2024-001 REPORTING - SIGNIFICANT DEFICIENCY Federal Program Community Development Block Grant-Entitlement/Special Purpose Grants Cluster ALN 14.218; passed through the County of Berks COVID-19 - 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 OMB 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; 2023-01. 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. This finding has since been resolved in 2025, with a new policy developed and implemented on December 12, 2025.
2024-002 PROGRAM INCOME – SIGNIFICANT DEFICIENCY Federal Program Community Development Block Grant-Entitlement/Special Purpose Grants Cluster ALN 14.218; 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 2024, it was noted that the Authority did properly report all program income received during the year into IDIS and applied all program income received towards expenditures by the end of the year. However, it was noted that there were two instances in which additional entitlement funds were drawn down before all available program income was applied to expenditures. 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 and to ensure all available program income was applied before drawing down entitlement funding. Effect Due to the lack of internal controls requiring the review of drawdowns, additional entitlement funding was drawn down twice during the year before all available program income was applied in the IDIS system. Questioned Costs None Context The entire population of program income received as reported in the reconciled grant-specific program income general ledger account was reviewed. The timing of the cash receipts was compared to the timing of the entitlement draws made in the IDIS system to determine if all available program income was applied to expenditures before new entitlement draws were made. Repeat Finding Yes; 2023-002 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. This finding has since been resolved in 2025, with a new policy developed and implemented on April 1, 2025.
2024-003 TIMING OF AUDIT COMPLETION - SIGNIFICANT DEFICIENCY Federal Program Community Development Block Grant-Entitlement/Special Purpose Grants Cluster ALN 14.218: passed through the County of Berks COVID-19 - Emergency Rental Assistance ALN 21.023; passed through the County of Berks COVID-19 - 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 2023 reporting package was submitted on December 24, 2025, which was after the nine month due date of September 30, 2024. In addition, the 2024 reporting package was not submitted by the September 30, 2025 due date. Cause In 2021, the Authority received a significant increase in grant funding. This increase in funding, along with limited staff resources at the time resulted in delays in closing the 2021 year-end and resulted in compounded delays in closing subsequent years as well. 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 Repeat Finding Yes; 2023-004. 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 While the Authority continues to be delinquent on the current year audit completion, a consulting firm was hired to assist with bringing records up to date. The Authority also had hired an assistant fiscal officer in the fall of 2021 and another assistant fiscal officer in the fall of 2022. As a result of the hiring, job responsibilities have been re-assigned and data gathering for future audits will occur in a timely manner. Accounts have been reconciled through December 31, 2025 prior to this audit commencing. The Authority will continue to execute their plan to have the audits completed on a timely basis and expects to submit the audited financial statements and single audit reporting package for the year ended December 31, 2025 to the Federal Audit Clearinghouse timely.
2024-004 DOCUMENTATION OF SECTION 3 CLAUSES IN PROCUREMENT CONTRACTS - SIGNIFICANT DEFICIENCY Federal Program Community Development Block Grant-Entitlement/Special Purpose Grants Cluster ALN 14.218 passed through the County of Berks Criteria Procurement contracts and bidding documents for federally assisted construction projects must include all applicable Federal labor standards and program requirements, including Section 3 requirements, as applicable. These requirements are mandated by the terms and conditions of the Federal award and applicable Federal statutes and regulations, and must be incorporated into solicitation and contract documents to ensure contractors are properly notified of and comply with Federal requirements. Condition During the audit, procurement files and contracts were reviewed related to federally funded construction activities. It was noted that Section 3 notifications were not included in the retained bidding documents and executed contracts. Although the required clauses were omitted from the retained procurement documents, testing showed that the Authority ultimately complied with the Section 3 requirements during project execution, as evidenced by monitoring documentation and other compliance procedures. Cause The omission occurred due to inadequate procurement review controls, specifically a lack of standardized checklist or review process to ensure that all required Section 3 notifications were included in retained bidding and contract documents for applicable CDBG program construction contracts prior to execution. Effect Failure to include required Federal clauses in procurement and contract documents increases the risk of contractor noncompliance, limits the Authority’s ability to enforce Federal requirements, and could result in questioned costs, repayment of Federal funds, or other administrative actions if compliance cannot be demonstrated. In this instance, no actual noncompliance with Section 3 requirements was identified. Questioned Costs None Repeat Finding This is not a repeat finding. Recommendation We recommend the Authority strengthen its procurement and contract review procedures to ensure that all federally required provisions, including Section 3 requirements, are consistently included in bidding documents and executed contracts for federally funded construction activities. This may include implementing a standardized procurement checklist, updating contract templates, and requiring documented supervisory review prior to solicitation and contract execution. These actions will help ensure contractors are properly notified of Federal requirements and reduce the risk of future noncompliance. Management Response The Authority has revised its policy for Section 3 and will include the policy and requirements in all applicable agreements, pre-bid documents, and resulting contracts. Section 3 requirements will also be reviewed during pre-construction meetings for any applicable projects.