Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.267, 93.224 & 93.527 Program: Continuum of Care Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04, H80CS10606-15-01, H80CS10606-16-00, 21H8FCS40355C6, H8GCS48224 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after the fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to the Health Center Program Cluster and Continuum of Care Program during 2023 based on budget allocation rates or employees’ schedules. Attestations were completed at a later date, post grant close out, to support employee’s time allocated to the grant for reimbursement. • For Health Center Program Cluster: o 72 out of 79 selections did not have timely completion of attestations. • For the Continuum of Care Program: o 1 out of 56 selections did not have timely completion of attestations. Cause: The Village did not have policies and procedures in place to timely prepare and complete timesheet attestations and reconcile to actual expenditures charged. Effect or Potential Effect: Without adequate controls in place to ensure attestations were completed based on time worked, the Village could incorrectly charge expenditures to the Federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: None reported. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Health Center Program Cluster in 2023 were $1,403,324. Payroll costs including fringe benefits for the Continuum of Care Program in 2023 were $1,345,469. Identification as a Repeat Finding: 2022-004. Recommendation: We recommend that the Village implement policies and procedures to timely completed employee attestations and to ensure timely review for any necessary budget to actual adjustments. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures to ensure timely completion.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.267, 93.224 & 93.527 Program: Continuum of Care Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04, H80CS10606-15-01, H80CS10606-16-00, 21H8FCS40355C6, H8GCS48224 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after the fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to the Health Center Program Cluster and Continuum of Care Program during 2023 based on budget allocation rates or employees’ schedules. Attestations were completed at a later date, post grant close out, to support employee’s time allocated to the grant for reimbursement. • For Health Center Program Cluster: o 72 out of 79 selections did not have timely completion of attestations. • For the Continuum of Care Program: o 1 out of 56 selections did not have timely completion of attestations. Cause: The Village did not have policies and procedures in place to timely prepare and complete timesheet attestations and reconcile to actual expenditures charged. Effect or Potential Effect: Without adequate controls in place to ensure attestations were completed based on time worked, the Village could incorrectly charge expenditures to the Federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: None reported. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Health Center Program Cluster in 2023 were $1,403,324. Payroll costs including fringe benefits for the Continuum of Care Program in 2023 were $1,345,469. Identification as a Repeat Finding: 2022-004. Recommendation: We recommend that the Village implement policies and procedures to timely completed employee attestations and to ensure timely review for any necessary budget to actual adjustments. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures to ensure timely completion.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.267, 93.224 & 93.527 Program: Continuum of Care Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04, H80CS10606-15-01, H80CS10606-16-00, 21H8FCS40355C6, H8GCS48224 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after the fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to the Health Center Program Cluster and Continuum of Care Program during 2023 based on budget allocation rates or employees’ schedules. Attestations were completed at a later date, post grant close out, to support employee’s time allocated to the grant for reimbursement. • For Health Center Program Cluster: o 72 out of 79 selections did not have timely completion of attestations. • For the Continuum of Care Program: o 1 out of 56 selections did not have timely completion of attestations. Cause: The Village did not have policies and procedures in place to timely prepare and complete timesheet attestations and reconcile to actual expenditures charged. Effect or Potential Effect: Without adequate controls in place to ensure attestations were completed based on time worked, the Village could incorrectly charge expenditures to the Federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: None reported. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Health Center Program Cluster in 2023 were $1,403,324. Payroll costs including fringe benefits for the Continuum of Care Program in 2023 were $1,345,469. Identification as a Repeat Finding: 2022-004. Recommendation: We recommend that the Village implement policies and procedures to timely completed employee attestations and to ensure timely review for any necessary budget to actual adjustments. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures to ensure timely completion.