2022-004 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of Housing and Urban Development Program: 14.231 Emergency Solutions Grant Program Award Number and Year: E-20-MW-27-0007, E-20-MC-27-0007, 2020; E-21-MC-27-0007, 2021 Pass-Through Agency: City of Saint Paul, Minnesota Criteria: Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. In addition, per the Joint Powers Agreement between the County and the City of Saint Paul, the County is to submit supporting evidence for each Draw Request prepared by the County for reimbursement. Condition: The County did not obtain itemized documentation from its subrecipients for six out of 40 disbursements tested. The amount of disbursements that did not have supporting documentation totaled $507,553. Itemized documentation would include reports derived from payroll systems or subrecipient general ledgers and original receipts. Questioned Costs: Could not be determined. Context: The County expended a total of $5,500,646 of Emergency Solutions Grant Program funds in 2022. Of this amount, $5,466,366 was passed through to subrecipients of the County. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: By not obtaining itemized documentation, the County cannot be assured that its subrecipients were expending funds on allowable activities and met the requirements of allowable costs. In addition, the County is not meeting the requirements outlined in its agreement with the City of Saint Paul. Cause: The County considered its subrecipient monitoring procedures sufficient in lieu of obtaining itemized documentation. Recommendation: We recommend the County obtain itemized documentation related to expenditures, including payroll or general ledger reports and itemized receipts, as applicable, for subrecipient reimbursement requests. View of Responsible Official: Acknowledge
2022-004 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of Housing and Urban Development Program: 14.231 Emergency Solutions Grant Program Award Number and Year: E-20-MW-27-0007, E-20-MC-27-0007, 2020; E-21-MC-27-0007, 2021 Pass-Through Agency: City of Saint Paul, Minnesota Criteria: Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. In addition, per the Joint Powers Agreement between the County and the City of Saint Paul, the County is to submit supporting evidence for each Draw Request prepared by the County for reimbursement. Condition: The County did not obtain itemized documentation from its subrecipients for six out of 40 disbursements tested. The amount of disbursements that did not have supporting documentation totaled $507,553. Itemized documentation would include reports derived from payroll systems or subrecipient general ledgers and original receipts. Questioned Costs: Could not be determined. Context: The County expended a total of $5,500,646 of Emergency Solutions Grant Program funds in 2022. Of this amount, $5,466,366 was passed through to subrecipients of the County. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: By not obtaining itemized documentation, the County cannot be assured that its subrecipients were expending funds on allowable activities and met the requirements of allowable costs. In addition, the County is not meeting the requirements outlined in its agreement with the City of Saint Paul. Cause: The County considered its subrecipient monitoring procedures sufficient in lieu of obtaining itemized documentation. Recommendation: We recommend the County obtain itemized documentation related to expenditures, including payroll or general ledger reports and itemized receipts, as applicable, for subrecipient reimbursement requests. View of Responsible Official: Acknowledge
2022-004 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of Housing and Urban Development Program: 14.231 Emergency Solutions Grant Program Award Number and Year: E-20-MW-27-0007, E-20-MC-27-0007, 2020; E-21-MC-27-0007, 2021 Pass-Through Agency: City of Saint Paul, Minnesota Criteria: Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. In addition, per the Joint Powers Agreement between the County and the City of Saint Paul, the County is to submit supporting evidence for each Draw Request prepared by the County for reimbursement. Condition: The County did not obtain itemized documentation from its subrecipients for six out of 40 disbursements tested. The amount of disbursements that did not have supporting documentation totaled $507,553. Itemized documentation would include reports derived from payroll systems or subrecipient general ledgers and original receipts. Questioned Costs: Could not be determined. Context: The County expended a total of $5,500,646 of Emergency Solutions Grant Program funds in 2022. Of this amount, $5,466,366 was passed through to subrecipients of the County. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: By not obtaining itemized documentation, the County cannot be assured that its subrecipients were expending funds on allowable activities and met the requirements of allowable costs. In addition, the County is not meeting the requirements outlined in its agreement with the City of Saint Paul. Cause: The County considered its subrecipient monitoring procedures sufficient in lieu of obtaining itemized documentation. Recommendation: We recommend the County obtain itemized documentation related to expenditures, including payroll or general ledger reports and itemized receipts, as applicable, for subrecipient reimbursement requests. View of Responsible Official: Acknowledge
