Finding 2022-003 ? Failure to Follow Established Subrecipient Monitoring Procedures for the Section 8 Project Based Cluster Program Federal Agency: U.S. Department of Housing and Urban Development (USHUD) Federal Program Name: Section 8 Project-Based Cluster (Section 8) Assistance Listing Numbers: 14.182/14.856 Federal Award Identification Number and Year: IL901 (2022) Award Period: July 1, 2021 to June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters CRITERIA OR SPECIFIC REQUIREMENT A pass-through entity must monitor the activities of its subrecipients to ensure subawards are used for authorized purposes, comply with the terms and conditions of the subaward, and achieve performance goals (2 CFR sections 200.332(d) through (f)). Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Effective internal controls should include ensuring on-site review procedures are performed in a timely manner, are designed to monitor fiscal controls, and are performed to ensure compliance with program regulations. CONDITION The Illinois Housing Development Authority (the Authority) did not follow its established policies and procedures for monitoring subrecipients of the Section 8 Project-Based (Section 8) program. The Authority has implemented procedures whereby program staff perform periodic on-site inspections and desk reviews of subrecipients? compliance with regulations applicable to the Section 8 Cluster program. These reviews are formally documented and include the issuance of a report documenting the results of the review to the subrecipient summarizing the procedures performed, results of the procedures, and any findings or performance improvement observations noted. The Authority?s policies require the subrecipient file to be closed within 90 days of the subrecipient being notified of any findings. QUESTIONED COSTS: None CONTEXT During our test work over monitoring review procedures performed for five subrecipients (with expenditures of $3,420,351) of the Section 8 Cluster program, we noted the Authority has not established adequate control activities to ensure its monitoring procedures were followed in communicating the results of its monitoring reviews. We noted the Authority did not send the findings of the Management and Occupancy Reviews (MORs) to two subrecipients (with expenditures totaling $1,799,238) in a timely manner (within 30 days of onsite inspection). Specifically, one MOR was sent 33 days after the onsite inspection and the other MOR was not sent until 41 days after the onsite inspection. CAUSE Authority officials stated staff members responsible for completing the Management and Occupancy Review (MOR) procedure within the 30-day period were not following the prescribed program regulations as documented in both Authority training and staff performance materials. EFFECT Failure to adequately follow on-site monitoring procedures may result in subrecipients not properly administering the Section 8 Cluster program in accordance with statutes, regulations, and the grant agreement. REPEAT FINDING A similar finding was reported in the prior year audit as finding 2021-003. (Finding Code No. 2022-003, 2021-003, 2020-002, 2019-006, 2018-007, 2017-004, 2016-007, 2015-007, 2014-003, 2013-005, 12-05, 11-11) RECOMMENDATION We recommend the Authority ensure monitoring files are completed and closed in accordance with established policies and procedures. AUTHORITY RESPONSE The Authority agrees with the finding and has implemented several new policies and procedures to strengthen controls surrounding the sub monitoring process. All staff are scheduled to complete a full monitoring cycle and have been scheduled for additional trainings. Additionally, weekly team meetings are conducted, and the Authority has updated its written procedures to address the sub monitoring deficiencies. Management and Supervisors will be responsible for weekly quality control tasks that include, reviewing system reports, weekly one on one meetings with the Assistant Director and any staff. The quality control and one on one meetings will be used to reduce and eliminate delayed submissions, closeouts, and notification letters. The Supervisors will run internal reports weekly to identify what inspections are due and ensure they are submitted timely.
Finding 2022-003 ? Failure to Follow Established Subrecipient Monitoring Procedures for the Section 8 Project Based Cluster Program Federal Agency: U.S. Department of Housing and Urban Development (USHUD) Federal Program Name: Section 8 Project-Based Cluster (Section 8) Assistance Listing Numbers: 14.182/14.856 Federal Award Identification Number and Year: IL901 (2022) Award Period: July 1, 2021 to June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters CRITERIA OR SPECIFIC REQUIREMENT A pass-through entity must monitor the activities of its subrecipients to ensure subawards are used for authorized purposes, comply with the terms and conditions of the subaward, and achieve performance goals (2 CFR sections 200.332(d) through (f)). Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Effective internal controls should include ensuring on-site review procedures are performed in a timely manner, are designed to monitor fiscal controls, and are performed to ensure compliance with program regulations. CONDITION The Illinois Housing Development Authority (the Authority) did not follow its established policies and procedures for monitoring subrecipients of the Section 8 Project-Based (Section 8) program. The Authority has implemented procedures whereby program staff perform periodic on-site inspections and desk reviews of subrecipients? compliance with regulations applicable to the Section 8 Cluster program. These reviews are formally documented and include the issuance of a report documenting the results of the review to the subrecipient summarizing the procedures performed, results of the procedures, and any findings or performance improvement observations noted. The Authority?s policies require