United States Department of the Treasury Reference Number: 2022-005 Program: 21.023 COVID-19 Emergency Rental Assistance Federal Award Number: ERA-2101123208 Type of Finding: Significant Deficiency in Internal Controls over Compliance Compliance Requirement: Allowable Cost / Cost Principles Condition: The following conditions were revealed during audit testing of the ERA Program: As reported in financial statement finding 2022-002, during the year ended June 30, 2021, DSHA commenced operation of the ERA Program which was funded by the Consolidated Appropriations Act, 2020 and the American Rescue Plan Act of 2021. DSHA identified potential errors in the processing and payment of assistance totaling approximately $904,000 that occurred during the period of May 1, 2021 through September 30, 2021. We consider DSHA?s design over the processing of payments included the following steps, performed by ERA Program Management internal control design weaknesses which, together, we consider a significant deficiency: ? The vendor information for some landlords, deemed eligible for receiving rental assistance for eligible renters, from the ERA Program software, was manually matched with pre-existing DSHA vendor information in the MITAS accounting system, to facilitate the payment of rental assistance. The matching of the landlord information to the vendor information in the MITAS vendor database was not adequately reviewed by DSHA personnel prior to initiating vendor payments, resulting in erroneous payments. ? ERA Program management uploaded vendor landlord payments calculated in the ERA Program software to DSHA?s accounting system without a detailed review, before disbursement of the funds, to verify that the payments were directed to the correct landlord(s). Criteria: DSHA management is responsible for establishing and maintaining effective internal control over compliance with the provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material on the federal program. Questioned Costs: None. DSHA?s remediation plan includes funding of payment errors from non-federal funds. Effect: Federal program expenditures of rental assistance were overpaid, and errors were made in the disbursement of approved rental assistance. Cause: Internal controls over compliance were not appropriately designed, implemented, or operated to address the risk of noncompliance with the federal program requirements. Recommendation: We recommend DSHA enhance its policies and procedures for processing rental assistance applications to ensure compliance with the federal program?s requirements.
United States Department of the Treasury Reference Number: 2022-006 Program: 21.023 COVID-19 Emergency Rental Assistance Federal Award Number: ERA-2101123208 and ERAE0280 Type of Finding: Noncompliance; Significant Deficiency in Internal Controls over Compliance Compliance Requirement: Eligibility Condition: Audit testing of a statistical sample of 40 cases processed during the period from September XX1, 2021 through June 30, 2022, revealed the following: ? Three cases revealed that three applicants received assistance in excess of the allowable maximum assistance resulting in overpayments of $11,225. Additionally, audit testing noted one of these applicants received an additional overpayment of $3,250 during the year ending June 30, 2023. The overpayments resulted from errors in applying statutorily established limits for rental assistance, duplicating assistance payments for the same months for one applicant, and the payment of a security deposit assistance in excess of one month?s rent. ? Three cases that received the correct amount of assistance were not processed in accordance with the program requirements. Specific supporting documentation required by the program guidelines was not obtained to support assistance payments. Criteria: The following summarizes the applicable portions of the ERA program requirements: ? United States Department of the Treasury Program FAQs updated July 6, 2022: ERA1 allows an eligible household to receive up to 12 months of assistance (plus an additional three (3) months if necessary to ensure housing stability for the household, subject to the availability of funds). ERA2 allows an eligible household to receive up to 15 months of assistance (plus an additional three (3) months if necessary to ensure housing stability for the household, subject to the availability of funds). The amount of a security deposit should not exceed one month?s rent, except in cases where a higher amount is reasonable and customary in the local housing market. DSHA?s ERA program design and guidelines limits security deposit assistance to one month?s rent. Grantees must establish policies and procedures to govern the implementation of their ERA programs consistent with the statutes and the ERA program requirements. ? 501(k)(3)(B) of Division N of the Consolidated Appropriations Act, 2021, and 2 CFR 200.403 requires a grantee to confirm that the ERA1 assistance does not duplicate any other assistance, including federal, state, or local assistance provided for the same costs. Questioned Costs: Audit testing of 40 cases totaling $243,254 of assistance identified $11,295 of overpayments. Context: During the period of September 1, 2021 through June 30, 2022, DSHA approved and disbursed assistance for 9,986 cases totaling $64,082,208. Effect: Federal program expenditures of rental assistance were overpaid. Cause: Internal controls over compliance were not appropriately designed, implemented, or operated to appropriately address the risk of noncompliance with the federal program requirements. Recommendation: We recommend DSHA enhance its policies and procedures for processing rental assistance applications to ensure compliance with the federal program?s requirements.
