Audit 324929

FY End
2023-12-31
Total Expended
$4.02M
Findings
18
Programs
4
Organization: Grace House INC (MS)
Year: 2023 Accepted: 2024-10-16

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
502973 2023-001 Significant Deficiency - E
502974 2023-001 Significant Deficiency - E
502975 2023-001 Significant Deficiency - E
502976 2023-001 Significant Deficiency - E
502977 2023-001 Significant Deficiency - E
502978 2023-001 Significant Deficiency - E
502979 2023-001 Significant Deficiency - E
502980 2023-001 Significant Deficiency - E
502981 2023-001 Significant Deficiency - E
1079415 2023-001 Significant Deficiency - E
1079416 2023-001 Significant Deficiency - E
1079417 2023-001 Significant Deficiency - E
1079418 2023-001 Significant Deficiency - E
1079419 2023-001 Significant Deficiency - E
1079420 2023-001 Significant Deficiency - E
1079421 2023-001 Significant Deficiency - E
1079422 2023-001 Significant Deficiency - E
1079423 2023-001 Significant Deficiency - E

Programs

ALN Program Spent Major Findings
14.267 Continuum of Care Program $403,714 - 0
97.024 Emergency Food and Shelter National Board Program $38,689 - 0
14.231 Emergency Solutions Grant Program $21,567 Yes 1
14.241 Housing Opportunities for Persons with Aids $2,309 Yes 1

Contacts

Name Title Type
VWJJK8276ZX1 Stacey Howard Auditee
6013531038 Catherine Bradshaw Auditor
No contacts on file

Notes to SEFA

Title: NOTE 1 BASIS OF PRESENTATION Accounting Policies: Basis of accounting: The accompanying Schedule includes the federal grant activity of the Organization and is presented on the accrual basis of accounting. The information in the Schedule is presented in accordance with the requirements of the Uniform Guidance. Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. The amounts presented in the Schedule have been reconciled to the Organization’s basic financial statements. Cost allocation: The Organization allocates indirect costs related to grant programs in accordance with, the cost principles contained in the Uniform Guidance. The Organization has elected to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. Program costs/Matching contributions: The amounts shown as current year expenses represent only the federal grant portion of the program costs. Entire program costs, including the Organization portion, may be more than shown. De Minimis Rate Used: Y Rate Explanation: The Organization has elected to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. The accompanying Schedule of Expenditures of Federal Awards (the Schedule) summarizes the federal awards expended by Grace House, Inc. (the Organization) for the year ended December 31, 2023. For the purposes of the Schedule, federal awards include all grants, contracts, loans, and loan guarantee agreements entered into directly between the Organization and agencies and departments of the federal government. The Organization has classified all awards into major and nonmajor programs in accordance with the provisions of Title 2 U.S. Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The major programs includes the following grants:  Housing Opportunities for Persons with AIDS  Housing Opportunities for Persons with AIDS – Pass-through from City of Jackson  Housing Opportunities for Persons with AIDS – Pass-through from Mississippi Home Corps.  Emergency Solutions Grant
Title: NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: Basis of accounting: The accompanying Schedule includes the federal grant activity of the Organization and is presented on the accrual basis of accounting. The information in the Schedule is presented in accordance with the requirements of the Uniform Guidance. Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. The amounts presented in the Schedule have been reconciled to the Organization’s basic financial statements. Cost allocation: The Organization allocates indirect costs related to grant programs in accordance with, the cost principles contained in the Uniform Guidance. The Organization has elected to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. Program costs/Matching contributions: The amounts shown as current year expenses represent only the federal grant portion of the program costs. Entire program costs, including the Organization portion, may be more than shown. De Minimis Rate Used: Y Rate Explanation: The Organization has elected to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. Basis of accounting: The accompanying Schedule includes the federal grant activity of the Organization and is presented on the accrual basis of accounting. The information in the Schedule is presented in accordance with the requirements of the Uniform Guidance. Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. The amounts presented in the Schedule have been reconciled to the Organization’s basic financial statements. Cost allocation: The Organization allocates indirect costs related to grant programs in accordance with, the cost principles contained in the Uniform Guidance. The Organization has elected to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. Program costs/Matching contributions: The amounts shown as current year expenses represent only the federal grant portion of the program costs. Entire program costs, including the Organization portion, may be more than shown.
