Audit 326953

Finding 2023-001 Information on the federal program: Community Development Block Grant, CFDA #14.218, Grant Period 1/1/23 - 12/31/23 Compliance/Internal Control over Compliance: Cash Management Criteria or specific requirement: 2 CFR Part 200 Appendix XI Compliance Supplement, Section 3.2C. Cash management requires that program costs must be paid by the Township before reimbursement is requested from the Federal government. Also, interest earned in excess of $100 on grant advances held in an interest-bearing account must be remitted to the U.S. Treasury. Condition: The Township did not initiate drawdowns for some expenses that had been paid. Interest earnings exceeded $100 and were not remitted to the U.S. Treasury as required. Questioned costs: Undetermined Context: During our review of cash management, we noted that there were various expenditures made that had yet to be drawn down through IDIS. Effect: The Township’s prior year substantial reconciled balance was utilized as program income for various eligible projects, however, now that other expenses have been made with no monies drawn down, the account is underfunded. In addition, interest is accumulating on grant advances in excess of $100 and not being remitted to the U.S. Treasury. Cause: Financial drawdown policies and procedures are lacking and/or inadequate. Drawdown procedures are not consistently performed as expenses are incurred. Recommendation: The Township’s drawdown policies and procedures be enhanced; that once expenditures are processed for payment, the drawdown should be initiated through IDIS to ensure all expenses are properly drawn down and proper cash flow is maintained. Interest earned over $100 be remitted to the U.S. Treasury. Management’s response: The Township of Bloomfield should establish financial drawdown policies and provide training to its staff to ensure compliance with the cash management compliance requirements of the Community Development Block Grant Program.

Finding 2023-002 Information on the federal program: Community Development Block Grant, CFDA #14.218, Grant Period 1/1/23 - 12/31/23 Compliance/Internal Control over Compliance: Reporting Criteria or specific requirement: The grantee must file the IDISC04PR29 Cash on Hand quarterly report on a timely basis. This report must be in agreement with the grantees reconciled cash balances. Condition: The Township’s IDISC04PR29 Cash on Hand Quarterly reports did not agree to the reconciled cash balances in the Community Development Trust Fund, and they were submitted late. Questioned costs: Undetermined Context: During the course of our audit, we noted that not all submitted Cash on Hand Quarterly reports agreed to the reconciled cash balances of the Townships CDBG Bank Account and, in some instance, they were not submitted on a timely basis. Effect: The Township is not in compliance with federal requirements regarding the reporting of cash on hand per the Compliance Supplement. Cause: The Township of Bloomfield is misreporting the applicable Cash on Hand. Recommendation: The Township takes more care to ensure that they are reporting the correct cash on hand balances, and that these reports are submitted on time. Management’s response: The Township of Bloomfield should establish policies to ensure that complete and accurate Cash on Hand reporting occurs.

Finding 2023-003 Information on the federal program: U.S. Department of Housing and Urban Development Section 7 Housing Choice Voucher Program, CFDA #14.871, Grant Period 1/1/23 - 12/31/23 Compliance/Internal Control over Compliance: Eligibility Criteria or specific requirement: Tenant Files. The PHA must do the following: As a condition of admission or continued occupancy, require the tenant and other family member to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24CFR sections 5.230, 5.609, and 982.516). These files are required to be maintained and available for examination at the time of audit. Condition: Based upon inspection of the Agency’s files and on discussion with management, there were discrepancies noted on the HUD-50058’s, Questioned costs: $6,831 Context: Of a sample size of thirteen (13) tenant files we noted the following: • Income was miscalculated on the HUD-50058 form in one (1) file. Effect: The Section 8 Housing Choice Vouchers Program is in non-compliance with the eligibility type of compliance related to the maintenance of tenant files. Cause: There is a significant deficiency in internal controls over the compliance for the eligibility type of compliance related to the maintenance of tenant files. Recommendation: We recommend the Agency design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement. Management’s response: The Agency accepts the recommendation of the auditor. The Agency will increase oversight in the Section 8 Housing Choice Vouchers Program to ensure that established internal control policies are being followed on a timely basis.

