Audit 408118

Condition: Controls in place did not identify an inaccurate calculation of financial assistance payments for a sample of households. We consider this item to be a significant deficiency in internal control over compliance with the major program. Criteria: The Organization is required to comply with the requirements of the Emergency Rental Assistance (ERA) Program. The Organization is required to design and implement controls to ensure financial assistance payments meet the criteria set forth by the 2025 OMB Compliance Supplement – Treasury Emergency Rental Assistance Program, Section 3201 of the American Rescue Plan Act of 2021 and the US. Treasury Emergency Rental Assistance (ERA1/ERA2) Frequently Asked Questions, including limiting the number of months of rental assistance payments eligible households are permitted to receive and ensuring only costs on or after March 13, 2020 are supported by the program. Cause: While the Organization had procedures in place to review the rental assistance calculations, management's review did not prevent inaccurate assistance payments. Effect: The Organization disbursed an amount that was not calculated in accordance with the U.S. Treasury guidance. Context: Out of a sample of 60 assistance case numbers selected for allowability testing, 2 samples were not properly calculated in accordance with the guidance noted above. Furthermore, 1 other sample included mathematical errors. The inaccurate calculations caused overpayments in rental assistance charged to the program. Questioned Costs: $2,253 Recommendation: We recommend the Organization review its procedures and controls to ensure calculations of eligible expenses are performed accurately. Views of Responsible Official: Management concurs with the finding. The errors identified resulted from inaccurate calculations of rental assistance amounts under the Emergency Rental Assistance program. Management has reviewed the affected cases and evaluated the circumstances contributing to the errors. Additional review procedures, calculation checklists, and supervisory verification steps have been implemented to improve the accuracy of assistance determinations and reduce the risk of future overpayments. Additionally, this federal funding program has come to an end.

Condition: During the audit of the Organization’s compliance with the Reporting compliance requirement for the year ended December 31, 2025, we identified errors between expenditures reported by the Organization and actual expenditures incurred under the program. Specifically, the Organization overreported ERA2 expenditures by $42,200 for the year ended December 31, 2025. The amounts reported to Cuyahoga County did not agree with the Organization’s underlying accounting records and supporting documentation. However, the reporting errors did not result in repayments of funds received. We consider this item to be a significant deficiency in internal control over compliance with the major program. Criteria: Title 2 CFR §200.302(b) requires recipients of federal awards to maintain records that accurately identify the source and application of federal funds and to ensure that financial reports submitted to federal awarding agencies are accurate, current, and complete. In addition, ERA2 reporting guidance issued by the U.S. Department of the Treasury requires that reported expenditures reflect actual, allowable costs incurred during the reporting period. Cause: The overreported expenditures resulted from appropriately designed reconciliation controls over the preparation and review of ERA2 reporting that were not implemented. Specifically, the operations team responsible for reporting ERA2 expenditures to Cuyahoga County on a monthly basis did not obtain reconciling information from the Organization’s finance department prior to submitting reporting of ERA2 expenditures, resulting in duplications and errors in reported amounts. Effect: As a result of this deficiency, ERA2 expenditures reported for the year ended December 31, 2025 were overstated by $42,200. Inaccurate reporting impairs the reliability of program data used by the federal awarding agency to monitor program performance and compliance. Context: Testing of the Organization’s annual reporting of the ERA2 program expenditures to Cuyahoga County, Ohio. We noted as part of our review of the annual reporting did not reconcile to the underlying accounting records or amounts reported on the SEFA by $42,200. Questioned Costs: None Recommendation: We recommend that the Organization strengthen internal controls over ERA2 reporting by: Ensuring reporting ERA2 expenditures are reconciled to the general ledger prior to submission; Implementing independent supervisory review of all ERA2 reports; Ensuring that reported expenditures reflect only allowable costs actually incurred during the reporting period. Views of Responsible Official: Management concurs with the finding. The reporting differences resulted from inadequate reconciliation between the programmatic report and the Organization's accounting records prior to submission. Communication between operations and finance staff have been strengthened to improve accuracy, completeness, and consistency of future reporting in other programs. Additionally, this federal funding program has come to an end.

Condition: During our testing of 60 ERA2 transactions, we identified 14 instances (approximately 23%) in which delinquent or prospective rental assistance amounts were shifted forward by one month based on an informal and unwritten organizational practice intended to address processing timing delays. This practice was not consistently applied to similar transactions, and in all instances noted, there was insufficient documentation supporting the adjustment or evidence of review and approval. We consider this item to be a significant deficiency in internal control over compliance with the major program. Criteria: Uniform Guidance requires that costs must be adequately documented, consistent with policies and procedures, and accorded consistent treatment. Uniform Guidance requires financial and programmatic records sufficient to permit training of federal funds and to demonstrate compliance with federal statues, regulations, and the terms and conditions of the federal award. The Treasury ERA guidance further requires recipient to maintain documentation supporting assistance determinations and payments. Cause: The condition appears to result from a lack of a formal written policy governing the timing of assistance payments and the lack of controls to ensure consistent application and adequate documentation of adjustments for shift in the covered period of rental assistance. Effect: As a result, there is an increased risk that expenditures may not be recorded in the proper period or in accordance with Uniform Guidance requirements related to documentation and consistency, including compliance with the period of performance. Although the transactions tested were otherwise compliant with ERA2 eligibility requirements, the deficiencies reduce the Organization’s ability to demonstrate compliance and increase the risk of future noncompliance. Context: The issue was identified in 14 out of 60 transactions tested, representing a deviation rate of approximately 23%, and reflects both inconsistent application of an informal practice and lack of supporting documentation. Questioned Costs: None identified.Recommendation: We recommend that the Organization establish a formal written policy addressing the timing of rental assistance payments, require documentation and supervisory approval for any adjustments, and implement controls to ensure consistent application across transactions. Views of Responsible Official: Management concurs with the finding. The Organization utilized an informal practice toaddress processing timing differences for rental assistance payments; however, the practice was not formally documented and was not applied consistently. Management recognizes the need for written policies and adequate supporting documentation when adjustments are made affecting the timing of rental assistance payments and will review and revise its current policies and procedures to ensure appropriate documentation. Additionally, this federal funding program has come to an end.