Title: NOTE 3 OTHER NONCASH ASSISTANCE Accounting Policies: Basis of accounting: The accompanying Schedule includes the federal grant activity of the Organization and is presented on the accrual basis of accounting. The information in the Schedule is presented in accordance with the requirements of the Uniform Guidance. Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. The amounts presented in the Schedule have been reconciled to the Organization’s basic financial statements. Cost allocation: The Organization allocates indirect costs related to grant programs in accordance with, the cost principles contained in the Uniform Guidance. The Organization has elected to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. Program costs/Matching contributions: The amounts shown as current year expenses represent only the federal grant portion of the program costs. Entire program costs, including the Organization portion, may be more than shown. De Minimis Rate Used: Y Rate Explanation: The Organization has elected to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. The Organization did not receive federal noncash assistance during the year ended December 31, 2023.
Title: NOTE 4 AMOUNT OF FEDERAL INSURANCE IN EFFECT DURING THE YEAR Accounting Policies: Basis of accounting: The accompanying Schedule includes the federal grant activity of the Organization and is presented on the accrual basis of accounting. The information in the Schedule is presented in accordance with the requirements of the Uniform Guidance. Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. The amounts presented in the Schedule have been reconciled to the Organization’s basic financial statements. Cost allocation: The Organization allocates indirect costs related to grant programs in accordance with, the cost principles contained in the Uniform Guidance. The Organization has elected to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. Program costs/Matching contributions: The amounts shown as current year expenses represent only the federal grant portion of the program costs. Entire program costs, including the Organization portion, may be more than shown. De Minimis Rate Used: Y Rate Explanation: The Organization has elected to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. No federal insurance was received by the Organization during the year ended December 31, 2023.

Finding Details

Significant Deficiency not considered to be Material Weakness 2023-1 Criteria or Specific Requirement - Management is responsible for establishing and maintaining internal control over compliance. Internal control should allow management or employees, to identify fraudulent properties and fraudulent tenants before entering into the program. Condition - The external auditors noted that while there are some controls in place, they were not sufficient to identify the fraudulent properties and tenants that were approved for the granting programs. In addition, there was collusion involved by two case managers that could not have been prevented by controls in place. Due to these reasons, the external auditors determined that the control finding is only a significant deficiency and not a material weakness. Effect – The lack of controls around monitoring of new properties and tenants enrolled in the grant programs resulted in fraudulent reimbursement requests being submitted under the following grants: a) Housing Opportunities For Persons With Aids (ALN #14.241) b) Emergency Solutions Grant (ALN #14.231) Cause – Lack of sufficient monitoring controls over applicants, specific to property and tenant validation. Recommendation –The Organization should implement more stringent controls to verify the applying tenant is who they claim to be, verify the ownership and history of the property being rented, and involve more individuals at various stages in the review process to strengthen the risk against collusion.
Significant Deficiency not considered to be Material Weakness 2023-1 Criteria or Specific Requirement - Management is responsible for establishing and maintaining internal control over compliance. Internal control should allow management or employees, to identify fraudulent properties and fraudulent tenants before entering into the program. Condition - The external auditors noted that while there are some controls in place, they were not sufficient to identify the fraudulent properties and tenants that were approved for the granting programs. In addition, there was collusion involved by two case managers that could not have been prevented by controls in place. Due to these reasons, the external auditors determined that the control finding is only a significant deficiency and not a material weakness. Effect – The lack of controls around monitoring of new properties and tenants enrolled in the grant programs resulted in fraudulent reimbursement requests being submitted under the following grants: a) Housing Opportunities For Persons With Aids (ALN #14.241) b) Emergency Solutions Grant (ALN #14.231) Cause – Lack of sufficient monitoring controls over applicants, specific to property and tenant validation. Recommendation –The Organization should implement more stringent controls to verify the applying tenant is who they claim to be, verify the ownership and history of the property being rented, and involve more individuals at various stages in the review process to strengthen the risk against collusion.