the subrecipient file to be closed within 90 days of the subrecipient being notified of any findings. QUESTIONED COSTS: None CONTEXT During our test work over monitoring review procedures performed for five subrecipients (with expenditures of $3,420,351) of the Section 8 Cluster program, we noted the Authority has not established adequate control activities to ensure its monitoring procedures were followed in communicating the results of its monitoring reviews. We noted the Authority did not send the findings of the Management and Occupancy Reviews (MORs) to two subrecipients (with expenditures totaling $1,799,238) in a timely manner (within 30 days of onsite inspection). Specifically, one MOR was sent 33 days after the onsite inspection and the other MOR was not sent until 41 days after the onsite inspection. CAUSE Authority officials stated staff members responsible for completing the Management and Occupancy Review (MOR) procedure within the 30-day period were not following the prescribed program regulations as documented in both Authority training and staff performance materials. EFFECT Failure to adequately follow on-site monitoring procedures may result in subrecipients not properly administering the Section 8 Cluster program in accordance with statutes, regulations, and the grant agreement. REPEAT FINDING A similar finding was reported in the prior year audit as finding 2021-003. (Finding Code No. 2022-003, 2021-003, 2020-002, 2019-006, 2018-007, 2017-004, 2016-007, 2015-007, 2014-003, 2013-005, 12-05, 11-11) RECOMMENDATION We recommend the Authority ensure monitoring files are completed and closed in accordance with established policies and procedures. AUTHORITY RESPONSE The Authority agrees with the finding and has implemented several new policies and procedures to strengthen controls surrounding the sub monitoring process. All staff are scheduled to complete a full monitoring cycle and have been scheduled for additional trainings. Additionally, weekly team meetings are conducted, and the Authority has updated its written procedures to address the sub monitoring deficiencies. Management and Supervisors will be responsible for weekly quality control tasks that include, reviewing system reports, weekly one on one meetings with the Assistant Director and any staff. The quality control and one on one meetings will be used to reduce and eliminate delayed submissions, closeouts, and notification letters. The Supervisors will run internal reports weekly to identify what inspections are due and ensure they are submitted timely.
Finding 2022-004 ? Failure to Execute Intergovernmental Agreements Federal Agency: U.S. Department of the Treasury (Passed through the State of Illinois) Federal Program Name: COVID-19 Homeowner Assistance Fund (HAF) / COVID-19 State and Local Fiscal Recovery Funds (SLFRF) Assistance Listing Numbers: 21.026 / 21.027 Federal Award Information Number and Year: None Award Period: July 1, 2021, to June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance CRITERIA OR SPECIFIC REQUIREMENT Uniform Guidance (2 CFR section 200.1) defines a subrecipient as `an entity, usually but not limited to nonfederal entities, that receives a subaward from a pass-through entity to carry out part of a federal award.? This relationship between pass-through entity and subrecipient must be formalized in a written agreement communicating the identification of the federal award, as well as all requirements imposed by the pass-through entity. The Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Effective internal control should include procedures to ensure agreements are in place between pass-through entity?s and subrecipients before funding is received and programs carried out. CONDITION The Illinois Housing Development Authority (IHDA, or the Authority) did not execute an intergovernmental agreement with other State of Illinois agencies before being subgranted funding for the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) and Housing Assistance Fund (HAF) programs. QUESTIONED COSTS: None CONTEXT During our testwork over the SLFRF and HAF programs, we requested IHDA provide us with the grant agreement / subrecipient agreements between IHDA and other State of Illinois agencies who passed through SLFRF and HAF funding to the Authority during fiscal year 2022. After discussion with Authority management, we learned that no such subrecipient agreements / intergovernmental agreements were executed for the SLFRF and HAF funding IHDA received. CAUSE Authority?s management stated during fiscal year 2022, at the height of the COVID-19 pandemic and in order to disburse emergency funding as quickly as possible, the Authority and the Illinois Department of Revenue followed the existing written internal control processes and procedures in place between the agencies with respect to drawing HAF and SLFRF money from Fund 286 in order to operate the programs. EFFECT Failure to notify subrecipients of all required federal award information could result in subrecipients improperly omitting expenditures from their schedules of expenditures of federal awards, expending federal funds for unallowable purposes, or not receiving a single audit in accordance with Uniform Grant Guidance. Additionally, failure to formalize agreements between entities could lead to disputes as to who was responsible for carrying out federal programs. (Finding Code No. 2022-004) RECOMMENDATION We recommend the Authority obtain intergovernmental agreements with other State of Illinois agencies before being subgranted funding. AUTHORITY RESPONSE The Authority is in the process of working with Illinois Department of Revenue to obtain an agreement for fiscal year 2023. Unless extraneous circumstances prevent the Authority from obtaining an agreement in a timely manner, the Authority will ensure intergovernmental agreements exist before commencing new program administration. The Authority will implement new policies and procedures to strengthen control.
