Corrective Action Plans

Finding 15980 (2022-036)

Material Weakness 2022

State of Washington C/o Office of Financial Management

WA

Questioned Costs Allowable Costs / Cost Principles Subrecipient Monitoring § 200.1 § 200.410 § 200.516

Finding: The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with client eligibility requirements for child care services paid with the Child Care and Development Fund and Temporary Assistance for Needy Families funds. Questioned Costs:...

Finding: The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with client eligibility requirements for child care services paid with the Child Care and Development Fund and Temporary Assistance for Needy Families funds. Questioned Costs: Assistance Listing # 93.558 93.575 93.575 COVID-19 93.596 Amount $5,689 $5,078 Status: Corrective action in progress Corrective Action: The Child Care and Development Fund (CCDF) program was previously managed by the Department of Social and Health Services and the Department of Early Learning. Since the program transitioned in 2019, the Department has been making efforts to strengthen internal controls over payments to child care providers and other CCDF grant requirements. In response to the finding, the Department established overpayments and referred them to the Office of Financial Recovery for collection. As part of process and internal control improvements, the Department implemented the Fair Start for Kids Act (FSKA) on October 1, 2021, to simplify rules and expand eligibility. The FSKA: ? Raises the State Median Income threshold, increasing the number of eligible two-parent households. ? Caps copayments at $115 for applicants and $215 for reapplicants, reducing the copay amounts for two-parent households. ? Acts as disincentives for fraud as families are less likely to report the non-custodial parent who is not a household member. The Department continues to review cases for accuracy following these new rules and policies. In September 2022, the Office of Child Care (OCC) released a document to help CCDF lead agencies simplify the format and content of child care assistance applications, which includes guidance on defining, collecting, and verifying eligibility information. The Department continues to follow guidance from OCC to update policies and procedures within the authority under the Revised Code of Washington and Washington Administrative Code. This includes: ? Updating policies and procedures for cases with simplified eligibility such as families experiencing homelessness or families with children receiving protective services. Public Benefit Specialist (PBS) staff received training in the winter of 2022, which included the use of systems data to establish household composition. ? Developing a guide for staff to more effectively use the Employment Security Department (ESD) quarterly reported data for eligibility determinations. The ESD data is directly reported by the employer, secured, and reduces delays in benefits by eliminating the wait for employment verification. It is also simple to use for the PBS staff and the auditors, thereby reducing income calculation errors and removing the need for consumers to provide documentation to support the eligibility determination. This procedural change and training are expected to be completed by the summer of 2023. The conditions noted in this finding were previously reported in findings 2021-035, 2020-039, 2019-032, 2018-030, 2017-026, 2016-023, 2015-026, 2014-026, 2013-017 and 2012-30. Completion Date: Estimated October 2023 Agency Contact: Stefanie Niemela Audit Liaison PO Box 40970 Olympia, WA 98504-0970 (360) 725-4402 stefanie.niemela@dcyf.wa.gov

View Audit 23129 Questioned Costs: $1

Finding 15979 (2022-035)

Material Weakness 2022

State of Washington C/o Office of Financial Management

WA

Questioned Costs Allowable Costs / Cost Principles Subrecipient Monitoring § 200.1 § 200.403 § 200.410 § 200.53

Finding: The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with requirements to ensure payments to child care providers paid with Temporary Assistance for Needy Families funds were allowable and properly supported. Questioned Costs: A...