United States Department of the Treasury Reference Number: 2022-007 Program: 21.023 COVID-19 Emergency Rental Assistance Federal Award Number: ERA-2101123208 Type of Finding: Noncompliance; Significant Deficiency in Internal Controls over Compliance Compliance Requirement: Eligibility Condition: Audit testing of a statistical sample of 40 rental assistance applications processed during the year ended June 30, 2022, in the prior processing system (that was replaced in August 2021) revealed one instance where 16 months of rental assistance was paid for a household using ERA1 funds, when a maximum of 15 months of rental assistance is allowed to be paid with ERA1 funds. one application only included one sign off, rather than the required two, from an ERA Program rental assistance processor. Criteria: The following summarizes the applicable portions of the ERA program requirements as detailed in United States Department of the Treasury Program FAQs updated July 6, 2022: ? ERA1 allows an eligible household to receive up to 12 months of assistance (plus an additional three (3) months if necessary to ensure housing stability for the household, subject to the availability of funds). Grantees must establish policies and procedures to govern the implementation of their ERA programs consistent with the statutes and the ERA program requirements. Questioned Costs: Audit testing of 40 cases totaling $221,269 of assistance identified $900 of overpayments. Context: . During the period of July 1, 2021 through August 2021, DSHA approved and disbursed assistance for 1,194 cases totaling $7,438,552. Effect: Federal program expenditures of rental assistance were overpaid. Cause: Internal controls over compliance were not appropriately designed, implemented, or operated to appropriately address the risk of noncompliance with the federal program requirements. Recommendation: We recommend DSHA enhance its policies and procedures for processing rental assistance applications to ensure compliance with the federal program?s requirements.
United States Department of the Treasury Reference Number: 2022-008 Program: 21.023 COVID-19 Emergency Rental Assistance Federal Award Number: ERA-2101123208 & ERAE0280 Type of Finding: Noncompliance; Significant Deficiency in Internal Controls over Compliance Compliance Requirement: Reporting & Special Tests and Provisions Condition: The following conditions were found during audit testing of four monthly reports and one quarterly report for ERA 1 and ERA 2: DSHA internal procedures over the reporting did not require a secondary review prior to submission of the reports. 2. Supporting documentation was not retained for information reported on the reports selected for testing. We were unable to reconcile amounts reported on monthly and quarterly reports submitted to the U.S. Treasury to underlying records. Additionally, audit testing found the differences noted below between the reports submitted and records obtained during the audit: a. The ERA 1 report for the quarter ended June 30, 2022, reported program spending and obligations totaling $166,277,794. Actual ERA 1 expenditures through June 30, 2022, totaled approximately $93,350,000. Program obligations were not tracked or reported. b. We found the following differences in Federal Funding Accountability and Transparency Act reporting on the quarterly reports submitted to the U.S. Treasury: One subrecipient?s TIN number was appeared incorrectly in the subrecipients section of the quarterly report. ii. DSHA could not provide evidence that two program subrecipients were correctly included in the quarterly report. The following U.S. Treasury required reports were not submitted timely: Reports for the quarter ended September 30, 2021 were due on October 29, 2021 and were submitted on December 28, 2021. Reports for the quarter ended June 30, 2022, Were due to the U.S. Treasury on July 15, 2022 and were submitted on August 15, 2022. Criteria: United States Department of the Treasury ERA Program Reporting Guidance version 3.2 was issued March 29, 2022. The following sections of the Reporting guidance contain the key criteria: Pages 10 and 11 detail monthly and quarterly reporting deadlines for the entire period of performance. Page 38 includes the text of the Report Certification and Submission representation that includes the following: ?I certify that the information provided is accurate and complete after reasonable inquiry of people, systems, and other information available to the ERA Recipient. ??. CFR ? 200.303 - Internal controls requires the non-federal entity to 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 the terms and conditions of the federal award. Questioned Costs: None. Context: . Monthly and Quarterly reports were required to be submitted for both ERA1 and ERA2. Effect: Reports required by the U.S. Treasury were not submitted timely and, accurately, and were not supported by contemporaneously prepared supporting documentation. Information necessary for the U.S. Treasury to calculate the required reallocations was not accurately reported on the quarterly reports submitted.
