Condition: When we requested DHS to obtain documentation supporting rent reasonableness for 2023 from three randomly selected program providers, we observed that the documentation supplied by one of the three providers was not sufficient to demonstrate that rent reasonableness was determined. For one of the Continuum of Care (CoC) projects administered by this provider, documentation was only supplied for 21 of 40 rental units, and the documentation had 2024 dates that approximated the date of our request for the information. For the other CoC project administered by this same provider, documentation was only supplied for 5 of 25 rental units, and the documentation had 2021 or earlier dates. This is a repeat finding from 2022.
Criteria: When program funds are used to pay rent for individual housing units, the rent paid must be reasonable in relation to rents being charged for comparable units taking into account relevant features. In addition, the rents may not exceed rents currently being charged by the same owner for comparable units.
Cause: DHS developed and implemented its own rent reasonableness policy and provided a rent reasonableness policy template to the CoC program providers to facilitate their development and implementation of such policies. However, DHS did not take adequate measures to ensure that all CoC program providers had in fact implemented and were adhering to appropriate rent reasonableness policies.
Effect: The County was not in compliance with the terms of the federal grant program.
Questioned Costs: none
Recommendation: The County Department of Human Services should take steps to ensure that DHS monitoring of rent reasonableness routinely occurs on an annual basis. In addition, DHS should document the determination of rent reasonableness for each program provider.
Management Response:
Management agrees with the finding, see attached Corrective Action Plan.
Condition: We observed that in connection with 13 of 60 program provider invoices tested, no support had been provided for the matching expenditures claimed by the program providers. These instances were not identified and properly resolved by DHS, such that the matching expenditures claimed were included in the accumulation of matching costs that was to be reported to HUD. We also noted that the total match reported to HUD on the Sage Financial Report did not agree to the accumulation of matching costs in the accounting records, which resulted in an underreporting of $63,580.
Criteria: Grantees should have a process in place to verify the amounts claimed and reported as matching expenditures, and a process in place to ensure that data reported to HUD agrees with the accounting records.
Cause: DHS does not have appropriate processes and internal controls in place to facilitate compliance with the matching requirements. Sufficient reviews of the amounts claimed and reported as matching expenditures are not occurring.
Effect: The County was not in compliance with the terms of the federal grant program.
Questioned Costs: 63,580
Recommendation: DHS management should ensure that appropriate reviews of the amounts claimed and reported as matching expenditures routinely occur and all compliance requirements are followed for federal grants awarded.
Management Response:
Management agrees with the finding, see attached Corrective Action Plan.
Condition: The Allegheny County Department of Human Services (DHS) did not report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS).
Criteria: Under the requirements of the Federal Funding Accountability Act (Transparency Act) direct recipients of federal grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS).
Cause: DHS was not attentive to the Transparency Act reporting requirements.
Effect: The County was not in compliance with the terms of the federal grant program.
Questioned Costs: none
Recommendation: DHS should immediately report the required data to FSRS and ensure that all compliance requirements are followed for federal grants awarded.
Management Response: Management agrees with the finding, see attached Corrective Action Plan.
Condition: The Allegheny County Department of Human Services (DHS) did not report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS).
Criteria: Under the requirements of the Federal Funding Accountability Act (Transparency Act) direct recipients of federal grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS).
Cause: DHS was not attentive to the Transparency Act reporting requirements.
Effect: The County was not in compliance with the terms of the federal grant program.
Questioned Costs: none
Recommendation: DHS should immediately report the required data to FSRS and ensure that all compliance requirements are followed for federal grants awarded.
Management Response: Management agrees with the finding, see attached Corrective Action Plan.
Condition: The Allegheny County Department of Human Services (DHS) did not report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS).
Criteria: Under the requirements of the Federal Funding Accountability Act (Transparency Act) direct recipients of federal grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS).
Cause: DHS was not attentive to the Transparency Act reporting requirements.
Effect: The County was not in compliance with the terms of the federal grant program.
Questioned Costs: none
Recommendation: DHS should immediately report the required data to FSRS and ensure that all compliance requirements are followed for federal grants awarded.
Management Response: Management agrees with the finding, see attached Corrective Action Plan.
Condition: Allegheny County Economic Development (ACED) charges CDBG program accounts for the salary and benefits of numerous employees, including employees that do not work full time on the CDBG Program. Hours for each employee are tracked by the program(s) the employee works on each day. ACED needs to calculate the salary and benefit amounts for time not related to CDBG, charge the proper non-CDBG program, and reduce the CDBG Program expense, based on these hours. ACED indicated these cross-charges are done on a quarterly basis. We tested the cross-charges for one quarter of calendar year 2023. Based on records provided by ACED, $178,382 in salaries and related fringe benefits were charged to CDBG for hours not worked on CDBG. ACED provided supporting documentation that CDBG expenses were reduced by $129,732; however, five of these entries totaling $72,088 were recorded in 2024 instead of 2023. In addition, it appears the CDBG Program expenses were not reduced for the remaining $48,650. This is a repeat finding from 2022.
Criteria: Allowable costs include those that are incurred specifically for the Federal award (2 CFR Part 200 Subpart E -Cost Principles (2 CFR 200.405.a.1).
Cause: ACED has a process to cross-charge time not worked on CDBG to the proper program, but due to department turnover, these cross-charges were not properly completed, or were not completed timely.