Finding: The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with requirements to ensure payments to child care providers paid with Temporary Assistance for Needy Families funds were allowable and properly supported. Questioned Costs: Assistance Listing # 93.558 Amount $67,699,429 Status: Corrective action in progress Corrective Action: The Working Connections Child Care (WCCC) program was previously managed by the Department of Social and Health Services (DSHS) and the Department of Early Learning. Since the program transitioned in 2019, the Department has been making efforts to strengthen internal controls over payments to child care providers and other grant requirements. The Department implemented grant-level management of all federal funds, including the Temporary Assistance for Needy Families (TANF) grant. The Department allocated the TANF grant to eligible clients and allowable activities in compliance with 45 CFR 98.67. For the fiscal year 2021 program audit, the State Auditor?s Office (SAO) issued a finding with $32 questioned costs for non-compliance with the CCDF eligibility requirement. No other findings, management letters, or exit items were reported in this compliance area or the cost allocation of funds based on eligibility for the CCDF or TANF grants. Given that eligibility or cost allocation has not been an area of concern, and transfers were processed between TANF and CCDF source of funds with the same eligibility criteria, the Department is assured that TANF funding was spent appropriately within federal regulations. The Department is committed to improving internal controls. The Department does not currently have the resources to develop and maintain the business process redesign, as well as the information technology initiatives necessary to meet the level of assurance recommended by SAO. In response to prior year?s audit recommendations, the Department has submitted a budget request to the Legislature in the 2023-2025 biennial budget for additional resources to process adjustments to include transaction-level data. As part of the audit resolution process, the Department of Health and Human Services (HHS), which oversees the CCDF program at the federal level, reviews all SAO findings and issues management decision letters. The letters will reflect the grantor?s determination of whether an audit finding is sustained, the reasons for the decision, and the required actions by the auditee. When a management decision is issued for the fiscal year 2021 finding, the Department will work with HHS and follow the audit resolution process. Completion Date: Agency Contact: The conditions noted in this finding were previously reported in finding 2021-028. Estimated December 2024 Stefanie Niemela Audit Liaison PO Box 40970 Olympia, WA 98504-0970 (360) 725-4402 stefanie.niemela@dcyf.wa.gov

View Audit 23129 Questioned Costs: $1

Finding 15976 (2022-034)

Material Weakness 2022

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Reporting Equipment & Real Property Management

Finding: The Department of Health did not have adequate internal controls over and did not comply with reporting requirements for the Epidemiology and Laboratory Capacity for Infectious Diseases program. Questioned Costs: Assistance Listing # 93.323 93.323 COVID-19 Status: Corrective action...

Finding: The Department of Health did not have adequate internal controls over and did not comply with reporting requirements for the Epidemiology and Laboratory Capacity for Infectious Diseases program. Questioned Costs: Assistance Listing # 93.323 93.323 COVID-19 Status: Corrective action in progress Corrective Action: The Department partially agrees with the finding. For the two reports on which the auditors took exceptions, the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program did discover the errors after the original reports were submitted. The Department notified the Centers for Disease Control and Prevention (CDC) about the reporting errors in February 2022, which was within the reporting period. However, due to a technical issue, the federal reporting system would not allow ELC program staff to input edits to the reports for the months of July through October 2021. After a discussion with CDC, program staff were advised to submit the corrected data of the previous reports via email, which was subsequently accepted by the grantor and the issue was resolved. The Department agrees there needs to be evidence of documented reviews of reports and is implementing steps to ensure review and approval of reports are well documented and retained before final submission to the federal grantor. Completion Date: Estimated December 2023 Agency Contact: Jeff Arbuckle External Audit Manager PO Box 47890 Olympia, WA 98504-7890 (360) 701-0798 Jeff.Arbuckle@doh.wa.gov

View Audit 23129

Finding 15975 (2022-033)

Material Weakness 2022

State of Washington C/o Office of Financial Management

WA

Questioned Costs Subrecipient Monitoring Allowable Costs / Cost Principles § 200.00 § 200.516

Finding: The Department of Health did not have adequate internal controls over and did not comply with fiscal monitoring requirements to ensure subrecipients of the Epidemiology and Laboratory Capacity for Infectious Diseases program only used funds for allowable activities and met cost principles....