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.267, 93.224 & 93.527 Program: Continuum of Care Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04, H80CS10606-15-01, H80CS10606-16-00, 21H8FCS40355C6, H8GCS48224 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after the fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to the Health Center Program Cluster and Continuum of Care Program during 2023 based on budget allocation rates or employees’ schedules. Attestations were completed at a later date, post grant close out, to support employee’s time allocated to the grant for reimbursement. • For Health Center Program Cluster: o 72 out of 79 selections did not have timely completion of attestations. • For the Continuum of Care Program: o 1 out of 56 selections did not have timely completion of attestations. Cause: The Village did not have policies and procedures in place to timely prepare and complete timesheet attestations and reconcile to actual expenditures charged. Effect or Potential Effect: Without adequate controls in place to ensure attestations were completed based on time worked, the Village could incorrectly charge expenditures to the Federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: None reported. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Health Center Program Cluster in 2023 were $1,403,324. Payroll costs including fringe benefits for the Continuum of Care Program in 2023 were $1,345,469. Identification as a Repeat Finding: 2022-004. Recommendation: We recommend that the Village implement policies and procedures to timely completed employee attestations and to ensure timely review for any necessary budget to actual adjustments. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures to ensure timely completion.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.267, 93.224 & 93.527 Program: Continuum of Care Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04, H80CS10606-15-01, H80CS10606-16-00, 21H8FCS40355C6, H8GCS48224 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after the fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to the Health Center Program Cluster and Continuum of Care Program during 2023 based on budget allocation rates or employees’ schedules. Attestations were completed at a later date, post grant close out, to support employee’s time allocated to the grant for reimbursement. • For Health Center Program Cluster: o 72 out of 79 selections did not have timely completion of attestations. • For the Continuum of Care Program: o 1 out of 56 selections did not have timely completion of attestations. Cause: The Village did not have policies and procedures in place to timely prepare and complete timesheet attestations and reconcile to actual expenditures charged. Effect or Potential Effect: Without adequate controls in place to ensure attestations were completed based on time worked, the Village could incorrectly charge expenditures to the Federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: None reported. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Health Center Program Cluster in 2023 were $1,403,324. Payroll costs including fringe benefits for the Continuum of Care Program in 2023 were $1,345,469. Identification as a Repeat Finding: 2022-004. Recommendation: We recommend that the Village implement policies and procedures to timely completed employee attestations and to ensure timely review for any necessary budget to actual adjustments. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures to ensure timely completion.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.267, 93.224 & 93.527 Program: Continuum of Care Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04, H80CS10606-15-01, H80CS10606-16-00, 21H8FCS40355C6, H8GCS48224 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after the fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to the Health Center Program Cluster and Continuum of Care Program during 2023 based on budget allocation rates or employees’ schedules. Attestations were completed at a later date, post grant close out, to support employee’s time allocated to the grant for reimbursement. • For Health Center Program Cluster: o 72 out of 79 selections did not have timely completion of attestations. • For the Continuum of Care Program: o 1 out of 56 selections did not have timely completion of attestations. Cause: The Village did not have policies and procedures in place to timely prepare and complete timesheet attestations and reconcile to actual expenditures charged. Effect or Potential Effect: Without adequate controls in place to ensure attestations were completed based on time worked, the Village could incorrectly charge expenditures to the Federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: None reported. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Health Center Program Cluster in 2023 were $1,403,324. Payroll costs including fringe benefits for the Continuum of Care Program in 2023 were $1,345,469. Identification as a Repeat Finding: 2022-004. Recommendation: We recommend that the Village implement policies and procedures to timely completed employee attestations and to ensure timely review for any necessary budget to actual adjustments. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures to ensure timely completion.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.267, 93.224 & 93.527 Program: Continuum of Care Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04, H80CS10606-15-01, H80CS10606-16-00, 21H8FCS40355C6, H8GCS48224 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after the fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to the Health Center Program Cluster and Continuum of Care Program during 2023 based on budget allocation rates or employees’ schedules. Attestations were completed at a later date, post grant close out, to support employee’s time allocated to the grant for reimbursement. • For Health Center Program Cluster: o 72 out of 79 selections did not have timely completion of attestations. • For the Continuum of Care Program: o 1 out of 56 selections did not have timely completion of attestations. Cause: The Village did not have policies and procedures in place to timely prepare and complete timesheet attestations and reconcile to actual expenditures charged. Effect or Potential Effect: Without adequate controls in place to ensure attestations were completed based on time worked, the Village could incorrectly charge expenditures to the Federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: None reported. