Audit 390612

2025-001 Information on the Federal Program: Assistance Listing Number 14.267; Continuum of Care Program; Department of Housing and Urban Development Criteria Or Specific Requirement: Activities Allowed/Unallowed and Cost Principles: As stated in 45 CFR §75.303, the non-federal entity (i.e., the Organization) must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations and terms and conditions of the federal award. Condition: The Organization identified two tenants whose rent amounts used in the rental assistance calculations did not agree with the executed lease agreements, resulting in incorrect reimbursement under the grant. Cause: The Organization did not consistently follow its established internal control policies and procedures designed to ensure that tenant rent amounts agreed to the rental assistance calculations. Effect or Potential Effect: There is a risk of overstating expenditures to the program, resulting in actual and/or potential questioned costs. Questioned Costs: $540 Context: During testing of rent reasonableness determinations, incorrect rent amounts for two of fifteen tenants were used in calculating the grant drawdown, resulting in an overstatement of rental assistance charged to the grant. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend that an individual with sufficient knowledge of the federal program perform a detailed review of rental assistance calculations for each lease. Additionally, management should consider implementing an additional level of review prior to final submission to the federal government. Views of Responsible Officials and Planned Corrective Actions: Management has corrected the rental assistance payments in the system to prevent further errors and will reduce future drawdowns for the two affected tenants to make the federal government whole.