Finding: The Department of Health did not have adequate internal controls over and did not comply with fiscal monitoring requirements to ensure subrecipients of the Epidemiology and Laboratory Capacity for Infectious Diseases program only used funds for allowable activities and met cost principles. Questioned Costs: Assistance Listing # 93.323 93.323 COVID-19 Amount $1,644,873 Status: Corrective action in progress Corrective Action: The Department partially concurs with the finding. The Department agrees with the auditors? recommendation over subrecipient monitoring to require transactions that were previously coded as ?COVID? to be recorded with the specific revenue source and will do so in future monitoring visits. The Department does not agree with the auditors? assessment of a material weakness in internal controls over subrecipient monitoring. When staff conduct fiscal monitoring site visits, key control systems including payroll and disbursements are reviewed and documented. These monitoring activities ensure internal controls are operating effectively and providing assurance that reimbursements are allowable and accurate. The Department acknowledges that internal controls can be strengthened over provider payments and will take the following actions: ? Require payments to providers be adequately supported by the appropriate backup documentation and subrecipient risk assessments. ? Update the documentation requirements to align with the identified risk levels and federal guidance. ? Develop tracking sheets, which enable staff to record details from backup documentation reviews and payment approvals. ? Provide additional training to staff in the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program responsible for reviewing invoices. The Department disagrees with the SAO?s assessment of a material weakness in internal controls over the consolidated contract provider payment process for the ELC program. The Department has established processes in place to ensure payments are allowable and meet cost principles for the program. These include: ? Perform annual review and approval of detailed subrecipient budgets. ? Compare invoice amounts to budgeted amounts for reasonableness before payment approval. ? Provide subrecipients regular technical assistance and training on applicable policies related to fiscal and programmatic processes. ? Conduct biennial program and fiscal monitoring visits to subrecipients as part of the Department?s monitoring procedures. In addition, the ELC program has monitoring controls in place and evidence of review at the program level. Program staff maintain a detailed spreadsheet that documents review and approval and includes any amounts that need to be withheld until issues with invoice support are resolved. These reviews are to be completed within the 10-day period before payment is released. The Department is planning on meeting with federal grantors to work through the exceptions and questioned costs identified in the finding. Completion Date: Estimated March 2024 Agency Contact: Jeff Arbuckle External Audit Manager PO Box 47890 Olympia, WA 98504-7890 (360) 701-0798 Jeff.Arbuckle@doh.wa.gov

View Audit 23129 Questioned Costs: $1

Finding 15970 (2022-032)

Material Weakness 2022

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Internal Control / Segregation of Duties Matching / Level of Effort / Earmarking

Finding: The Department of Health did not have adequate internal controls to ensure it filed accurate and timely reports required by the Federal Funding Accountability and Transparency Act for the Immunization Cooperative Agreements program. Questioned Costs: Assistance Listing # 93.268 93.26...

Finding: The Department of Health did not have adequate internal controls to ensure it filed accurate and timely reports required by the Federal Funding Accountability and Transparency Act for the Immunization Cooperative Agreements program. Questioned Costs: Assistance Listing # 93.268 93.268 COVID-19 Amount $0 Status: Corrective action in progress Corrective Action: The Department agrees with the finding. The Department will review internal processes and determine when a review is most effective to ensure accuracy and completeness of the Federal Funding Accountability and Transparency Act reporting submissions. Management has already addressed the obligation dates to ensure the execution date of the award or amendment is reported. Completion Date: Estimated July 2024 Agency Contact: Jeff Arbuckle External Audit Manager PO Box 47890 Olympia, WA 98504-7890 (360) 701-0798 Jeff.Arbuckle@doh.wa.gov

View Audit 23129

Finding 15969 (2022-031)

Material Weakness 2022

State of Washington C/o Office of Financial Management

WA

Questioned Costs Subrecipient Monitoring Allowable Costs / Cost Principles § 200.00 § 200.1 § 200.410 § 200.516

Finding: The Department of Health did not have adequate internal controls over and did not comply with requirements to ensure payments to providers were allowable, met cost principles, and were within the period of performance for the Immunization Cooperative Agreements program. Questioned Costs:...