Significant Deficiency not considered to be Material Weakness 2023-1 Criteria or Specific Requirement - Management is responsible for establishing and maintaining internal control over compliance. Internal control should allow management or employees, to identify fraudulent properties and fraudulent tenants before entering into the program. Condition - The external auditors noted that while there are some controls in place, they were not sufficient to identify the fraudulent properties and tenants that were approved for the granting programs. In addition, there was collusion involved by two case managers that could not have been prevented by controls in place. Due to these reasons, the external auditors determined that the control finding is only a significant deficiency and not a material weakness. Effect – The lack of controls around monitoring of new properties and tenants enrolled in the grant programs resulted in fraudulent reimbursement requests being submitted under the following grants: a) Housing Opportunities For Persons With Aids (ALN #14.241) b) Emergency Solutions Grant (ALN #14.231) Cause – Lack of sufficient monitoring controls over applicants, specific to property and tenant validation. Recommendation –The Organization should implement more stringent controls to verify the applying tenant is who they claim to be, verify the ownership and history of the property being rented, and involve more individuals at various stages in the review process to strengthen the risk against collusion.
Significant Deficiency not considered to be Material Weakness 2023-1 Criteria or Specific Requirement - Management is responsible for establishing and maintaining internal control over compliance. Internal control should allow management or employees, to identify fraudulent properties and fraudulent tenants before entering into the program. Condition - The external auditors noted that while there are some controls in place, they were not sufficient to identify the fraudulent properties and tenants that were approved for the granting programs. In addition, there was collusion involved by two case managers that could not have been prevented by controls in place. Due to these reasons, the external auditors determined that the control finding is only a significant deficiency and not a material weakness. Effect – The lack of controls around monitoring of new properties and tenants enrolled in the grant programs resulted in fraudulent reimbursement requests being submitted under the following grants: a) Housing Opportunities For Persons With Aids (ALN #14.241) b) Emergency Solutions Grant (ALN #14.231) Cause – Lack of sufficient monitoring controls over applicants, specific to property and tenant validation. Recommendation –The Organization should implement more stringent controls to verify the applying tenant is who they claim to be, verify the ownership and history of the property being rented, and involve more individuals at various stages in the review process to strengthen the risk against collusion.
Significant Deficiency not considered to be Material Weakness 2023-1 Criteria or Specific Requirement - Management is responsible for establishing and maintaining internal control over compliance. Internal control should allow management or employees, to identify fraudulent properties and fraudulent tenants before entering into the program. Condition - The external auditors noted that while there are some controls in place, they were not sufficient to identify the fraudulent properties and tenants that were approved for the granting programs. In addition, there was collusion involved by two case managers that could not have been prevented by controls in place. Due to these reasons, the external auditors determined that the control finding is only a significant deficiency and not a material weakness. Effect – The lack of controls around monitoring of new properties and tenants enrolled in the grant programs resulted in fraudulent reimbursement requests being submitted under the following grants: a) Housing Opportunities For Persons With Aids (ALN #14.241) b) Emergency Solutions Grant (ALN #14.231) Cause – Lack of sufficient monitoring controls over applicants, specific to property and tenant validation. Recommendation –The Organization should implement more stringent controls to verify the applying tenant is who they claim to be, verify the ownership and history of the property being rented, and involve more individuals at various stages in the review process to strengthen the risk against collusion.
Significant Deficiency not considered to be Material Weakness 2023-1 Criteria or Specific Requirement - Management is responsible for establishing and maintaining internal control over compliance. Internal control should allow management or employees, to identify fraudulent properties and fraudulent tenants before entering into the program. Condition - The external auditors noted that while there are some controls in place, they were not sufficient to identify the fraudulent properties and tenants that were approved for the granting programs. In addition, there was collusion involved by two case managers that could not have been prevented by controls in place. Due to these reasons, the external auditors determined that the control finding is only a significant deficiency and not a material weakness. Effect – The lack of controls around monitoring of new properties and tenants enrolled in the grant programs resulted in fraudulent reimbursement requests being submitted under the following grants: a) Housing Opportunities For Persons With Aids (ALN #14.241) b) Emergency Solutions Grant (ALN #14.231) Cause – Lack of sufficient monitoring controls over applicants, specific to property and tenant validation. Recommendation –The Organization should implement more stringent controls to verify the applying tenant is who they claim to be, verify the ownership and history of the property being rented, and involve more individuals at various stages in the review process to strengthen the risk against collusion.
