate reviews were not consistently performed, which could result in an ineligible individual receiving benefits. However, with respect to the forty (40) sampled files referred to above, ACS personnel were able to demonstrate that all such individuals were in fact eligible for Foster Care benefits, and accordingly, program eligibility requirements were satisfied for these sampled files.
Questioned Costs:
None noted.
Identification as a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that ACS strengthen controls over the foster care eligibility process to ensure the appropriate supervisory review and approval is consistently performed.
New York City Police Department (“NYPD”)
Finding #: 2023-011
Funding Year(s): 9/1/2018 - 8/31/2025
Port Security Grant Program (FAL #97.056)
Contract Number(s): EMW-2018-PU-00123-S01, EMW-2019-PU-00316-S01, EMW-2020-PU-00278-S01, EMW-2021-PU-00321-S01, EMW-2022-PU-00311-S01
Federal Agency: U.S. Department of Homeland Security
Type of Finding: Equipment and Real Property Management - Compliance and Internal Control (Control Deficiency)
Criteria:
In accordance with 2 CFR section 200.313(d)(1), property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and 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, and any ultimate disposition data including the date of disposal and sale price of the property.
Condition/Context:
The New York City Police Department (“NYPD”) utilizes the City’s Grants Tracking System (“GTS”), a citywide web-based inventory program, designed to standardize the tracking of federally funded equipment. Further, NYPD Command-designated grants coordinators are responsible for monitoring the equipment and updating the inventory on a periodic basis in accordance with federal guidelines. The NYPD Grants Unit periodically generates an inventory listing from GTS that includes the biennial inventory count due date for each item and distributes it to the assigned NYPD Command designated grant coordinators to ensure the inventory count is conducted timely and in accordance with federal requirements. After the completion of biennial inventory count, the NYPD Command-designated grants coordinators update the inventory count information to GTS.
From a non-statistical sample of twenty (20) pieces of equipment subjected to testing, we identified one (1) piece of equipment that was disposed of prior to the most recent inventory count, but the equipment was not removed from the active inventory listing.
Cause/Effect:
While NYPD had certain procedures in place to monitor their equipment purchased with federal funding, such procedures were not adequate to ensure that each aspect of the equipment and real property management compliance requirements were performed and documented within the required timeframe, which resulted in the finding noted above. Without the appropriate internal controls and monitoring procedures in place, federally funded equipment could be inaccurately recorded on inventory records and not discovered and corrected timely, inventory could be misplaced, misappropriated, or otherwise disposed of outside of the requirements of the federal guidelines.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that NYPD strengthen controls over the inventory process to ensure dispositions of equipment are updated in the equipment records.
New York City Fire Department (“FDNY”)
Finding #: 2023-012
Funding Year(s): 9/1/2018 - 8/31/2024
Port Security Grant Program (FAL #97.056)
Contract Number(s): EMW-2018-PU-00004-S01, EMW-2020-PU-00020-S01, EMW-2021-PU-00015-S01, EMW-2019-PU-00013-S01
Federal Agency: U.S. Department of Homeland Security
Type of Finding: Equipment and Real Property Management - Compliance and Internal Control (Significant Deficiency)
Criteria:
In accordance with 2 CFR section 200.313(d)(1), property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and 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, and any ultimate disposition data including the date of disposal and sale price of the property.
Condition/Context:
The New York City Fire Department (“FDNY”) utilizes the City’s Grants Tracking System (“GTS”), a citywide web-based inventory program, designed to standardize the tracking of federally funded equipment. Further, FDNY Command-designated grants coordinators are responsible for monitoring the equipment and updating the inventory on a periodic basis in accordance with federal guidelines. The FDNY Grants Unit periodically generates an inventory listing from GTS that includes the biennial inventory count due date for each item and distributes it to the assigned FDNY Command designated grant coordinators to ensure the inventory count is conducted timely and in accordance with federal requirements. After the completion of biennial inventory count, the FDNY Command-designated grants coordinators update the inventory count information to GTS.
From a non-statistical sample of twenty (20) pieces of equipment subjected to testing, we identified three (3) pieces of equipment that were disposed of prior to the most recent inventory count but the equipment was not removed from the active inventory listing.
Cause/Effect:
While FDNY had certain procedures in place to monitor their equipment purchased with federal funding, such procedures were not adequate to ensure that each aspect of the equipment and real property management compliance requirements were consistently performed and documented, which resulted in the findings noted above. Without the appropriate internal controls and monitoring procedures in place, federally funded equipment could be inaccurately recorded on inventory records and not discovered and corrected timely, inventory could be misplaced, misappropriated, or otherwise disposed of outside of the requirements of the federal guidelines
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that FDNY strengthen controls over the inventory process to ensure dispositions of equipment are updated in the equipment records, inventories performed are reconciled back to equipment records, and biennial inventory counts are consistently performed for all equipment within the required timeframe.
New York City Department of Human Resources Administration (“HRA”)
Finding #: 2023-003
Funding Year(s): 9/13/2021 – 9/12/2023
Emergency Solutions Grants Program (FAL #14.231)
Contract Number: E21MC360104
Federal Agency: U.S. Department of Housing and Urban Development
Type of Finding: Special Tests and Provisions - Compliance and Internal Control (Control Deficiency)
Criteria:
Per 24 CFR Section 576.203(a)(2), within 180 days after the date that HUD signs the grant agreement with the metropolitan city, urban county, or territory, the recipient must obligate all the grant amount, except the amount for its administrative costs. Total grant award obligations are required to be reported to HUD through the Integrated Disbursement and Information System (“IDIS”), using a PR-91 ESG Financial Summary Report.
Condition/Context:
HUD signed HRA’s Emergency Solutions Grants Program (“ESG”) grant agreement #E21MC360104 on September 13, 2021, and as such the total grant amount was required to be obligated by March 12, 2022. Per the PR-91 ESG Financial Summary Report submitted by HRA through IDIS on February 2, 2023, none of the total $14,799,420 award had been obligated by the required due date.
Cause/Effect:
While HRA has policies and procedures in place regarding the review and approval of the PR-91 ESG Financial Report, this process did not include a comprehensive review to ensure that HRA obligated all grant funding within the required timeframe prior to submission. As such, this resulted in HRA’s non-compliance.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This finding is similar to finding #2022-003, included on page 236 of the Fiscal 2022 Single Audit report.
Recommendation:
We recommend that HRA strengthen their internal controls over the special tests and provisions process to ensure all grant amounts are obligated within the required 180-day timeframe, and that the obligation is properly reviewed prior to the PR-91 ESG Financial Report submission through IDIS.
New York City Human Resources Administration (“HRA”)
Finding #: 2023-002
Funding Year(s): 10/19/2017 - 9/1/2027
HOME Investment Partnerships Program (FAL #14.239)
Contract Numbers: M-17-MC-36-0204; M-18-MC-36-0204; M-19-MC-36-0204
Federal Agency: U.S. Department of Housing and Urban Development
Type of Finding: Allowable Costs and Eligibility - Material Noncompliance and Internal Control (Material Weakness)
Criteria:
In accordance with 23 CFR sections 1.9, 172.11(a), 420.113(a), and 630.106(a), costs incurred under federal awards are considered allowable and reimbursable when such costs are deemed necessary and reasonable; incurred subsequent to the date of authorization to proceed and in accordance with the conditions contained in the project agreement and the plans specifications; and, not included as costs used to meet cost sharing or matching requirements, among other things.
As stipulated by 24 CFR §92.209, tenant-based rental assistance (“TBRA”) may only be provided to very low- and low-income families. The participating jurisdiction must determine that the family is very low- or low-income before the assistance is provided. During the period of assistance, the participating jurisdiction must annually determine that the family continues to be low-income. Also, the maximum monthly assistance that a participating jurisdiction may pay to, or on behalf of, a family may not exceed the difference between a rent standard for the unit size established by the participating jurisdiction and 30% of the family's monthly adjusted income. Additionally, the participating jurisdiction must disapprove a lease if the rent is not reasonable, based on rents that are charged for comparable unassisted rental units.
Additionally, as stipulated by 2 CFR Section 200.303, recipients of federal awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers.
Condition/Context:
The New York City Human Resources Administration (“HRA”) utilizes the Current System to assess beneficiaries’ eligibility to receive tenant based rental assistance through the HOME Investment Partnerships Program (“HOME”). To assess eligibility, HRA program staff obtain income supporting documentation to determine if the household met the low-income requirement and to calculate the maximum subsidy amount to be paid by HRA. Additionally, a rent reasonableness valuation is performed which compares the current beneficiary’s rent to other rents charged for comparable units to ensure reasonableness. Upon the completion of the eligibility determination by an HRA staff member, a designated program supervisor reviews and approves the eligibility determination, subsidy amount, and tenant share within the Current System.
We selected a non-statistical sample of forty (40) rental assistance payments made on behalf of tenants during fiscal 2023 and found that eight (8) of the selections had errors as follows:
• For five (5) of the eight (8) selections, it was noted that HRA’s share of monthly rent was determined to be lower than the amounts actually paid on behalf of the tenants. For these selections, HRA’s share of monthly rent was calculated as $1,709, $1,293, $1,410, $1,078, and $1,363. However, due to manual input errors, the amounts actually paid on behalf of these tenants were $1,742, $1,320, $1,469, $1,096, and $1,521, respectively.
• For three (3) of the eight (8) selections, it was noted that HRA’s share of monthly rent was determined to be higher than the amounts actually paid on behalf of the tenants. For these selections, HRA’s share of monthly rent was calculated as $2,326, $1,240, and $1,740. However, due to manual input errors, the amounts actually paid on behalf of these tenants were $2,233, $1,210, and $1,640 respectively.