Effect: The County was not in compliance with the terms of the federal grant program.
Questioned Costs: $48,650
Recommendation: ACED should establish procedures to ensure that all cross-charges are properly calculated and completed in a timely manner.
Management Response:
Management agrees with the finding, see attached Corrective Action Plan.
Condition: Allegheny County Economic Development (ACED) charges CDBG program accounts for the salary and benefits of numerous employees, including employees that do not work full time on the CDBG Program. ACED tracks the time these employees worked by program and calculates the salary and benefit amounts to be cross-charged out of CDBG to the proper program based on the hours worked on a quarterly basis.
We tested the cross-charge records for one quarter of calendar year 2023. ACED calculated the salary cross-charge amount using the hours worked and the employees’ hourly rate. However, the fringe benefit cross-charge was calculated by applying a percentage to the salary cross-charge amount, instead of using actual fringe benefit costs and hours worked. In addition, the percentage was calculated based on one paycheck for two employees and used incorrect amounts, such as federal income tax, in the calculation.
The use of a blended fringe benefit rate was identified as a finding in the prior year. ACED indicated they would use actual fringe rates from JDE using ReportsNOW to calculate the fringe benefit cross-charge amounts. This is a repeat finding from 2022.
Criteria: Allowable costs include those that are incurred specifically for the Federal award (2 CFR Part 200 Subpart E -Cost Principles (2 CFR 200.405.a.1).
Cause: ACED has not established a procedure to determine the actual fringe benefit cost to be used in the cross-charge calculation that transfers fringe benefits out of CDGB to the proper program.
Effect: The County was not in compliance with the terms of the federal grant program.
Questioned Costs: The amount of questioned costs, if any, were unable to be determined.
Recommendation: ACED should establish procedures that will use JDE data to calculate the actual fringe benefit costs that will be used in the fringe benefit cross-charge calculation. This will allow for program expenditures of CDBG, and other ACED programs, to be more accurately stated.
Management Response:
Management agrees with the finding, see attached Corrective Action Plan.
Condition: ACED did not include all program income in the Cash on Hand Reports. Based on JDE accounting records and ACED and Authority supporting loan records, CDBG program income was calculated at $913,127 for calendar year 2023. The program income received reported on the four quarterly Cash on Hand Reports for 2023 totaled $9,715 and an additional $41,969 was included on ACED reports in January 2024. The remaining difference of $861,443 was not included in the Cash on Hand Reports. In addition, the program income cash on hand balance at the end of the quarter was not properly carried to the program income beginning balance on the next quarter’s report for any of the four quarters in the program year.
Criteria: CDBG grant recipients are required to treat principal and interest repayments on CDBG program funded loans as program income. To the extent that CDBG-funded loans are not part of a revolving loan program, the related program income is to be used to finance CDBG program expenditures before additional entitlement funds are utilized.
Cause: As in the prior year’s CDBG audit, there has been turnover in the staff, and human error has led to reporting errors.
Effect: The County was not in compliance with the terms of the federal grant program.
Questioned Costs: None
Recommendation: ACED should take steps to ensure that all program income is identified on the modified accrual basis of accounting in the accounting system, properly reported as program income, and used to finance CDBG program expenditures before using entitlement funds. Reports should be reviewed for accuracy prior to submission to HUD.
Management Response: Management agrees with the finding, see attached Corrective Action Plan.
Condition: ACED did not properly report the data required by the Federal Funding Accountability and Transparency Act (Transparency Act) in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) for first-tier subawards of $30,000 or more for 2023. A subaward is defined as an award provided by a pass-through entity to a subrecipient. Since ACED could not provide documentation that they completed the reporting, no further testing was completed.
Criteria: The Transparency Act requires recipients of grants to report first-tier subawards of $30,000 or more to the FSRS. The following key data elements must be reported: subawardee name, subawardee DUNS#, amount of subaward, subaward obligation/action date, date of report submission, subaward number, subaward project description, subawardee names and compensation of highly compensated officers.
Cause: ACED had a process to report the required information in the FSRS, but due to department turnover, the required reporting was not completed.
Effect: The County was not in compliance with the terms of the federal grant program.
Questioned Costs: None
Recommendation: ACED should implement internal controls to ensure that first-tier subawards are properly reported in the FSRS
Management Response: Management agrees with the finding, see attached Corrective Action Plan.
Condition: The Allegheny County Health Department (ACHD) did not report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). In addition, the expenditures reported in the SF-425 federal financial report submitted by the ACHD do not agree to the accounting records. The reported expenditures are reconcilable to the accounting records, but the reconciling items were expenditures that were not properly accrued.
Criteria: Under the requirements of the Federal Funding Accountability Act (Transparency Act) direct recipients of federal grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System. In addition, expenditures reported in the federal financial reports should match the expenditures recorded in the accounting records for the proper period.
Cause: The ACHD was not attentive to the Transparency Act and audit requirements.
Effect: The County was not in compliance with the terms of the federal grant program.
Questioned Costs: none.
Recommendation: The ACHD should immediately report the required data to FSRS and take steps to ensure that the data reported reconciles to the accounting records for the proper period. This should involve maintaining records that show how the reported data was derived from the accounting records as well as including the review of such documentation as a component of the review process.
Management Response:
Management agrees with the finding, see attached Corrective Action Plan.