Significant Deficiency not considered to be Material Weakness 2023-1 Criteria or Specific Requirement - Management is responsible for establishing and maintaining internal control over compliance. Internal control should allow management or employees, to identify fraudulent properties and fraudulent tenants before entering into the program. Condition - The external auditors noted that while there are some controls in place, they were not sufficient to identify the fraudulent properties and tenants that were approved for the granting programs. In addition, there was collusion involved by two case managers that could not have been prevented by controls in place. Due to these reasons, the external auditors determined that the control finding is only a significant deficiency and not a material weakness. Effect – The lack of controls around monitoring of new properties and tenants enrolled in the grant programs resulted in fraudulent reimbursement requests being submitted under the following grants: a) Housing Opportunities For Persons With Aids (ALN #14.241) b) Emergency Solutions Grant (ALN #14.231) Cause – Lack of sufficient monitoring controls over applicants, specific to property and tenant validation. Recommendation –The Organization should implement more stringent controls to verify the applying tenant is who they claim to be, verify the ownership and history of the property being rented, and involve more individuals at various stages in the review process to strengthen the risk against collusion.
Significant Deficiency not considered to be Material Weakness 2023-1 Criteria or Specific Requirement - Management is responsible for establishing and maintaining internal control over compliance. Internal control should allow management or employees, to identify fraudulent properties and fraudulent tenants before entering into the program. Condition - The external auditors noted that while there are some controls in place, they were not sufficient to identify the fraudulent properties and tenants that were approved for the granting programs. In addition, there was collusion involved by two case managers that could not have been prevented by controls in place. Due to these reasons, the external auditors determined that the control finding is only a significant deficiency and not a material weakness. Effect – The lack of controls around monitoring of new properties and tenants enrolled in the grant programs resulted in fraudulent reimbursement requests being submitted under the following grants: a) Housing Opportunities For Persons With Aids (ALN #14.241) b) Emergency Solutions Grant (ALN #14.231) Cause – Lack of sufficient monitoring controls over applicants, specific to property and tenant validation. Recommendation –The Organization should implement more stringent controls to verify the applying tenant is who they claim to be, verify the ownership and history of the property being rented, and involve more individuals at various stages in the review process to strengthen the risk against collusion.
Significant Deficiency not considered to be Material Weakness 2023-1 Criteria or Specific Requirement - Management is responsible for establishing and maintaining internal control over compliance. Internal control should allow management or employees, to identify fraudulent properties and fraudulent tenants before entering into the program. Condition - The external auditors noted that while there are some controls in place, they were not sufficient to identify the fraudulent properties and tenants that were approved for the granting programs. In addition, there was collusion involved by two case managers that could not have been prevented by controls in place. Due to these reasons, the external auditors determined that the control finding is only a significant deficiency and not a material weakness. Effect – The lack of controls around monitoring of new properties and tenants enrolled in the grant programs resulted in fraudulent reimbursement requests being submitted under the following grants: a) Housing Opportunities For Persons With Aids (ALN #14.241) b) Emergency Solutions Grant (ALN #14.231) Cause – Lack of sufficient monitoring controls over applicants, specific to property and tenant validation. Recommendation –The Organization should implement more stringent controls to verify the applying tenant is who they claim to be, verify the ownership and history of the property being rented, and involve more individuals at various stages in the review process to strengthen the risk against collusion.
Significant Deficiency not considered to be Material Weakness 2023-1 Criteria or Specific Requirement - Management is responsible for establishing and maintaining internal control over compliance. Internal control should allow management or employees, to identify fraudulent properties and fraudulent tenants before entering into the program. Condition - The external auditors noted that while there are some controls in place, they were not sufficient to identify the fraudulent properties and tenants that were approved for the granting programs. In addition, there was collusion involved by two case managers that could not have been prevented by controls in place. Due to these reasons, the external auditors determined that the control finding is only a significant deficiency and not a material weakness. Effect – The lack of controls around monitoring of new properties and tenants enrolled in the grant programs resulted in fraudulent reimbursement requests being submitted under the following grants: a) Housing Opportunities For Persons With Aids (ALN #14.241) b) Emergency Solutions Grant (ALN #14.231) Cause – Lack of sufficient monitoring controls over applicants, specific to property and tenant validation. Recommendation –The Organization should implement more stringent controls to verify the applying tenant is who they claim to be, verify the ownership and history of the property being rented, and involve more individuals at various stages in the review process to strengthen the risk against collusion.
