Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: CA0802L9D012416, CA0802L9D012315, CA1348L9D012410, CA1348L9D012309, CA1510L9D012409, CA1510L9D012308, CA1883L9D012405, CA1883L9D012304, SIHI-25-07, HHI-26-08, SIHI-25-18, HHI-26-11 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR §578.51(g), “HUD will only provide rental assistance for a unit if the rent is reasonable. The recipient or subrecipient must determine whether the rent charged for the unit receiving rental assistance is reasonable in relation to rents being charged for comparable unassisted units, taking into account the location, size, type, quality, amenities, facilities, and management and maintenance of each unit. Reasonable rent must not exceed rents currently being charged by the same owner for comparable unassisted units.” Condition: In accordance with 24 CFR §578.51(g), we noted that: • 1 out of 60 rental payments tested did not have a comparable unit analysis conducted upon rent increase. • 8 out of 60 rental payments did not have a comparable unit analysis completed in a timely manner prior to the tenant’s move-in or prior to increases in rent. • 4 of the 60 rental payments that did have rent reasonableness performed did not have rent reasonableness analyzed in the past 12-months of the rent payment. • 1 out of the 60 rental payments were paid in excess of rent per the lease agreement. Cause: The Village did not appropriately retain or produce documentation verifying that rent reasonableness was assessed prior to move-in or during changes to lease terms, as required by its policies. Furthermore, not all supporting documentation for initial or changes to lease terms was obtained or retained. Effect or Potential Effect: The insufficient retention or creation of rent reasonableness forms and supporting documentation has led to ineffective operation of rent reasonableness controls, thereby not appropriately identifying rental amounts for the Village’s clients in need of rental assistance. Consequently, this deficiency could result in incorrect charges being applied to the Federal program. Questioned Costs: Known Questioned Costs: None above the $25,000 reporting threshold. Likely Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Questioned costs were determined as the amounts paid without supporting rent reasonableness documentation. The total costs subject to rent reasonableness amounted to $2,153,333. Repeat Finding: 2024-006 Recommendation: We recommend that the Village enhance existing policies to ensure rent reasonableness is performed on all rental assistance. In addition, we recommend management ensures determinations are performed prior to move-in or rent changes being charged, and documentation is maintained for both the rent amount and reasonableness of the rent. We further recommend a policy be enacted for reviewing rent reasonableness on a periodic basis (i.e. annually) for those tenants that have not had a change in rent during the period. Views of Responsible Officials: Management agrees with the finding. Management is in the process of enhancing and enforcing existing policies and procedures as well as performing a comprehensive tenant record review.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: CA0802L9D012416, CA0802L9D012315, CA1348L9D012410, CA1348L9D012309, CA1510L9D012409, CA1510L9D012308, CA1883L9D012405, CA1883L9D012304, SIHI-25-07, HHI-26-08, SIHI-25-18, HHI-26-11 Criteria: Where a funding period is specified, a recipient may charge to the grant only allowable costs resulting from obligations incurred during the funding period and any pre-award costs authorized by the Federal awarding agency. Unless the Federal awarding agency authorizes an extension, a recipient shall liquidate all obligations incurred under the award no later than 90 calendar days after the funding period or the date of completion as specified in the terms and conditions of the award or in agency implementing instructions. Condition: We noted that the Village allocated expenditures that were incurred prior to the start of the funding period to Continuum of Care Program during 2025. During our testing, we noted instances of costs that were incurred prior to the start of the applicable funding periods and were not approved in accordance with §200.308. • 3 out of 40 samples selected for testing had costs claimed in the incorrect grant period. Cause: Due to the manual nature of the allocation process, the Village misapplied certain costs to grant awards. This resulted in certain costs being reported and claimed in the wrong grant period, leading to inaccuracies in the allocation of expenditures across periods of performance. Effect or Potential Effect: Without adequate controls in place to ensure costs are reported in the proper period of performance, the Village could incorrectly charge expenditures to the federal programs. Questioned Costs: Known Questioned Costs: $630 Likely Questioned Costs: $37,148 Context: This is a condition identified per review of the Villages compliance with specified requirements not using a statistically valid sample. Total costs near grant cutoff periods were $1,445,942. Repeat Finding: 2024-004 Recommendation: We recommend that only costs incurred during the appropriate funding period be charged, and that this be appropriately documented and reviewed. Views of Responsible Officials: Management agrees with the finding. Management is in the process of implementing new processes and procedures to reduce manual errors.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: CA0802L9D012416, CA0802L9D012315, CA1348L9D012410, CA1348L9D012309, CA1510L9D012409, CA1510L9D012308, CA1883L9D012405, CA1883L9D012304, SIHI-25-07, HHI-26-08, SIHI-25-18, HHI-26-11 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR §578.73(b): “Notwithstanding 2 CFR 200.306(b)(5), a recipient or subrecipient may use funds from any source, including any other federal sources (excluding Continuum of Care program funds), as well as State, local, and private sources, provided that funds from the source are not statutorily prohibited to be used as a match. The recipient must ensure that any funds used to satisfy the matching requirements of this section are eligible under the laws governing the funds in order to be used as matching funds for a grant awarded under this program.” 2 CFR 200.306(c) states: “Unrecovered indirect costs, including indirect costs on cost sharing, may be included as part of cost sharing with the prior approval of the Federal agency or pass-through entity. Unrecovered indirect cost means the difference between the amount charged to the Federal award and the amount which could have been charged to the Federal award under the recipient's or subrecipient's approved indirect cost rate." Condition: We noted that the Village’s controls did not identify unrecovered indirect costs that were not pre-approved and were determined to be unallowable by the Federal agency. One out of six grants that ended during 2025 did not meet the required 25% match as a result of excluding these unallowable costs. Cause: The Village did not have adequate policies and procedures in place to ensure that only allowable costs were included in the matching pool used to satisfy matching requirements. Effect of Potential Effect: Due to inadequate controls, for one grant, the Village did not meet the matching requirements for the grant period. Not meeting matching requirements may result in repayment of funds and could affect future funding. Questioned Costs: Known Questioned Costs: $41,729 Likely Questioned Costs: $41,729 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Six out of 12 grants ended during 2025. Total required matching costs on the ended grants amount to $1,275,698. Repeat Finding: 2024-008 Recommendation: We recommend Village enhance their policies and procedures to ensure that only allowable costs are utilized to satisfy matching requirements. Views of Responsible Officials: Management agrees with the finding. Management is updating procedures to ensure that the costs in matching pools are appropriately reviewed.