Audit 369520

Internal Control over Special Tests and Provisions Federal Agency: U.S. Department of Housing and Urban Development Assistance Listing Number: 14.267 Federal Program Name: Continuum of Care Pass-through Entity: King County Regional Homelessness Authority Pass-through Award Numbers: DA-202212-01215 Criteria: Under 2 CFR 200.303(a), the non-federal entity must establish and maintain effective internal control over compliance with the special tests and provisions requirements of federal awards. When funds are used to pay for rent, the Continuum of Care program includes a requirement that recipients must determine that the rent paid is reasonable in relation to rents being charged in the area for comparable space. Condition: Documentation of the rent reasonable determination could not be located for one of seven program participants selected for testing. Cause and Context: The Organization had been dealing with staff turnover in late 2023 when this program participant initially applied for assistance and had not retained documentation of its determination of rent reasonableness. Effect: Inadequate internal controls over requirements for special tests and provisions may result in the Organization incurring disallowed costs. Questioned Costs: Documentation of the rent reasonableness determination had not been performed for costs totaling $3,935 during the year ended December 31, 2024. Recommendation: We recommend that management verifies documentation of rent reasonableness verifications for all participants before rent payments are authorized. Views of Responsible Officials: There is no disagreement with the finding.