Significant Deficiency not considered to be Material Weakness 2023-1 Criteria or Specific Requirement - Management is responsible for establishing and maintaining internal control over compliance. Internal control should allow management or employees, to identify fraudulent properties and fraudulent tenants before entering into the program. Condition - The external auditors noted that while there are some controls in place, they were not sufficient to identify the fraudulent properties and tenants that were approved for the granting programs. In addition, there was collusion involved by two case managers that could not have been prevented by controls in place. Due to these reasons, the external auditors determined that the control finding is only a significant deficiency and not a material weakness. Effect – The lack of controls around monitoring of new properties and tenants enrolled in the grant programs resulted in fraudulent reimbursement requests being submitted under the following grants: a) Housing Opportunities For Persons With Aids (ALN #14.241) b) Emergency Solutions Grant (ALN #14.231) Cause – Lack of sufficient monitoring controls over applicants, specific to property and tenant validation. Recommendation –The Organization should implement more stringent controls to verify the applying tenant is who they claim to be, verify the ownership and history of the property being rented, and involve more individuals at various stages in the review process to strengthen the risk against collusion.
Significant Deficiency not considered to be Material Weakness 2023-1 Criteria or Specific Requirement - Management is responsible for establishing and maintaining internal control over compliance. Internal control should allow management or employees, to identify fraudulent properties and fraudulent tenants before entering into the program. Condition - The external auditors noted that while there are some controls in place, they were not sufficient to identify the fraudulent properties and tenants that were approved for the granting programs. In addition, there was collusion involved by two case managers that could not have been prevented by controls in place. Due to these reasons, the external auditors determined that the control finding is only a significant deficiency and not a material weakness. Effect – The lack of controls around monitoring of new properties and tenants enrolled in the grant programs resulted in fraudulent reimbursement requests being submitted under the following grants: a) Housing Opportunities For Persons With Aids (ALN #14.241) b) Emergency Solutions Grant (ALN #14.231) Cause – Lack of sufficient monitoring controls over applicants, specific to property and tenant validation. Recommendation –The Organization should implement more stringent controls to verify the applying tenant is who they claim to be, verify the ownership and history of the property being rented, and involve more individuals at various stages in the review process to strengthen the risk against collusion.
Significant Deficiency not considered to be Material Weakness 2023-1 Criteria or Specific Requirement - Management is responsible for establishing and maintaining internal control over compliance. Internal control should allow management or employees, to identify fraudulent properties and fraudulent tenants before entering into the program. Condition - The external auditors noted that while there are some controls in place, they were not sufficient to identify the fraudulent properties and tenants that were approved for the granting programs. In addition, there was collusion involved by two case managers that could not have been prevented by controls in place. Due to these reasons, the external auditors determined that the control finding is only a significant deficiency and not a material weakness. Effect – The lack of controls around monitoring of new properties and tenants enrolled in the grant programs resulted in fraudulent reimbursement requests being submitted under the following grants: a) Housing Opportunities For Persons With Aids (ALN #14.241) b) Emergency Solutions Grant (ALN #14.231) Cause – Lack of sufficient monitoring controls over applicants, specific to property and tenant validation. Recommendation –The Organization should implement more stringent controls to verify the applying tenant is who they claim to be, verify the ownership and history of the property being rented, and involve more individuals at various stages in the review process to strengthen the risk against collusion.
Significant Deficiency not considered to be Material Weakness 2023-1 Criteria or Specific Requirement - Management is responsible for establishing and maintaining internal control over compliance. Internal control should allow management or employees, to identify fraudulent properties and fraudulent tenants before entering into the program. Condition - The external auditors noted that while there are some controls in place, they were not sufficient to identify the fraudulent properties and tenants that were approved for the granting programs. In addition, there was collusion involved by two case managers that could not have been prevented by controls in place. Due to these reasons, the external auditors determined that the control finding is only a significant deficiency and not a material weakness. Effect – The lack of controls around monitoring of new properties and tenants enrolled in the grant programs resulted in fraudulent reimbursement requests being submitted under the following grants: a) Housing Opportunities For Persons With Aids (ALN #14.241) b) Emergency Solutions Grant (ALN #14.231) Cause – Lack of sufficient monitoring controls over applicants, specific to property and tenant validation. Recommendation –The Organization should implement more stringent controls to verify the applying tenant is who they claim to be, verify the ownership and history of the property being rented, and involve more individuals at various stages in the review process to strengthen the risk against collusion.
