2023-001 REPORTING – SIGNIFICANT DEFICIENCY Federal Program Community Development Block Grant/Entitlement Grant Cluster ALN 14.218; passed through the County of Berks Emergency Rental Assistance ALN 21.023; passed through the County of Berks Criteria Per 2 CFR §200.303, non-federal entities must establish and maintain effective internal control over federal awards to provide reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of the award. The Compliance Supplement for Reporting requires entities to have controls to ensure accurate and timely submission of required reports. Condition/Cause The auditee did not have any documented or implemented internal controls over the review of federal program reporting requirements. Reports were prepared and submitted without documentation of supervisory review or verification of accuracy and completeness. Management did not design or implement procedures to review reports prior to submission, relying solely on preparer knowledge without formal oversight. Effect Without internal controls, there is an increased risk that reports submitted to the federal agency or pass-through entity may contain inaccurate or incomplete information, potentially resulting in noncompliance with reporting requirements. Questioned Costs None. Repeat Finding Yes; 2022-06. Recommendation We recommend that all grant reports are reviewed by a person independent of the preparer who has knowledge of the grant requirements. This review should include comparing the amounts reported to detailed support for accuracy. We also recommend the Authority review their recordkeeping procedures for documentation related to grant reporting. There should be a process in place to ensure all required documentation is maintained and filed in an orderly system that allows the Authority to locate and provide documentation when required. Management Response In general, management agrees with the finding. It should be noted that internal controls for supervisory review of reporting requirements were in place but were not written controls or processes. Reporting for the CDBG Program is accomplished through the preparation of the annual Comprehensive Annual Performance and Evaluation Report (CAPER). Written policies and procedures for the CAPER have been developed. Reporting for the Emergency Rental Assistance Program is accomplished through an online reporting system of the U.S. Treasury and by email to the Pennsylvania Human Services Department. Written policies and procedures have been developed.
2023-002 PROGRAM INCOME - MATERIAL WEAKNESS Federal Program Community Development Block Grant/Entitlement Grant Cluster ALN 14.218; passed through the County of Berks and HOME Investment Partnership Program ALN 14.239; passed through the County of Berks Criteria Per 2 CFR section 200.307(a), program income must be expended prior to requesting Federal Funds. The Authority receives program income under the above grants and must report the receipt and application of program income within the United States Department of Housing and Urban Development Integrated Disbursement and Information System (IDIS). Condition/Cause During our testing of program income received during 2023, it was noted that the Authority did not report all program income received into IDIS. As a result of not entering all program income into IDIS, our testing indicated that new entitlement funds were drawn down prior to utilizing all available program income on hand. The Authority utilizes a separate general ledger account in the financial reporting software to record all program income received for each federal grant program. The Fiscal Officer enters the program income into IDIS. No internal control existed to ensure the completeness or accuracy of the program income information entered into IDIS. Effect As a result of not recording all program income received timely after it’s receipt, new entitlement funding draws were made before all available program income received was applied to grant expenditures within IDIS. Questioned Costs Home Investment Partnership Program - $34,720 Community Development Block Grant/Entitlement Grant - $326,712 Context The entire population of program income received as reported in the reconciled grant-specific program income general ledger account was reviewed. For the Community Development Block Grant program, three receipts of program income totaling $326,712 were not entered into IDIS. For the HOME Investment Partnership Program, seven receipts totaling $34,720 were not entered into IDIS. Repeat Finding Yes; 2022-007 Recommendation We recommend the Authority develop and implement an internal control procedure to ensure that all program income is entered timely within the IDIS system. Prior to drawing down new entitlement funding, the program income general ledger account associated with the grant program should be reviewed and compared to the program income reported within IDIS to ensure all program income is recorded and fully utilized before drawing down additional entitlement funding. Management Response The Authority implemented a new policy to track and document program income: a. Upon receipt of program income, it shall be entered individually into IDIS and assigned to an activity or activities within fifteen (15) calendar days of receipt. b. At the next request for funds for an activity which includes funding from program income, program income shall be used prior to requesting federal funds for the activity. c. The request for federal funds shall be prepared by the Fiscal Officer and reviewed by one of the Assistant Fiscal Officers to determine if program income is being used prior to the request of federal funds. d. If it has been determined and documented that program income is being used prior to the request for federal funds, the request shall be forwarded to the Executive Director for approval. Current Status of Corrective Action Plan This finding has been resolved by management. The new policy was implemented on April 1, 2025.