Condition: The Allegheny County Health Department (ACHD) did not report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). In addition, the expenditures reported in the SF-425 federal financial report submitted by the ACHD do not agree to the accounting records. The reported expenditures are reconcilable to the accounting records, but the reconciling items were expenditures that were not properly accrued.
Criteria: Under the requirements of the Federal Funding Accountability Act (Transparency Act) direct recipients of federal grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System. In addition, expenditures reported in the federal financial reports should match the expenditures recorded in the accounting records for the proper period.
Cause: The ACHD was not attentive to the Transparency Act and audit requirements.
Effect: The County was not in compliance with the terms of the federal grant program.
Questioned Costs: none.
Recommendation: The ACHD should immediately report the required data to FSRS and take steps to ensure that the data reported reconciles to the accounting records for the proper period. This should involve maintaining records that show how the reported data was derived from the accounting records as well as including the review of such documentation as a component of the review process.
Management Response:
Management agrees with the finding, see attached Corrective Action Plan.
Condition: We determined that $500,928 in program expenditures reported in the Schedule of Expenditures of Federal Awards (SEFA) are not actually 2023 program expenditures. These expenditures were incurred in 2022.
Criteria: Federal program expenditures are required to be reported in the proper accounting period.
Cause: The $500,928 in program expenditures were not recorded timely.
Effect: The County was not in compliance with the terms of the federal grant program.
Questioned Costs: $500,928
Recommendation: The Allegheny County Health Department should exercise greater care to ensure that program expenditures are charged timely to the proper programs to facilitate proper accounting and reporting.
Management Response:
Management agrees with the finding, see attached Corrective Action Plan.
Condition: We determined that $500,928 in program expenditures reported in the Schedule of Expenditures of Federal Awards (SEFA) are not actually 2023 program expenditures. These expenditures were incurred in 2022.
Criteria: Federal program expenditures are required to be reported in the proper accounting period.
Cause: The $500,928 in program expenditures were not recorded timely.
Effect: The County was not in compliance with the terms of the federal grant program.
Questioned Costs: $500,928
Recommendation: The Allegheny County Health Department should exercise greater care to ensure that program expenditures are charged timely to the proper programs to facilitate proper accounting and reporting.
Management Response:
Management agrees with the finding, see attached Corrective Action Plan.
Condition: The ACHD did not communicate to three subrecipients randomly selected for testing all of the information required to be communicated about the subawards. It appears that the ACHD does not have a process in place to communicate such information. The ACHD did not determine whether the three subrecipients we randomly selected for testing were required to obtain Single Audits and did not request or review such audits. We were informed that the ACHD did not determine whether any of the subrecipients involved in the administration of the program required Single Audits and did not request or review such audits from any of the subrecipients. Consequently, the ACHD has no knowledge of any subrecipient Single Audit findings that may impact the federal award.
Criteria: The Uniform Guidance indicates that pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and provides a list of the information that should be provided about each subaward (2CRF 200.332 (a)). In addition, the Uniform Guidance indicates that all pass-through entities must verify that every subrecipient is audited as required when it is expected that the subrecipient’s federal awards expended during the respective fiscal year equaled or exceeded the applicable threshold (2 CFR 200.332(f)) and consider whether the results of the subrecipient’s audits, onsite reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity’s own records (2 CFR 200.332(g)). The Uniform Guidance also indicates that pass-through entity monitoring of a subrecipient must include following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward (2 CFR 200.332(d)(2).
Cause: The ACHD was not attentive to the audit requirements.
Effect: Allegheny County is not in compliance with the federal program subrecipient monitoring requirements.
Questioned Costs: none.
Recommendation: The ACHD should maintain lists of the subrecipients utilized for each federal program and use checklists to help ensure that the required subrecipient monitoring activities are performed for each subrecipient.
Management Response:
Management agrees with the finding, see attached Corrective Action Plan.
Condition: The ACHD did not communicate to three subrecipients randomly selected for testing all of the information required to be communicated about the subawards. It appears that the ACHD does not have a process in place to communicate such information. The ACHD did not determine whether the three subrecipients we randomly selected for testing were required to obtain Single Audits and did not request or review such audits. We were informed that the ACHD did not determine whether any of the subrecipients involved in the administration of the program required Single Audits and did not request or review such audits from any of the subrecipients. Consequently, the ACHD has no knowledge of any subrecipient Single Audit findings that may impact the federal award.
Criteria: The Uniform Guidance indicates that pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and provides a list of the information that should be provided about each subaward (2CRF 200.332 (a)). In addition, the Uniform Guidance indicates that all pass-through entities must verify that every subrecipient is audited as required when it is expected that the subrecipient’s federal awards expended during the respective fiscal year equaled or exceeded the applicable threshold (2 CFR 200.332(f)) and consider whether the results of the subrecipient’s audits, onsite reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity’s own records (2 CFR 200.332(g)). The Uniform Guidance also indicates that pass-through entity monitoring of a subrecipient must include following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward (2 CFR 200.332(d)(2).
Cause: The ACHD was not attentive to the audit requirements.
Effect: Allegheny County is not in compliance with the federal program subrecipient monitoring requirements.
Questioned Costs: none.
Recommendation: The ACHD should maintain lists of the subrecipients utilized for each federal program and use checklists to help ensure that the required subrecipient monitoring activities are performed for each subrecipient.
Management Response:
Management agrees with the finding, see attached Corrective Action Plan.