2022-005 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of the Treasury Program: 21.023 COVID-19 ? Emergency Rental Assistance Program Criteria: Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Per the County?s subrecipient agreements, ?each jurisdiction?s program allocation may only be used to provide Emergency Rental Assistance (ERA) [or Financial Assistance] to eligible households within the geographical boundaries of that jurisdiction.? In addition, Part 3 of the OMB Compliance Supplement states that improper payments include any duplicate payment. Condition: The following exceptions were detected in the audit of COVID-19 ? Emergency Rental Assistance Program: ? In the sample of 15 disbursements tested, five consisted of advance payments to the County?s subrecipients where itemized documentation was not subsequently obtained, and ? In the sample of three journal entries tested, all three included duplicate expenditures. Questioned Costs: $254,296 Context: The County was allocated over $15 million in ERA1 and ERA2 funds between 2021 and 2022, expending $6,470,692 in 2022. Of this amount, $5,741,917 was passed through to subrecipients in 2022. The County completed monitoring procedures over its subrecipients at the beginning of 2022, reviewed spending of the subrecipients against budgets established at the beginning of the program, and viewed data entered by its subrecipients into online portals noting rent and utility assistance provided. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: By not obtaining itemized documentation, the County cannot be assured that its subrecipients were expending funds on allowable activities and met the requirements of allowable costs. Excess funding was to be returned to the U.S. Department of the Treasury for reallocation. Cause: The County considered its subrecipient monitoring procedures and monitoring of spending and online portals sufficient in lieu of obtaining itemized documentation. The County created journal entries to move funding between the ERA1 and ERA2 Programs to close and ?clean up? the ERA1 Program. Recommendation: We recommend the County obtain supporting documentation related to advances, including payroll and general ledger reports, and itemized receipts for purchases prior to disbursing subsequent advances. In addition, we recommend the County implement procedures to ensure that only allowable program expenditures are reimbursed, taking special care with journal entries to ensure expenditures are not duplicated. View of Responsible Official: Acknowledge
2022-006 Eligibility Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of the Treasury Program: 21.023 COVID-19 ? Emergency Rental Assistance Program Criteria: Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Per the County's Federal Emergency Rental Assistance Program Guide for Tenant Application, the County is to obtain a written attestation if the participant household has no qualifying income or does not have documentation of all current income. In addition, per the U.S. Department of the Treasury's Emergency Rental Assistance Frequently Asked Questions, revised July 27, 2022, a grantee may rely on a written attestation without further documentation of household income under three approaches, self-attestation being one of these approaches; and the cost of a hotel or motel room may be covered using Emergency Rental Assistance provided that documentation of the hotel or motel stay is provided. The cost of the hotel or motel stay would not include expenses incidental to the charge for the room. Condition: In a sample of 19 participant?s eligibility documentation tested, the following exceptions were detected: ? One payment to a participant?s landlord exceeded the amount in the agreement; ? Three participants did not have documentation to support household income; and ? All participants did not have documentation originating from the hotel or shelter supporting the payment amount on behalf of the participant, including that incidental expenses were not included; or the hotel invoice did not agree to the actual payment amount. Questioned Costs: Less than $25,000 Context: The County informed us that its procedures are to take attendance daily for participants housed at hotels or shelters, and reconcile it to monthly attendance confirmations provided by the hotels or shelters. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The County is not in compliance with requirements determined by the U.S. Department of the Treasury, as well as the County is not following procedures as outlined in its Federal Emergency Rental Assistance Program Guide for Tenant Application. Cause: For the damage deposit discrepancy noted, the County believes that the incorrect damage deposit amount was noted in the lease by the landlord in error. The County informed us that it allowed verbal attestation in some cases for income verifications. Lastly, the County was unable to provide documentation of its reconciliation procedures over participant attendance at hotels or shelters. Recommendation: We recommend the County ensure its policies and procedures are being followed. In addition, we recommend the County review guidance provided by the U.S. Department of the Treasury to ensure it is meeting all applicable compliance requirements. View of Responsible Official: Acknowledge
