Audit 402270

Condition: During testing of 91 Low-Income Home Energy Assistance Program (LIHEAP) participant files, we identified 11 files for which internal controls over compliance with major program requirements were not operating effectively, as follows: Nine (9) files did not include evidence of management review (i.e., a management signature or initials on the application). One (1) file was missing the utility bill from the hard-copy file maintained at the Agency; however, the Agency had submitted the eligibility documentation in FACSPro. One (1) file was missing income verification for the head of household and a social security card for one household member from the hard-copy file maintained at the Agency; however, the Agency had submitted the eligibility documentation in FACSPro. Criteria: In accordance with 2 CFR 200.303 and LIHEAP program requirements, recipients must establish and maintain effective internal controls to provide reasonable assurance that assistance is awarded only to eligible households. Eligibility determinations must be supported by complete and adequate documentation. The Agency’s policies require that each LIHEAP applicant folder include a hard copy of the documents used to determine eligibility that is maintained at the Agency. In addition, all applications must receive a secondary review by management. This review must be documented by the reviewer’s initials or signature on the application. Cause: The exceptions noted resulted from management not consistently adhering to the Agency’s established policies regarding documentation retention and documented management review of LIHEAP applications. Effect: Failure to consistently document and review LIHEAP applications increases the risk that assistance may be awarded to ineligible households. This could result in questioned costs and noncompliance with applicable federal requirements. Recommendation: We recommend that management consistently follow Agency policy by ensuring that (1) all LIHEAP applicant files maintained at the Agency are complete and include the documentation used to support eligibility and (2) all applications receive a management review that is clearly documented through reviewer initials or signatures. View of Responsible Officials: See auditee prepared Corrective Action Plan