Total TBRA payments charged to the grant were $5,521,322 and total TBRA benefits subjected to testing were $60,087.
Cause/Effect:
While HRA has a process in place to assess the eligibility of tenants and calculate the monthly TBRA payments on behalf of those tenants to ensure allowability of costs incurred, a comprehensive review was not consistently performed to support those determinations and calculations. As a result, costs were incurred on behalf of certain tenants that may not have met the eligibility requirements, or an incorrect amount may have been paid on their behalf.
Questioned Costs:
Known questioned costs totaled $296.
Identification as a Repeat Finding:
This finding is similar to finding #2022-012, included on pages 253 through 255 of the Fiscal 2022 Single Audit report.
Recommendation:
We recommend that HRA strengthen their internal controls governing the eligibility determination and monthly TBRA payment calculation process, including creating a comprehensive review checklist to ensure each tenant meets every eligibility requirement and HRA’s portion of the TBRA payments are properly calculated, and that appropriate supervisory review and approval is consistently performed and documented prior to processing payments and charging costs to the grant.
New York City Department of Housing Preservation and Development (“HPD”)
Finding #: 2023-006
Funding Year(s): 10/19/2017 - 09/01/2029
HOME Investment Partnership Program (FAL #14.239)
Contract Number: M-17-MC-36-0204; M-18-MC-36-0204; M-19-MC-36-0204; M-20-MC-36-0204, M-21-MC-36-0204
Federal Agency: U.S. Department of Housing and Urban Development
Type of Finding: Special Tests and Provisions Compliance
Criteria:
During the period of affordability for which the non-federal entity must maintain subsidized housing for the HOME-assisted rental housing program, the participating jurisdiction must perform on-site inspections at least once every three (3) years to determine compliance with Housing Quality Standards (24 CFR sections 92.209(i), 92.251(f), and 92.504(d)). Furthermore, for any failed inspections, the appropriate repairs to bring the building into compliance must be performed timely.
Condition/Context:
HPD has policies and procedures in place to identify units which require Housing Quality Standards inspections and performs inspections of these units to help ensure that any needed repairs are completed within the stipulated timeframe. For those units in need of repairs, HPD’s policy requires that repairs be completed within 90 days after the initial inspection and supported by a Certificate of Repairs form. In accordance with the individual agreements between HPD and the Sponsors of the respective housing projects, the Sponsors are responsible for maintaining compliance with the Housing Quality Standards, and HPD inspections are conducted to help ensure the respective Sponsors are maintaining compliance. Additionally, there are clauses within the individual agreements between HPD and the Sponsor which allows HPD to exercise remedies such as restricting funding to Sponsors who do not comply with the Housing Quality Standards.
Our procedures identified six (6) instances from a sample of forty (40), where the necessary repairs were not made by the Sponsors within the stipulated 90-day period.
Cause/Effect:
While HPD conducts monitoring procedures to help ensure that Housing Quality Standards are maintained and, when necessary, related repairs are performed by the respective Sponsors within the prescribed 90-day timeframe, we noted that the necessary repairs were not consistently completed within the stipulated timeframe or not completed at all. Incomplete and/or repairs that do not meet the stipulated completion timeframe could result in Sponsored projects not maintaining the appropriate quality of living conditions for tenants and, therefore, not comply with the applicable Housing Quality Standards.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This finding is similar to finding #2022-008, included on pages 243 and 244 of the Fiscal 2022 Single Audit report.
Recommendation:
While contract provisions between HPD and the respective Sponsors permit HPD to exercise remedies, which may include the withdrawal of future funding, HPD did not elect to exercise any such remedies. Accordingly, we recommend that HPD continue to strengthen its monitoring of Sponsors in connection with housing quality inspections and determine, on a case-by-case basis, whether to exercise appropriate remedies in accordance with contract provisions or consider documenting its rationale for not doing so.
New York City Human Resources Administration (“HRA”)
Finding #: 2023-004
Funding Year(s): 9/13/2021 - 11/8/2026
Housing Opportunities for Persons with AIDS (HOPWA) (FAL #14.241)
Contract Numbers: NYH21F002; NYH22F002; NYH23F002
Federal Agency: U.S. Department of Housing and Urban Development
Type of Finding: Special Tests and Provisions - Internal Control (Significant Deficiency)
Criteria:
All housing that is assisted under specific HOPWA activities per CFR sections 574.300(b) (3), (4), (5), and (8) must meet specific applicable Housing Quality Standards (“HQS”) as outlined in 24 CFR section 574.310(b) determined by on-site inspections.
Additionally, as stipulated by 2 CFR Section 200.303, recipients of federal awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers.
Condition/Context:
Prior to providing rental assistance to landlords, HRA conducts on-site inspections to ensure each unit meets all applicable Housing Quality Standards. During each inspection, a HRA Case Manager would assign a Quality Assurance (“QA”) Inspector to complete an inspection checklist, which outlines each standard and documents if the unit passed or failed each requirement. The QA Inspector would sign off on the report and provide it to the landlord, noting if any repairs are required. In addition to the initial annual inspection, if there were any adverse findings identified, the Case Manager would conduct follow-up visits for that unit until the findings were remediated. Landlords are required to address any deficiencies and violations found through a Corrective Action Plan (CAP) within 30 days of the receipt of the failed inspection letter. HRA would then ensure a physical inspection was conducted prior to June 30, 2023. In accordance with the individual agreements between HRA and the landlords of the units receiving the rental assistance, the landlords are responsible for maintaining compliance with the HQS, and the HRA inspections are conducted to help ensure the respective landlords are maintaining compliance.
We selected a non-statistical sample of twenty-four (24) units that were subject to an initial inspection by HRA during fiscal 2023 and noted that for eight (8) selections, HRA was unable to provide a copy of the inspection checklist that was completed by the QA Inspector prior to assistance being provided for the unit.
Cause/Effect:
While HRA conducts monitoring procedures to help ensure that Housing Quality Standards are maintained and, when necessary, related repairs are performed by the respective landlords within the prescribed 30-day timeframe, we noted that the inspection checklists used to document such procedures were not consistently maintained. If controls aren’t in place to ensure each unit is properly inspected in accordance with the guidelines and HRA’s policies, there is a risk that some units may not meet the appropriate quality of living conditions for tenants and, therefore, not comply with the applicable Housing Quality Standards.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This finding is similar to finding #2022-014, included on pages 258 and 259 of the Fiscal 2022 Single Audit report.
Recommendation:
We recommend that HRA strengthen their internal controls governing the Housing Quality Standards inspection process, including that appropriate documentation is maintained for each inspection performed, to ensure compliance with the requirements is met for each unit under their supervision.
New York City Human Resources Administration (“HRA”)
Finding #: 2023-005
Funding Year(s): 9/13/2021 - 11/8/2026
Housing Opportunities for Persons with AIDS (HOPWA) (FAL #14.241)
Contract Numbers: NYH21F002; NYH22F002; NYH23F002
Federal Agency: U.S. Department of Housing and Urban Development
Type of Finding: Eligibility - Compliance and Internal Control (Significant Deficiency)
Criteria:
As stipulated by 24 CFR Section 574.3, to be eligible to receive HOPWA funded benefits, a participant must be diagnosed with an acquired immunodeficiency syndrome or related diseases and be a low-income individual, as determined by the Secretary of Housing and Urban Development. HRA utilizes the household income of eligible participants to calculate the monthly rental assistance payment to be made on their behalf. The amount of grant funds used to pay monthly assistance for an eligible person may not exceed the difference between the lower of the rent standard or reasonable rent. Per 24 CFR 574.320(a)(2) the rent standard shall be established by the grantee and shall be no more than the published section 8 fair market rent (FMR) or the HUD-approved community-wide exception rent for the unit size.
Additionally, as stipulated by 2 CFR Section 200.303, recipients of federal awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers.
Condition/Context:
From a non-statistical sample of sixty-five (65) rental assistance payments made on behalf of tenants during fiscal year 2023 that were selected for testing, we identified the following:
• For two (2) of the selections, HRA utilized household income that was lower than the participants’ actual income, which caused HRA’s monthly rental assistance payment for the selected period to be higher than it should have been. The excess monthly payments for these selections totaled $6.
• For one (1) of the selections, the participant’s share of the monthly rent was incorrectly recorded as $660 instead of $664, which caused HRA’s monthly rental assistance payment for the selected period to be higher than it should have been. The excess payments for this selection totaled $4.
Total rental assistance payments charged to the grant were $21,825,396 and total HOPWA rent subsidies subjected to testing were $83,509.
Cause/Effect:
While HRA has processes in place to assess the eligibility of tenants to receive HOPWA benefits and to calculate the monthly rental assistance payments to be made on their behalf, they did not consistently ensure that the inputs utilized to calculate the monthly rental assistance payment were accurate. As a result, an incorrect monthly rental assistance amount was paid on behalf of certain tenants.
Questioned Costs:
None noted.
Identification as a Repeat Finding:
This finding is similar to finding #2022-013, included on pages 256 and 257 of the Fiscal 2022 Single Audit report.
Recommendation:
We recommend that HRA strengthen their internal controls governing the eligibility process, including ensuring all inputs utilized to calculate the monthly rental assistance amount is accurate and that the review performed to verify that each participant’s rent is not above the FMR limit is appropriately documented, prior to processing payments and charging costs to the grant.
New York City Human Resources Administration (“HRA”)
Finding #: 2023-004
Funding Year(s): 9/13/2021 - 11/8/2026
Housing Opportunities for Persons with AIDS (HOPWA) (FAL #14.241)
Contract Numbers: NYH21F002; NYH22F002; NYH23F002
Federal Agency: U.S. Department of Housing and Urban Development
Type of Finding: Special Tests and Provisions - Internal Control (Significant Deficiency)
Criteria:
All housing that is assisted under specific HOPWA activities per CFR sections 574.300(b) (3), (4), (5), and (8) must meet specific applicable Housing Quality Standards (“HQS”) as outlined in 24 CFR section 574.310(b) determined by on-site inspections.