2022-004 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of Housing and Urban Development Program: 14.231 Emergency Solutions Grant Program Award Number and Year: E-20-MW-27-0007, E-20-MC-27-0007, 2020; E-21-MC-27-0007, 2021 Pass-Through Agency: City of Saint Paul, Minnesota Criteria: Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. In addition, per the Joint Powers Agreement between the County and the City of Saint Paul, the County is to submit supporting evidence for each Draw Request prepared by the County for reimbursement. Condition: The County did not obtain itemized documentation from its subrecipients for six out of 40 disbursements tested. The amount of disbursements that did not have supporting documentation totaled $507,553. Itemized documentation would include reports derived from payroll systems or subrecipient general ledgers and original receipts. Questioned Costs: Could not be determined. Context: The County expended a total of $5,500,646 of Emergency Solutions Grant Program funds in 2022. Of this amount, $5,466,366 was passed through to subrecipients of the County. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: By not obtaining itemized documentation, the County cannot be assured that its subrecipients were expending funds on allowable activities and met the requirements of allowable costs. In addition, the County is not meeting the requirements outlined in its agreement with the City of Saint Paul. Cause: The County considered its subrecipient monitoring procedures sufficient in lieu of obtaining itemized documentation. Recommendation: We recommend the County obtain itemized documentation related to expenditures, including payroll or general ledger reports and itemized receipts, as applicable, for subrecipient reimbursement requests. View of Responsible Official: Acknowledge
2022-004 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of Housing and Urban Development Program: 14.231 Emergency Solutions Grant Program Award Number and Year: E-20-MW-27-0007, E-20-MC-27-0007, 2020; E-21-MC-27-0007, 2021 Pass-Through Agency: City of Saint Paul, Minnesota Criteria: Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. In addition, per the Joint Powers Agreement between the County and the City of Saint Paul, the County is to submit supporting evidence for each Draw Request prepared by the County for reimbursement. Condition: The County did not obtain itemized documentation from its subrecipients for six out of 40 disbursements tested. The amount of disbursements that did not have supporting documentation totaled $507,553. Itemized documentation would include reports derived from payroll systems or subrecipient general ledgers and original receipts. Questioned Costs: Could not be determined. Context: The County expended a total of $5,500,646 of Emergency Solutions Grant Program funds in 2022. Of this amount, $5,466,366 was passed through to subrecipients of the County. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: By not obtaining itemized documentation, the County cannot be assured that its subrecipients were expending funds on allowable activities and met the requirements of allowable costs. In addition, the County is not meeting the requirements outlined in its agreement with the City of Saint Paul. Cause: The County considered its subrecipient monitoring procedures sufficient in lieu of obtaining itemized documentation. Recommendation: We recommend the County obtain itemized documentation related to expenditures, including payroll or general ledger reports and itemized receipts, as applicable, for subrecipient reimbursement requests. View of Responsible Official: Acknowledge
2022-004 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of Housing and Urban Development Program: 14.231 Emergency Solutions Grant Program Award Number and Year: E-20-MW-27-0007, E-20-MC-27-0007, 2020; E-21-MC-27-0007, 2021 Pass-Through Agency: City of Saint Paul, Minnesota Criteria: Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. In addition, per the Joint Powers Agreement between the County and the City of Saint Paul, the County is to submit supporting evidence for each Draw Request prepared by the County for reimbursement. Condition: The County did not obtain itemized documentation from its subrecipients for six out of 40 disbursements tested. The amount of disbursements that did not have supporting documentation totaled $507,553. Itemized documentation would include reports derived from payroll systems or subrecipient general ledgers and original receipts. Questioned Costs: Could not be determined. Context: The County expended a total of $5,500,646 of Emergency Solutions Grant Program funds in 2022. Of this amount, $5,466,366 was passed through to subrecipients of the County. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: By not obtaining itemized documentation, the County cannot be assured that its subrecipients were expending funds on allowable activities and met the requirements of allowable costs. In addition, the County is not meeting the requirements outlined in its agreement with the City of Saint Paul. Cause: The County considered its subrecipient monitoring procedures sufficient in lieu of obtaining itemized documentation. Recommendation: We recommend the County obtain itemized documentation related to expenditures, including payroll or general ledger reports and itemized receipts, as applicable, for subrecipient reimbursement requests. View of Responsible Official: Acknowledge
