Finding Reference: 2022-005 Federal Agency: Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as ?policies and procedures that help ensures management?s directives are carried out? This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor?s report, or nine months after the end of the audit period. Accordingly, audits for fiscal years ending June 30, 2022 would be due on March 31, 2023. Cause: The single audit report was not submitted due to delays in year-end closing entries, schedules, and reconciliations. Effect: As a result of the finding, SMTCCAC did not provide required information to its federal oversight agency in a timely manner. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame. Views of Responsible Officials and Planned Corrective Actions: See Corrective Action Plans section.
Finding Reference: 2022-006 Federal Agency: Department of Health and Human Services Compliance Requirement: Allowable Costs (Indirect Costs) Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Federal Program: 93.600 ? Head Start; 93.569 ? CSBG; Grant Award: Various Condition/Context: During the testing of indirect cost allocations to federal programs, it was determined that SMTCCAC overcharged indirect costs on two of seven federal programs. Head Start, a major program, was one of the two programs with overcharges. The indirect costs charged to the programs exceeded the approved provisional federal indirect cost rate of 31.5% without obtaining approvals from the federal awarding agencies. As a result, an overallocation of indirect expenses was incurred by the effected federal programs. In addition, we found that SMTCCAC applied indirect cost rates inconsistently among programs and failed to calculate an actual indirect cost rate and provide composition of indirect costs for the fiscal year 2022. Criteria: On July 23, 2021, the Department of Health and Human Services approved a provisional indirect cost rate of 31.5% to be applied to total direct salaries and fringe benefit costs related to all federal programs. This rate is applicable to SMTCCAC?s grants, contract, and other agreements covered by 2 CFR 200 for the period effective from December 1, 2020 to June 30, 2023. According to the approved rate agreement, if any federal contract, grant, or other agreement is reimbursing indirect costs by a means other than the approved rate in this agreement, the organization should (1) credit such costs to the affected programs, and (2) apply the approved rate to the appropriate base to identify the proper amount of indirect costs allocable to these programs. Cause: SMTCCAC charged indirect costs to grants based on budgeted amounts per grant agreements instead of allocating indirect costs to programs based on an actual indirect rate for the fiscal year not to exceed its approved provisional indirect cost rate of 31.5%. SMTCCAC didn?t calculate an actual annual indirect cost rate for FY 2022 to compare to the approved provisional rate. The actual rate should have been calculated to determine if it was lower than the approved provisional rate. If lower, the actual rate should have been applied. If higher, the approved provisional rate should have been used. Additionally, indirect cost rates were not consistently applied across the various programs. Effect: Indirect cost rates were inconsistently applied across each federal program. SMTCCAC obtained approval from the ERAP grantor to charge indirect costs in excess of the approved provisional indirect cost rate of 31.5%. However, SMTCCAC allocated indirect costs in excess of the approved provisional rate to two of the six remaining federal programs. The remaining four programs were charged below the approved provisional rate. Questioned Costs: The questioned costs were not determinable because the actual annual indirect cost rate was not calculated. Without the actual rate, we could not determine if the actual rate was lower or higher than the approved provisional rate. However, based on our assessment using the approved provisional rate, the overallocations appear to be material. Recommendation: We recommend that SMTCCAC ensures compliance with the cost principals in 2 CFR Part 200, Subpart E, and follows the approved federal indirect cost rate agreement and calculate the actual annual indirect cost rate when determining indirect costs charged to federal awards. Views of Responsible Officials and Planned Corrective Actions: See Corrective Action Plans section.
