Audit 55339

2022 ? 001 Federal Agency: U.S. Department of the Treasury Federal Program Name: Homeowner?s Assistance Fund Assistance Listing Number: 21.026 Federal Award Identification Number and Year: HAF0019 ? 2022 Pass-Through Agency: State of New Jersey Pass-Through Number(s): 21-6000928 Award Period: January 1, 2022 ? December 31, 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: The HAF Guidance documents the full eligibility considerations for HAF participants to extend financial assistance to vulnerable populations without imposing undue documentation burdens. HAF participants must require all applications for assistance to include an attestation from the applicant homeowner that all information included is correct and complete. In addition, HAF participants are expected to have policies and procedures to determine homeowner eligibility in the following three criteria: HAF participants are expected to have policies and procedures to determine homeowner eligibility in the following criteria: Financial Hardship: HAF participants may rely on homeowners' attestations that they experienced financial hardship after January 21, 2020 (including a hardship that began before January 21, 2020 but continued after that date). The attestation must describe the nature of the financial hardship (for example, job loss, reduction in income, or increased costs due to healthcare or the need to care for a family member). Income: HAF participants may take one of two approaches to income verification: (1) the homeowner may provide a written attestation as to household income together with supporting documentation such as paystubs, W2s or other wage statements, IRS Form 1099s, tax filings, depository institution statements demonstrating regular income, or an attestation from an employer; or (2) the homeowner may provide a written attestation as to household income and the HAF participant may use a reasonable fact-specific proxy for household income, such as reliance on data regarding average incomes in the household?s geographic area. To be eligible for HAF assistance, the homeowner must have income equal to or less than 150 percent of the area median income or 100 percent of the median income for the United States, whichever is greater. Condition: The Agency does not have internal controls in place to ensure all requirement documents are obtained prior to disbursing assistance to participants. Questioned costs: None Context: 40 files were selected from a population of over 250 participants. This is sample is a statistically valid sample. Exceptions were noted in 2 out of 40 instances tested: - 1 case in which only three paystubs were provided for income support, although four are required per program eligibility requirements - 1 case in which a bank statement for a second required month was not provided, as required by program eligibility requirements Cause: The Agency failed to obtain missing documentation during the application and acceptance process of a participant?s eligibility to obtain housing assistance. Effect: There is potential that participants that are not eligible could receive federal monies. This could impact the Agency receiving monies for similar types of programs in the future. Recommendation: The Agency should evaluate the steps it takes to ensure that any required documentation not gathered from the client is obtained prior to finalizing an application and providing housing assistance. Any changes in this methodology should be documented in the program policies and procedures and communicated to all employee who engage in the application process. Views of responsible officials: There is no disagreement with the audit finding.

2022 ? 001 Federal Agency: U.S. Department of the Treasury Federal Program Name: Homeowner?s Assistance Fund Assistance Listing Number: 21.026 Federal Award Identification Number and Year: HAF0019 ? 2022 Pass-Through Agency: State of New Jersey Pass-Through Number(s): 21-6000928 Award Period: January 1, 2022 ? December 31, 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: The HAF Guidance documents the full eligibility considerations for HAF participants to extend financial assistance to vulnerable populations without imposing undue documentation burdens. HAF participants must require all applications for assistance to include an attestation from the applicant homeowner that all information included is correct and complete. In addition, HAF participants are expected to have policies and procedures to determine homeowner eligibility in the following three criteria: HAF participants are expected to have policies and procedures to determine homeowner eligibility in the following criteria: Financial Hardship: HAF participants may rely on homeowners' attestations that they experienced financial hardship after January 21, 2020 (including a hardship that began before January 21, 2020 but continued after that date). The attestation must describe the nature of the financial hardship (for example, job loss, reduction in income, or increased costs due to healthcare or the need to care for a family member). Income: HAF participants may take one of two approaches to income verification: (1) the homeowner may provide a written attestation as to household income together with supporting documentation such as paystubs, W2s or other wage statements, IRS Form 1099s, tax filings, depository institution statements demonstrating regular income, or an attestation from an employer; or (2) the homeowner may provide a written attestation as to household income and the HAF participant may use a reasonable fact-specific proxy for household income, such as reliance on data regarding average incomes in the household?s geographic area. To be eligible for HAF assistance, the homeowner must have income equal to or less than 150 percent of the area median income or 100 percent of the median income for the United States, whichever is greater. Condition: The Agency does not have internal controls in place to ensure all requirement documents are obtained prior to disbursing assistance to participants. Questioned costs: None Context: 40 files were selected from a population of over 250 participants. This is sample is a statistically valid sample. Exceptions were noted in 2 out of 40 instances tested: - 1 case in which only three paystubs were provided for income support, although four are required per program eligibility requirements - 1 case in which a bank statement for a second required month was not provided, as required by program eligibility requirements Cause: The Agency failed to obtain missing documentation during the application and acceptance process of a participant?s eligibility to obtain housing assistance. Effect: There is potential that participants that are not eligible could receive federal monies. This could impact the Agency receiving monies for similar types of programs in the future. Recommendation: The Agency should evaluate the steps it takes to ensure that any required documentation not gathered from the client is obtained prior to finalizing an application and providing housing assistance. Any changes in this methodology should be documented in the program policies and procedures and communicated to all employee who engage in the application process. Views of responsible officials: There is no disagreement with the audit finding.