Finding 2022-004 ? Failure to Execute Intergovernmental Agreements Federal Agency: U.S. Department of the Treasury (Passed through the State of Illinois) Federal Program Name: COVID-19 Homeowner Assistance Fund (HAF) / COVID-19 State and Local Fiscal Recovery Funds (SLFRF) Assistance Listing Numbers: 21.026 / 21.027 Federal Award Information Number and Year: None Award Period: July 1, 2021, to June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance CRITERIA OR SPECIFIC REQUIREMENT Uniform Guidance (2 CFR section 200.1) defines a subrecipient as `an entity, usually but not limited to nonfederal entities, that receives a subaward from a pass-through entity to carry out part of a federal award.? This relationship between pass-through entity and subrecipient must be formalized in a written agreement communicating the identification of the federal award, as well as all requirements imposed by the pass-through entity. The Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Effective internal control should include procedures to ensure agreements are in place between pass-through entity?s and subrecipients before funding is received and programs carried out. CONDITION The Illinois Housing Development Authority (IHDA, or the Authority) did not execute an intergovernmental agreement with other State of Illinois agencies before being subgranted funding for the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) and Housing Assistance Fund (HAF) programs. QUESTIONED COSTS: None CONTEXT During our testwork over the SLFRF and HAF programs, we requested IHDA provide us with the grant agreement / subrecipient agreements between IHDA and other State of Illinois agencies who passed through SLFRF and HAF funding to the Authority during fiscal year 2022. After discussion with Authority management, we learned that no such subrecipient agreements / intergovernmental agreements were executed for the SLFRF and HAF funding IHDA received. CAUSE Authority?s management stated during fiscal year 2022, at the height of the COVID-19 pandemic and in order to disburse emergency funding as quickly as possible, the Authority and the Illinois Department of Revenue followed the existing written internal control processes and procedures in place between the agencies with respect to drawing HAF and SLFRF money from Fund 286 in order to operate the programs. EFFECT Failure to notify subrecipients of all required federal award information could result in subrecipients improperly omitting expenditures from their schedules of expenditures of federal awards, expending federal funds for unallowable purposes, or not receiving a single audit in accordance with Uniform Grant Guidance. Additionally, failure to formalize agreements between entities could lead to disputes as to who was responsible for carrying out federal programs. (Finding Code No. 2022-004) RECOMMENDATION We recommend the Authority obtain intergovernmental agreements with other State of Illinois agencies before being subgranted funding. AUTHORITY RESPONSE The Authority is in the process of working with Illinois Department of Revenue to obtain an agreement for fiscal year 2023. Unless extraneous circumstances prevent the Authority from obtaining an agreement in a timely manner, the Authority will ensure intergovernmental agreements exist before commencing new program administration. The Authority will implement new policies and procedures to strengthen control.
Finding 2022-004 ? Failure to Execute Intergovernmental Agreements Federal Agency: U.S. Department of the Treasury (Passed through the State of Illinois) Federal Program Name: COVID-19 Homeowner Assistance Fund (HAF) / COVID-19 State and Local Fiscal Recovery Funds (SLFRF) Assistance Listing Numbers: 21.026 / 21.027 Federal Award Information Number and Year: None Award Period: July 1, 2021, to June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance CRITERIA OR SPECIFIC REQUIREMENT Uniform Guidance (2 CFR section 200.1) defines a subrecipient as `an entity, usually but not limited to nonfederal entities, that receives a subaward from a pass-through entity to carry out part of a federal award.? This relationship between pass-through entity and subrecipient must be formalized in a written agreement communicating the identification of the federal award, as well as all requirements imposed by the pass-through entity. The Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Effective internal control should include procedures to ensure agreements are in place between pass-through entity?s and subrecipients before funding is received and programs carried out. CONDITION The Illinois Housing Development Authority (IHDA, or the Authority) did not execute an intergovernmental agreement with other State of Illinois agencies before being subgranted funding for the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) and Housing Assistance Fund (HAF) programs. QUESTIONED COSTS: None CONTEXT During our testwork over the SLFRF and HAF programs, we requested IHDA provide us with the grant agreement / subrecipient agreements between IHDA and other State of Illinois agencies who passed through SLFRF and HAF funding to the Authority during fiscal year 2022. After discussion with Authority management, we learned that no such subrecipient agreements / intergovernmental agreements were executed for the SLFRF and HAF funding IHDA received. CAUSE Authority?s management stated during fiscal year 2022, at the height of the COVID-19 pandemic and in order to disburse emergency funding as quickly as possible, the Authority and the Illinois Department of Revenue followed the existing written internal control processes and procedures in place between the agencies with respect to drawing HAF and SLFRF money from Fund 286 in order to operate the programs. EFFECT Failure to notify subrecipients of all required federal award information could result in subrecipients improperly omitting expenditures from their schedules of expenditures of federal awards, expending federal funds for unallowable purposes, or not receiving a single audit in accordance with Uniform Grant Guidance. Additionally, failure to formalize agreements between entities could lead to disputes as to who was responsible for carrying out federal programs. (Finding Code No. 2022-004) RECOMMENDATION We recommend the Authority obtain intergovernmental agreements with other State of Illinois agencies before being subgranted funding. AUTHORITY RESPONSE The Authority is in the process of working with Illinois Department of Revenue to obtain an agreement for fiscal year 2023. Unless extraneous circumstances prevent the Authority from obtaining an agreement in a timely manner, the Authority will ensure intergovernmental agreements exist before commencing new program administration. The Authority will implement new policies and procedures to strengthen control.