Finding Reference: 2022-006 Federal Agency: Department of Health and Human Services Compliance Requirement: Allowable Costs (Indirect Costs) Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Federal Program: 93.600 ? Head Start; 93.569 ? CSBG; Grant Award: Various Condition/Context: During the testing of indirect cost allocations to federal programs, it was determined that SMTCCAC overcharged indirect costs on two of seven federal programs. Head Start, a major program, was one of the two programs with overcharges. The indirect costs charged to the programs exceeded the approved provisional federal indirect cost rate of 31.5% without obtaining approvals from the federal awarding agencies. As a result, an overallocation of indirect expenses was incurred by the effected federal programs. In addition, we found that SMTCCAC applied indirect cost rates inconsistently among programs and failed to calculate an actual indirect cost rate and provide composition of indirect costs for the fiscal year 2022. Criteria: On July 23, 2021, the Department of Health and Human Services approved a provisional indirect cost rate of 31.5% to be applied to total direct salaries and fringe benefit costs related to all federal programs. This rate is applicable to SMTCCAC?s grants, contract, and other agreements covered by 2 CFR 200 for the period effective from December 1, 2020 to June 30, 2023. According to the approved rate agreement, if any federal contract, grant, or other agreement is reimbursing indirect costs by a means other than the approved rate in this agreement, the organization should (1) credit such costs to the affected programs, and (2) apply the approved rate to the appropriate base to identify the proper amount of indirect costs allocable to these programs. Cause: SMTCCAC charged indirect costs to grants based on budgeted amounts per grant agreements instead of allocating indirect costs to programs based on an actual indirect rate for the fiscal year not to exceed its approved provisional indirect cost rate of 31.5%. SMTCCAC didn?t calculate an actual annual indirect cost rate for FY 2022 to compare to the approved provisional rate. The actual rate should have been calculated to determine if it was lower than the approved provisional rate. If lower, the actual rate should have been applied. If higher, the approved provisional rate should have been used. Additionally, indirect cost rates were not consistently applied across the various programs. Effect: Indirect cost rates were inconsistently applied across each federal program. SMTCCAC obtained approval from the ERAP grantor to charge indirect costs in excess of the approved provisional indirect cost rate of 31.5%. However, SMTCCAC allocated indirect costs in excess of the approved provisional rate to two of the six remaining federal programs. The remaining four programs were charged below the approved provisional rate. Questioned Costs: The questioned costs were not determinable because the actual annual indirect cost rate was not calculated. Without the actual rate, we could not determine if the actual rate was lower or higher than the approved provisional rate. However, based on our assessment using the approved provisional rate, the overallocations appear to be material. Recommendation: We recommend that SMTCCAC ensures compliance with the cost principals in 2 CFR Part 200, Subpart E, and follows the approved federal indirect cost rate agreement and calculate the actual annual indirect cost rate when determining indirect costs charged to federal awards. Views of Responsible Officials and Planned Corrective Actions: See Corrective Action Plans section.
Finding Reference: 2022-002 Federal Agency: Department of Treasury Compliance Requirement: Allowable Costs (Non-Payroll) Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: 21.023 ? Emergency Rental Assistance Grant Award: ERAP I Charles County Condition/Context: FSTA selected a sample of sixty disbursements of rental assistance claims for testing and noted the following errors: ? SMTCCAC mistakenly processed a duplicate payment of $7,700 for an eligible claim, which was one (1) of the 60 rental assistance claims selected for testing in Charles County ERAP I grant. ? SMTCCAC made a payment of $31,800 to a landlord for one (1) of the 60 rental assistance claims selected for testing, for which another agency had made a payment for the same claim before SMTCCAC. Criteria: Internal Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance: Under OMB guidance, Public Law (Pub. L.) No. 107-300, the Improper Payments Information Act of 2002, as amended by Pub. L. No. 111-204, the Improper Payments Elimination and Recovery Act, Executive Order 13520 on reducing improper payments, and the June 18, 2010 Memorandum on Enhancing Payment Accuracy - Any payment that should not have been made or that was made in an incorrect amount, including an overpayment or underpayment, under a statutory, contractual, administrative, or other legally applicable requirement; and includes ? (i) any payment to an ineligible recipient;(ii) any payment for an ineligible good or service; (iii) any duplicate payment; (iv) any payment for services not received; and (v) any payment that does not account for credit for applicable discounts. Cause: Due to staff turnover, the claim of $7,700 was submitted to Finance for payment twice. SMTCCAC did not sufficiently monitor controls to detect the duplicate payment. Additionally, SMTCCAC did not adequately monitor controls to ensure proper review of the shared document among participating ERAP agencies in Charles County to avoid the duplication of benefits for the claim of $31,800. Effect: The duplicate expenditure included in the program cost was deemed unallowable. The landlord involved in the rental assistance claim confirmed receiving two checks, each totaling $7,700. SMTCCAC did not require the landlord to return the duplicate funds, nor did it establish a repayment plan after the landlord expressed a willingness to establish a repayment agreement. Ultimately, the landlord chose to apply the duplicate payment of $7,700 towards future rents for the applicable tenant. During FY2023, Charles County identified the duplicate check and promptly requested the return of duplicate payment of $7,700 from SMTCCAC. During a program file audit by Charles County, it was determined that a duplicate expenditure included in the program cost was deemed unallowable. In FY2022, SMTCCAC paid $31,800 to a landlord who had already received payment from another participating ERAP agency. Despite notifications from SMTCCAC, the landlord has not/was not willing to return the duplicate funds to SMCTTAC. Charles County has notified SMTCCAC on numerous occasions about the need to reimburse the County for the duplicated funds. Once the funds are received, Charles County will return the monies to the State of Maryland. In March of 2023, the County also sent an invoice of $31,800 requesting SMTCCAC to return the $31,800. Questioned Costs: $7,700 ? duplicate payment made to a landlord for a rental assistance claim selected for testing. $31,800 ? duplicate payment made to a landlord for a rental assistance claim selected for testing. Recommendation: We recommend that SMTCCAC implement effective controls to prevent duplicate payments. Additionally, we recommend that SMTCCAC consistently verify the shared document used among participating ERAP agencies in Charles County to ensure that a claim has not been applied for and paid by other agencies. Views of Responsible Officials and Planned Corrective Actions: See Corrective Action Plans section.
Finding Reference: 2022-003 Federal Agency: Department of Treasury Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: 21.023 ? Emergency Rental Assistance Grant Award: ERAPI Charles County Condition/Context: SMTCCAC did not provide proof of review of the shared document among participating ERAP agencies in Charles County to avoid duplication of benefits for four (4) of the 60 rental assistance claims selected for testing. Criteria: Internal Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Cause: SMTCCAC did not adequately monitor controls to ensure proper review of the shared document among participating ERAP agencies in Charles County resulting in the potential duplication of benefits. Effect: Failure to review the shared document used among participating ERAP agencies in Charles County could result in duplication of benefits. Questioned Costs: None Recommendation: We recommend that SMTCCAC consistently verify the shared document used among participating ERAP agencies in Charles County to avoid duplication of benefits. Views of Responsible Officials and Planned Corrective Actions: See Corrective Action Plans section.
Finding Reference: 2022-004 Federal Agency: Department of Treasury Compliance Requirement: Activities Allowed, Allowable Costs (Non-Payroll) Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: 21.023 ? Emergency Rental Assistance Grant Award: ERAPI Charles County Condition/Context: SMTCCAC was unable to provide documentation to support review and approval for one (1) of the 40 transactions selected for testing. Criteria: Internal Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Cause: SMTCCAC was unable to locate the Expenditure Request Form that demonstrates the approval of an invoice. Effect: The risk of unallowed costs increases due to lack of supervisor review and approval of expenditures charged to the program. Questioned Costs: None Recommendation: We recommend that SMTCCAC maintain the documentation of review and approval of expenditures charged to the federal award programs. Views of Responsible Officials and Planned Corrective Actions: See Corrective Action Plans section.
Finding Reference: 2022-005 Federal Agency: Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as ?policies and procedures that help ensures management?s directives are carried out? This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor?s report, or nine months after the end of the audit period. Accordingly, audits for fiscal years ending June 30, 2022 would be due on March 31, 2023. Cause: The single audit report was not submitted due to delays in year-end closing entries, schedules, and reconciliations. Effect: As a result of the finding, SMTCCAC did not provide required information to its federal oversight agency in a timely manner. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame. Views of Responsible Officials and Planned Corrective Actions: See Corrective Action Plans section.