Finding: The Department of Health did not have adequate internal controls over and did not comply with requirements to ensure payments to providers were allowable, met cost principles, and were within the period of performance for the Immunization Cooperative Agreements program. Questioned Costs: Assistance Listing # 93.268 93.268 COVID-19 Status: Corrective action in progress Corrective Action: The Department partially agrees with the finding. The Department agrees that internal controls can be strengthened over provider payments to ensure funds are allowable and spent within the period of performance. The following actions were taken: ? Required payments to providers contain adequate support in line with the A19 matrix and subrecipients? risk assessments. ? Provided additional training to staff in the immunization unit responsible for reviewing invoices. ? Developed tracking sheets which enable staff to record details from backup documentation reviews and payment approvals. The Department will review the control weaknesses identified in the audit related to the consolidated contract payment process and will determine if changes need to be made. The Department disagrees with the audit exceptions and questioned costs identified in the finding. The Department will work with the federal grantor to resolve any questioned costs. Completion Date: Estimated December 2023 Agency Contact: Jeff Arbuckle External Audit Manager PO Box 47890 Olympia, WA 98504-7890 (360) 701-0798 Jeff.Arbuckle@doh.wa.gov

View Audit 23129 Questioned Costs: $1

Finding 15956 (2022-004)

Significant Deficiency 2022

Human Services of Faribault and Martin Counties

MN

Reporting Significant Deficiency Internal Control / Segregation of Duties

2022-004 TIMELY REPORTING Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Medical Assistance Program (Medicaid Cluster) Assistance Listing Number: 93.778 Federal Award Identification Numbers and Year: 2205MN5MAP and 2205MN5ADM, 2022 Pass-Through Agency: ...

2022-004 TIMELY REPORTING Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Medical Assistance Program (Medicaid Cluster) Assistance Listing Number: 93.778 Federal Award Identification Numbers and Year: 2205MN5MAP and 2205MN5ADM, 2022 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Numbers: 2205MN5MAP and 2205MN5ADM Compliance Requirement Affected: Reporting Award Period: Year-Ended December 31, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Recommendation: It is recommended the Agency implement control procedures to ensure all reporting deadlines are met. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The Agency will review procedures and implement changes as needed to ensure going forward all reports are submitted timely. Name of the contact person responsible for corrective action plan: Chera Sevcik, Human Services Executive Director Planned completion date for corrective action plan: December 31, 2023

View Audit 22857

Finding 15953 (2022-004)

Material Weakness 2022

New London Community School District

IA

Internal Control / Segregation of Duties

Contact Person Anticipated Comment Comment Corrective Title Date of Number Title Action Plan Phone Number Completion 2022-004 Segregation The corrective action plan was Jessica Boyer FY23 of Duties documented in ...

Contact Person Anticipated Comment Comment Corrective Title Date of Number Title Action Plan Phone Number Completion 2022-004 Segregation The corrective action plan was Jessica Boyer FY23 of Duties documented in our response to Business Manager the auditor's comment. See the 319-367-0512 Schedule of Findings and Questioned Costs.

View Audit 22291

Finding 15952 (2022-001)

None 2022

Pacific Housing Oahu Corporation - Elderly Residence

HI

HUD Housing Programs

1. Ref. No. 2022-001: Deposit Funds Monthly to an Interest-Bearing Replacement Reserve Account Recommendation: The Company should implement a process to adhere to the Regulatory Agreement requirements and ensure that the replacement reserve account deposits are completed monthly. Action Taken: The...

1. Ref. No. 2022-001: Deposit Funds Monthly to an Interest-Bearing Replacement Reserve Account Recommendation: The Company should implement a process to adhere to the Regulatory Agreement requirements and ensure that the replacement reserve account deposits are completed monthly. Action Taken: The Company has instructed Bob Tanaka, Inc. to establish a procedure to ensure $2,000 is deposited into the replacement reserve account every month, preferably via an automated process. Contact person: Patrick Delaney (808) 523-5681, ext. 693 Anticipated Completion Date: October 31, 2023

View Audit 21384

Finding 15951 (2022-002)

None 2022

Pacific Housing Oahu Corporation - Elderly Residence

HI

HUD Housing Programs

2. Ref. No. 2022-002: Ensure Only Authorized Withdrawals are Disbursed from the Replacement Reserve Account Recommendation: Management should transfer $12,817 from the operating cash account to the replacement reserve fund. Action Taken: The Company has removed Locations/MontPac as the property ma...