Condition: The Allegheny County Health Department (ACHD) did not report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). In addition, the expenditures reported in the SF-425 federal financial report submitted by the ACHD do not agree to the accounting records. The reported expenditures are reconcilable to the accounting records, but the reconciling items were expenditures that were not properly accrued.
Criteria: Under the requirements of the Federal Funding Accountability Act (Transparency Act) direct recipients of federal grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System. In addition, expenditures reported in federal financial reports should match the expenditures recorded in the accounting records for the proper period.
Cause: The ACHD was not attentive to the Transparency Act reporting and audit requirements.
Effect: Allegheny County is not in compliance with the federal program requirements.
Questioned Costs: none.
Recommendation: The ACHD should immediately report the required data to FSRS and take steps to ensure that the data reported reconciles to the accounting records for the proper period. This should involve maintaining records that show how the reported data was derived from the accounting records as well as including the review of such documentation as a component of the review process.
Management Response:
Management agrees with the finding, see attached Corrective Action Plan.
Condition: The ACHD did not determine whether the three subrecipients we randomly selected for testing were required to obtain Single Audits and did not request or review such audits. We were informed that the ACHD did not determine whether any of the subrecipients involved in the administration of the program required Single Audits and did not request or review such audits from any of the subrecipients. Consequently, the ACHD has no knowledge of any subrecipient Single Audit findings that may impact the federal award.
Criteria: The Uniform Guidance indicates that all pass-through entities must verify that every subrecipient is audited as required when it is expected that the subrecipient’s federal awards expended during the respective fiscal year equaled or exceeded the applicable threshold (2 CFR 200.332(f)) and consider whether the results of the subrecipient’s audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity’s own records (2 CFR 200.332(g)). The Uniform Guidance also indicates that pass-through entity monitoring of a subrecipient must include following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward (2 CFR 200.332(d)(2).
Cause: The ACHD was not attentive to the audit requirements.
Effect: Allegheny County is not in compliance with the federal program requirements.
Questioned Costs: none.
Recommendation: The ACHD should maintain lists of the subrecipients utilized for each federal program and use checklists to help ensure that the required subrecipient monitoring activities are performed for each subrecipient.
Management Response:
Management agrees with the finding, see attached Corrective Action Plan.
Condition: We determined that $141,576 in program expenditures reported in the Schedule of Expenditures of Federal Awards are not actually 2023 program expenditures. These expenditures were incurred in 2022. In addition, of this amount, payroll costs of $113,511 charged to the federal award were not supported by timesheets or other documentation that would demonstrate the proper allocation of the costs.
Criteria: The Uniform Guidance (section 200.403(e)) indicates that expenditures must be determined in accordance with generally accepted accounting principles. The Uniform Guidance (section 200.430(i)(1)) also indicates that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. The records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.
Cause: The ACHD did not have processes and controls in place to ensure that expenditures were recorded in the proper accounting period and to ensure compliance with the documentation requirements for salaries and wages charged to federal awards.
Effect: The County was not in compliance with the terms of the federal grant program.
Questioned Costs: none
Recommendation: The ACHD should implement processes and controls to verify that expenditures are being recorded in the proper accounting period and that payroll costs charged to federal awards are supported by appropriate documentation.
Management Response:
Management agrees with the finding, see attached Corrective Action Plan.
Condition: We determined that $141,576 in program expenditures reported in the Schedule of Expenditures of Federal Awards are not actually 2023 program expenditures. These expenditures were incurred in 2022. In addition, of this amount, payroll costs of $113,511 charged to the federal award were not supported by timesheets or other documentation that would demonstrate the proper allocation of the costs.
Criteria: The Uniform Guidance (section 200.403(e)) indicates that expenditures must be determined in accordance with generally accepted accounting principles. The Uniform Guidance (section 200.430(i)(1)) also indicates that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. The records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.
Cause: The ACHD did not have processes and controls in place to ensure that expenditures were recorded in the proper accounting period and to ensure compliance with the documentation requirements for salaries and wages charged to federal awards.
Effect: The County was not in compliance with the terms of the federal grant program.
Questioned Costs: none
Recommendation: The ACHD should implement processes and controls to verify that expenditures are being recorded in the proper accounting period and that payroll costs charged to federal awards are supported by appropriate documentation.
Management Response:
Management agrees with the finding, see attached Corrective Action Plan.
Condition: We determined that $141,576 in program expenditures reported in the Schedule of Expenditures of Federal Awards are not actually 2023 program expenditures. These expenditures were incurred in 2022. In addition, of this amount, payroll costs of $113,511 charged to the federal award were not supported by timesheets or other documentation that would demonstrate the proper allocation of the costs.
Criteria: The Uniform Guidance (section 200.403(e)) indicates that expenditures must be determined in accordance with generally accepted accounting principles. The Uniform Guidance (section 200.430(i)(1)) also indicates that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. The records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.
Cause: The ACHD did not have processes and controls in place to ensure that expenditures were recorded in the proper accounting period and to ensure compliance with the documentation requirements for salaries and wages charged to federal awards.
Effect: The County was not in compliance with the terms of the federal grant program.
Questioned Costs: none
Recommendation: The ACHD should implement processes and controls to verify that expenditures are being recorded in the proper accounting period and that payroll costs charged to federal awards are supported by appropriate documentation.
Management Response:
Management agrees with the finding, see attached Corrective Action Plan.