Finding Reference: 2022-005 Federal Agency: Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as ?policies and procedures that help ensures management?s directives are carried out? This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor?s report, or nine months after the end of the audit period. Accordingly, audits for fiscal years ending June 30, 2022 would be due on March 31, 2023. Cause: The single audit report was not submitted due to delays in year-end closing entries, schedules, and reconciliations. Effect: As a result of the finding, SMTCCAC did not provide required information to its federal oversight agency in a timely manner. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame. Views of Responsible Officials and Planned Corrective Actions: See Corrective Action Plans section.
Finding Reference: 2022-006 Federal Agency: Department of Health and Human Services Compliance Requirement: Allowable Costs (Indirect Costs) Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Federal Program: 93.600 ? Head Start; 93.569 ? CSBG; Grant Award: Various Condition/Context: During the testing of indirect cost allocations to federal programs, it was determined that SMTCCAC overcharged indirect costs on two of seven federal programs. Head Start, a major program, was one of the two programs with overcharges. The indirect costs charged to the programs exceeded the approved provisional federal indirect cost rate of 31.5% without obtaining approvals from the federal awarding agencies. As a result, an overallocation of indirect expenses was incurred by the effected federal programs. In addition, we found that SMTCCAC applied indirect cost rates inconsistently among programs and failed to calculate an actual indirect cost rate and provide composition of indirect costs for the fiscal year 2022. Criteria: On July 23, 2021, the Department of Health and Human Services approved a provisional indirect cost rate of 31.5% to be applied to total direct salaries and fringe benefit costs related to all federal programs. This rate is applicable to SMTCCAC?s grants, contract, and other agreements covered by 2 CFR 200 for the period effective from December 1, 2020 to June 30, 2023. According to the approved rate agreement, if any federal contract, grant, or other agreement is reimbursing indirect costs by a means other than the approved rate in this agreement, the organization should (1) credit such costs to the affected programs, and (2) apply the approved rate to the appropriate base to identify the proper amount of indirect costs allocable to these programs. Cause: SMTCCAC charged indirect costs to grants based on budgeted amounts per grant agreements instead of allocating indirect costs to programs based on an actual indirect rate for the fiscal year not to exceed its approved provisional indirect cost rate of 31.5%. SMTCCAC didn?t calculate an actual annual indirect cost rate for FY 2022 to compare to the approved provisional rate. The actual rate should have been calculated to determine if it was lower than the approved provisional rate. If lower, the actual rate should have been applied. If higher, the approved provisional rate should have been used. Additionally, indirect cost rates were not consistently applied across the various programs. Effect: Indirect cost rates were inconsistently applied across each federal program. SMTCCAC obtained approval from the ERAP grantor to charge indirect costs in excess of the approved provisional indirect cost rate of 31.5%. However, SMTCCAC allocated indirect costs in excess of the approved provisional rate to two of the six remaining federal programs. The remaining four programs were charged below the approved provisional rate. Questioned Costs: The questioned costs were not determinable because the actual annual indirect cost rate was not calculated. Without the actual rate, we could not determine if the actual rate was lower or higher than the approved provisional rate. However, based on our assessment using the approved provisional rate, the overallocations appear to be material. Recommendation: We recommend that SMTCCAC ensures compliance with the cost principals in 2 CFR Part 200, Subpart E, and follows the approved federal indirect cost rate agreement and calculate the actual annual indirect cost rate when determining indirect costs charged to federal awards. Views of Responsible Officials and Planned Corrective Actions: See Corrective Action Plans section.