Finding 2022-004 ? Failure to Execute Intergovernmental Agreements Federal Agency: U.S. Department of the Treasury (Passed through the State of Illinois) Federal Program Name: COVID-19 Homeowner Assistance Fund (HAF) / COVID-19 State and Local Fiscal Recovery Funds (SLFRF) Assistance Listing Numbers: 21.026 / 21.027 Federal Award Information Number and Year: None Award Period: July 1, 2021, to June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance CRITERIA OR SPECIFIC REQUIREMENT Uniform Guidance (2 CFR section 200.1) defines a subrecipient as `an entity, usually but not limited to nonfederal entities, that receives a subaward from a pass-through entity to carry out part of a federal award.? This relationship between pass-through entity and subrecipient must be formalized in a written agreement communicating the identification of the federal award, as well as all requirements imposed by the pass-through entity. The Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Effective internal control should include procedures to ensure agreements are in place between pass-through entity?s and subrecipients before funding is received and programs carried out. CONDITION The Illinois Housing Development Authority (IHDA, or the Authority) did not execute an intergovernmental agreement with other State of Illinois agencies before being subgranted funding for the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) and Housing Assistance Fund (HAF) programs. QUESTIONED COSTS: None CONTEXT During our testwork over the SLFRF and HAF programs, we requested IHDA provide us with the grant agreement / subrecipient agreements between IHDA and other State of Illinois agencies who passed through SLFRF and HAF funding to the Authority during fiscal year 2022. After discussion with Authority management, we learned that no such subrecipient agreements / intergovernmental agreements were executed for the SLFRF and HAF funding IHDA received. CAUSE Authority?s management stated during fiscal year 2022, at the height of the COVID-19 pandemic and in order to disburse emergency funding as quickly as possible, the Authority and the Illinois Department of Revenue followed the existing written internal control processes and procedures in place between the agencies with respect to drawing HAF and SLFRF money from Fund 286 in order to operate the programs. EFFECT Failure to notify subrecipients of all required federal award information could result in subrecipients improperly omitting expenditures from their schedules of expenditures of federal awards, expending federal funds for unallowable purposes, or not receiving a single audit in accordance with Uniform Grant Guidance. Additionally, failure to formalize agreements between entities could lead to disputes as to who was responsible for carrying out federal programs. (Finding Code No. 2022-004) RECOMMENDATION We recommend the Authority obtain intergovernmental agreements with other State of Illinois agencies before being subgranted funding. AUTHORITY RESPONSE The Authority is in the process of working with Illinois Department of Revenue to obtain an agreement for fiscal year 2023. Unless extraneous circumstances prevent the Authority from obtaining an agreement in a timely manner, the Authority will ensure intergovernmental agreements exist before commencing new program administration. The Authority will implement new policies and procedures to strengthen control.
Finding 2022-004 ? Failure to Execute Intergovernmental Agreements Federal Agency: U.S. Department of the Treasury (Passed through the State of Illinois) Federal Program Name: COVID-19 Homeowner Assistance Fund (HAF) / COVID-19 State and Local Fiscal Recovery Funds (SLFRF) Assistance Listing Numbers: 21.026 / 21.027 Federal Award Information Number and Year: None Award Period: July 1, 2021, to June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance CRITERIA OR SPECIFIC REQUIREMENT Uniform Guidance (2 CFR section 200.1) defines a subrecipient as `an entity, usually but not limited to nonfederal entities, that receives a subaward from a pass-through entity to carry out part of a federal award.? This relationship between pass-through entity and subrecipient must be formalized in a written agreement communicating the identification of the federal award, as well as all requirements imposed by the pass-through entity. The Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Effective internal control should include procedures to ensure agreements are in place between pass-through entity?s and subrecipients before funding is received and programs carried out. CONDITION The Illinois Housing Development Authority (IHDA, or the Authority) did not execute an intergovernmental agreement with other State of Illinois agencies before being subgranted funding for the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) and Housing Assistance Fund (HAF) programs. QUESTIONED COSTS: None CONTEXT During our testwork over the SLFRF and HAF programs, we requested IHDA provide us with the grant agreement / subrecipient agreements between IHDA and other State of Illinois agencies who passed through SLFRF and HAF funding to the Authority during fiscal year 2022. After discussion with Authority management, we learned that no such subrecipient agreements / intergovernmental agreements were executed for the SLFRF and HAF funding IHDA received. CAUSE Authority?s management stated during fiscal year 2022, at the height of the COVID-19 pandemic and in order to disburse emergency funding as quickly as possible, the Authority and the Illinois Department of Revenue followed the existing written internal control processes and procedures in place between the agencies with respect to drawing HAF and SLFRF money from Fund 286 in order to operate the programs. EFFECT Failure to notify subrecipients of all required federal award information could result in subrecipients improperly omitting expenditures from their schedules of expenditures of federal awards, expending federal funds for unallowable purposes, or not receiving a single audit in accordance with Uniform Grant Guidance. Additionally, failure to formalize agreements between entities could lead to disputes as to who was responsible for carrying out federal programs. (Finding Code No. 2022-004) RECOMMENDATION We recommend the Authority obtain intergovernmental agreements with other State of Illinois agencies before being subgranted funding. AUTHORITY RESPONSE The Authority is in the process of working with Illinois Department of Revenue to obtain an agreement for fiscal year 2023. Unless extraneous circumstances prevent the Authority from obtaining an agreement in a timely manner, the Authority will ensure intergovernmental agreements exist before commencing new program administration. The Authority will implement new policies and procedures to strengthen control.
