Federal Agency: Department of Housing and Urban Development and Department of Veterans Affairs Federal Program Name: Emergency Solutions Grant Program and VA Homeless Providers Grant and Per Diem Program Assistance Listing Number: 14.231 and 64.024 Federal Award Identification Number and Year: E20DW37001-2021 and ODMH543-1095-659-CM-20 Pass-Through Agency: North Carolina Department of Health and Human Services, Division of Aging and Adult Services Pass-Through Number(s): 00041416 Award Period: 7/29/2020 - 6/30/2021 and 10/1/2019 - 9/30/2021 Type of Finding: Material Weakness in Internal Control over Compliance Criteria or specific requirement: In accordance with 2 CFR 200.318 (a), the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. Condition: During our testing, we noted the Organization did not have documented procurement policies and procedures. Questioned costs: None Context: During our testing, we noted the Organization did not have documented procurement policies. Cause: The Organization did not have established procurement policies and did not have internal controls designed to ensure compliance with Federal procurement standards. Effect: The Organization was not in compliance with the Compliance Supplement and the Code of Federal Regulations related to procurement and suspension and debarment provisions. Repeat Finding: No Recommendation: We recommend that the Organization adopt a formal and written procurement policy. Additionally, management should develop controls to help ensure procurement procedures are followed and to monitor the amount spent with vendors throughout the year to ensure procurement procedures are initiated when the vendor costs exceed the procurement thresholds. Views of responsible officials: There is no disagreement with the finding.
Federal Agency: Department of Veterans Affairs Federal Program Name: VA Homeless Providers Grant and Per Diem Program Assistance Listing Number: 64.024 Federal Award Identification Number and Year: ODMH543-1095-659-CM-20 Pass-Through Agency: None Pass-Through Number(s): None Award Period: 10/1/2019 - 9/30/2021 Type of Finding: - Material Weakness in Internal Control over Compliance - Material Noncompliance (Modified Opinion) Criteria or specific requirement: In accordance with 2 CFR 200.337, the Federal agency or pass through entity, Inspectors General, the Comptroller General of the United States, or any of their authorized representatives must have the right to access any records of the recipient pertinent to the Federal awards to perform audits. In accordance with 2 CFR 200.334, the non-Federal entity must retain all Federal award records for three years from the date of submission of their final financial report. For awards renewed quarterly or annually, records must be retained for three years from the submission of their quarterly or annual financial report. In accordance with §200.334(a) the records must be retained until all litigation, claims, or audit findings involving the records have been resolved and final action taken if any litigation, claim, or audit is started before the expiration of the three-year period. Condition: During our testing, we noted the Organization was unable to provide documentation supporting that they were in compliance with the eligibility requirements under the grant agreement. Questioned costs: None Context: During our testing, records relating to program participants were unavailable. As a result, we were unable to determine if program participants met the eligibility requirements under the program. Cause: The participant records and details were unavailable. Effect: The Organization could have provided benefits to people that were ineligible under the program. Repeat Finding: No. Recommendation: We recommend that management retain all documents including evidence of participant eligibility under the program until the latter of the legally required retention period or completion of required audits and have the records available for audit. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: Department of Veterans AffairsFederal Program Name: VA Homeless Providers Grant and Per Diem Program Assistance Listing Number: 64.024 Federal Award Identification Number and Year: ODMH543-1095-659-CM-20 Pass-Through Agency: None Pass-Through Number(s): None Award Period: 10/1/2019 - 9/30/2021 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: In accordance with the Compliance Supplement, Part 6 - Internal Control, 2 CFR section 200.303 requires that non-Federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-Federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Under the grant agreement, an annual SF-425 was required to be filed within 30 days of calendar year end. Condition: During our testing, we noted the Organization did not submit an annual SF-425 within the required timeline. Questioned costs: None Context: During our testing, it was noted that the SF-425 was not submitted until 4/8/2021. Cause: The Organizations controls were not sufficient to ensure that the report was submitted within the required timeframe. Effect: The Organization was not in compliance with the grant agreement. Repeat Finding: No Recommendation: We recommend the Organization design controls to ensure an adequate review process is in place to ensure that required reports are accurate and submitted within the required timeframe. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: Department of Housing and Urban Development and Department of Veterans Affairs Federal Program Name: Emergency Solutions Grant Program and VA Homeless Providers Grant and Per Diem Program Assistance Listing Number: 14.231 and 64.024 Federal Award Identification Number and Year: E20DW37001-2021 and ODMH543-1095-659-CM-20 Pass-Through Agency: North Carolina Department of Health and Human Services, Division of Aging and Adult Services Pass-Through Number(s): 00041416 Award Period: 7/29/2020 - 6/30/2021 and 10/1/2019 - 9/30/2021 Type of Finding: - Material Weakness in Internal Control over Compliance - Material Noncompliance (Modified Opinion) Criteria or specific requirement: In accordance with 2 CFR 200.302(b)(3), the recipient's financial management system must maintain records sufficient to identify the amount, source, and expenditure of federal funds for federal awards, These records must contain information necessary to identify federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. In accordance with the Compliance Supplement, Part 6 Internal Control, 2 CFR section 200.303 requires that non-Federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-Federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. In accordance with 2 CFR 200.430 (a), costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, when applicable. In accordance with 2 CFR 200.430(g), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. The records must: (1) Be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated, (2) Be incorporated into the official records of the recipient (3) Reasonably reflect the total activity for which the employee is compensated. Condition: During our testing, we noted the Organization did not have adequate controls to ensure that expenditures of federal awards were properly supported, reasonably reflective of the work performed, and properly reviewed and approved. Questioned costs: Assistance listing number: 14.231 Federal award identification number: E20DW37001-2021 Known questioned costs: $19,334 Assistance listing number: 64.024 Federal award identification number: ODMH543-1095-659-CM-20 Know questioned costs: $51,247 Context: During our testing, we noted the following related to the VA Homeless Providers Grant and Per Diem Program: 40 out of 40 payroll transactions tested for allowable costs and allowable activities were not allocated based on actual time worked on the grant and lacked adequate records. 27 out of 40 tested for allowable costs and allowable activities did not have evidence showing expenditures were allowable under the grant 25 out of 40 tested for allowable costs and allowable activities lacked evidence of review and approval 17 out of 17 tested for period of performance did not have evidence of review and approval 5 out of 17 tested for period of performance lacked appropriate supporting documentation showing the expenditures related to the grant During our testing, we noted the following related to the Emergency Solutions Grant Program: 20 of 40 tested for allowable costs and allowable activities lacked evidence showing the expenditures were allowable under the grant 3 of 40 tested for allowable costs and allowable activities were not allowable under the grant. 6 out of 11 payroll transactions tested for allowable costs and allowable activities were not allocated based on actual time worked on the grant and lacked adequate records. Cause: The Organizations controls were not sufficient to ensure that expenditures of federal funds were supported, reasonably reflecting the work performed under the program, reviewed and approved, and only for allowable costs and allowable activities. Effect: The Organization could have incurred expenses that were not allowable under the grant beyond those identified. Repeat Finding: No Recommendation: We recommend the Organization develop a system of internal controls to ensure that salaries and related payroll expenses are tracked to reasonably reflect the actual time spent working on the programs. In addition we recommend that management retain all documents including evidence of review and approval for all expenditures of federal funds until the latter of the legally required retention period or completion of required audits. Views of responsible officials: There is no disagreement with the audit finding.