Significant Deficiency not considered to be Material Weakness 2023-1 Criteria or Specific Requirement - Management is responsible for establishing and maintaining internal control over compliance. Internal control should allow management or employees, to identify fraudulent properties and fraudulent tenants before entering into the program. Condition - The external auditors noted that while there are some controls in place, they were not sufficient to identify the fraudulent properties and tenants that were approved for the granting programs. In addition, there was collusion involved by two case managers that could not have been prevented by controls in place. Due to these reasons, the external auditors determined that the control finding is only a significant deficiency and not a material weakness. Effect – The lack of controls around monitoring of new properties and tenants enrolled in the grant programs resulted in fraudulent reimbursement requests being submitted under the following grants: a) Housing Opportunities For Persons With Aids (ALN #14.241) b) Emergency Solutions Grant (ALN #14.231) Cause – Lack of sufficient monitoring controls over applicants, specific to property and tenant validation. Recommendation –The Organization should implement more stringent controls to verify the applying tenant is who they claim to be, verify the ownership and history of the property being rented, and involve more individuals at various stages in the review process to strengthen the risk against collusion.
Significant Deficiency not considered to be Material Weakness 2023-1 Criteria or Specific Requirement - Management is responsible for establishing and maintaining internal control over compliance. Internal control should allow management or employees, to identify fraudulent properties and fraudulent tenants before entering into the program. Condition - The external auditors noted that while there are some controls in place, they were not sufficient to identify the fraudulent properties and tenants that were approved for the granting programs. In addition, there was collusion involved by two case managers that could not have been prevented by controls in place. Due to these reasons, the external auditors determined that the control finding is only a significant deficiency and not a material weakness. Effect – The lack of controls around monitoring of new properties and tenants enrolled in the grant programs resulted in fraudulent reimbursement requests being submitted under the following grants: a) Housing Opportunities For Persons With Aids (ALN #14.241) b) Emergency Solutions Grant (ALN #14.231) Cause – Lack of sufficient monitoring controls over applicants, specific to property and tenant validation. Recommendation –The Organization should implement more stringent controls to verify the applying tenant is who they claim to be, verify the ownership and history of the property being rented, and involve more individuals at various stages in the review process to strengthen the risk against collusion.
Significant Deficiency not considered to be Material Weakness 2023-1 Criteria or Specific Requirement - Management is responsible for establishing and maintaining internal control over compliance. Internal control should allow management or employees, to identify fraudulent properties and fraudulent tenants before entering into the program. Condition - The external auditors noted that while there are some controls in place, they were not sufficient to identify the fraudulent properties and tenants that were approved for the granting programs. In addition, there was collusion involved by two case managers that could not have been prevented by controls in place. Due to these reasons, the external auditors determined that the control finding is only a significant deficiency and not a material weakness. Effect – The lack of controls around monitoring of new properties and tenants enrolled in the grant programs resulted in fraudulent reimbursement requests being submitted under the following grants: a) Housing Opportunities For Persons With Aids (ALN #14.241) b) Emergency Solutions Grant (ALN #14.231) Cause – Lack of sufficient monitoring controls over applicants, specific to property and tenant validation. Recommendation –The Organization should implement more stringent controls to verify the applying tenant is who they claim to be, verify the ownership and history of the property being rented, and involve more individuals at various stages in the review process to strengthen the risk against collusion.
Significant Deficiency not considered to be Material Weakness 2023-1 Criteria or Specific Requirement - Management is responsible for establishing and maintaining internal control over compliance. Internal control should allow management or employees, to identify fraudulent properties and fraudulent tenants before entering into the program. Condition - The external auditors noted that while there are some controls in place, they were not sufficient to identify the fraudulent properties and tenants that were approved for the granting programs. In addition, there was collusion involved by two case managers that could not have been prevented by controls in place. Due to these reasons, the external auditors determined that the control finding is only a significant deficiency and not a material weakness. Effect – The lack of controls around monitoring of new properties and tenants enrolled in the grant programs resulted in fraudulent reimbursement requests being submitted under the following grants: a) Housing Opportunities For Persons With Aids (ALN #14.241) b) Emergency Solutions Grant (ALN #14.231) Cause – Lack of sufficient monitoring controls over applicants, specific to property and tenant validation. Recommendation –The Organization should implement more stringent controls to verify the applying tenant is who they claim to be, verify the ownership and history of the property being rented, and involve more individuals at various stages in the review process to strengthen the risk against collusion.