2. Ref. No. 2022-002: Ensure Only Authorized Withdrawals are Disbursed from the Replacement Reserve Account Recommendation: Management should transfer $12,817 from the operating cash account to the replacement reserve fund. Action Taken: The Company has removed Locations/MontPac as the property managers on March 31, 2023 and hired Bob Tanaka, Inc. as their replacement. The Company has instructed Bob Tanaka, Inc. to transfer $12,817 from the operating bank account to the replacement reserve bank account. The Company has also instructed Bob Tanaka, Inc. to obtain HUD authorization prior to making transfers from the replacement reserve account. Contact person: Patrick Delaney (808) 523-5681, ext. 693 Anticipated Completions Date: Completed.

View Audit 21384

Finding 15949 (2022-001)

Significant Deficiency 2022

Rainbow Heights, Inc.

GA

HUD Housing Programs Internal Control / Segregation of Duties

Reportable Views of Responsible Officials: Management is in agreement with the finding and has started the process to increase to increase the policy coverage amount.

View Audit 20279

Finding 15948 (2022-005)

Significant Deficiency 2022

Chesapeake Research Consortium, Inc.

MD

Allowable Costs / Cost Principles Reporting Significant Deficiency

Environmental Protection Agency Chesapeake Bay Program - Grant No. CB96343601; Grant period - Year ended June 30, 2022 FINDING 2022-005: Internal Controls Over Financial Reporting Recommendation: Accounting processes and procedures should be reviewed and revised to include the process of all...

Environmental Protection Agency Chesapeake Bay Program - Grant No. CB96343601; Grant period - Year ended June 30, 2022 FINDING 2022-005: Internal Controls Over Financial Reporting Recommendation: Accounting processes and procedures should be reviewed and revised to include the process of allocating and recording credit card bills to corresponding grants. Action Taken: We concur with the recommendation and will adjust our processes accordingly.

View Audit 19565

Finding 15946 (2022-003)

Significant Deficiency 2022

City of Potosi, Missouri

MO

Procurement, Suspension & Debarment Matching / Level of Effort / Earmarking

FEDERAL AWARD FINDINGS AND QUESTIONED COSTS FEDERAL SIGNIFICANT DEFICIENCY 2022-3 The City has not adopted written policies and procedures related to federal awards as required by Uniform Guidance. Recommendation: We recommend the City adopt the required written policies and procedures requir...

FEDERAL AWARD FINDINGS AND QUESTIONED COSTS FEDERAL SIGNIFICANT DEFICIENCY 2022-3 The City has not adopted written policies and procedures related to federal awards as required by Uniform Guidance. Recommendation: We recommend the City adopt the required written policies and procedures required by Uniform Guidance. City?s Response: The City understands the concern. The City will review and update the City of Potosi?s procurement policy to add the federal guidelines to comply with Uniform Guidance. Planned Completion Date for the Corrective Action Plan: The City plans to have its accounting procedures and controls documented by May 1, 2023.

View Audit 19560

Finding 15941 (2022-004)

None 2022

Syracuse Model Neighborhood Facility, Inc.

NY

Allowable Costs / Cost Principles

Control Deficiency 2022-004 Allocation of Functional Expenses Contact Person Responsible for Corrective Action Plan: Lawrence Williams, Chief Executive Officer. Corrective Action Plan: The Chief Executive Officer and Chief Financial Officer will ensure a detailed review is performed of expenses be...

Control Deficiency 2022-004 Allocation of Functional Expenses Contact Person Responsible for Corrective Action Plan: Lawrence Williams, Chief Executive Officer. Corrective Action Plan: The Chief Executive Officer and Chief Financial Officer will ensure a detailed review is performed of expenses between program expense and administrative expenses. Anticipated Completion Date of Corrective Action Plan: December 31, 2023

View Audit 19559

Finding 15940 (2022-003)

Significant Deficiency 2022

Syracuse Model Neighborhood Facility, Inc.

NY

Cash Management Significant Deficiency

Significant Deficiency 2022-003 Application of Cash Receipts Contact Person Responsible for Corrective Action Plan: Lawrence Williams, Chief Executive Officer. Corrective Action Plan: The Chief Executive Officer and Chief Financial Officer will ensure that all cash receipts are properly applied to...

