Audit 343995

Finding 2023‐001: Allowable costs and activities – significant deficiency in internal controls over compliance and compliance finding specific to payroll allocation. Coronavirus State and Local Fiscal Recovery Funds ALN 21.027 (CSLFRF) Criteria: Housing Forward’s internal control procedures over compliance specify that all employees maintain timesheets and hours and rates per timesheets agree to the payroll register and amount allocated to grant activities. Condition: During allowable cost and activities testing for the CSLFRF grant, 2 out of 40 timesheets tested did not agree to the number of hours charged to the grant. Cause: Although the 2 timesheets were filled out completely, signed and reviewed by a supervisor, there was an error in the data entry into the accounting software. Amounts were calculated correctly, but inadvertently assigned to the wrong grant. General ledger detail was provided to the funder as part of the monthly reporting, but neither the funder nor Housing Forward staff noticed this error. Effect: Housing Forward’s reporting of grant time and effort was not fully documented, in accordance with internal control over compliance procedures, due to data entry error. The cumulative effect of the exceptions noted during testing resulted in the grant being overcharged by Housing Forward. Questioned Costs: Known questioned costs totaling $2,864.86 with likely questioned costs totaling $32,206.61 based on extrapolating the known overcharged amount to the entire payroll population for the year of audit. Recommendation: Management should ensure amount charged to the grants agree to the timesheets and payroll registers before the request for reimbursement is submitted. Management’s Response: See corrective action plan

Finding 2023‐001: Allowable costs and activities – significant deficiency in internal controls over compliance and compliance finding specific to payroll allocation. Coronavirus State and Local Fiscal Recovery Funds ALN 21.027 (CSLFRF) Criteria: Housing Forward’s internal control procedures over compliance specify that all employees maintain timesheets and hours and rates per timesheets agree to the payroll register and amount allocated to grant activities. Condition: During allowable cost and activities testing for the CSLFRF grant, 2 out of 40 timesheets tested did not agree to the number of hours charged to the grant. Cause: Although the 2 timesheets were filled out completely, signed and reviewed by a supervisor, there was an error in the data entry into the accounting software. Amounts were calculated correctly, but inadvertently assigned to the wrong grant. General ledger detail was provided to the funder as part of the monthly reporting, but neither the funder nor Housing Forward staff noticed this error. Effect: Housing Forward’s reporting of grant time and effort was not fully documented, in accordance with internal control over compliance procedures, due to data entry error. The cumulative effect of the exceptions noted during testing resulted in the grant being overcharged by Housing Forward. Questioned Costs: Known questioned costs totaling $2,864.86 with likely questioned costs totaling $32,206.61 based on extrapolating the known overcharged amount to the entire payroll population for the year of audit. Recommendation: Management should ensure amount charged to the grants agree to the timesheets and payroll registers before the request for reimbursement is submitted. Management’s Response: See corrective action plan