2023-003 ALLOWABLE ACTIVITIES AND ALLOWABLE COSTS – SIGNIFICANT DEFICIENCY Federal Program Emergency Rental Assistance ALN 21.023; passed through the County of Berks Criteria 2 CFR Section 200.400 requires recipients and subrecipients of federal grant funds to maintain adequate documentation to support costs charged to a federal award. FAQ #5 issued by the Department of Treasury related to this program indicates that Grantees must obtain, if available, a current lease, signed by the applicant and the landlord or sublessor, that identifies the unit where the applicant resides and establishes the rental payment amount. Additionally, FAQ #6 notes that all payments for utilities and home energy costs should be supported by a bill, invoice, or evidence of payment to the provider of the utility or home energy service. Condition/Cause For 23 out of 60 cases tested, the amount paid for rent or utilities did not agree to a lease agreement or bills on file for the following reasons: (1) clerical errors, (2) duplicate payments due to multiple staff working on the same file, or (3) failure to request or maintain support before payment was made. Known questioned costs associated with the 23 exceptions noted in our testing were $9,867. Based on the projection of the sampling results to the remaining population, we project additional likely questioned costs of approximately $173,400. The Authority did not have controls in place to detect the noncompliance prior to issuing payments. Effect The Authority is not in compliance with the 2 CFR Part 200 requirement to maintain adequate documentation to support costs charged to a federal program. Questioned Costs Known questioned costs are $9,868, projected costs $173,400. Repeat Finding Yes; 2022-005. Recommendation We recommend the Authority revisit and strengthen internal controls over tracking individual payments for transactions entered as batches, particularly when related to federal awards. We encourage the Authority to continue working to identify the individual transactions making up the remainder of the federal expenditures under this program. We also recommend the Authority revisit and strengthen internal controls over allowable activities and allowable costs related to grant programs. Management Response The Authority launched the Emergency Rental Assistance Program (ERAP) with little administrative guidance from the U.S. Treasury. The Authority contracted with the Berks Coalition to End Homelessness (BCEH) to undertake various aspects of the Emergency Rental Assistance Program and in the late fall of 2021, the Authority began reviewing all case documentation provided by BCEH. This review eliminated the vast majority of the errors noted. The Authority also updated case documentation checklists as well as provided training for staff involved with ERAP. Current Status of Corrective Action Plan The Authority has resolved this finding subsequent to December 31, 2023. An additional review was added at the close of each case.
2023-004 TIMING OF AUDIT COMPLETION - SIGNIFICANT DEFICIENCY Federal Program Community Development Block Grant/Entitlement Grant Cluster ALN 14.218; passed through the County of Berks HOME Investment Partnership Program ALN 14.239; passed through the County of Berks Emergency Rental Assistance ALN 21.023; passed through the County of Berks Coronavirus State and Local Fiscal Recovery ALN 21.027; passed through the Commonwealth of Pennsylvania Department of Community and Economic Development Criteria Per 2 CFR 200.512(a), auditees must submit the reporting package and Data Collection Form within the earlier of 30 days after receipt of the auditor’s report or nine months after the end of the audit period. Condition The Authority did not submit the Single Audit reporting package and Data Collection Form to the Federal Audit Clearinghouse within the required timeframe of nine months after the end of the audit period. The 2022 reporting package was submitted on May 7, 2025, which was after the nine-month due date of September 30, 2023. In addition, the 2023 reporting package was not submitted by the September 30, 2024 due date. Cause The significant increase in grant funding limited staff capacity to prepare for and provide information requested for the audit. For example, key reconciliations needed to support balances were not prepared by management prior to the audit. Effect The delay in the submission of the data collection form and audit to the Federal Audit Clearinghouse will result in the Authority not being considered a low-risk auditee as defined by the Uniform Guidance for the following two years. Questioned Costs None Context The lack of staff resources to timely close the accounting records has resulted in compounded delays in closing the subsequent 2023 and 2024 year-ends as well. The Authority has taken steps such as hiring additional accounting staff, and engaging a consulting firm to assist with bringing the accounting records up to date and past-due audits submitted to the Federal Audit Clearinghouse. Repeat Finding Yes; 2022-003. Recommendation We recommend that the Authority continue to execute their plan to bring the accounting records up to date and submit outstanding audited financial statements to the Federal Audit Clearinghouse. Management Response The Authority will continue to execute their plan to bring the accounting records up to date and submit outstanding audited financial statements to the Federal Audit Clearinghouse. Current Status of Corrective Action Plan While the Authority continues to be delinquent on audit completions, a consulting firm was hired to assist with bringing records up to date. Accounts have been reconciled through December 31, 2024 prior to the audit commencing. Additionally, the Authority has entered into a contract with an auditing firm to complete audits for 2023 and 2024 by December 2025.