Finding 2022-003 ? Failure to Follow Established Subrecipient Monitoring Procedures for the Section 8 Project Based Cluster Program Federal Agency: U.S. Department of Housing and Urban Development (USHUD) Federal Program Name: Section 8 Project-Based Cluster (Section 8) Assistance Listing Numbers: 14.182/14.856 Federal Award Identification Number and Year: IL901 (2022) Award Period: July 1, 2021 to June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters CRITERIA OR SPECIFIC REQUIREMENT A pass-through entity must monitor the activities of its subrecipients to ensure subawards are used for authorized purposes, comply with the terms and conditions of the subaward, and achieve performance goals (2 CFR sections 200.332(d) through (f)). Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Effective internal controls should include ensuring on-site review procedures are performed in a timely manner, are designed to monitor fiscal controls, and are performed to ensure compliance with program regulations. CONDITION The Illinois Housing Development Authority (the Authority) did not follow its established policies and procedures for monitoring subrecipients of the Section 8 Project-Based (Section 8) program. The Authority has implemented procedures whereby program staff perform periodic on-site inspections and desk reviews of subrecipients? compliance with regulations applicable to the Section 8 Cluster program. These reviews are formally documented and include the issuance of a report documenting the results of the review to the subrecipient summarizing the procedures performed, results of the procedures, and any findings or performance improvement observations noted. The Authority?s policies require the subrecipient file to be closed within 90 days of the subrecipient being notified of any findings. QUESTIONED COSTS: None CONTEXT During our test work over monitoring review procedures performed for five subrecipients (with expenditures of $3,420,351) of the Section 8 Cluster program, we noted the Authority has not established adequate control activities to ensure its monitoring procedures were followed in communicating the results of its monitoring reviews. We noted the Authority did not send the findings of the Management and Occupancy Reviews (MORs) to two subrecipients (with expenditures totaling $1,799,238) in a timely manner (within 30 days of onsite inspection). Specifically, one MOR was sent 33 days after the onsite inspection and the other MOR was not sent until 41 days after the onsite inspection. CAUSE Authority officials stated staff members responsible for completing the Management and Occupancy Review (MOR) procedure within the 30-day period were not following the prescribed program regulations as documented in both Authority training and staff performance materials. EFFECT Failure to adequately follow on-site monitoring procedures may result in subrecipients not properly administering the Section 8 Cluster program in accordance with statutes, regulations, and the grant agreement. REPEAT FINDING A similar finding was reported in the prior year audit as finding 2021-003. (Finding Code No. 2022-003, 2021-003, 2020-002, 2019-006, 2018-007, 2017-004, 2016-007, 2015-007, 2014-003, 2013-005, 12-05, 11-11) RECOMMENDATION We recommend the Authority ensure monitoring files are completed and closed in accordance with established policies and procedures. AUTHORITY RESPONSE The Authority agrees with the finding and has implemented several new policies and procedures to strengthen controls surrounding the sub monitoring process. All staff are scheduled to complete a full monitoring cycle and have been scheduled for additional trainings. Additionally, weekly team meetings are conducted, and the Authority has updated its written procedures to address the sub monitoring deficiencies. Management and Supervisors will be responsible for weekly quality control tasks that include, reviewing system reports, weekly one on one meetings with the Assistant Director and any staff. The quality control and one on one meetings will be used to reduce and eliminate delayed submissions, closeouts, and notification letters. The Supervisors will run internal reports weekly to identify what inspections are due and ensure they are submitted timely.
Finding 2022-003 ? Failure to Follow Established Subrecipient Monitoring Procedures for the Section 8 Project Based Cluster Program Federal Agency: U.S. Department of Housing and Urban Development (USHUD) Federal Program Name: Section 8 Project-Based Cluster (Section 8) Assistance Listing Numbers: 14.182/14.856 Federal Award Identification Number and Year: IL901 (2022) Award Period: July 1, 2021 to June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters CRITERIA OR SPECIFIC REQUIREMENT A pass-through entity must monitor the activities of its subrecipients to ensure subawards are used for authorized purposes, comply with the terms and conditions of the subaward, and achieve performance goals (2 CFR sections 200.332(d) through (f)). Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Effective internal controls should include ensuring on-site review procedures are performed in a timely manner, are designed to monitor fiscal controls, and are performed to ensure compliance with program regulations. CONDITION The Illinois Housing Development Authority (the Authority) did not follow its established policies and procedures for monitoring subrecipients of the Section 8 Project-Based (Section 8) program. The Authority has implemented procedures whereby program staff perform periodic on-site inspections and desk reviews of subrecipients? compliance with regulations applicable to the Section 8 Cluster program. These reviews are formally documented and include the issuance of a report documenting the results of the review to the subrecipient summarizing the procedures performed, results of the procedures, and any findings or performance improvement observations noted. The Authority?s policies require