Additionally, as stipulated by 2 CFR Section 200.303, recipients of federal awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers.
Condition/Context:
Prior to providing rental assistance to landlords, HRA conducts on-site inspections to ensure each unit meets all applicable Housing Quality Standards. During each inspection, a HRA Case Manager would assign a Quality Assurance (“QA”) Inspector to complete an inspection checklist, which outlines each standard and documents if the unit passed or failed each requirement. The QA Inspector would sign off on the report and provide it to the landlord, noting if any repairs are required. In addition to the initial annual inspection, if there were any adverse findings identified, the Case Manager would conduct follow-up visits for that unit until the findings were remediated. Landlords are required to address any deficiencies and violations found through a Corrective Action Plan (CAP) within 30 days of the receipt of the failed inspection letter. HRA would then ensure a physical inspection was conducted prior to June 30, 2023. In accordance with the individual agreements between HRA and the landlords of the units receiving the rental assistance, the landlords are responsible for maintaining compliance with the HQS, and the HRA inspections are conducted to help ensure the respective landlords are maintaining compliance.
We selected a non-statistical sample of twenty-four (24) units that were subject to an initial inspection by HRA during fiscal 2023 and noted that for eight (8) selections, HRA was unable to provide a copy of the inspection checklist that was completed by the QA Inspector prior to assistance being provided for the unit.
Cause/Effect:
While HRA conducts monitoring procedures to help ensure that Housing Quality Standards are maintained and, when necessary, related repairs are performed by the respective landlords within the prescribed 30-day timeframe, we noted that the inspection checklists used to document such procedures were not consistently maintained. If controls aren’t in place to ensure each unit is properly inspected in accordance with the guidelines and HRA’s policies, there is a risk that some units may not meet the appropriate quality of living conditions for tenants and, therefore, not comply with the applicable Housing Quality Standards.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This finding is similar to finding #2022-014, included on pages 258 and 259 of the Fiscal 2022 Single Audit report.
Recommendation:
We recommend that HRA strengthen their internal controls governing the Housing Quality Standards inspection process, including that appropriate documentation is maintained for each inspection performed, to ensure compliance with the requirements is met for each unit under their supervision.
New York City Human Resources Administration (“HRA”)
Finding #: 2023-005
Funding Year(s): 9/13/2021 - 11/8/2026
Housing Opportunities for Persons with AIDS (HOPWA) (FAL #14.241)
Contract Numbers: NYH21F002; NYH22F002; NYH23F002
Federal Agency: U.S. Department of Housing and Urban Development
Type of Finding: Eligibility - Compliance and Internal Control (Significant Deficiency)
Criteria:
As stipulated by 24 CFR Section 574.3, to be eligible to receive HOPWA funded benefits, a participant must be diagnosed with an acquired immunodeficiency syndrome or related diseases and be a low-income individual, as determined by the Secretary of Housing and Urban Development. HRA utilizes the household income of eligible participants to calculate the monthly rental assistance payment to be made on their behalf. The amount of grant funds used to pay monthly assistance for an eligible person may not exceed the difference between the lower of the rent standard or reasonable rent. Per 24 CFR 574.320(a)(2) the rent standard shall be established by the grantee and shall be no more than the published section 8 fair market rent (FMR) or the HUD-approved community-wide exception rent for the unit size.
Additionally, as stipulated by 2 CFR Section 200.303, recipients of federal awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers.
Condition/Context:
From a non-statistical sample of sixty-five (65) rental assistance payments made on behalf of tenants during fiscal year 2023 that were selected for testing, we identified the following:
• For two (2) of the selections, HRA utilized household income that was lower than the participants’ actual income, which caused HRA’s monthly rental assistance payment for the selected period to be higher than it should have been. The excess monthly payments for these selections totaled $6.
• For one (1) of the selections, the participant’s share of the monthly rent was incorrectly recorded as $660 instead of $664, which caused HRA’s monthly rental assistance payment for the selected period to be higher than it should have been. The excess payments for this selection totaled $4.
Total rental assistance payments charged to the grant were $21,825,396 and total HOPWA rent subsidies subjected to testing were $83,509.
Cause/Effect:
While HRA has processes in place to assess the eligibility of tenants to receive HOPWA benefits and to calculate the monthly rental assistance payments to be made on their behalf, they did not consistently ensure that the inputs utilized to calculate the monthly rental assistance payment were accurate. As a result, an incorrect monthly rental assistance amount was paid on behalf of certain tenants.
Questioned Costs:
None noted.
Identification as a Repeat Finding:
This finding is similar to finding #2022-013, included on pages 256 and 257 of the Fiscal 2022 Single Audit report.
Recommendation:
We recommend that HRA strengthen their internal controls governing the eligibility process, including ensuring all inputs utilized to calculate the monthly rental assistance amount is accurate and that the review performed to verify that each participant’s rent is not above the FMR limit is appropriately documented, prior to processing payments and charging costs to the grant.
New York City Housing Preservation & Development (“HPD”)
Finding #: 2023-014
Funding Year(s): 7/1/2022 – 6/30/2023
Section 8 Project-Based Cluster:
Section 8 Moderate Rehabilitation Single Room Occupancy (FAL #14.249)
Lower Income Housing Assistance Program – Section 8 Moderate Rehabilitation (FAL #14.856)
Contract Numbers: N/A
Federal Agency: U.S. Department of Housing and Urban Development (“HUD”)
Type of Finding: Eligibility and Special Tests and Provisions - Material Noncompliance and Internal Control (Material Weakness)
Criteria:
As stipulated by 24 CFR Section 880.603, prior to providing housing assistance payments (HAP) to participants, HPD must verify the eligibility of applicants by (a) obtaining signed applications; (b) conducting verifications of family income and other pertinent information; (c) documenting inspections and tenant certifications, as appropriate; and, (d) determining that tenant income did not exceed the maximum limit set by HUD. HPD must also reexamine family income and composition for each tenant at least once every 12 months to verify continued eligibility and adjust the HAP amount, as necessary. Further, HPD must maintain an up-to-date utility allowance schedule and establish procedures to properly apply the updated utility allowances to each tenant’s HAP calculations as part of the annual reexamination process.
Additionally, as stipulated by 2 CFR Section 200.303, recipients of Federal Awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers.
Condition/Context:
To assess eligibility, HPD’s policy is to conduct annual recertifications of family income and composition. As part of that process, HPD sends a recertification package to the head of household, which contains documentation that the tenant must complete for verification purposes. HPD then analyzes and verifies all information included in the recertification package to determine if the tenant is eligible to continue to receive HAPs and adjust the tenant rent and HAP amounts as necessary for the following 12-month period.
We selected a non-statistical sample of forty (40) tenants who received HAPs under the Section 8 Project-Based Cluster during fiscal year 2023. For twenty-five (25) of the tenants tested, HPD was not able to provide documentation to support that an eligibility recertification for the tenant, including a review of the utility allowance and HAP calculation, was performed within the previous 12 months, as required.
Cause/Effect:
While HPD has a process in place to assess the eligibility of tenants receiving HAPs under the Section 8 Project-Based Cluster, the reexamination of family income and composition and utility allowance was not consistently performed for each tenant at least once every 12 months to support the tenant’s continued eligibility to receive benefits through this program at the appropriate amounts.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that HPD strengthen their internal controls governing the eligibility requirements, including implementing a control to ensure recertifications of family income and composition are performed at least once every 12 months and the tenants HAP amount and tenant utility allowance is adjusted as necessary to meet the eligibility requirements per 24 CFR sections 880.603, 881.601, 882.514, 882.808, 833.701, 884.214, 886.119, and 886.318.
New York City Housing Preservation & Development (“HPD”)
Finding #: 2023-015
Funding Year(s): 7/1/2022 – 6/30/2023
Section 8 Project-Based Cluster:
Section 8 Moderate Rehabilitation Single Room Occupancy (FAL #14.249)
Lower Income Housing Assistance Program – Section 8 Moderate Rehabilitation (FAL #14.856)
Contract Numbers: N/A
Federal Agency: U.S. Department of Housing and Urban Development
Type of Finding: Special Tests and Provisions - Material Noncompliance and Internal Control (Material Weakness)
Criteria:
Per 24 CFR Section 5.705, a property must be inspected and meet specific Housing Quality Standards (“HQS”) before the property is approved for participation in any of the HUD housing programs. As stipulated in 24 CFR 882.516, in addition to the inspections required prior to the execution of the contract, HPD must inspect contract units at least annually, and at such other times as may be necessary to assure that the owner is meeting the obligations to maintain the units and provide the agreed upon utilities and other services. Further, as per HUD regulation 24 CFR 982.404(a)(3), for any failed inspections, HPD is required to verify that the HQS failure items have been repaired to bring the unit into compliance within 30 days.
Additionally, as stipulated by 2 CFR Section 200.303, recipients of Federal Awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers.
Condition/Context:
HPD has policies and procedures in place to identify units which require HQS inspections and performs inspections of these units to help ensure that any needed repairs are completed within the stipulated timeframe. For those units in need of repairs, HPD’s policy requires that those repairs be completed within thirty (30) days after the initial inspection.
From a non-statistical sample of forty (40) units that were selected for testing, we identified the following:
• For thirty-three (33) of the units tested, HPD was not able to provide documentation to support that an HQS inspection was performed for the unit under contract within the previous 12 months, as required.