2022-005 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of the Treasury Program: 21.023 COVID-19 ? Emergency Rental Assistance Program Criteria: Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Per the County?s subrecipient agreements, ?each jurisdiction?s program allocation may only be used to provide Emergency Rental Assistance (ERA) [or Financial Assistance] to eligible households within the geographical boundaries of that jurisdiction.? In addition, Part 3 of the OMB Compliance Supplement states that improper payments include any duplicate payment. Condition: The following exceptions were detected in the audit of COVID-19 ? Emergency Rental Assistance Program: ? In the sample of 15 disbursements tested, five consisted of advance payments to the County?s subrecipients where itemized documentation was not subsequently obtained, and ? In the sample of three journal entries tested, all three included duplicate expenditures. Questioned Costs: $254,296 Context: The County was allocated over $15 million in ERA1 and ERA2 funds between 2021 and 2022, expending $6,470,692 in 2022. Of this amount, $5,741,917 was passed through to subrecipients in 2022. The County completed monitoring procedures over its subrecipients at the beginning of 2022, reviewed spending of the subrecipients against budgets established at the beginning of the program, and viewed data entered by its subrecipients into online portals noting rent and utility assistance provided. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: By not obtaining itemized documentation, the County cannot be assured that its subrecipients were expending funds on allowable activities and met the requirements of allowable costs. Excess funding was to be returned to the U.S. Department of the Treasury for reallocation. Cause: The County considered its subrecipient monitoring procedures and monitoring of spending and online portals sufficient in lieu of obtaining itemized documentation. The County created journal entries to move funding between the ERA1 and ERA2 Programs to close and ?clean up? the ERA1 Program. Recommendation: We recommend the County obtain supporting documentation related to advances, including payroll and general ledger reports, and itemized receipts for purchases prior to disbursing subsequent advances. In addition, we recommend the County implement procedures to ensure that only allowable program expenditures are reimbursed, taking special care with journal entries to ensure expenditures are not duplicated. View of Responsible Official: Acknowledge
2022-006 Eligibility Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of the Treasury Program: 21.023 COVID-19 ? Emergency Rental Assistance Program Criteria: Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Per the County's Federal Emergency Rental Assistance Program Guide for Tenant Application, the County is to obtain a written attestation if the participant household has no qualifying income or does not have documentation of all current income. In addition, per the U.S. Department of the Treasury's Emergency Rental Assistance Frequently Asked Questions, revised July 27, 2022, a grantee may rely on a written attestation without further documentation of household income under three approaches, self-attestation being one of these approaches; and the cost of a hotel or motel room may be covered using Emergency Rental Assistance provided that documentation of the hotel or motel stay is provided. The cost of the hotel or motel stay would not include expenses incidental to the charge for the room. Condition: In a sample of 19 participant?s eligibility documentation tested, the following exceptions were detected: ? One payment to a participant?s landlord exceeded the amount in the agreement; ? Three participants did not have documentation to support household income; and ? All participants did not have documentation originating from the hotel or shelter supporting the payment amount on behalf of the participant, including that incidental expenses were not included; or the hotel invoice did not agree to the actual payment amount. Questioned Costs: Less than $25,000 Context: The County informed us that its procedures are to take attendance daily for participants housed at hotels or shelters, and reconcile it to monthly attendance confirmations provided by the hotels or shelters. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The County is not in compliance with requirements determined by the U.S. Department of the Treasury, as well as the County is not following procedures as outlined in its Federal Emergency Rental Assistance Program Guide for Tenant Application. Cause: For the damage deposit discrepancy noted, the County believes that the incorrect damage deposit amount was noted in the lease by the landlord in error. The County informed us that it allowed verbal attestation in some cases for income verifications. Lastly, the County was unable to provide documentation of its reconciliation procedures over participant attendance at hotels or shelters. Recommendation: We recommend the County ensure its policies and procedures are being followed. In addition, we recommend the County review guidance provided by the U.S. Department of the Treasury to ensure it is meeting all applicable compliance requirements. View of Responsible Official: Acknowledge