Finding Reference: 2022-006 Federal Agency: Department of Health and Human Services Compliance Requirement: Allowable Costs (Indirect Costs) Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Federal Program: 93.600 ? Head Start; 93.569 ? CSBG; Grant Award: Various Condition/Context: During the testing of indirect cost allocations to federal programs, it was determined that SMTCCAC overcharged indirect costs on two of seven federal programs. Head Start, a major program, was one of the two programs with overcharges. The indirect costs charged to the programs exceeded the approved provisional federal indirect cost rate of 31.5% without obtaining approvals from the federal awarding agencies. As a result, an overallocation of indirect expenses was incurred by the effected federal programs. In addition, we found that SMTCCAC applied indirect cost rates inconsistently among programs and failed to calculate an actual indirect cost rate and provide composition of indirect costs for the fiscal year 2022. Criteria: On July 23, 2021, the Department of Health and Human Services approved a provisional indirect cost rate of 31.5% to be applied to total direct salaries and fringe benefit costs related to all federal programs. This rate is applicable to SMTCCAC?s grants, contract, and other agreements covered by 2 CFR 200 for the period effective from December 1, 2020 to June 30, 2023. According to the approved rate agreement, if any federal contract, grant, or other agreement is reimbursing indirect costs by a means other than the approved rate in this agreement, the organization should (1) credit such costs to the affected programs, and (2) apply the approved rate to the appropriate base to identify the proper amount of indirect costs allocable to these programs. Cause: SMTCCAC charged indirect costs to grants based on budgeted amounts per grant agreements instead of allocating indirect costs to programs based on an actual indirect rate for the fiscal year not to exceed its approved provisional indirect cost rate of 31.5%. SMTCCAC didn?t calculate an actual annual indirect cost rate for FY 2022 to compare to the approved provisional rate. The actual rate should have been calculated to determine if it was lower than the approved provisional rate. If lower, the actual rate should have been applied. If higher, the approved provisional rate should have been used. Additionally, indirect cost rates were not consistently applied across the various programs. Effect: Indirect cost rates were inconsistently applied across each federal program. SMTCCAC obtained approval from the ERAP grantor to charge indirect costs in excess of the approved provisional indirect cost rate of 31.5%. However, SMTCCAC allocated indirect costs in excess of the approved provisional rate to two of the six remaining federal programs. The remaining four programs were charged below the approved provisional rate. Questioned Costs: The questioned costs were not determinable because the actual annual indirect cost rate was not calculated. Without the actual rate, we could not determine if the actual rate was lower or higher than the approved provisional rate. However, based on our assessment using the approved provisional rate, the overallocations appear to be material. Recommendation: We recommend that SMTCCAC ensures compliance with the cost principals in 2 CFR Part 200, Subpart E, and follows the approved federal indirect cost rate agreement and calculate the actual annual indirect cost rate when determining indirect costs charged to federal awards. Views of Responsible Officials and Planned Corrective Actions: See Corrective Action Plans section.
Finding Reference: 2022-002 Federal Agency: Department of Treasury Compliance Requirement: Allowable Costs (Non-Payroll) Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: 21.023 ? Emergency Rental Assistance Grant Award: ERAP I Charles County Condition/Context: FSTA selected a sample of sixty disbursements of rental assistance claims for testing and noted the following errors: ? SMTCCAC mistakenly processed a duplicate payment of $7,700 for an eligible claim, which was one (1) of the 60 rental assistance claims selected for testing in Charles County ERAP I grant. ? SMTCCAC made a payment of $31,800 to a landlord for one (1) of the 60 rental assistance claims selected for testing, for which another agency had made a payment for the same claim before SMTCCAC. Criteria: Internal Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance: Under OMB guidance, Public Law (Pub. L.) No. 107-300, the Improper Payments Information Act of 2002, as amended by Pub. L. No. 111-204, the Improper Payments Elimination and Recovery Act, Executive Order 13520 on reducing improper payments, and the June 18, 2010 Memorandum on Enhancing Payment Accuracy - Any payment that should not have been made or that was made in an incorrect amount, including an overpayment or underpayment, under a statutory, contractual, administrative, or other legally applicable requirement; and includes ? (i) any payment to an ineligible recipient;(ii) any payment for an ineligible good or service; (iii) any duplicate payment; (iv) any payment for services not received; and (v) any payment that does not account for credit for applicable discounts. Cause: Due to staff turnover, the claim of $7,700 was submitted to Finance for payment twice. SMTCCAC did not