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Health Center Program Cluster in 2023 were $1,403,324. Payroll costs including fringe benefits for the Continuum of Care Program in 2023 were $1,345,469. Identification as a Repeat Finding: 2022-004. Recommendation: We recommend that the Village implement policies and procedures to timely completed employee attestations and to ensure timely review for any necessary budget to actual adjustments. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures to ensure timely completion.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR §578.51(g), “HUD will only provide rental assistance for a unit if the rent is reasonable. The recipient or subrecipient must determine whether the rent charged for the unit receiving rental assistance is reasonable in relation to rents being charged for comparable unassisted units, taking into account the location, size, type, quality, amenities, facilities, and management and maintenance of each unit. Reasonable rent must not exceed rents currently being charged by the same owner for comparable unassisted units.” Condition: In accordance with 24 CFR §578.51(g), we noted that: • 21 out of 60 rental payments tested did not have a comparable unit analysis conducted for move-in or increases in rent. • 17 out of 60 rental payments did not have a comparable unit analysis completed in a timely manner prior to the tenant’s move-in or prior to increases in rent. • 15 of the 43 rental payments that did have rent reasonableness performed did not have rent reasonableness analyzed in the past year. • 4 out of 60 rental payments tested did not have documentation for amounts charged (such as lease agreements, rent increase letters, or invoices). • 2 out of 60 rental payments tested had errors in the rent reasonableness forms. Cause: The Village did not appropriately retain or produce documentation verifying that rent reasonableness was assessed prior to move-in or during changes to lease terms, as required by its policies. Additionally, not all supporting documentation for changes to lease terms was obtained or retained. Effect or Potential Effect: The insufficient retention or creation of rent reasonableness forms and supporting documentation has led to ineffective operation of rent reasonableness controls, thereby not appropriately identifying rental amounts for the Village’s clients in need of rental assistance. Consequently, this deficiency could result in incorrect charges being applied to the Federal program. Questioned Costs: Known Questioned Costs: $33,686 Likely Questioned Costs: $910,698 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Questioned costs were determined as the amounts paid without supporting rent reasonableness documentation. The total costs subject to rent reasonableness amounted to $2,719,260. Of the questioned costs identified above, $2,702 of known and $65,525 of likely questioned costs relate to a subrecipient’s tenants, which the Village is still responsible for ensuring rent reasonableness is properly completed. The subrecipient processed rental assistance documentation for $204,409 of tenant payments. Identification as a Repeat Finding: 2022-008 Recommendation: We recommend that the Village enhance existing policies to ensure rent reasonableness is performed on all rental assistance. In addition, we recommend management ensures determinations are performed prior to move-in or rent changes being charged, and documentation is maintained for both the rent amount and reasonableness of the rent. We further recommend a policy be enacted for reviewing rent reasonableness on a periodic basis (i.e. annually) for those tenants that have not had a change in rent during the period. Views of Responsible Officials: Management agrees with the finding. Management is in the process of enhancing and enforcing existing policies and procedures as well as performing a comprehensive tenant record review.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR §578.51(g), “HUD will only provide rental assistance for a unit if the rent is reasonable. The recipient or subrecipient must determine whether the rent charged for the unit receiving rental assistance is reasonable in relation to rents being charged for comparable unassisted units, taking into account the location, size, type, quality, amenities, facilities, and management and maintenance of each unit. Reasonable rent must not exceed rents currently being charged by the same owner for comparable unassisted units.” Condition: In accordance with 24 CFR §578.51(g), we noted that: • 21 out of 60 rental payments tested did not have a comparable unit analysis conducted for move-in or increases in rent. • 17 out of 60 rental payments did not have a comparable unit analysis completed in a timely manner prior to the tenant’s move-in or prior to increases in rent. • 15 of the 43 rental payments that did have rent reasonableness performed did not have rent reasonableness analyzed in the past year. • 4 out of 60 rental payments tested did not have documentation for amounts charged (such as lease agreements, rent increase letters, or invoices). • 2 out of 60 rental payments tested had errors in the rent reasonableness forms. Cause: The Village did not appropriately retain or produce documentation verifying that rent reasonableness was assessed