Condition: When we requested DHS to obtain documentation supporting rent reasonableness for 2023 from three randomly selected program providers, we observed that the documentation supplied by one of the three providers was not sufficient to demonstrate that rent reasonableness was determined. For one of the Continuum of Care (CoC) projects administered by this provider, documentation was only supplied for 21 of 40 rental units, and the documentation had 2024 dates that approximated the date of our request for the information. For the other CoC project administered by this same provider, documentation was only supplied for 5 of 25 rental units, and the documentation had 2021 or earlier dates. This is a repeat finding from 2022.
Criteria: When program funds are used to pay rent for individual housing units, the rent paid must be reasonable in relation to rents being charged for comparable units taking into account relevant features. In addition, the rents may not exceed rents currently being charged by the same owner for comparable units.
Cause: DHS developed and implemented its own rent reasonableness policy and provided a rent reasonableness policy template to the CoC program providers to facilitate their development and implementation of such policies. However, DHS did not take adequate measures to ensure that all CoC program providers had in fact implemented and were adhering to appropriate rent reasonableness policies.
Effect: The County was not in compliance with the terms of the federal grant program.
Questioned Costs: none
Recommendation: The County Department of Human Services should take steps to ensure that DHS monitoring of rent reasonableness routinely occurs on an annual basis. In addition, DHS should document the determination of rent reasonableness for each program provider.
Management Response:
Management agrees with the finding, see attached Corrective Action Plan.
Condition: We observed that in connection with 13 of 60 program provider invoices tested, no support had been provided for the matching expenditures claimed by the program providers. These instances were not identified and properly resolved by DHS, such that the matching expenditures claimed were included in the accumulation of matching costs that was to be reported to HUD. We also noted that the total match reported to HUD on the Sage Financial Report did not agree to the accumulation of matching costs in the accounting records, which resulted in an underreporting of $63,580.
Criteria: Grantees should have a process in place to verify the amounts claimed and reported as matching expenditures, and a process in place to ensure that data reported to HUD agrees with the accounting records.
Cause: DHS does not have appropriate processes and internal controls in place to facilitate compliance with the matching requirements. Sufficient reviews of the amounts claimed and reported as matching expenditures are not occurring.
Effect: The County was not in compliance with the terms of the federal grant program.
Questioned Costs: 63,580
Recommendation: DHS management should ensure that appropriate reviews of the amounts claimed and reported as matching expenditures routinely occur and all compliance requirements are followed for federal grants awarded.
Management Response:
Management agrees with the finding, see attached Corrective Action Plan.
Condition: The Allegheny County Department of Human Services (DHS) did not report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS).
Criteria: Under the requirements of the Federal Funding Accountability Act (Transparency Act) direct recipients of federal grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS).
Cause: DHS was not attentive to the Transparency Act reporting requirements.
Effect: The County was not in compliance with the terms of the federal grant program.
Questioned Costs: none
Recommendation: DHS should immediately report the required data to FSRS and ensure that all compliance requirements are followed for federal grants awarded.
Management Response: Management agrees with the finding, see attached Corrective Action Plan.
Condition: The Allegheny County Department of Human Services (DHS) did not report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS).
Criteria: Under the requirements of the Federal Funding Accountability Act (Transparency Act) direct recipients of federal grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS).
Cause: DHS was not attentive to the Transparency Act reporting requirements.
Effect: The County was not in compliance with the terms of the federal grant program.
Questioned Costs: none
Recommendation: DHS should immediately report the required data to FSRS and ensure that all compliance requirements are followed for federal grants awarded.
Management Response: Management agrees with the finding, see attached Corrective Action Plan.
Condition: The Allegheny County Department of Human Services (DHS) did not report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS).
Criteria: Under the requirements of the Federal Funding Accountability Act (Transparency Act) direct recipients of federal grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS).
Cause: DHS was not attentive to the Transparency Act reporting requirements.
Effect: The County was not in compliance with the terms of the federal grant program.
Questioned Costs: none
Recommendation: DHS should immediately report the required data to FSRS and ensure that all compliance requirements are followed for federal grants awarded.
Management Response: Management agrees with the finding, see attached Corrective Action Plan.
Condition: Allegheny County Economic Development (ACED) charges CDBG program accounts for the salary and benefits of numerous employees, including employees that do not work full time on the CDBG Program. Hours for each employee are tracked by the program(s) the employee works on each day. ACED needs to calculate the salary and benefit amounts for time not related to CDBG, charge the proper non-CDBG program, and reduce the CDBG Program expense, based on these hours. ACED indicated these cross-charges are done on a quarterly basis. We tested the cross-charges for one quarter of calendar year 2023. Based on records provided by ACED, $178,382 in salaries and related fringe benefits were charged to CDBG for hours not worked on CDBG. ACED provided supporting documentation that CDBG expenses were reduced by $129,732; however, five of these entries totaling $72,088 were recorded in 2024 instead of 2023. In addition, it appears the CDBG Program expenses were not reduced for the remaining $48,650. This is a repeat finding from 2022.
Criteria: Allowable costs include those that are incurred specifically for the Federal award (2 CFR Part 200 Subpart E -Cost Principles (2 CFR 200.405.a.1).
Cause: ACED has a process to cross-charge time not worked on CDBG to the proper program, but due to department turnover, these cross-charges were not properly completed, or were not completed timely.