• For eight (8) of the tenants tested where the unit under contract failed to meet HQS standards, HPD was not able to provide documentation to support that HPD verified the correction of the failed items through reinspection or alternative means.
Cause/Effect:
While HPD has a process in place to perform periodic HQS inspections for the units under contract that are part of the Section 8 Project-Based Cluster, a HQS inspection was not consistently performed at least once every 12 months to support that the owner is meeting the obligations to maintain the units and provide the agreed upon utilities and other services, as required.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that HPD strengthen their internal controls governing the HQS inspection requirements, including implementing controls to ensure inspections are performed annually for each unit under contract, and for any failed inspections, to verify that the HQS failure items have been repaired to bring the unit into compliance within thirty (30) days, as required.
New York City Housing Preservation & Development (“HPD”)
Finding #: 2023-014
Funding Year(s): 7/1/2022 – 6/30/2023
Section 8 Project-Based Cluster:
Section 8 Moderate Rehabilitation Single Room Occupancy (FAL #14.249)
Lower Income Housing Assistance Program – Section 8 Moderate Rehabilitation (FAL #14.856)
Contract Numbers: N/A
Federal Agency: U.S. Department of Housing and Urban Development (“HUD”)
Type of Finding: Eligibility and Special Tests and Provisions - Material Noncompliance and Internal Control (Material Weakness)
Criteria:
As stipulated by 24 CFR Section 880.603, prior to providing housing assistance payments (HAP) to participants, HPD must verify the eligibility of applicants by (a) obtaining signed applications; (b) conducting verifications of family income and other pertinent information; (c) documenting inspections and tenant certifications, as appropriate; and, (d) determining that tenant income did not exceed the maximum limit set by HUD. HPD must also reexamine family income and composition for each tenant at least once every 12 months to verify continued eligibility and adjust the HAP amount, as necessary. Further, HPD must maintain an up-to-date utility allowance schedule and establish procedures to properly apply the updated utility allowances to each tenant’s HAP calculations as part of the annual reexamination process.
Additionally, as stipulated by 2 CFR Section 200.303, recipients of Federal Awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers.
Condition/Context:
To assess eligibility, HPD’s policy is to conduct annual recertifications of family income and composition. As part of that process, HPD sends a recertification package to the head of household, which contains documentation that the tenant must complete for verification purposes. HPD then analyzes and verifies all information included in the recertification package to determine if the tenant is eligible to continue to receive HAPs and adjust the tenant rent and HAP amounts as necessary for the following 12-month period.
We selected a non-statistical sample of forty (40) tenants who received HAPs under the Section 8 Project-Based Cluster during fiscal year 2023. For twenty-five (25) of the tenants tested, HPD was not able to provide documentation to support that an eligibility recertification for the tenant, including a review of the utility allowance and HAP calculation, was performed within the previous 12 months, as required.
Cause/Effect:
While HPD has a process in place to assess the eligibility of tenants receiving HAPs under the Section 8 Project-Based Cluster, the reexamination of family income and composition and utility allowance was not consistently performed for each tenant at least once every 12 months to support the tenant’s continued eligibility to receive benefits through this program at the appropriate amounts.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that HPD strengthen their internal controls governing the eligibility requirements, including implementing a control to ensure recertifications of family income and composition are performed at least once every 12 months and the tenants HAP amount and tenant utility allowance is adjusted as necessary to meet the eligibility requirements per 24 CFR sections 880.603, 881.601, 882.514, 882.808, 833.701, 884.214, 886.119, and 886.318.
New York City Housing Preservation & Development (“HPD”)
Finding #: 2023-015
Funding Year(s): 7/1/2022 – 6/30/2023
Section 8 Project-Based Cluster:
Section 8 Moderate Rehabilitation Single Room Occupancy (FAL #14.249)
Lower Income Housing Assistance Program – Section 8 Moderate Rehabilitation (FAL #14.856)
Contract Numbers: N/A
Federal Agency: U.S. Department of Housing and Urban Development
Type of Finding: Special Tests and Provisions - Material Noncompliance and Internal Control (Material Weakness)
Criteria:
Per 24 CFR Section 5.705, a property must be inspected and meet specific Housing Quality Standards (“HQS”) before the property is approved for participation in any of the HUD housing programs. As stipulated in 24 CFR 882.516, in addition to the inspections required prior to the execution of the contract, HPD must inspect contract units at least annually, and at such other times as may be necessary to assure that the owner is meeting the obligations to maintain the units and provide the agreed upon utilities and other services. Further, as per HUD regulation 24 CFR 982.404(a)(3), for any failed inspections, HPD is required to verify that the HQS failure items have been repaired to bring the unit into compliance within 30 days.
Additionally, as stipulated by 2 CFR Section 200.303, recipients of Federal Awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers.
Condition/Context:
HPD has policies and procedures in place to identify units which require HQS inspections and performs inspections of these units to help ensure that any needed repairs are completed within the stipulated timeframe. For those units in need of repairs, HPD’s policy requires that those repairs be completed within thirty (30) days after the initial inspection.
From a non-statistical sample of forty (40) units that were selected for testing, we identified the following:
• For thirty-three (33) of the units tested, HPD was not able to provide documentation to support that an HQS inspection was performed for the unit under contract within the previous 12 months, as required.
• For eight (8) of the tenants tested where the unit under contract failed to meet HQS standards, HPD was not able to provide documentation to support that HPD verified the correction of the failed items through reinspection or alternative means.
Cause/Effect:
While HPD has a process in place to perform periodic HQS inspections for the units under contract that are part of the Section 8 Project-Based Cluster, a HQS inspection was not consistently performed at least once every 12 months to support that the owner is meeting the obligations to maintain the units and provide the agreed upon utilities and other services, as required.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that HPD strengthen their internal controls governing the HQS inspection requirements, including implementing controls to ensure inspections are performed annually for each unit under contract, and for any failed inspections, to verify that the HQS failure items have been repaired to bring the unit into compliance within thirty (30) days, as required.
New York City Housing Preservation & Development (“HPD”)
Finding #: 2023-016
Funding Year(s): 7/1/2022 – 6/30/2023
Housing Voucher Cluster:
Section 8 Housing Choice Vouchers (FAL #14.871)
Contract Numbers: N/A
Federal Agency: U.S. Department of Housing and Urban Development
Type of Finding: Eligibility and Special Tests and Provisions - Material Noncompliance and Internal Control (Material Weakness)
Criteria:
As stipulated by 24 CFR Section 982.201, prior to providing housing assistance payments (HAP) to participants, HPD must verify the eligibility of applicants based on their family income and composition. Per 24 CFR section 982.516, HPD must also reexamine family income and composition for each tenant at least once every 12 months to verify continued eligibility and adjust the HAP amount, as necessary. Further, as stipulated by 24 CFR Section 982.517, HPD must maintain an up-to-date utility allowance schedule and establish procedures to properly apply the updated utility allowances to each tenant’s HAP calculations as part of the annual reexamination process.
Additionally, as stipulated by 2 CFR Section 200.303, recipients of Federal Awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers.
Condition/Context:
To assess eligibility, HPD’s policy is to conduct annual recertifications of family income and composition. As part of that process, HPD sends a recertification package to the head of household, which contains documentation that the tenant must complete for verification purposes. HPD then analyzes and verifies all information included in the recertification package to determine if the tenant is eligible to continue to receive HAPs and adjust the tenant rent and HAP amounts as necessary for the following 12-month period.
We selected a non-statistical sample of forty (40) tenants who received HAPs under the Housing Voucher Cluster during fiscal year 2023. For eighteen (18) of the tenants tested, HPD was not able to provide documentation to support that an eligibility recertification for the tenant, including a review of the utility allowance and HAP calculation, was performed within the previous 12 months, as required.
Cause/Effect:
While HPD has a process in place to assess the eligibility of tenants receiving HAPs under the Housing Voucher Cluster, the reexamination of family income and composition and utility allowance was not consistently performed at least once every 12 months to support the tenant’s continued eligibility to receive benefits through this program at the appropriate amounts.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that HPD strengthen their internal controls governing the eligibility requirements, including implementing a control to ensure recertifications of family income and composition are performed at least once every 12 months and the tenants HAP amount and tenant utility allowance is adjusted as necessary to meet the eligibility requirements per 24 CFR sections 5.230, 5.609, 982.201 and 982.516.
New York City Department of Investigation (“DOI”)
Finding #: 2023-009
Funding Year(s): 7/1/2022 – 6/30/2023
Equitable Sharing Program (FAL #16.922)
Contract Numbers: N/A
Federal Agency: U.S. Department of Justice
Type of Finding: Equipment and Real Property Management - Compliance and Internal Control (Significant Deficiency)
Criteria:
As stipulated by 2 CFR section 200.313(d)(2), a physical inventory of property and equipment acquired under a federal award must be taken, and the results reconciled with the property records, at least once every two years.
Also, as stipulated by 2 CFR Section 200.303, recipients of federal awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers.
Condition/Context:
From a non-statistical sample of forty (40) pieces of equipment subjected to testing, DOI was unable to provide supporting documentation for two (2) of the selections, that a review and approval of the inventory had taken place at the time the inventory was conducted.
Cause/Effect:
While DOI had certain procedures in place to monitor their equipment purchased with federal funding, such procedures were not adequate to ensure that each aspect of the equipment and real property management compliance requirements were performed and documented within the requirement timeframe, which resulted in the findings noted above. Without the appropriate internal controls and monitoring procedures in place, federally funded equipment could be inaccurately recorded on inventory records and not discovered and corrected timely, inventory could be misplaced, misappropriated, or otherwise disposed of outside of the requirements of the federal guidelines
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This finding is similar to finding #2022-009, included on pages 245 through 247 of the Fiscal 2022 Single Audit report.