the subrecipient file to be closed within 90 days of the subrecipient being notified of any findings. QUESTIONED COSTS: None CONTEXT During our test work over monitoring review procedures performed for five subrecipients (with expenditures of $3,420,351) of the Section 8 Cluster program, we noted the Authority has not established adequate control activities to ensure its monitoring procedures were followed in communicating the results of its monitoring reviews. We noted the Authority did not send the findings of the Management and Occupancy Reviews (MORs) to two subrecipients (with expenditures totaling $1,799,238) in a timely manner (within 30 days of onsite inspection). Specifically, one MOR was sent 33 days after the onsite inspection and the other MOR was not sent until 41 days after the onsite inspection. CAUSE Authority officials stated staff members responsible for completing the Management and Occupancy Review (MOR) procedure within the 30-day period were not following the prescribed program regulations as documented in both Authority training and staff performance materials. EFFECT Failure to adequately follow on-site monitoring procedures may result in subrecipients not properly administering the Section 8 Cluster program in accordance with statutes, regulations, and the grant agreement. REPEAT FINDING A similar finding was reported in the prior year audit as finding 2021-003. (Finding Code No. 2022-003, 2021-003, 2020-002, 2019-006, 2018-007, 2017-004, 2016-007, 2015-007, 2014-003, 2013-005, 12-05, 11-11) RECOMMENDATION We recommend the Authority ensure monitoring files are completed and closed in accordance with established policies and procedures. AUTHORITY RESPONSE The Authority agrees with the finding and has implemented several new policies and procedures to strengthen controls surrounding the sub monitoring process. All staff are scheduled to complete a full monitoring cycle and have been scheduled for additional trainings. Additionally, weekly team meetings are conducted, and the Authority has updated its written procedures to address the sub monitoring deficiencies. Management and Supervisors will be responsible for weekly quality control tasks that include, reviewing system reports, weekly one on one meetings with the Assistant Director and any staff. The quality control and one on one meetings will be used to reduce and eliminate delayed submissions, closeouts, and notification letters. The Supervisors will run internal reports weekly to identify what inspections are due and ensure they are submitted timely.
Finding 2022-004 ? Failure to Execute Intergovernmental Agreements Federal Agency: U.S. Department of the Treasury (Passed through the State of Illinois) Federal Program Name: COVID-19 Homeowner Assistance Fund (HAF) / COVID-19 State and Local Fiscal Recovery Funds (SLFRF) Assistance Listing Numbers: 21.026 / 21.027 Federal Award Information Number and Year: None Award Period: July 1, 2021, to June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance CRITERIA OR SPECIFIC REQUIREMENT Uniform Guidance (2 CFR section 200.1) defines a subrecipient as `an entity, usually but not limited to nonfederal entities, that receives a subaward from a pass-through entity to carry out part of a federal award.? This relationship between pass-through entity and subrecipient must be formalized in a written agreement communicating the identification of the federal award, as well as all requirements imposed by the pass-through entity. The Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Effective internal control should include procedures to ensure agreements are in place between pass-through entity?s and subrecipients before funding is received and programs carried out. CONDITION The Illinois Housing Development Authority (IHDA, or the Authority) did not execute an intergovernmental agreement with other State of Illinois agencies before being subgranted funding for the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) and Housing Assistance Fund (HAF) programs. QUESTIONED COSTS: None CONTEXT During our testwork over the SLFRF and HAF programs, we requested IHDA provide us with the grant agreement / subrecipient agreements between IHDA and other State of Illinois agencies who passed through SLFRF and HAF funding to the Authority during fiscal year 2022. After discussion with Authority management, we learned that no such subrecipient agreements / intergovernmental agreements were executed for the SLFRF and HAF funding IHDA received. CAUSE Authority?s management stated during fiscal year 2022, at the height of the COVID-19 pandemic and in order to disburse emergency funding as quickly as possible, the Authority and the Illinois Department of Revenue followed the existing written internal control processes and procedures in place between the agencies with respect to drawing HAF and SLFRF money from Fund 286 in order to operate the programs. EFFECT Failure to notify subrecipients of all required federal award information could result in subrecipients improperly omitting expenditures from their schedules of expenditures of federal awards, expending federal funds for unallowable purposes, or not receiving a single audit in accordance with Uniform Grant Guidance. Additionally, failure to formalize agreements between entities could lead to disputes as to who was responsible for carrying out federal programs. (Finding Code No. 2022-004) RECOMMENDATION We recommend the Authority obtain intergovernmental agreements with other State of Illinois agencies before being subgranted funding. AUTHORITY RESPONSE The Authority is in the process of working with Illinois Department of Revenue to obtain an agreement for fiscal year 2023. Unless extraneous circumstances prevent the Authority from obtaining an agreement in a timely manner, the Authority will ensure intergovernmental agreements exist before commencing new program administration. The Authority will implement new policies and procedures to strengthen control.