Effect: The County was not in compliance with the terms of the federal grant program.
Questioned Costs: $48,650
Recommendation: ACED should establish procedures to ensure that all cross-charges are properly calculated and completed in a timely manner.
Management Response:
Management agrees with the finding, see attached Corrective Action Plan.
Condition: Allegheny County Economic Development (ACED) charges CDBG program accounts for the salary and benefits of numerous employees, including employees that do not work full time on the CDBG Program. ACED tracks the time these employees worked by program and calculates the salary and benefit amounts to be cross-charged out of CDBG to the proper program based on the hours worked on a quarterly basis.
We tested the cross-charge records for one quarter of calendar year 2023. ACED calculated the salary cross-charge amount using the hours worked and the employees’ hourly rate. However, the fringe benefit cross-charge was calculated by applying a percentage to the salary cross-charge amount, instead of using actual fringe benefit costs and hours worked. In addition, the percentage was calculated based on one paycheck for two employees and used incorrect amounts, such as federal income tax, in the calculation.
The use of a blended fringe benefit rate was identified as a finding in the prior year. ACED indicated they would use actual fringe rates from JDE using ReportsNOW to calculate the fringe benefit cross-charge amounts. This is a repeat finding from 2022.
Criteria: Allowable costs include those that are incurred specifically for the Federal award (2 CFR Part 200 Subpart E -Cost Principles (2 CFR 200.405.a.1).
Cause: ACED has not established a procedure to determine the actual fringe benefit cost to be used in the cross-charge calculation that transfers fringe benefits out of CDGB to the proper program.
Effect: The County was not in compliance with the terms of the federal grant program.
Questioned Costs: The amount of questioned costs, if any, were unable to be determined.
Recommendation: ACED should establish procedures that will use JDE data to calculate the actual fringe benefit costs that will be used in the fringe benefit cross-charge calculation. This will allow for program expenditures of CDBG, and other ACED programs, to be more accurately stated.
Management Response:
Management agrees with the finding, see attached Corrective Action Plan.
Condition: ACED did not include all program income in the Cash on Hand Reports. Based on JDE accounting records and ACED and Authority supporting loan records, CDBG program income was calculated at $913,127 for calendar year 2023. The program income received reported on the four quarterly Cash on Hand Reports for 2023 totaled $9,715 and an additional $41,969 was included on ACED reports in January 2024. The remaining difference of $861,443 was not included in the Cash on Hand Reports. In addition, the program income cash on hand balance at the end of the quarter was not properly carried to the program income beginning balance on the next quarter’s report for any of the four quarters in the program year.
Criteria: CDBG grant recipients are required to treat principal and interest repayments on CDBG program funded loans as program income. To the extent that CDBG-funded loans are not part of a revolving loan program, the related program income is to be used to finance CDBG program expenditures before additional entitlement funds are utilized.
Cause: As in the prior year’s CDBG audit, there has been turnover in the staff, and human error has led to reporting errors.
Effect: The County was not in compliance with the terms of the federal grant program.
Questioned Costs: None
Recommendation: ACED should take steps to ensure that all program income is identified on the modified accrual basis of accounting in the accounting system, properly reported as program income, and used to finance CDBG program expenditures before using entitlement funds. Reports should be reviewed for accuracy prior to submission to HUD.
Management Response: Management agrees with the finding, see attached Corrective Action Plan.
Condition: ACED did not properly report the data required by the Federal Funding Accountability and Transparency Act (Transparency Act) in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) for first-tier subawards of $30,000 or more for 2023. A subaward is defined as an award provided by a pass-through entity to a subrecipient. Since ACED could not provide documentation that they completed the reporting, no further testing was completed.
Criteria: The Transparency Act requires recipients of grants to report first-tier subawards of $30,000 or more to the FSRS. The following key data elements must be reported: subawardee name, subawardee DUNS#, amount of subaward, subaward obligation/action date, date of report submission, subaward number, subaward project description, subawardee names and compensation of highly compensated officers.
Cause: ACED had a process to report the required information in the FSRS, but due to department turnover, the required reporting was not completed.
Effect: The County was not in compliance with the terms of the federal grant program.
Questioned Costs: None
Recommendation: ACED should implement internal controls to ensure that first-tier subawards are properly reported in the FSRS
Management Response: Management agrees with the finding, see attached Corrective Action Plan.
Condition: The Allegheny County Health Department (ACHD) did not report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). In addition, the expenditures reported in the SF-425 federal financial report submitted by the ACHD do not agree to the accounting records. The reported expenditures are reconcilable to the accounting records, but the reconciling items were expenditures that were not properly accrued.
Criteria: Under the requirements of the Federal Funding Accountability Act (Transparency Act) direct recipients of federal grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System. In addition, expenditures reported in the federal financial reports should match the expenditures recorded in the accounting records for the proper period.
Cause: The ACHD was not attentive to the Transparency Act and audit requirements.
Effect: The County was not in compliance with the terms of the federal grant program.
Questioned Costs: none.
Recommendation: The ACHD should immediately report the required data to FSRS and take steps to ensure that the data reported reconciles to the accounting records for the proper period. This should involve maintaining records that show how the reported data was derived from the accounting records as well as including the review of such documentation as a component of the review process.
Management Response:
Management agrees with the finding, see attached Corrective Action Plan.