sufficiently monitor controls to detect the duplicate payment. Additionally, SMTCCAC did not adequately monitor controls to ensure proper review of the shared document among participating ERAP agencies in Charles County to avoid the duplication of benefits for the claim of $31,800. Effect: The duplicate expenditure included in the program cost was deemed unallowable. The landlord involved in the rental assistance claim confirmed receiving two checks, each totaling $7,700. SMTCCAC did not require the landlord to return the duplicate funds, nor did it establish a repayment plan after the landlord expressed a willingness to establish a repayment agreement. Ultimately, the landlord chose to apply the duplicate payment of $7,700 towards future rents for the applicable tenant. During FY2023, Charles County identified the duplicate check and promptly requested the return of duplicate payment of $7,700 from SMTCCAC. During a program file audit by Charles County, it was determined that a duplicate expenditure included in the program cost was deemed unallowable. In FY2022, SMTCCAC paid $31,800 to a landlord who had already received payment from another participating ERAP agency. Despite notifications from SMTCCAC, the landlord has not/was not willing to return the duplicate funds to SMCTTAC. Charles County has notified SMTCCAC on numerous occasions about the need to reimburse the County for the duplicated funds. Once the funds are received, Charles County will return the monies to the State of Maryland. In March of 2023, the County also sent an invoice of $31,800 requesting SMTCCAC to return the $31,800. Questioned Costs: $7,700 ? duplicate payment made to a landlord for a rental assistance claim selected for testing. $31,800 ? duplicate payment made to a landlord for a rental assistance claim selected for testing. Recommendation: We recommend that SMTCCAC implement effective controls to prevent duplicate payments. Additionally, we recommend that SMTCCAC consistently verify the shared document used among participating ERAP agencies in Charles County to ensure that a claim has not been applied for and paid by other agencies. Views of Responsible Officials and Planned Corrective Actions: See Corrective Action Plans section.
Finding Reference: 2022-003 Federal Agency: Department of Treasury Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: 21.023 ? Emergency Rental Assistance Grant Award: ERAPI Charles County Condition/Context: SMTCCAC did not provide proof of review of the shared document among participating ERAP agencies in Charles County to avoid duplication of benefits for four (4) of the 60 rental assistance claims selected for testing. Criteria: Internal Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Cause: SMTCCAC did not adequately monitor controls to ensure proper review of the shared document among participating ERAP agencies in Charles County resulting in the potential duplication of benefits. Effect: Failure to review the shared document used among participating ERAP agencies in Charles County could result in duplication of benefits. Questioned Costs: None Recommendation: We recommend that SMTCCAC consistently verify the shared document used among participating ERAP agencies in Charles County to avoid duplication of benefits. Views of Responsible Officials and Planned Corrective Actions: See Corrective Action Plans section.
Finding Reference: 2022-004 Federal Agency: Department of Treasury Compliance Requirement: Activities Allowed, Allowable Costs (Non-Payroll) Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: 21.023 ? Emergency Rental Assistance Grant Award: ERAPI Charles County Condition/Context: SMTCCAC was unable to provide documentation to support review and approval for one (1) of the 40 transactions selected for testing. Criteria: Internal Control: Per 2 CFR section 200.303(a), a 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. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Cause: SMTCCAC was unable to locate the Expenditure Request Form that demonstrates the approval of an invoice. Effect: The risk of unallowed costs increases due to lack of supervisor review and approval of expenditures charged to the program. Questioned Costs: None Recommendation: We recommend that SMTCCAC maintain the documentation of review and approval of expenditures charged to the federal award programs. Views of Responsible Officials and Planned Corrective Actions: See Corrective Action Plans section.
Finding Reference: 2022-005 Federal Agency: Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Impacts All Federal Award Programs Grant Award: Various Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as ?policies and procedures that help ensures management?s directives are carried out? This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor?s report, or nine months after the end of the audit period. Accordingly, audits for fiscal years ending June 30, 2022 would be due on March 31, 2023. Cause: The single audit report was not submitted due to delays in year-end closing entries, schedules, and reconciliations. Effect: As a result of the finding, SMTCCAC did not provide required information to its federal oversight agency in a timely manner. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame. Views of Responsible Officials and Planned Corrective Actions: See Corrective Action Plans section.