Recommendation:
We recommend that DOI strengthen controls over the inventory process to ensure biennial inventory counts are consistently performed over all equipment within the required timeframe, and that the review and approval of each inventory performed is appropriately documented.
New York City Department of Education (“DOE”)
Finding #: 2023-001
Funding Year(s): 7/1/2021 – 8/31/2022
Title I Grants to Local Educational Agencies (FAL #84.010)
Contract Numbers: 2R1251N01, 2R1251A01, 2R1264A01, 2R1240A01
Twenty-First Century Community Learning Centers (FAL #84.287)
Contract Numbers: 2R3901A01, 2R3911A01, 2R3913A01, 2R3916A01, 2R3922A01, 2R3931A01, 2R3903A01, 2R3904A01
English Language Acquisition Grants (FAL #84.365)
Contract Number: 2R4164A01
Supporting Effective Instruction State Grant (FAL #84.367)
Contract Numbers: 2R2664A01
Pass-Through Agency: New York State Department of Education
Federal Agency: U.S. Department of Education
Type of Finding: Reporting Compliance
Criteria:
As stipulated by the New York State Education Department (“NYSED”) Fiscal Guidelines for Federal and State Grants, program recipients are required to submit to NYSED a signed copy of the Final Expenditure Report for a Federal Project (“FS-10F”) within 90 days following the end of the grant award period.
Condition/Context:
Of the thirty-five (35) FS-10F reports submitted by the DOE during fiscal year 2023, we selected a sample of fourteen (14) FS-10F reports and found that fourteen (14) of the reports tested were submitted after the required due date, as follows:
• Title I Grants to Local Educational Agencies (FAL #84.010): of the four (4) FS-10F reports tested, such reports were submitted between 23 and 160 days late.
• Twenty-First Century Community Learning Centers (FAL #84.287): of the eight (8) FS-10F reports tested, such reports were submitted between 85 and 103 days late.
• English Language Acquisition Grants (FAL #84.365): of the one (1) FS-10F report tested, such report was submitted 167 days late.
• Supporting Effective Instruction State Grants (FAL #84.367): of the one (1) FS-10F report tested, such report was submitted 169 days late.
Cause/Effect:
We were informed that due to open encumbrances which had not been fully liquidated by the FS-10F due date, the DOE was unable to complete and submit the FS-10F financial reports within the stipulated 90-day period, thus resulting in late-filed reports.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This finding is similar to finding #2022-001, included on pages 232 and 233 of the Fiscal 2022 Single Audit report.
Recommendation:
We recommend the DOE consider establishing procedures and operational practices whereby disposition of open encumbrances is accelerated such that all FS-10F expenditure reports are prepared and submitted within the required 90-day timeframe.
New York City Department of Education (“DOE”)
Finding #: 2023-001
Funding Year(s): 7/1/2021 – 8/31/2022
Title I Grants to Local Educational Agencies (FAL #84.010)
Contract Numbers: 2R1251N01, 2R1251A01, 2R1264A01, 2R1240A01
Twenty-First Century Community Learning Centers (FAL #84.287)
Contract Numbers: 2R3901A01, 2R3911A01, 2R3913A01, 2R3916A01, 2R3922A01, 2R3931A01, 2R3903A01, 2R3904A01
English Language Acquisition Grants (FAL #84.365)
Contract Number: 2R4164A01
Supporting Effective Instruction State Grant (FAL #84.367)
Contract Numbers: 2R2664A01
Pass-Through Agency: New York State Department of Education
Federal Agency: U.S. Department of Education
Type of Finding: Reporting Compliance
Criteria:
As stipulated by the New York State Education Department (“NYSED”) Fiscal Guidelines for Federal and State Grants, program recipients are required to submit to NYSED a signed copy of the Final Expenditure Report for a Federal Project (“FS-10F”) within 90 days following the end of the grant award period.
Condition/Context:
Of the thirty-five (35) FS-10F reports submitted by the DOE during fiscal year 2023, we selected a sample of fourteen (14) FS-10F reports and found that fourteen (14) of the reports tested were submitted after the required due date, as follows:
• Title I Grants to Local Educational Agencies (FAL #84.010): of the four (4) FS-10F reports tested, such reports were submitted between 23 and 160 days late.
• Twenty-First Century Community Learning Centers (FAL #84.287): of the eight (8) FS-10F reports tested, such reports were submitted between 85 and 103 days late.
• English Language Acquisition Grants (FAL #84.365): of the one (1) FS-10F report tested, such report was submitted 167 days late.
• Supporting Effective Instruction State Grants (FAL #84.367): of the one (1) FS-10F report tested, such report was submitted 169 days late.
Cause/Effect:
We were informed that due to open encumbrances which had not been fully liquidated by the FS-10F due date, the DOE was unable to complete and submit the FS-10F financial reports within the stipulated 90-day period, thus resulting in late-filed reports.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This finding is similar to finding #2022-001, included on pages 232 and 233 of the Fiscal 2022 Single Audit report.
Recommendation:
We recommend the DOE consider establishing procedures and operational practices whereby disposition of open encumbrances is accelerated such that all FS-10F expenditure reports are prepared and submitted within the required 90-day timeframe.
New York City Department of Education (“DOE”)
Finding #: 2023-001
Funding Year(s): 7/1/2021 – 8/31/2022
Title I Grants to Local Educational Agencies (FAL #84.010)
Contract Numbers: 2R1251N01, 2R1251A01, 2R1264A01, 2R1240A01
Twenty-First Century Community Learning Centers (FAL #84.287)
Contract Numbers: 2R3901A01, 2R3911A01, 2R3913A01, 2R3916A01, 2R3922A01, 2R3931A01, 2R3903A01, 2R3904A01
English Language Acquisition Grants (FAL #84.365)
Contract Number: 2R4164A01
Supporting Effective Instruction State Grant (FAL #84.367)
Contract Numbers: 2R2664A01
Pass-Through Agency: New York State Department of Education
Federal Agency: U.S. Department of Education
Type of Finding: Reporting Compliance
Criteria:
As stipulated by the New York State Education Department (“NYSED”) Fiscal Guidelines for Federal and State Grants, program recipients are required to submit to NYSED a signed copy of the Final Expenditure Report for a Federal Project (“FS-10F”) within 90 days following the end of the grant award period.
Condition/Context:
Of the thirty-five (35) FS-10F reports submitted by the DOE during fiscal year 2023, we selected a sample of fourteen (14) FS-10F reports and found that fourteen (14) of the reports tested were submitted after the required due date, as follows:
• Title I Grants to Local Educational Agencies (FAL #84.010): of the four (4) FS-10F reports tested, such reports were submitted between 23 and 160 days late.
• Twenty-First Century Community Learning Centers (FAL #84.287): of the eight (8) FS-10F reports tested, such reports were submitted between 85 and 103 days late.
• English Language Acquisition Grants (FAL #84.365): of the one (1) FS-10F report tested, such report was submitted 167 days late.
• Supporting Effective Instruction State Grants (FAL #84.367): of the one (1) FS-10F report tested, such report was submitted 169 days late.
Cause/Effect:
We were informed that due to open encumbrances which had not been fully liquidated by the FS-10F due date, the DOE was unable to complete and submit the FS-10F financial reports within the stipulated 90-day period, thus resulting in late-filed reports.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This finding is similar to finding #2022-001, included on pages 232 and 233 of the Fiscal 2022 Single Audit report.
Recommendation:
We recommend the DOE consider establishing procedures and operational practices whereby disposition of open encumbrances is accelerated such that all FS-10F expenditure reports are prepared and submitted within the required 90-day timeframe.
New York City Department of Education (“DOE”)
Finding #: 2023-001
Funding Year(s): 7/1/2021 – 8/31/2022
Title I Grants to Local Educational Agencies (FAL #84.010)
Contract Numbers: 2R1251N01, 2R1251A01, 2R1264A01, 2R1240A01
Twenty-First Century Community Learning Centers (FAL #84.287)
Contract Numbers: 2R3901A01, 2R3911A01, 2R3913A01, 2R3916A01, 2R3922A01, 2R3931A01, 2R3903A01, 2R3904A01
English Language Acquisition Grants (FAL #84.365)
Contract Number: 2R4164A01
Supporting Effective Instruction State Grant (FAL #84.367)
Contract Numbers: 2R2664A01
Pass-Through Agency: New York State Department of Education
Federal Agency: U.S. Department of Education
Type of Finding: Reporting Compliance
Criteria:
As stipulated by the New York State Education Department (“NYSED”) Fiscal Guidelines for Federal and State Grants, program recipients are required to submit to NYSED a signed copy of the Final Expenditure Report for a Federal Project (“FS-10F”) within 90 days following the end of the grant award period.
Condition/Context:
Of the thirty-five (35) FS-10F reports submitted by the DOE during fiscal year 2023, we selected a sample of fourteen (14) FS-10F reports and found that fourteen (14) of the reports tested were submitted after the required due date, as follows:
• Title I Grants to Local Educational Agencies (FAL #84.010): of the four (4) FS-10F reports tested, such reports were submitted between 23 and 160 days late.
• Twenty-First Century Community Learning Centers (FAL #84.287): of the eight (8) FS-10F reports tested, such reports were submitted between 85 and 103 days late.
• English Language Acquisition Grants (FAL #84.365): of the one (1) FS-10F report tested, such report was submitted 167 days late.
• Supporting Effective Instruction State Grants (FAL #84.367): of the one (1) FS-10F report tested, such report was submitted 169 days late.
Cause/Effect:
We were informed that due to open encumbrances which had not been fully liquidated by the FS-10F due date, the DOE was unable to complete and submit the FS-10F financial reports within the stipulated 90-day period, thus resulting in late-filed reports.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This finding is similar to finding #2022-001, included on pages 232 and 233 of the Fiscal 2022 Single Audit report.