Significant Deficiency 2022-003 Application of Cash Receipts Contact Person Responsible for Corrective Action Plan: Lawrence Williams, Chief Executive Officer. Corrective Action Plan: The Chief Executive Officer and Chief Financial Officer will ensure that all cash receipts are properly applied to the appropriate grant receivable funder and utilize any deferred revenue from the funder where appropriate. Anticipated Completion Date of Corrective Action Plan: December 31, 2023

View Audit 19559

Finding 15939 (2022-002)

Significant Deficiency 2022

Syracuse Model Neighborhood Facility, Inc.

NY

Cash Management Significant Deficiency

Significant Deficiency 2022-002 Grant Voucher Submissions Contact Person Responsible for Corrective Action Plan: Lawrence Williams, Chief Executive Officer. Corrective Action Plan: The Chief Executive Officer and Chief Financial Officer will ensure that all vouchers are prepared and submitted on a...

Significant Deficiency 2022-002 Grant Voucher Submissions Contact Person Responsible for Corrective Action Plan: Lawrence Williams, Chief Executive Officer. Corrective Action Plan: The Chief Executive Officer and Chief Financial Officer will ensure that all vouchers are prepared and submitted on a timely basis. Anticipated Completion Date of Corrective Action Plan: December 31, 2023

View Audit 19559

Finding 15938 (2022-001)

Material Weakness 2022

Syracuse Model Neighborhood Facility, Inc.

NY

Material Weakness Reporting Internal Control / Segregation of Duties

Material Weakness 2022-001 Bank Statement Reconciliations Contact Person Responsible for Corrective Action Plan: Lawrence Williams, Chief Executive Officer. Corrective Action Plan: The Chief Executive Officer and Chief Financial Officer will ensure this important control procedure is rectified to...

Material Weakness 2022-001 Bank Statement Reconciliations Contact Person Responsible for Corrective Action Plan: Lawrence Williams, Chief Executive Officer. Corrective Action Plan: The Chief Executive Officer and Chief Financial Officer will ensure this important control procedure is rectified to ensure that bank reconciliations are performed and reviewed in a timely manner. Anticipated Completion Date of Corrective Action Plan: June 30, 2023

View Audit 19559

Finding 15934 (2022-004)

Material Weakness 2022

Plainview Serenity Center, Inc.

TX

Questioned Costs

2022-004 Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing No. 93.959 Material Weakness: See Finding 2022-002

View Audit 19918 Questioned Costs: $1

Finding 15933 (2022-003)

Material Weakness 2022

Plainview Serenity Center, Inc.

TX

2022-003 Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing No. 93.959 Material Weakness: See Finding 2022-001

View Audit 19918

Finding 15932 (2022-001)

Significant Deficiency 2022

Connections to Success

MO

Eligibility Significant Deficiency Internal Control / Segregation of Duties

Type of Finding: Significant Deficiency in Internal Control Over Compliance ? Eligibility Recommendation: The Organization should ensure that controls exist to document and provide evidence of review procedure in effect to ensure that eligibility requirements are met beyond the initial inquiries an...

Type of Finding: Significant Deficiency in Internal Control Over Compliance ? Eligibility Recommendation: The Organization should ensure that controls exist to document and provide evidence of review procedure in effect to ensure that eligibility requirements are met beyond the initial inquiries and information gathering process. Views of Responsible Officials: There is no disagreement with the audit finding. Eligibility requirements are obtained and documented based on the requirements of the individual grants. The program staff are well versed in the requirements and ensure the participants are eligible under the grant. In August 2021, to enhance the existing practice, a Case Management system was implemented which assists in ensuring that proper documentation and approval are maintained. In September 2023, the case management system was looked over and rules were put into place to minimize or eliminate room for human error.

View Audit 19762

Finding 15931 (2022-005)

Significant Deficiency 2022

South Carolina State Housing Finance and Development Authority

SC

Reporting Significant Deficiency Internal Control / Segregation of Duties

COVID-19 Emergency Rental Assistance ? Assistance Listing Number 21.023 Recommendation: We recommend the Authority implements controls to ensure that documentation is maintained to support amounts reported. Review and approval of the amounts reported to Treasury should be documented. Explanation of ...

