Audit 409354

Matching and Earmarking Significant Deficiency U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT ALN #: 14.267 Federal Award Identification #: TX0724L6T002300 Condition: The Organization was not in compliance with matching and earmarking requirements. Criteria: 24 CFR 578.73, 24 CFR 578.59 Questioned Costs: $25,824 Context: The Organization could not locate support for all match costs claimed against federal funding provided. The Organization was required to have $40,726 in matching costs at a minimum, which is 25% of $372,678 total costs reported. Only $37,916 was able to be supported, which left $2,811 in unmet matching costs. $2,811 in unmet matching costs divided by the 25% match requirement results in $11,243 questioned costs reported that are unsupported by match. Additionally, the Organization exceeded the 10% threshold for costs to administer the grant. The Organization was limited to 10% of total costs of $372,678 to administer the grant out, which is $37,268. The Organization reported $51,848 in costs to administer the grant, which exceeds the threshold by $14,581, resulting in questioned costs. Total questioned costs of $11,243 for the matching requirement and $14,581 for the earmarking requirement is $25,824. Cause: Oversight by management. Effect: Questioned costs for the grant agreement. Identification as repeat finding, if applicable: Not applicable. Recommendation: We recommend that the Organization implement a documented formal review process to ensure that the Organization is in compliance with matching and earmarking requirements throughout the life of the grant. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.