United States Department of the Treasury Reference Number: 2022-005 Program: 21.023 COVID-19 Emergency Rental Assistance Federal Award Number: ERA-2101123208 Type of Finding: Significant Deficiency in Internal Controls over Compliance Compliance Requirement: Allowable Cost / Cost Principles Condition: The following conditions were revealed during audit testing of the ERA Program: As reported in financial statement finding 2022-002, during the year ended June 30, 2021, DSHA commenced operation of the ERA Program which was funded by the Consolidated Appropriations Act, 2020 and the American Rescue Plan Act of 2021. DSHA identified potential errors in the processing and payment of assistance totaling approximately $904,000 that occurred during the period of May 1, 2021 through September 30, 2021. We consider DSHA?s design over the processing of payments included the following steps, performed by ERA Program Management internal control design weaknesses which, together, we consider a significant deficiency: ? The vendor information for some landlords, deemed eligible for receiving rental assistance for eligible renters, from the ERA Program software, was manually matched with pre-existing DSHA vendor information in the MITAS accounting system, to facilitate the payment of rental assistance. The matching of the landlord information to the vendor information in the MITAS vendor database was not adequately reviewed by DSHA personnel prior to initiating vendor payments, resulting in erroneous payments. ? ERA Program management uploaded vendor landlord payments calculated in the ERA Program software to DSHA?s accounting system without a detailed review, before disbursement of the funds, to verify that the payments were directed to the correct landlord(s). Criteria: DSHA management is responsible for establishing and maintaining effective internal control over compliance with the provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material on the federal program. Questioned Costs: None. DSHA?s remediation plan includes funding of payment errors from non-federal funds. Effect: Federal program expenditures of rental assistance were overpaid, and errors were made in the disbursement of approved rental assistance. Cause: Internal controls over compliance were not appropriately designed, implemented, or operated to address the risk of noncompliance with the federal program requirements. Recommendation: We recommend DSHA enhance its policies and procedures for processing rental assistance applications to ensure compliance with the federal program?s requirements.
United States Department of the Treasury Reference Number: 2022-006 Program: 21.023 COVID-19 Emergency Rental Assistance Federal Award Number: ERA-2101123208 and ERAE0280 Type of Finding: Noncompliance; Significant Deficiency in Internal Controls over Compliance Compliance Requirement: Eligibility Condition: Audit testing of a statistical sample of 40 cases processed during the period from September XX1, 2021 through June 30, 2022, revealed the following: ? Three cases revealed that three applicants received assistance in excess of the allowable maximum assistance resulting in overpayments of $11,225. Additionally, audit testing noted one of these applicants received an additional overpayment of $3,250 during the year ending June 30, 2023. The overpayments resulted from errors in applying statutorily established limits for rental assistance, duplicating assistance payments for the same months for one applicant, and the payment of a security deposit assistance in excess of one month?s rent. ? Three cases that received the correct amount of assistance were not processed in accordance with the program requirements. Specific supporting documentation required by the program guidelines was not obtained to support assistance payments. Criteria: The following summarizes the applicable portions of the ERA program requirements: ? United States Department of the Treasury Program FAQs updated July 6, 2022: ERA1 allows an eligible household to receive up to 12 months of assistance (plus an additional three (3) months if necessary to ensure housing stability for the household, subject to the availability of funds). ERA2 allows an eligible household to receive up to 15 months of assistance (plus an additional three (3) months if necessary to ensure housing stability for the household, subject to the availability of funds). The amount of a security deposit should not exceed one month?s rent, except in cases where a higher amount is reasonable and customary in the local housing market. DSHA?s ERA program design and guidelines limits security deposit assistance to one month?s rent. Grantees must establish policies and procedures to govern the implementation of their ERA programs consistent with the statutes and the ERA program requirements. ? 501(k)(3)(B) of Division N of the Consolidated Appropriations Act, 2021, and 2 CFR 200.403 requires a grantee to confirm that the ERA1 assistance does not duplicate any other assistance, including federal, state, or local assistance provided for the same costs. Questioned Costs: Audit testing of 40 cases totaling $243,254 of assistance identified $11,295 of overpayments. Context: During the period of September 1, 2021 through June 30, 2022, DSHA approved and disbursed assistance for 9,986 cases totaling $64,082,208. Effect: Federal program expenditures of rental assistance were overpaid. Cause: Internal controls over compliance were not appropriately designed, implemented, or operated to appropriately address the risk of noncompliance with the federal program requirements. Recommendation: We recommend DSHA enhance its policies and procedures for processing rental assistance applications to ensure compliance with the federal program?s requirements.