COVID-19 Emergency Rental Assistance ? Assistance Listing Number 21.023 Recommendation: We recommend the Authority implements controls to ensure that documentation is maintained to support amounts reported. Review and approval of the amounts reported to Treasury should be documented. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: SC Housing has expended the majority of the COVID-19 Emergency Rental Assistance funds, and the program will be ending in the coming months. The close-out plan includes the transfer and archive of all data from the third-party vendor working to implement the program. A protocol was implemented with the closeout report to Treasury for ERA1 funds in January, 2023, to retain all documentation supporting the report, and all reports moving forward, in SC Housing program files. Review of future reports by the Division Director prior to submission to Treasury will be added to the reporting process. Names of the contact persons responsible for corrective action: Amanda Colbert, Marni Holloway Planned completion date for corrective action plan: partially implemented, review will begin with next report due in April, 2023.

View Audit 19599

Finding 15918 (2022-004)

Significant Deficiency 2022

South Carolina State Housing Finance and Development Authority

SC

Significant Deficiency Internal Control / Segregation of Duties

Housing Voucher Cluster ? Assistance Listing Numbers 14.871/14.879 Recommendation: We recommend the Authority implements controls to ensure that rent reasonableness is determined prior to the effective date of the change in rent. Explanation of disagreement with audit finding: There is no disagreeme...

Housing Voucher Cluster ? Assistance Listing Numbers 14.871/14.879 Recommendation: We recommend the Authority implements controls to ensure that rent reasonableness is determined prior to the effective date of the change in rent. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Additional training is being provided to HCP staff to insure they have a clear understanding of the rent reasonableness requirements and timing imposed by HUD. Financing Housing. Building SC. Processes have been updated to require dual authentication. Within 10 business days of receiving a request from the owner for a rent increase, or; within 10 business days of receipt of a decrease request received from HUD, or; when there has been a 10% decrease in the fair market rent that goes into effect at least 60 days before the contract anniversary date, the Housing Program Coordinator (HPC) will make a rent reasonableness determination and approve a corresponding rent adjustment when applicable. Following assessment and action determination, all files will be reviewed a second time by a Housing Administration Coordinator for accuracy and appropriateness. Both the HPC and the Administration Coordinator will be required to acknowledge the request/action taken in writing. Late actions must be justified and reviewed by the Director of Rental Assistance and Compliance prior to effecting the change and/or issuing correspondence. Memo records will be recorded on each voucher file to document actions taken. Names of the contact persons responsible for corrective action: Yolanda Dennison, Kristel Walker, Lenzy Morris, Corrie Temples Planned completion date for corrective action plan: Partially implemented; to be finalized by June 30, 2023.

View Audit 19599

Finding 15917 (2022-003)

Significant Deficiency 2022

South Carolina State Housing Finance and Development Authority

SC

HUD Housing Programs Significant Deficiency Internal Control / Segregation of Duties

Housing Voucher Cluster ? Assistance Listing Numbers 14.871/14.879 Recommendation: We recommend that the Authority sets up a separate interestbearing account and executes a depository agreement with their financial institution and HUD; alternatively, we recommend that the Authority obtains a waiver ...

Housing Voucher Cluster ? Assistance Listing Numbers 14.871/14.879 Recommendation: We recommend that the Authority sets up a separate interestbearing account and executes a depository agreement with their financial institution and HUD; alternatively, we recommend that the Authority obtains a waiver from this requirement if local regulation prohibits the Authority from following 24 CFR section 982.156. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Housing Voucher Cluster funds are held by the Treasurer for the State of South Carolina. The depository agreements in place are between the depository institution and the state Treasurer. SC Housing has contacted HUD via email and requested a waiver for this regulatory requirement. An update will be provided when available. Name of the contact person responsible for corrective action: Lisa Wilkerson Planned completion date for corrective action plan: Waiver request submitted to HUD local field office on March 29, 2023.