Recommendation:
We recommend the DOE consider establishing procedures and operational practices whereby disposition of open encumbrances is accelerated such that all FS-10F expenditure reports are prepared and submitted within the required 90-day timeframe.
New York City Department for the Aging (“DFTA”)
Finding #: 2023-010
Funding Year(s): 07/01/2022 - 06/30/2023
New York City Department for the Aging:
Aging Cluster (FAL #93.044, 93.045 & 93.053)
Contract Number: N/A
Pass-Through Agency: New York State Office for the Aging
Type of Finding: Subrecipient Monitoring Compliance and Internal Control (Significant Deficiency)
Criteria:
As stipulated in 2 CFR 200.332(f) pass-through entities should verify that every subrecipient that expends $750,000 or more in federal awards during their fiscal year has a single or program-specific audit conducted for that fiscal year in accordance with 2 CFR 200.501. Additionally, per 2 CFR 200.512(a)(1) the audit must be completed and the data collection form along with the reporting package must be submitted to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the auditor’s report(s), or nine months after the end of the audit period.
Condition/Context:
Of the forty (40) subrecipients under the Aging Cluster that were selected for testing, four (4) of the single audit report dates were beyond the nine-month required submission date required by 2 CFR 200.512(a)(1). For these four (4) selections, DFTA was unable to provide supporting documentation of notification by the subrecipient of the late submission and acknowledgment of the notification by DFTA.
Cause/Effect:
While DFTA has established subrecipient monitoring procedures, we noted that monitoring of subrecipient compliance with federal statues, regulations and terms and conditions of the federal award were not consistently performed and documented. Missing or incomplete monitoring procedures could result in subrecipients not complying with Uniform Guidance reporting and/or other program specific compliance requirements.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that DFTA create a comprehensive internal control structure which ensures that all subrecipient compliance requirements stipulated by 2 CFR 200.332 are being met, including following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient detected through audits, on-site reviews, and written confirmation from the subrecipient.
New York City Department for the Aging (“DFTA”)
Finding #: 2023-010
Funding Year(s): 07/01/2022 - 06/30/2023
New York City Department for the Aging:
Aging Cluster (FAL #93.044, 93.045 & 93.053)
Contract Number: N/A
Pass-Through Agency: New York State Office for the Aging
Type of Finding: Subrecipient Monitoring Compliance and Internal Control (Significant Deficiency)
Criteria:
As stipulated in 2 CFR 200.332(f) pass-through entities should verify that every subrecipient that expends $750,000 or more in federal awards during their fiscal year has a single or program-specific audit conducted for that fiscal year in accordance with 2 CFR 200.501. Additionally, per 2 CFR 200.512(a)(1) the audit must be completed and the data collection form along with the reporting package must be submitted to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the auditor’s report(s), or nine months after the end of the audit period.
Condition/Context:
Of the forty (40) subrecipients under the Aging Cluster that were selected for testing, four (4) of the single audit report dates were beyond the nine-month required submission date required by 2 CFR 200.512(a)(1). For these four (4) selections, DFTA was unable to provide supporting documentation of notification by the subrecipient of the late submission and acknowledgment of the notification by DFTA.
Cause/Effect:
While DFTA has established subrecipient monitoring procedures, we noted that monitoring of subrecipient compliance with federal statues, regulations and terms and conditions of the federal award were not consistently performed and documented. Missing or incomplete monitoring procedures could result in subrecipients not complying with Uniform Guidance reporting and/or other program specific compliance requirements.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that DFTA create a comprehensive internal control structure which ensures that all subrecipient compliance requirements stipulated by 2 CFR 200.332 are being met, including following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient detected through audits, on-site reviews, and written confirmation from the subrecipient.
New York City Department for the Aging (“DFTA”)
Finding #: 2023-010
Funding Year(s): 07/01/2022 - 06/30/2023
New York City Department for the Aging:
Aging Cluster (FAL #93.044, 93.045 & 93.053)
Contract Number: N/A
Pass-Through Agency: New York State Office for the Aging
Type of Finding: Subrecipient Monitoring Compliance and Internal Control (Significant Deficiency)
Criteria:
As stipulated in 2 CFR 200.332(f) pass-through entities should verify that every subrecipient that expends $750,000 or more in federal awards during their fiscal year has a single or program-specific audit conducted for that fiscal year in accordance with 2 CFR 200.501. Additionally, per 2 CFR 200.512(a)(1) the audit must be completed and the data collection form along with the reporting package must be submitted to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the auditor’s report(s), or nine months after the end of the audit period.
Condition/Context:
Of the forty (40) subrecipients under the Aging Cluster that were selected for testing, four (4) of the single audit report dates were beyond the nine-month required submission date required by 2 CFR 200.512(a)(1). For these four (4) selections, DFTA was unable to provide supporting documentation of notification by the subrecipient of the late submission and acknowledgment of the notification by DFTA.
Cause/Effect:
While DFTA has established subrecipient monitoring procedures, we noted that monitoring of subrecipient compliance with federal statues, regulations and terms and conditions of the federal award were not consistently performed and documented. Missing or incomplete monitoring procedures could result in subrecipients not complying with Uniform Guidance reporting and/or other program specific compliance requirements.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that DFTA create a comprehensive internal control structure which ensures that all subrecipient compliance requirements stipulated by 2 CFR 200.332 are being met, including following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient detected through audits, on-site reviews, and written confirmation from the subrecipient.
New York City Department for the Aging (“DFTA”)
Finding #: 2023-010
Funding Year(s): 07/01/2022 - 06/30/2023
New York City Department for the Aging:
Aging Cluster (FAL #93.044, 93.045 & 93.053)
Contract Number: N/A
Pass-Through Agency: New York State Office for the Aging
Type of Finding: Subrecipient Monitoring Compliance and Internal Control (Significant Deficiency)
Criteria:
As stipulated in 2 CFR 200.332(f) pass-through entities should verify that every subrecipient that expends $750,000 or more in federal awards during their fiscal year has a single or program-specific audit conducted for that fiscal year in accordance with 2 CFR 200.501. Additionally, per 2 CFR 200.512(a)(1) the audit must be completed and the data collection form along with the reporting package must be submitted to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the auditor’s report(s), or nine months after the end of the audit period.
Condition/Context:
Of the forty (40) subrecipients under the Aging Cluster that were selected for testing, four (4) of the single audit report dates were beyond the nine-month required submission date required by 2 CFR 200.512(a)(1). For these four (4) selections, DFTA was unable to provide supporting documentation of notification by the subrecipient of the late submission and acknowledgment of the notification by DFTA.
Cause/Effect:
While DFTA has established subrecipient monitoring procedures, we noted that monitoring of subrecipient compliance with federal statues, regulations and terms and conditions of the federal award were not consistently performed and documented. Missing or incomplete monitoring procedures could result in subrecipients not complying with Uniform Guidance reporting and/or other program specific compliance requirements.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that DFTA create a comprehensive internal control structure which ensures that all subrecipient compliance requirements stipulated by 2 CFR 200.332 are being met, including following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient detected through audits, on-site reviews, and written confirmation from the subrecipient.
New York City Department for the Aging (“DFTA”)
Finding #: 2023-010
Funding Year(s): 07/01/2022 - 06/30/2023
New York City Department for the Aging:
Aging Cluster (FAL #93.044, 93.045 & 93.053)
Contract Number: N/A
Pass-Through Agency: New York State Office for the Aging
Type of Finding: Subrecipient Monitoring Compliance and Internal Control (Significant Deficiency)
Criteria:
As stipulated in 2 CFR 200.332(f) pass-through entities should verify that every subrecipient that expends $750,000 or more in federal awards during their fiscal year has a single or program-specific audit conducted for that fiscal year in accordance with 2 CFR 200.501. Additionally, per 2 CFR 200.512(a)(1) the audit must be completed and the data collection form along with the reporting package must be submitted to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the auditor’s report(s), or nine months after the end of the audit period.
Condition/Context:
Of the forty (40) subrecipients under the Aging Cluster that were selected for testing, four (4) of the single audit report dates were beyond the nine-month required submission date required by 2 CFR 200.512(a)(1). For these four (4) selections, DFTA was unable to provide supporting documentation of notification by the subrecipient of the late submission and acknowledgment of the notification by DFTA.
Cause/Effect:
While DFTA has established subrecipient monitoring procedures, we noted that monitoring of subrecipient compliance with federal statues, regulations and terms and conditions of the federal award were not consistently performed and documented. Missing or incomplete monitoring procedures could result in subrecipients not complying with Uniform Guidance reporting and/or other program specific compliance requirements.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that DFTA create a comprehensive internal control structure which ensures that all subrecipient compliance requirements stipulated by 2 CFR 200.332 are being met, including following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient detected through audits, on-site reviews, and written confirmation from the subrecipient.
New York City Department of Health and Mental Hygiene (“DOHMH”)
Finding #: 2023-008
Funding Year(s): 8/1/2019 - 7/31/2024
Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (FAL #93.323)
Contract Number: 5 NU50CK000517, 6 NU50CK000517
Federal Agency: U.S. Department of Health and Human Services
Type of Finding: Reporting – Internal Control (Significant Deficiency)
Criteria:
In accordance with the U.S Department of Health and Human Services (“HHS”) Grants Policy Statement, reports of expenditures are required as documentation of the financial status of grants according to the official accounting records of the recipient. Financial or expenditure reporting is accomplished using the Financial Status Report (“FSR”) (SF 269 or SF 269A). The FSR is required annually, and the report must be submitted for each budget period no later than 90 days after the close of the budget period or applicable 12-month period. Additionally, special reports are required by the terms and conditions of the federal awards.