prior to move-in or during changes to lease terms, as required by its policies. Additionally, not all supporting documentation for changes to lease terms was obtained or retained. Effect or Potential Effect: The insufficient retention or creation of rent reasonableness forms and supporting documentation has led to ineffective operation of rent reasonableness controls, thereby not appropriately identifying rental amounts for the Village’s clients in need of rental assistance. Consequently, this deficiency could result in incorrect charges being applied to the Federal program. Questioned Costs: Known Questioned Costs: $33,686 Likely Questioned Costs: $910,698 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Questioned costs were determined as the amounts paid without supporting rent reasonableness documentation. The total costs subject to rent reasonableness amounted to $2,719,260. Of the questioned costs identified above, $2,702 of known and $65,525 of likely questioned costs relate to a subrecipient’s tenants, which the Village is still responsible for ensuring rent reasonableness is properly completed. The subrecipient processed rental assistance documentation for $204,409 of tenant payments. Identification as a Repeat Finding: 2022-008 Recommendation: We recommend that the Village enhance existing policies to ensure rent reasonableness is performed on all rental assistance. In addition, we recommend management ensures determinations are performed prior to move-in or rent changes being charged, and documentation is maintained for both the rent amount and reasonableness of the rent. We further recommend a policy be enacted for reviewing rent reasonableness on a periodic basis (i.e. annually) for those tenants that have not had a change in rent during the period. Views of Responsible Officials: Management agrees with the finding. Management is in the process of enhancing and enforcing existing policies and procedures as well as performing a comprehensive tenant record review.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR §578.51(g), “HUD will only provide rental assistance for a unit if the rent is reasonable. The recipient or subrecipient must determine whether the rent charged for the unit receiving rental assistance is reasonable in relation to rents being charged for comparable unassisted units, taking into account the location, size, type, quality, amenities, facilities, and management and maintenance of each unit. Reasonable rent must not exceed rents currently being charged by the same owner for comparable unassisted units.” Condition: In accordance with 24 CFR §578.51(g), we noted that: • 21 out of 60 rental payments tested did not have a comparable unit analysis conducted for move-in or increases in rent. • 17 out of 60 rental payments did not have a comparable unit analysis completed in a timely manner prior to the tenant’s move-in or prior to increases in rent. • 15 of the 43 rental payments that did have rent reasonableness performed did not have rent reasonableness analyzed in the past year. • 4 out of 60 rental payments tested did not have documentation for amounts charged (such as lease agreements, rent increase letters, or invoices). • 2 out of 60 rental payments tested had errors in the rent reasonableness forms. Cause: The Village did not appropriately retain or produce documentation verifying that rent reasonableness was assessed prior to move-in or during changes to lease terms, as required by its policies. Additionally, not all supporting documentation for changes to lease terms was obtained or retained. Effect or Potential Effect: The insufficient retention or creation of rent reasonableness forms and supporting documentation has led to ineffective operation of rent reasonableness controls, thereby not appropriately identifying rental amounts for the Village’s clients in need of rental assistance. Consequently, this deficiency could result in incorrect charges being applied to the Federal program. Questioned Costs: Known Questioned Costs: $33,686 Likely Questioned Costs: $910,698 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Questioned costs were determined as the amounts paid without supporting rent reasonableness documentation. The total costs subject to rent reasonableness amounted to $2,719,260. Of the questioned costs identified above, $2,702 of known and $65,525 of likely questioned costs relate to a subrecipient’s tenants, which the Village is still responsible for ensuring rent reasonableness is properly completed. The subrecipient processed rental assistance documentation for $204,409 of tenant payments. Identification as a Repeat Finding: 2022-008 Recommendation: We recommend that the Village enhance existing policies to ensure rent reasonableness is performed on all rental assistance. In addition, we recommend management ensures determinations are performed prior to move-in or rent changes being charged, and documentation is maintained for both the rent amount and reasonableness of the rent. We further recommend a policy be enacted for reviewing rent reasonableness on a periodic basis (i.e. annually) for those tenants that have not had a change in rent during the period. Views of Responsible Officials: Management agrees with the finding. Management is in the process of enhancing and enforcing existing policies and procedures as well as performing a comprehensive tenant record review.