Condition: The Allegheny County Health Department (ACHD) did not report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). In addition, the expenditures reported in the SF-425 federal financial report submitted by the ACHD do not agree to the accounting records. The reported expenditures are reconcilable to the accounting records, but the reconciling items were expenditures that were not properly accrued.
Criteria: Under the requirements of the Federal Funding Accountability Act (Transparency Act) direct recipients of federal grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System. In addition, expenditures reported in the federal financial reports should match the expenditures recorded in the accounting records for the proper period.
Cause: The ACHD was not attentive to the Transparency Act and audit requirements.
Effect: The County was not in compliance with the terms of the federal grant program.
Questioned Costs: none.
Recommendation: The ACHD should immediately report the required data to FSRS and take steps to ensure that the data reported reconciles to the accounting records for the proper period. This should involve maintaining records that show how the reported data was derived from the accounting records as well as including the review of such documentation as a component of the review process.
Management Response:
Management agrees with the finding, see attached Corrective Action Plan.
Condition: We determined that $500,928 in program expenditures reported in the Schedule of Expenditures of Federal Awards (SEFA) are not actually 2023 program expenditures. These expenditures were incurred in 2022.
Criteria: Federal program expenditures are required to be reported in the proper accounting period.
Cause: The $500,928 in program expenditures were not recorded timely.
Effect: The County was not in compliance with the terms of the federal grant program.
Questioned Costs: $500,928
Recommendation: The Allegheny County Health Department should exercise greater care to ensure that program expenditures are charged timely to the proper programs to facilitate proper accounting and reporting.
Management Response:
Management agrees with the finding, see attached Corrective Action Plan.
Condition: We determined that $500,928 in program expenditures reported in the Schedule of Expenditures of Federal Awards (SEFA) are not actually 2023 program expenditures. These expenditures were incurred in 2022.
Criteria: Federal program expenditures are required to be reported in the proper accounting period.
Cause: The $500,928 in program expenditures were not recorded timely.
Effect: The County was not in compliance with the terms of the federal grant program.
Questioned Costs: $500,928
Recommendation: The Allegheny County Health Department should exercise greater care to ensure that program expenditures are charged timely to the proper programs to facilitate proper accounting and reporting.
Management Response:
Management agrees with the finding, see attached Corrective Action Plan.
Condition: The ACHD did not communicate to three subrecipients randomly selected for testing all of the information required to be communicated about the subawards. It appears that the ACHD does not have a process in place to communicate such information. The ACHD did not determine whether the three subrecipients we randomly selected for testing were required to obtain Single Audits and did not request or review such audits. We were informed that the ACHD did not determine whether any of the subrecipients involved in the administration of the program required Single Audits and did not request or review such audits from any of the subrecipients. Consequently, the ACHD has no knowledge of any subrecipient Single Audit findings that may impact the federal award.
Criteria: The Uniform Guidance indicates that pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and provides a list of the information that should be provided about each subaward (2CRF 200.332 (a)). In addition, the Uniform Guidance indicates that all pass-through entities must verify that every subrecipient is audited as required when it is expected that the subrecipient’s federal awards expended during the respective fiscal year equaled or exceeded the applicable threshold (2 CFR 200.332(f)) and consider whether the results of the subrecipient’s audits, onsite reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity’s own records (2 CFR 200.332(g)). The Uniform Guidance also indicates that pass-through entity monitoring of a subrecipient must include following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward (2 CFR 200.332(d)(2).
Cause: The ACHD was not attentive to the audit requirements.
Effect: Allegheny County is not in compliance with the federal program subrecipient monitoring requirements.
Questioned Costs: none.
Recommendation: The ACHD should maintain lists of the subrecipients utilized for each federal program and use checklists to help ensure that the required subrecipient monitoring activities are performed for each subrecipient.
Management Response:
Management agrees with the finding, see attached Corrective Action Plan.
Condition: The ACHD did not communicate to three subrecipients randomly selected for testing all of the information required to be communicated about the subawards. It appears that the ACHD does not have a process in place to communicate such information. The ACHD did not determine whether the three subrecipients we randomly selected for testing were required to obtain Single Audits and did not request or review such audits. We were informed that the ACHD did not determine whether any of the subrecipients involved in the administration of the program required Single Audits and did not request or review such audits from any of the subrecipients. Consequently, the ACHD has no knowledge of any subrecipient Single Audit findings that may impact the federal award.
Criteria: The Uniform Guidance indicates that pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and provides a list of the information that should be provided about each subaward (2CRF 200.332 (a)). In addition, the Uniform Guidance indicates that all pass-through entities must verify that every subrecipient is audited as required when it is expected that the subrecipient’s federal awards expended during the respective fiscal year equaled or exceeded the applicable threshold (2 CFR 200.332(f)) and consider whether the results of the subrecipient’s audits, onsite reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity’s own records (2 CFR 200.332(g)). The Uniform Guidance also indicates that pass-through entity monitoring of a subrecipient must include following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward (2 CFR 200.332(d)(2).
Cause: The ACHD was not attentive to the audit requirements.
Effect: Allegheny County is not in compliance with the federal program subrecipient monitoring requirements.
Questioned Costs: none.
Recommendation: The ACHD should maintain lists of the subrecipients utilized for each federal program and use checklists to help ensure that the required subrecipient monitoring activities are performed for each subrecipient.
Management Response:
Management agrees with the finding, see attached Corrective Action Plan.