As stipulated by 2 CFR Section 200.303, recipients of federal awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers.
Condition/Context:
From a non-statistical sample of four (4) annual FSRs subject to testing, we identified one (1) FSR that was submitted after the required reporting deadline of within 90 days following the end of the budget period.
In addition, we selected a non-statistical sample of twenty-four (24) special performance reports required to be filed. While the reports were prepared and submitted promptly in accordance with the reporting deadlines, for all twenty-four (24) selections, DOHMH was unable to provide supporting documentation that a review was performed to verify that the performance report was accurately prepared and submitted.
Cause/Effect:
While DOHMH has established policies and procedures to ensure that the required reports are accurately
completed and submitted on a timely basis, we noted the appropriate reviews were not consistently performed and documented for both financial and performance reporting thus resulting in one (1) FSR that was submitted after the required reporting deadline of within 90 days following the end of the budget period.
Questioned Costs:
None noted.
Identification as a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that DOHMH strengthen their internal controls over the reporting process to include documented review and approval all financial and special performance reports prior to submission within the required timeframe.
New York City Department of Health and Mental Hygiene (“DOHMH”)
Finding #: 2023-008
Funding Year(s): 8/1/2019 - 7/31/2024
Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (FAL #93.323)
Contract Number: 5 NU50CK000517, 6 NU50CK000517
Federal Agency: U.S. Department of Health and Human Services
Type of Finding: Reporting – Internal Control (Significant Deficiency)
Criteria:
In accordance with the U.S Department of Health and Human Services (“HHS”) Grants Policy Statement, reports of expenditures are required as documentation of the financial status of grants according to the official accounting records of the recipient. Financial or expenditure reporting is accomplished using the Financial Status Report (“FSR”) (SF 269 or SF 269A). The FSR is required annually, and the report must be submitted for each budget period no later than 90 days after the close of the budget period or applicable 12-month period. Additionally, special reports are required by the terms and conditions of the federal awards.
As stipulated by 2 CFR Section 200.303, recipients of federal awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers.
Condition/Context:
From a non-statistical sample of four (4) annual FSRs subject to testing, we identified one (1) FSR that was submitted after the required reporting deadline of within 90 days following the end of the budget period.
In addition, we selected a non-statistical sample of twenty-four (24) special performance reports required to be filed. While the reports were prepared and submitted promptly in accordance with the reporting deadlines, for all twenty-four (24) selections, DOHMH was unable to provide supporting documentation that a review was performed to verify that the performance report was accurately prepared and submitted.
Cause/Effect:
While DOHMH has established policies and procedures to ensure that the required reports are accurately
completed and submitted on a timely basis, we noted the appropriate reviews were not consistently performed and documented for both financial and performance reporting thus resulting in one (1) FSR that was submitted after the required reporting deadline of within 90 days following the end of the budget period.
Questioned Costs:
None noted.
Identification as a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that DOHMH strengthen their internal controls over the reporting process to include documented review and approval all financial and special performance reports prior to submission within the required timeframe.
New York City Department of Health and Mental Hygiene (“DOHMH”)
Finding #: 2023-008
Funding Year(s): 8/1/2019 - 7/31/2024
Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (FAL #93.323)
Contract Number: 5 NU50CK000517, 6 NU50CK000517
Federal Agency: U.S. Department of Health and Human Services
Type of Finding: Reporting – Internal Control (Significant Deficiency)
Criteria:
In accordance with the U.S Department of Health and Human Services (“HHS”) Grants Policy Statement, reports of expenditures are required as documentation of the financial status of grants according to the official accounting records of the recipient. Financial or expenditure reporting is accomplished using the Financial Status Report (“FSR”) (SF 269 or SF 269A). The FSR is required annually, and the report must be submitted for each budget period no later than 90 days after the close of the budget period or applicable 12-month period. Additionally, special reports are required by the terms and conditions of the federal awards.
As stipulated by 2 CFR Section 200.303, recipients of federal awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers.
Condition/Context:
From a non-statistical sample of four (4) annual FSRs subject to testing, we identified one (1) FSR that was submitted after the required reporting deadline of within 90 days following the end of the budget period.
In addition, we selected a non-statistical sample of twenty-four (24) special performance reports required to be filed. While the reports were prepared and submitted promptly in accordance with the reporting deadlines, for all twenty-four (24) selections, DOHMH was unable to provide supporting documentation that a review was performed to verify that the performance report was accurately prepared and submitted.
Cause/Effect:
While DOHMH has established policies and procedures to ensure that the required reports are accurately
completed and submitted on a timely basis, we noted the appropriate reviews were not consistently performed and documented for both financial and performance reporting thus resulting in one (1) FSR that was submitted after the required reporting deadline of within 90 days following the end of the budget period.
Questioned Costs:
None noted.
Identification as a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that DOHMH strengthen their internal controls over the reporting process to include documented review and approval all financial and special performance reports prior to submission within the required timeframe.
Administration for Children’s Services (“ACS”) and New York City Human Resources Administration (“HRA”)
Finding #: 2023-013
Funding Year(s): 10/1/2021 - 9/30/2023
CCDF Cluster: Child Care and Development Block Grant (FAL #93.575)
Contract Numbers: 22-OCFS-LCM-08, 23-OCFS-LCM-12-R1
Pass-Through Agency: NYS Office of Children and Family Services
Federal Agency: U.S. Department of Health and Human Services
Type of Finding: Eligibility - Material Noncompliance and Internal Control (Material Weakness)
Criteria:
As stipulated by the 45 CFR Part 98 Subpart C, to be eligible for services under the Child Care and Development Block Grant (“CCDBG”), a child shall (1) be under the age of thirteen (13) years of age or be under the age of nineteen (19) and physically or mentally incapable of caring for himself or herself; (2) Reside with a family whose income does not exceed 85 percent of the State's median income (SMI) and whose family assets do not exceed $1,000,000; and (3) reside with a parent or parents who are working or attending a job training or educational program; or receive, or need to receive, protective services.
Additionally, as stipulated by 2 CFR Section 200.303, recipients of federal awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers.
Condition/Context:
We selected a non-statistical sample of forty (40) individuals who received services under CCDBG during fiscal year 2023 and found that five (5) of the individuals tested had errors as follows:
• One (1) of the individuals tested from HRA did not meet some or all of the eligibility criteria as stipulated in 45 CFR Part 98 Subpart C;
• For four (4) of the individuals, HRA was not able to provide documentation to support that the individual met all the eligibility criteria as stipulated in 45 CFR Part 98 Subpart C; and,
Total CCDBG Benefits charged to the grant were $532,211,608 and total CCDBG benefits subjected to testing were $37,776.
Cause/Effect:
While ACS and HRA have a process in place to assess the eligibility of children, a comprehensive review was not consistently performed and documented to ensure the appropriate evidence and related approvals were maintained to support those determinations. As a result, costs were incurred on behalf of certain children that did not meet all of the eligibility requirements or were not supported by appropriate documentation.
Questioned Costs:
Known questioned costs of $520.
Identification as a Repeat Finding:
This finding is similar to finding #2022-015, included on pages 260 and 261 of the Fiscal 2022 Single Audit report.
Recommendation:
We recommend that ACS and HRA strengthen their internal controls governing the eligibility requirements, including implementing a review checklist to ensure the child meets every eligibility requirement per 45 CFR Part 98 Subpart C during the eligibility determination process.
Administration for Children’s Services (“ACS”) and New York City Human Resources Administration (“HRA”)
Finding #: 2023-013
Funding Year(s): 10/1/2021 - 9/30/2023
CCDF Cluster: Child Care and Development Block Grant (FAL #93.575)
Contract Numbers: 22-OCFS-LCM-08, 23-OCFS-LCM-12-R1
Pass-Through Agency: NYS Office of Children and Family Services
Federal Agency: U.S. Department of Health and Human Services
Type of Finding: Eligibility - Material Noncompliance and Internal Control (Material Weakness)
Criteria:
As stipulated by the 45 CFR Part 98 Subpart C, to be eligible for services under the Child Care and Development Block Grant (“CCDBG”), a child shall (1) be under the age of thirteen (13) years of age or be under the age of nineteen (19) and physically or mentally incapable of caring for himself or herself; (2) Reside with a family whose income does not exceed 85 percent of the State's median income (SMI) and whose family assets do not exceed $1,000,000; and (3) reside with a parent or parents who are working or attending a job training or educational program; or receive, or need to receive, protective services.
Additionally, as stipulated by 2 CFR Section 200.303, recipients of federal awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers.
Condition/Context:
We selected a non-statistical sample of forty (40) individuals who received services under CCDBG during fiscal year 2023 and found that five (5) of the individuals tested had errors as follows:
• One (1) of the individuals tested from HRA did not meet some or all of the eligibility criteria as stipulated in 45 CFR Part 98 Subpart C;
• For four (4) of the individuals, HRA was not able to provide documentation to support that the individual met all the eligibility criteria as stipulated in 45 CFR Part 98 Subpart C; and,
Total CCDBG Benefits charged to the grant were $532,211,608 and total CCDBG benefits subjected to testing were $37,776.
Cause/Effect:
While ACS and HRA have a process in place to assess the eligibility of children, a comprehensive review was not consistently performed and documented to ensure the appropriate evidence and related approvals were maintained to support those determinations. As a result, costs were incurred on behalf of certain children that did not meet all of the eligibility requirements or were not supported by appropriate documentation.
Questioned Costs:
Known questioned costs of $520.
Identification as a Repeat Finding:
This finding is similar to finding #2022-015, included on pages 260 and 261 of the Fiscal 2022 Single Audit report.