Finding 2022-004 ? Failure to Execute Intergovernmental Agreements Federal Agency: U.S. Department of the Treasury (Passed through the State of Illinois) Federal Program Name: COVID-19 Homeowner Assistance Fund (HAF) / COVID-19 State and Local Fiscal Recovery Funds (SLFRF) Assistance Listing Numbers: 21.026 / 21.027 Federal Award Information Number and Year: None Award Period: July 1, 2021, to June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance CRITERIA OR SPECIFIC REQUIREMENT Uniform Guidance (2 CFR section 200.1) defines a subrecipient as `an entity, usually but not limited to nonfederal entities, that receives a subaward from a pass-through entity to carry out part of a federal award.? This relationship between pass-through entity and subrecipient must be formalized in a written agreement communicating the identification of the federal award, as well as all requirements imposed by the pass-through entity. The Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Effective internal control should include procedures to ensure agreements are in place between pass-through entity?s and subrecipients before funding is received and programs carried out. CONDITION The Illinois Housing Development Authority (IHDA, or the Authority) did not execute an intergovernmental agreement with other State of Illinois agencies before being subgranted funding for the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) and Housing Assistance Fund (HAF) programs. QUESTIONED COSTS: None CONTEXT During our testwork over the SLFRF and HAF programs, we requested IHDA provide us with the grant agreement / subrecipient agreements between IHDA and other State of Illinois agencies who passed through SLFRF and HAF funding to the Authority during fiscal year 2022. After discussion with Authority management, we learned that no such subrecipient agreements / intergovernmental agreements were executed for the SLFRF and HAF funding IHDA received. CAUSE Authority?s management stated during fiscal year 2022, at the height of the COVID-19 pandemic and in order to disburse emergency funding as quickly as possible, the Authority and the Illinois Department of Revenue followed the existing written internal control processes and procedures in place between the agencies with respect to drawing HAF and SLFRF money from Fund 286 in order to operate the programs. EFFECT Failure to notify subrecipients of all required federal award information could result in subrecipients improperly omitting expenditures from their schedules of expenditures of federal awards, expending federal funds for unallowable purposes, or not receiving a single audit in accordance with Uniform Grant Guidance. Additionally, failure to formalize agreements between entities could lead to disputes as to who was responsible for carrying out federal programs. (Finding Code No. 2022-004) RECOMMENDATION We recommend the Authority obtain intergovernmental agreements with other State of Illinois agencies before being subgranted funding. AUTHORITY RESPONSE The Authority is in the process of working with Illinois Department of Revenue to obtain an agreement for fiscal year 2023. Unless extraneous circumstances prevent the Authority from obtaining an agreement in a timely manner, the Authority will ensure intergovernmental agreements exist before commencing new program administration. The Authority will implement new policies and procedures to strengthen control.
Finding 2022-004 ? Failure to Execute Intergovernmental Agreements Federal Agency: U.S. Department of the Treasury (Passed through the State of Illinois) Federal Program Name: COVID-19 Homeowner Assistance Fund (HAF) / COVID-19 State and Local Fiscal Recovery Funds (SLFRF) Assistance Listing Numbers: 21.026 / 21.027 Federal Award Information Number and Year: None Award Period: July 1, 2021, to June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance CRITERIA OR SPECIFIC REQUIREMENT Uniform Guidance (2 CFR section 200.1) defines a subrecipient as `an entity, usually but not limited to nonfederal entities, that receives a subaward from a pass-through entity to carry out part of a federal award.? This relationship between pass-through entity and subrecipient must be formalized in a written agreement communicating the identification of the federal award, as well as all requirements imposed by the pass-through entity. The Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Effective internal control should include procedures to ensure agreements are in place between pass-through entity?s and subrecipients before funding is received and programs carried out. CONDITION The Illinois Housing Development Authority (IHDA, or the Authority) did not execute an intergovernmental agreement with other State of Illinois agencies before being subgranted funding for the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) and Housing Assistance Fund (HAF) programs. QUESTIONED COSTS: None CONTEXT During our testwork over the SLFRF and HAF programs, we requested IHDA provide us with the grant agreement / subrecipient agreements between IHDA and other State of Illinois agencies who passed through SLFRF and HAF funding to the Authority during fiscal year 2022. After discussion with Authority management, we learned that no such subrecipient agreements / intergovernmental agreements were executed for the SLFRF and HAF funding IHDA received. CAUSE Authority?s management stated during fiscal year 2022, at the height of the COVID-19 pandemic and in order to disburse emergency funding as quickly as possible, the Authority and the Illinois Department of Revenue followed the existing written internal control processes and procedures in place between the agencies with respect to drawing HAF and SLFRF money from Fund 286 in order to operate the programs. EFFECT Failure to notify subrecipients of all required federal award information could result in subrecipients improperly omitting expenditures from their schedules of expenditures of federal awards, expending federal funds for unallowable purposes, or not receiving a single audit in accordance with Uniform Grant Guidance. Additionally, failure to formalize agreements between entities could lead to disputes as to who was responsible for carrying out federal programs. (Finding Code No. 2022-004) RECOMMENDATION We recommend the Authority obtain intergovernmental agreements with other State of Illinois agencies before being subgranted funding. AUTHORITY RESPONSE The Authority is in the process of working with Illinois Department of Revenue to obtain an agreement for fiscal year 2023. Unless extraneous circumstances prevent the Authority from obtaining an agreement in a timely manner, the Authority will ensure intergovernmental agreements exist before commencing new program administration. The Authority will implement new policies and procedures to strengthen control.
