Audit 322033

Criteria or specific requirement: In accordance with Uniform Grant Guidance (2 CFR Part 200), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition: Home Forward is not in compliance with allowable cost requirements related to payroll. Questioned costs: $116 Context: For 1 of 40 payroll transactions tested, an erroneous $116 of additional pay was charged to the program. Cause: Home Forward did not sufficiently monitor controls to ensure compliance with payroll requirements. Effect: Home Forward is not in compliance with federal regulations regarding allowable costs for payroll. Repeat Finding: No. Recommendation: We recommend that Home Forward reviews the controls in place to ensure that payroll transactions charged to the program are supported. Views of responsible officials: There is no disagreement with the audit finding.

Criteria or specific requirement: Beneficiaries must be “low-income families,” as defined in Section 3(b)(2) of the 1937 Housing Act (42 USC 1437a(b)(2)) (Section 204(b) of Pub. L. No. 104-134 (42 USC 1437f (note))). Condition: Home Forward is not in compliance with requirements related to eligibility. Questioned costs: Unable to determine. Context: For 1 of 40 files tested for public housing eligibility, family income and composition were not examined on a biennial basis and tenant income was not supported by 3rd party documentation. Cause: Home Forward did not sufficiently monitor controls to ensure compliance with eligibility requirements Effect: Home Forward is not in compliance with federal regulations regarding eligibility. Tenant rent may have been miscalculated due to using stale/inaccurate information in the rent calculation. Repeat Finding: No. Recommendation: We recommend that Home Forward reviews the controls in place to ensure that recertifications are performed timely and income is supported. Views of responsible officials: There is no disagreement with the audit finding.

Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. According to §180.300 of 2 CFR Part 180, when you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. This is done by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Condition: Home Forward is not in compliance with requirements related to suspension and debarment. Questioned costs: Unable to determine. Context: During our testing, it was noted that Home Forward did not review one of one vendors subject to the requirement prior to entering into a contract with the vendor to ensure the vendor did not have any active exclusion records. Cause: Home Forward did not anticipate spending federal funds under the contract. Effect: Home Forward is not in compliance with federal regulations that require verification to ensure that the business to which they have entered into a covered transaction is not excluded or disqualified, as specified in §180.300. Repeat Finding: No. Recommendation: We recommend Home Forward implements a process to ensure exclusion checks are done prior to the execution of a contract. This process should include a system to ensure documentation is maintained in the files evidencing the date of the exclusion check as well as documented review and approval of the results of the exclusion check by program staff. Views of responsible officials: There is no disagreement with the audit finding.

Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The Authority is required to establish a reasonable rent policy and ensure that policy is followed. Condition: During our testing, we noted Home Forward did not have adequate internal controls designed to ensure the approval of comparables is formally documented in the files. Questioned costs: Unable to determine. Context: During our testing, it was noted that Home Forward did not formally document approval of comparables in 4 of 40 files. Cause: Home Forward has not been consistent with keeping formal documentation of approval of comparables in the files. Effect: The auditor noted no instances of noncompliance with the provisions of special tests and provisions - reasonable rental rates; however, the lack of internal controls over these compliance requirements provides an opportunity for noncompliance. Repeat Finding: No. Recommendation: We recommend Home Forward design controls to ensure formal documentation of approval of comparables is in the files. Views of responsible officials: There is no disagreement with the audit finding.

Criteria or specific requirement: In accordance with Uniform Grant Guidance (2 CFR Part 200), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition: Home Forward is not in compliance with allowable cost requirements related to payroll. Questioned costs: $116 Context: For 1 of 40 payroll transactions tested, an erroneous $116 of additional pay was charged to the program. Cause: Home Forward did not sufficiently monitor controls to ensure compliance with payroll requirements. Effect: Home Forward is not in compliance with federal regulations regarding allowable costs for payroll. Repeat Finding: No. Recommendation: We recommend that Home Forward reviews the controls in place to ensure that payroll transactions charged to the program are supported. Views of responsible officials: There is no disagreement with the audit finding.

Criteria or specific requirement: Beneficiaries must be “low-income families,” as defined in Section 3(b)(2) of the 1937 Housing Act (42 USC 1437a(b)(2)) (Section 204(b) of Pub. L. No. 104-134 (42 USC 1437f (note))). Condition: Home Forward is not in compliance with requirements related to eligibility. Questioned costs: Unable to determine. Context: For 1 of 40 files tested for public housing eligibility, family income and composition were not examined on a biennial basis and tenant income was not supported by 3rd party documentation. Cause: Home Forward did not sufficiently monitor controls to ensure compliance with eligibility requirements Effect: Home Forward is not in compliance with federal regulations regarding eligibility. Tenant rent may have been miscalculated due to using stale/inaccurate information in the rent calculation. Repeat Finding: No. Recommendation: We recommend that Home Forward reviews the controls in place to ensure that recertifications are performed timely and income is supported. Views of responsible officials: There is no disagreement with the audit finding.

Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. According to §180.300 of 2 CFR Part 180, when you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. This is done by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Condition: Home Forward is not in compliance with requirements related to suspension and debarment. Questioned costs: Unable to determine. Context: During our testing, it was noted that Home Forward did not review one of one vendors subject to the requirement prior to entering into a contract with the vendor to ensure the vendor did not have any active exclusion records. Cause: Home Forward did not anticipate spending federal funds under the contract. Effect: Home Forward is not in compliance with federal regulations that require verification to ensure that the business to which they have entered into a covered transaction is not excluded or disqualified, as specified in §180.300. Repeat Finding: No. Recommendation: We recommend Home Forward implements a process to ensure exclusion checks are done prior to the execution of a contract. This process should include a system to ensure documentation is maintained in the files evidencing the date of the exclusion check as well as documented review and approval of the results of the exclusion check by program staff. Views of responsible officials: There is no disagreement with the audit finding.

Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The Authority is required to establish a reasonable rent policy and ensure that policy is followed. Condition: During our testing, we noted Home Forward did not have adequate internal controls designed to ensure the approval of comparables is formally documented in the files. Questioned costs: Unable to determine. Context: During our testing, it was noted that Home Forward did not formally document approval of comparables in 4 of 40 files. Cause: Home Forward has not been consistent with keeping formal documentation of approval of comparables in the files. Effect: The auditor noted no instances of noncompliance with the provisions of special tests and provisions - reasonable rental rates; however, the lack of internal controls over these compliance requirements provides an opportunity for noncompliance. Repeat Finding: No. Recommendation: We recommend Home Forward design controls to ensure formal documentation of approval of comparables is in the files. Views of responsible officials: There is no disagreement with the audit finding.