Condition: The Allegheny County Health Department (ACHD) did not report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). In addition, the expenditures reported in the SF-425 federal financial report submitted by the ACHD do not agree to the accounting records. The reported expenditures are reconcilable to the accounting records, but the reconciling items were expenditures that were not properly accrued.
Criteria: Under the requirements of the Federal Funding Accountability Act (Transparency Act) direct recipients of federal grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System. In addition, expenditures reported in federal financial reports should match the expenditures recorded in the accounting records for the proper period.
Cause: The ACHD was not attentive to the Transparency Act reporting and audit requirements.
Effect: Allegheny County is not in compliance with the federal program requirements.
Questioned Costs: none.
Recommendation: The ACHD should immediately report the required data to FSRS and take steps to ensure that the data reported reconciles to the accounting records for the proper period. This should involve maintaining records that show how the reported data was derived from the accounting records as well as including the review of such documentation as a component of the review process.
Management Response:
Management agrees with the finding, see attached Corrective Action Plan.
Condition: The ACHD did not determine whether the three subrecipients we randomly selected for testing were required to obtain Single Audits and did not request or review such audits. We were informed that the ACHD did not determine whether any of the subrecipients involved in the administration of the program required Single Audits and did not request or review such audits from any of the subrecipients. Consequently, the ACHD has no knowledge of any subrecipient Single Audit findings that may impact the federal award.
Criteria: The Uniform Guidance indicates that all pass-through entities must verify that every subrecipient is audited as required when it is expected that the subrecipient’s federal awards expended during the respective fiscal year equaled or exceeded the applicable threshold (2 CFR 200.332(f)) and consider whether the results of the subrecipient’s audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity’s own records (2 CFR 200.332(g)). The Uniform Guidance also indicates that pass-through entity monitoring of a subrecipient must include following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward (2 CFR 200.332(d)(2).
Cause: The ACHD was not attentive to the audit requirements.
Effect: Allegheny County is not in compliance with the federal program requirements.
Questioned Costs: none.
Recommendation: The ACHD should maintain lists of the subrecipients utilized for each federal program and use checklists to help ensure that the required subrecipient monitoring activities are performed for each subrecipient.
Management Response:
Management agrees with the finding, see attached Corrective Action Plan.
Condition: We determined that $141,576 in program expenditures reported in the Schedule of Expenditures of Federal Awards are not actually 2023 program expenditures. These expenditures were incurred in 2022. In addition, of this amount, payroll costs of $113,511 charged to the federal award were not supported by timesheets or other documentation that would demonstrate the proper allocation of the costs.
Criteria: The Uniform Guidance (section 200.403(e)) indicates that expenditures must be determined in accordance with generally accepted accounting principles. The Uniform Guidance (section 200.430(i)(1)) also indicates that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. The records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.
Cause: The ACHD did not have processes and controls in place to ensure that expenditures were recorded in the proper accounting period and to ensure compliance with the documentation requirements for salaries and wages charged to federal awards.
Effect: The County was not in compliance with the terms of the federal grant program.
Questioned Costs: none
Recommendation: The ACHD should implement processes and controls to verify that expenditures are being recorded in the proper accounting period and that payroll costs charged to federal awards are supported by appropriate documentation.
Management Response:
Management agrees with the finding, see attached Corrective Action Plan.
Condition: We determined that $141,576 in program expenditures reported in the Schedule of Expenditures of Federal Awards are not actually 2023 program expenditures. These expenditures were incurred in 2022. In addition, of this amount, payroll costs of $113,511 charged to the federal award were not supported by timesheets or other documentation that would demonstrate the proper allocation of the costs.
Criteria: The Uniform Guidance (section 200.403(e)) indicates that expenditures must be determined in accordance with generally accepted accounting principles. The Uniform Guidance (section 200.430(i)(1)) also indicates that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. The records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.
Cause: The ACHD did not have processes and controls in place to ensure that expenditures were recorded in the proper accounting period and to ensure compliance with the documentation requirements for salaries and wages charged to federal awards.
Effect: The County was not in compliance with the terms of the federal grant program.
Questioned Costs: none
Recommendation: The ACHD should implement processes and controls to verify that expenditures are being recorded in the proper accounting period and that payroll costs charged to federal awards are supported by appropriate documentation.
Management Response:
Management agrees with the finding, see attached Corrective Action Plan.
Condition: We determined that $141,576 in program expenditures reported in the Schedule of Expenditures of Federal Awards are not actually 2023 program expenditures. These expenditures were incurred in 2022. In addition, of this amount, payroll costs of $113,511 charged to the federal award were not supported by timesheets or other documentation that would demonstrate the proper allocation of the costs.
Criteria: The Uniform Guidance (section 200.403(e)) indicates that expenditures must be determined in accordance with generally accepted accounting principles. The Uniform Guidance (section 200.430(i)(1)) also indicates that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. The records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.
Cause: The ACHD did not have processes and controls in place to ensure that expenditures were recorded in the proper accounting period and to ensure compliance with the documentation requirements for salaries and wages charged to federal awards.
Effect: The County was not in compliance with the terms of the federal grant program.
Questioned Costs: none
Recommendation: The ACHD should implement processes and controls to verify that expenditures are being recorded in the proper accounting period and that payroll costs charged to federal awards are supported by appropriate documentation.
Management Response:
Management agrees with the finding, see attached Corrective Action Plan.