Finding 2022-004 ? Failure to Execute Intergovernmental Agreements Federal Agency: U.S. Department of the Treasury (Passed through the State of Illinois) Federal Program Name: COVID-19 Homeowner Assistance Fund (HAF) / COVID-19 State and Local Fiscal Recovery Funds (SLFRF) Assistance Listing Numbers: 21.026 / 21.027 Federal Award Information Number and Year: None Award Period: July 1, 2021, to June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance CRITERIA OR SPECIFIC REQUIREMENT Uniform Guidance (2 CFR section 200.1) defines a subrecipient as `an entity, usually but not limited to nonfederal entities, that receives a subaward from a pass-through entity to carry out part of a federal award.? This relationship between pass-through entity and subrecipient must be formalized in a written agreement communicating the identification of the federal award, as well as all requirements imposed by the pass-through entity. The Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Effective internal control should include procedures to ensure agreements are in place between pass-through entity?s and subrecipients before funding is received and programs carried out. CONDITION The Illinois Housing Development Authority (IHDA, or the Authority) did not execute an intergovernmental agreement with other State of Illinois agencies before being subgranted funding for the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) and Housing Assistance Fund (HAF) programs. QUESTIONED COSTS: None CONTEXT During our testwork over the SLFRF and HAF programs, we requested IHDA provide us with the grant agreement / subrecipient agreements between IHDA and other State of Illinois agencies who passed through SLFRF and HAF funding to the Authority during fiscal year 2022. After discussion with Authority management, we learned that no such subrecipient agreements / intergovernmental agreements were executed for the SLFRF and HAF funding IHDA received. CAUSE Authority?s management stated during fiscal year 2022, at the height of the COVID-19 pandemic and in order to disburse emergency funding as quickly as possible, the Authority and the Illinois Department of Revenue followed the existing written internal control processes and procedures in place between the agencies with respect to drawing HAF and SLFRF money from Fund 286 in order to operate the programs. EFFECT Failure to notify subrecipients of all required federal award information could result in subrecipients improperly omitting expenditures from their schedules of expenditures of federal awards, expending federal funds for unallowable purposes, or not receiving a single audit in accordance with Uniform Grant Guidance. Additionally, failure to formalize agreements between entities could lead to disputes as to who was responsible for carrying out federal programs. (Finding Code No. 2022-004) RECOMMENDATION We recommend the Authority obtain intergovernmental agreements with other State of Illinois agencies before being subgranted funding. AUTHORITY RESPONSE The Authority is in the process of working with Illinois Department of Revenue to obtain an agreement for fiscal year 2023. Unless extraneous circumstances prevent the Authority from obtaining an agreement in a timely manner, the Authority will ensure intergovernmental agreements exist before commencing new program administration. The Authority will implement new policies and procedures to strengthen control.
Finding 2022-004 ? Failure to Execute Intergovernmental Agreements Federal Agency: U.S. Department of the Treasury (Passed through the State of Illinois) Federal Program Name: COVID-19 Homeowner Assistance Fund (HAF) / COVID-19 State and Local Fiscal Recovery Funds (SLFRF) Assistance Listing Numbers: 21.026 / 21.027 Federal Award Information Number and Year: None Award Period: July 1, 2021, to June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance CRITERIA OR SPECIFIC REQUIREMENT Uniform Guidance (2 CFR section 200.1) defines a subrecipient as `an entity, usually but not limited to nonfederal entities, that receives a subaward from a pass-through entity to carry out part of a federal award.? This relationship between pass-through entity and subrecipient must be formalized in a written agreement communicating the identification of the federal award, as well as all requirements imposed by the pass-through entity. The Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Effective internal control should include procedures to ensure agreements are in place between pass-through entity?s and subrecipients before funding is received and programs carried out. CONDITION The Illinois Housing Development Authority (IHDA, or the Authority) did not execute an intergovernmental agreement with other State of Illinois agencies before being subgranted funding for the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) and Housing Assistance Fund (HAF) programs. QUESTIONED COSTS: None CONTEXT During our testwork over the SLFRF and HAF programs, we requested IHDA provide us with the grant agreement / subrecipient agreements between IHDA and other State of Illinois agencies who passed through SLFRF and HAF funding to the Authority during fiscal year 2022. After discussion with Authority management, we learned that no such subrecipient agreements / intergovernmental agreements were executed for the SLFRF and HAF funding IHDA received. CAUSE Authority?s management stated during fiscal year 2022, at the height of the COVID-19 pandemic and in order to disburse emergency funding as quickly as possible, the Authority and the Illinois Department of Revenue followed the existing written internal control processes and procedures in place between the agencies with respect to drawing HAF and SLFRF money from Fund 286 in order to operate the programs. EFFECT Failure to notify subrecipients of all required federal award information could result in subrecipients improperly omitting expenditures from their schedules of expenditures of federal awards, expending federal funds for unallowable purposes, or not receiving a single audit in accordance with Uniform Grant Guidance. Additionally, failure to formalize agreements between entities could lead to disputes as to who was responsible for carrying out federal programs. (Finding Code No. 2022-004) RECOMMENDATION We recommend the Authority obtain intergovernmental agreements with other State of Illinois agencies before being subgranted funding. AUTHORITY RESPONSE The Authority is in the process of working with Illinois Department of Revenue to obtain an agreement for fiscal year 2023. Unless extraneous circumstances prevent the Authority from obtaining an agreement in a timely manner, the Authority will ensure intergovernmental agreements exist before commencing new program administration. The Authority will implement new policies and procedures to strengthen control.