View Audit 19599

Finding 15916 (2022-002)

Material Weakness 2022

South Carolina State Housing Finance and Development Authority

SC

Questioned Costs Material Weakness Internal Control / Segregation of Duties

Housing Voucher Cluster ? Assistance Listing Numbers 14.871/14.879 Recommendation: We recommend the Authority implements controls to ensure that the Authority requires HQS deficiencies to be corrected within the timeframe set forth by 2 CFR section 982.404(a). We recommend the Authority implements c...

Housing Voucher Cluster ? Assistance Listing Numbers 14.871/14.879 Recommendation: We recommend the Authority implements controls to ensure that the Authority requires HQS deficiencies to be corrected within the timeframe set forth by 2 CFR section 982.404(a). We recommend the Authority implements controls to ensure abatement is timely for units that do not correct the cited HQS deficiencies within the required timeframe. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Processes have been updated to assure that Yardi system generated letters are being utilized by staff for inspection deficiency correspondence. The vendor, Yardi, assumes responsibility for assuring that this correspondence meets all current regulatory requirements, as may be amended periodically. This will cure the notice deficiencies observed by the audit team. Additional training is being provided to HCP staff to insure they have a clear understanding of communication requirements and the critical timeline that accompanies the mitigation of exigent health and safety findings, other non-life threating deficiencies, as well as the follow-up inspection time frames allowed by HUD. Processes have been updated to require a monthly report of failed HQS inspections, to include all actions taken, be issued to the Director of Housing Choice Voucher and the Director of Rental Assistance and Compliance. This report is due by the first business day monthly and will be reviewed by senior management to determine abatements required and to issue authorization to abate within the HUD required timeframe. Memo records will be recorded on each voucher file to document actions taken. Financing Housing. Building SC. Names of the contact persons responsible for corrective action: Yolanda Dennison and Lisa Wilkerson Planned completion date for corrective action plan: Partially implemented; to be finalized by June 30, 2023.

View Audit 19599 Questioned Costs: $1

Finding 15915 (2022-001)

Material Weakness 2022

South Carolina State Housing Finance and Development Authority

SC

Material Weakness Internal Control / Segregation of Duties

Housing Voucher Cluster ? Assistance Listing Numbers 14.871/14.879 Recommendation: We recommend the Authority implement controls to ensure that required HQS and QC inspections are completed timely. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Actio...

Housing Voucher Cluster ? Assistance Listing Numbers 14.871/14.879 Recommendation: We recommend the Authority implement controls to ensure that required HQS and QC inspections are completed timely. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Periodic HQS Inspections: Procedures are in place that require staff to generate a listing of all properties requiring inspection no less than one hundred twenty (120) days prior to the scheduled inspection date. Each unit under HAP contract must be inspected prior to execution of the initial lease and prior to execution of the HAP contract and no less than biennially thereafter to confirm the unit continues to meet minimum HUD requirements. Management identified a system generated report from YARDI to establish when recurring inspections must be completed. This report is generated a minimum of once monthly to assist with scheduling. The report is monitored by the Operations Manager and the Housing Choice Voucher Director. Procedures have been updated to require that the Director of Rental Assistance and Compliance review all inspections completed after the date due and the accompanying explanation for the delay. Management will track and analyze the data generated from the late inspections to identify patterns and implement corrective actions as warranted. Financing Housing. Building SC. QC Inspections: Upon discovery, a supervisor was assigned and all prior year HQS QC inspections were completed, albeit late. Effective April 1, 2023, and every month thereafter, the designated manager will conduct QC inspections utilizing the minimum file size sample based on the number of units under HAP contract annually. All required inspections will be completed no later than the end of each fiscal year. A status report documenting all efforts and results will be submitted monthly to the Director of Rental Assistance and Compliance. Management will track and analyze the data generated from these inspections to assure all program inspections are consistent and compliant and that any patterns identified are effectively addressed with additional training, etc. as warranted. Names of the contact persons responsible for corrective action: Lenzy Morris, Yolanda Dennison, Lisa Wilkerson Planned completion date for corrective action plan: June 30, 2023

View Audit 19599

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