Finding 2023-001 Information on the federal program: Community Development Block Grant, CFDA #14.218, Grant Period 1/1/23 - 12/31/23 Compliance/Internal Control over Compliance: Cash Management Criteria or specific requirement: 2 CFR Part 200 Appendix XI Compliance Supplement, Section 3.2C. Cash management requires that program costs must be paid by the Township before reimbursement is requested from the Federal government. Also, interest earned in excess of $100 on grant advances held in an interest-bearing account must be remitted to the U.S. Treasury. Condition: The Township did not initiate drawdowns for some expenses that had been paid. Interest earnings exceeded $100 and were not remitted to the U.S. Treasury as required. Questioned costs: Undetermined Context: During our review of cash management, we noted that there were various expenditures made that had yet to be drawn down through IDIS. Effect: The Township’s prior year substantial reconciled balance was utilized as program income for various eligible projects, however, now that other expenses have been made with no monies drawn down, the account is underfunded. In addition, interest is accumulating on grant advances in excess of $100 and not being remitted to the U.S. Treasury. Cause: Financial drawdown policies and procedures are lacking and/or inadequate. Drawdown procedures are not consistently performed as expenses are incurred. Recommendation: The Township’s drawdown policies and procedures be enhanced; that once expenditures are processed for payment, the drawdown should be initiated through IDIS to ensure all expenses are properly drawn down and proper cash flow is maintained. Interest earned over $100 be remitted to the U.S. Treasury. Management’s response: The Township of Bloomfield should establish financial drawdown policies and provide training to its staff to ensure compliance with the cash management compliance requirements of the Community Development Block Grant Program.

Finding 2023-002 Information on the federal program: Community Development Block Grant, CFDA #14.218, Grant Period 1/1/23 - 12/31/23 Compliance/Internal Control over Compliance: Reporting Criteria or specific requirement: The grantee must file the IDISC04PR29 Cash on Hand quarterly report on a timely basis. This report must be in agreement with the grantees reconciled cash balances. Condition: The Township’s IDISC04PR29 Cash on Hand Quarterly reports did not agree to the reconciled cash balances in the Community Development Trust Fund, and they were submitted late. Questioned costs: Undetermined Context: During the course of our audit, we noted that not all submitted Cash on Hand Quarterly reports agreed to the reconciled cash balances of the Townships CDBG Bank Account and, in some instance, they were not submitted on a timely basis. Effect: The Township is not in compliance with federal requirements regarding the reporting of cash on hand per the Compliance Supplement. Cause: The Township of Bloomfield is misreporting the applicable Cash on Hand. Recommendation: The Township takes more care to ensure that they are reporting the correct cash on hand balances, and that these reports are submitted on time. Management’s response: The Township of Bloomfield should establish policies to ensure that complete and accurate Cash on Hand reporting occurs.

Finding 2023-003 Information on the federal program: U.S. Department of Housing and Urban Development Section 7 Housing Choice Voucher Program, CFDA #14.871, Grant Period 1/1/23 - 12/31/23 Compliance/Internal Control over Compliance: Eligibility Criteria or specific requirement: Tenant Files. The PHA must do the following: As a condition of admission or continued occupancy, require the tenant and other family member to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24CFR sections 5.230, 5.609, and 982.516). These files are required to be maintained and available for examination at the time of audit. Condition: Based upon inspection of the Agency’s files and on discussion with management, there were discrepancies noted on the HUD-50058’s, Questioned costs: $6,831 Context: Of a sample size of thirteen (13) tenant files we noted the following: • Income was miscalculated on the HUD-50058 form in one (1) file. Effect: The Section 8 Housing Choice Vouchers Program is in non-compliance with the eligibility type of compliance related to the maintenance of tenant files. Cause: There is a significant deficiency in internal controls over the compliance for the eligibility type of compliance related to the maintenance of tenant files. Recommendation: We recommend the Agency design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement. Management’s response: The Agency accepts the recommendation of the auditor. The Agency will increase oversight in the Section 8 Housing Choice Vouchers Program to ensure that established internal control policies are being followed on a timely basis.