United States Department of the Treasury Reference Number: 2022-007 Program: 21.023 COVID-19 Emergency Rental Assistance Federal Award Number: ERA-2101123208 Type of Finding: Noncompliance; Significant Deficiency in Internal Controls over Compliance Compliance Requirement: Eligibility Condition: Audit testing of a statistical sample of 40 rental assistance applications processed during the year ended June 30, 2022, in the prior processing system (that was replaced in August 2021) revealed one instance where 16 months of rental assistance was paid for a household using ERA1 funds, when a maximum of 15 months of rental assistance is allowed to be paid with ERA1 funds. one application only included one sign off, rather than the required two, from an ERA Program rental assistance processor. Criteria: The following summarizes the applicable portions of the ERA program requirements as detailed in United States Department of the Treasury Program FAQs updated July 6, 2022: ? ERA1 allows an eligible household to receive up to 12 months of assistance (plus an additional three (3) months if necessary to ensure housing stability for the household, subject to the availability of funds). Grantees must establish policies and procedures to govern the implementation of their ERA programs consistent with the statutes and the ERA program requirements. Questioned Costs: Audit testing of 40 cases totaling $221,269 of assistance identified $900 of overpayments. Context: . During the period of July 1, 2021 through August 2021, DSHA approved and disbursed assistance for 1,194 cases totaling $7,438,552. Effect: Federal program expenditures of rental assistance were overpaid. Cause: Internal controls over compliance were not appropriately designed, implemented, or operated to appropriately address the risk of noncompliance with the federal program requirements. Recommendation: We recommend DSHA enhance its policies and procedures for processing rental assistance applications to ensure compliance with the federal program?s requirements.
United States Department of the Treasury Reference Number: 2022-008 Program: 21.023 COVID-19 Emergency Rental Assistance Federal Award Number: ERA-2101123208 & ERAE0280 Type of Finding: Noncompliance; Significant Deficiency in Internal Controls over Compliance Compliance Requirement: Reporting & Special Tests and Provisions Condition: The following conditions were found during audit testing of four monthly reports and one quarterly report for ERA 1 and ERA 2: DSHA internal procedures over the reporting did not require a secondary review prior to submission of the reports. 2. Supporting documentation was not retained for information reported on the reports selected for testing. We were unable to reconcile amounts reported on monthly and quarterly reports submitted to the U.S. Treasury to underlying records. Additionally, audit testing found the differences noted below between the reports submitted and records obtained during the audit: a. The ERA 1 report for the quarter ended June 30, 2022, reported program spending and obligations totaling $166,277,794. Actual ERA 1 expenditures through June 30, 2022, totaled approximately $93,350,000. Program obligations were not tracked or reported. b. We found the following differences in Federal Funding Accountability and Transparency Act reporting on the quarterly reports submitted to the U.S. Treasury: One subrecipient?s TIN number was appeared incorrectly in the subrecipients section of the quarterly report. ii. DSHA could not provide evidence that two program subrecipients were correctly included in the quarterly report. The following U.S. Treasury required reports were not submitted timely: Reports for the quarter ended September 30, 2021 were due on October 29, 2021 and were submitted on December 28, 2021. Reports for the quarter ended June 30, 2022, Were due to the U.S. Treasury on July 15, 2022 and were submitted on August 15, 2022. Criteria: United States Department of the Treasury ERA Program Reporting Guidance version 3.2 was issued March 29, 2022. The following sections of the Reporting guidance contain the key criteria: Pages 10 and 11 detail monthly and quarterly reporting deadlines for the entire period of performance. Page 38 includes the text of the Report Certification and Submission representation that includes the following: ?I certify that the information provided is accurate and complete after reasonable inquiry of people, systems, and other information available to the ERA Recipient. ??. CFR ? 200.303 - Internal controls requires the non-federal entity to 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 the terms and conditions of the federal award. Questioned Costs: None. Context: . Monthly and Quarterly reports were required to be submitted for both ERA1 and ERA2. Effect: Reports required by the U.S. Treasury were not submitted timely and, accurately, and were not supported by contemporaneously prepared supporting documentation. Information necessary for the U.S. Treasury to calculate the required reallocations was not accurately reported on the quarterly reports submitted.