Recommendation:
We recommend that ACS and HRA strengthen their internal controls governing the eligibility requirements, including implementing a review checklist to ensure the child meets every eligibility requirement per 45 CFR Part 98 Subpart C during the eligibility determination process.
Administration for Children’s Services (“ACS”)
Finding #: 2023-007
Funding Year(s): 10/1/2018 - 9/30/2028
Foster Care – Title IV - E (FAL #93.658)
Contract Numbers: 1901NYFOST, 2001NYFOST, 2301NYFOST
Federal Agency: U.S. Department of Health and Human Services
Type of Finding: Eligibility - Compliance and Internal Control (Significant Deficiency)
Criteria:
A child’s removal from the home (unless removal is pursuant to a voluntary placement agreement) must be in accordance with a judicial determination to the effect that continuation in the home would be contrary to the child’s welfare, or that placement in foster care would be in the best interest of the child. The judicial determination must be explicitly stated in the court order and made on a case-by-case basis. The precise language “contrary to the welfare” does not have to be included in the removal court order, but the order must include language to the effect that remaining in the home will be contrary to the child’s welfare, safety, or best interest (45 CFR section 1356.21(c)). The judicial determination of contrary to the welfare must be in the first court ruling that sanctions the child’s removal from home (45 CFR section 1356.21(c)). Acceptable documentation is a court order containing a judicial determination regarding contrary to the welfare or a transcript of the court proceedings reflecting this determination (45 CFR section 1356.21(d)).
Additionally, as stipulated by 2 CFR Section 200.303, recipients of federal awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers.
Condition/Context:
The New York City Administration for Children’s Services (“ACS”) utilizes an eligibility checklist mandated by the State of New York (“NY State”) to assess beneficiaries’ eligibility to receive benefits through the Foster Care program. Upon the completion of the eligibility checklist by an ACS staff member, ACS’ policies and procedures require that a designated supervisor review and approve the checklist prior to ACS determining a child to be IV-E eligible. From a non-statistical sample of forty (40) eligibility files subject to testing, we identified one (1) eligibility redetermination checklist that did not include evidence of the required approval by a supervisor and two (2) redetermination checklists with untimely approval by a supervisor. In addition, those same two (2) files did not contain a copy of the court order until a year after the judicial finding was made.
Cause/Effect:
While ACS has established policies and procedures to help ensure eligibility requirements are met, we noted the appropriate reviews were not consistently performed, which could result in an ineligible individual receiving benefits. However, with respect to the forty (40) sampled files referred to above, ACS personnel were able to demonstrate that all such individuals were in fact eligible for Foster Care benefits, and accordingly, program eligibility requirements were satisfied for these sampled files.
Questioned Costs:
None noted.
Identification as a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that ACS strengthen controls over the foster care eligibility process to ensure the appropriate supervisory review and approval is consistently performed.
Administration for Children’s Services (“ACS”)
Finding #: 2023-007
Funding Year(s): 10/1/2018 - 9/30/2028
Foster Care – Title IV - E (FAL #93.658)
Contract Numbers: 1901NYFOST, 2001NYFOST, 2301NYFOST
Federal Agency: U.S. Department of Health and Human Services
Type of Finding: Eligibility - Compliance and Internal Control (Significant Deficiency)
Criteria:
A child’s removal from the home (unless removal is pursuant to a voluntary placement agreement) must be in accordance with a judicial determination to the effect that continuation in the home would be contrary to the child’s welfare, or that placement in foster care would be in the best interest of the child. The judicial determination must be explicitly stated in the court order and made on a case-by-case basis. The precise language “contrary to the welfare” does not have to be included in the removal court order, but the order must include language to the effect that remaining in the home will be contrary to the child’s welfare, safety, or best interest (45 CFR section 1356.21(c)). The judicial determination of contrary to the welfare must be in the first court ruling that sanctions the child’s removal from home (45 CFR section 1356.21(c)). Acceptable documentation is a court order containing a judicial determination regarding contrary to the welfare or a transcript of the court proceedings reflecting this determination (45 CFR section 1356.21(d)).
Additionally, as stipulated by 2 CFR Section 200.303, recipients of federal awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers.
Condition/Context:
The New York City Administration for Children’s Services (“ACS”) utilizes an eligibility checklist mandated by the State of New York (“NY State”) to assess beneficiaries’ eligibility to receive benefits through the Foster Care program. Upon the completion of the eligibility checklist by an ACS staff member, ACS’ policies and procedures require that a designated supervisor review and approve the checklist prior to ACS determining a child to be IV-E eligible. From a non-statistical sample of forty (40) eligibility files subject to testing, we identified one (1) eligibility redetermination checklist that did not include evidence of the required approval by a supervisor and two (2) redetermination checklists with untimely approval by a supervisor. In addition, those same two (2) files did not contain a copy of the court order until a year after the judicial finding was made.
Cause/Effect:
While ACS has established policies and procedures to help ensure eligibility requirements are met, we noted the appropriate reviews were not consistently performed, which could result in an ineligible individual receiving benefits. However, with respect to the forty (40) sampled files referred to above, ACS personnel were able to demonstrate that all such individuals were in fact eligible for Foster Care benefits, and accordingly, program eligibility requirements were satisfied for these sampled files.
Questioned Costs:
None noted.
Identification as a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that ACS strengthen controls over the foster care eligibility process to ensure the appropriate supervisory review and approval is consistently performed.
New York City Police Department (“NYPD”)
Finding #: 2023-011
Funding Year(s): 9/1/2018 - 8/31/2025
Port Security Grant Program (FAL #97.056)
Contract Number(s): EMW-2018-PU-00123-S01, EMW-2019-PU-00316-S01, EMW-2020-PU-00278-S01, EMW-2021-PU-00321-S01, EMW-2022-PU-00311-S01
Federal Agency: U.S. Department of Homeland Security
Type of Finding: Equipment and Real Property Management - Compliance and Internal Control (Control Deficiency)
Criteria:
In accordance with 2 CFR section 200.313(d)(1), property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and 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, and any ultimate disposition data including the date of disposal and sale price of the property.
Condition/Context:
The New York City Police Department (“NYPD”) utilizes the City’s Grants Tracking System (“GTS”), a citywide web-based inventory program, designed to standardize the tracking of federally funded equipment. Further, NYPD Command-designated grants coordinators are responsible for monitoring the equipment and updating the inventory on a periodic basis in accordance with federal guidelines. The NYPD Grants Unit periodically generates an inventory listing from GTS that includes the biennial inventory count due date for each item and distributes it to the assigned NYPD Command designated grant coordinators to ensure the inventory count is conducted timely and in accordance with federal requirements. After the completion of biennial inventory count, the NYPD Command-designated grants coordinators update the inventory count information to GTS.
From a non-statistical sample of twenty (20) pieces of equipment subjected to testing, we identified one (1) piece of equipment that was disposed of prior to the most recent inventory count, but the equipment was not removed from the active inventory listing.
Cause/Effect:
While NYPD had certain procedures in place to monitor their equipment purchased with federal funding, such procedures were not adequate to ensure that each aspect of the equipment and real property management compliance requirements were performed and documented within the required timeframe, which resulted in the finding noted above. Without the appropriate internal controls and monitoring procedures in place, federally funded equipment could be inaccurately recorded on inventory records and not discovered and corrected timely, inventory could be misplaced, misappropriated, or otherwise disposed of outside of the requirements of the federal guidelines.
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that NYPD strengthen controls over the inventory process to ensure dispositions of equipment are updated in the equipment records.
New York City Fire Department (“FDNY”)
Finding #: 2023-012
Funding Year(s): 9/1/2018 - 8/31/2024
Port Security Grant Program (FAL #97.056)
Contract Number(s): EMW-2018-PU-00004-S01, EMW-2020-PU-00020-S01, EMW-2021-PU-00015-S01, EMW-2019-PU-00013-S01
Federal Agency: U.S. Department of Homeland Security
Type of Finding: Equipment and Real Property Management - Compliance and Internal Control (Significant Deficiency)
Criteria:
In accordance with 2 CFR section 200.313(d)(1), property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and 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, and any ultimate disposition data including the date of disposal and sale price of the property.
Condition/Context:
The New York City Fire Department (“FDNY”) utilizes the City’s Grants Tracking System (“GTS”), a citywide web-based inventory program, designed to standardize the tracking of federally funded equipment. Further, FDNY Command-designated grants coordinators are responsible for monitoring the equipment and updating the inventory on a periodic basis in accordance with federal guidelines. The FDNY Grants Unit periodically generates an inventory listing from GTS that includes the biennial inventory count due date for each item and distributes it to the assigned FDNY Command designated grant coordinators to ensure the inventory count is conducted timely and in accordance with federal requirements. After the completion of biennial inventory count, the FDNY Command-designated grants coordinators update the inventory count information to GTS.
From a non-statistical sample of twenty (20) pieces of equipment subjected to testing, we identified three (3) pieces of equipment that were disposed of prior to the most recent inventory count but the equipment was not removed from the active inventory listing.
Cause/Effect:
While FDNY had certain procedures in place to monitor their equipment purchased with federal funding, such procedures were not adequate to ensure that each aspect of the equipment and real property management compliance requirements were consistently performed and documented, which resulted in the findings noted above. Without the appropriate internal controls and monitoring procedures in place, federally funded equipment could be inaccurately recorded on inventory records and not discovered and corrected timely, inventory could be misplaced, misappropriated, or otherwise disposed of outside of the requirements of the federal guidelines
Questioned Costs:
None identified.
Identification as a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that FDNY strengthen controls over the inventory process to ensure dispositions of equipment are updated in the equipment records, inventories performed are reconciled back to equipment records, and biennial inventory counts are consistently performed for all equipment within the required timeframe.