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR §578.51(g), “HUD will only provide rental assistance for a unit if the rent is reasonable. The recipient or subrecipient must determine whether the rent charged for the unit receiving rental assistance is reasonable in relation to rents being charged for comparable unassisted units, taking into account the location, size, type, quality, amenities, facilities, and management and maintenance of each unit. Reasonable rent must not exceed rents currently being charged by the same owner for comparable unassisted units.” Condition: In accordance with 24 CFR §578.51(g), we noted that: • 21 out of 60 rental payments tested did not have a comparable unit analysis conducted for move-in or increases in rent. • 17 out of 60 rental payments did not have a comparable unit analysis completed in a timely manner prior to the tenant’s move-in or prior to increases in rent. • 15 of the 43 rental payments that did have rent reasonableness performed did not have rent reasonableness analyzed in the past year. • 4 out of 60 rental payments tested did not have documentation for amounts charged (such as lease agreements, rent increase letters, or invoices). • 2 out of 60 rental payments tested had errors in the rent reasonableness forms. Cause: The Village did not appropriately retain or produce documentation verifying that rent reasonableness was assessed prior to move-in or during changes to lease terms, as required by its policies. Additionally, not all supporting documentation for changes to lease terms was obtained or retained. Effect or Potential Effect: The insufficient retention or creation of rent reasonableness forms and supporting documentation has led to ineffective operation of rent reasonableness controls, thereby not appropriately identifying rental amounts for the Village’s clients in need of rental assistance. Consequently, this deficiency could result in incorrect charges being applied to the Federal program. Questioned Costs: Known Questioned Costs: $33,686 Likely Questioned Costs: $910,698 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Questioned costs were determined as the amounts paid without supporting rent reasonableness documentation. The total costs subject to rent reasonableness amounted to $2,719,260. Of the questioned costs identified above, $2,702 of known and $65,525 of likely questioned costs relate to a subrecipient’s tenants, which the Village is still responsible for ensuring rent reasonableness is properly completed. The subrecipient processed rental assistance documentation for $204,409 of tenant payments. Identification as a Repeat Finding: 2022-008 Recommendation: We recommend that the Village enhance existing policies to ensure rent reasonableness is performed on all rental assistance. In addition, we recommend management ensures determinations are performed prior to move-in or rent changes being charged, and documentation is maintained for both the rent amount and reasonableness of the rent. We further recommend a policy be enacted for reviewing rent reasonableness on a periodic basis (i.e. annually) for those tenants that have not had a change in rent during the period. Views of Responsible Officials: Management agrees with the finding. Management is in the process of enhancing and enforcing existing policies and procedures as well as performing a comprehensive tenant record review.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR §578.51(g), “HUD will only provide rental assistance for a unit if the rent is reasonable. The recipient or subrecipient must determine whether the rent charged for the unit receiving rental assistance is reasonable in relation to rents being charged for comparable unassisted units, taking into account the location, size, type, quality, amenities, facilities, and management and maintenance of each unit. Reasonable rent must not exceed rents currently being charged by the same owner for comparable unassisted units.” Condition: In accordance with 24 CFR §578.51(g), we noted that: • 21 out of 60 rental payments tested did not have a comparable unit analysis conducted for move-in or increases in rent. • 17 out of 60 rental payments did not have a comparable unit analysis completed in a timely manner prior to the tenant’s move-in or prior to increases in rent. • 15 of the 43 rental payments that did have rent reasonableness performed did not have rent reasonableness analyzed in the past year. • 4 out of 60 rental payments tested did not have documentation for amounts charged (such as lease agreements, rent increase letters, or invoices). • 2 out of 60 rental payments tested had errors in the rent reasonableness forms. Cause: The Village did not appropriately retain or produce documentation verifying that rent reasonableness was assessed prior to move-in or during changes to lease terms, as required by its policies. Additionally, not all supporting documentation for changes to lease terms was obtained or retained. Effect or Potential Effect: The insufficient retention or creation of rent reasonableness forms and supporting documentation has led to ineffective operation of rent reasonableness controls, thereby not appropriately identifying rental amounts for the Village’s clients in need of rental assistance. Consequently, this deficiency could result in incorrect charges being applied to the Federal program. Questioned Costs: Known Questioned Costs: $33,686 Likely Questioned Costs: $910,698 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Questioned costs were determined as the amounts paid without supporting rent reasonableness documentation. The total costs subject to rent reasonableness amounted to $2,719,260. Of the questioned costs identified above, $2,702 of known and $65,525 of likely questioned costs relate to a subrecipient’s tenants, which the Village is still responsible for ensuring rent reasonableness is properly completed. The subrecipient processed rental assistance documentation for $204,409 of tenant payments. Identification as a Repeat Finding: 2022-008 Recommendation: We recommend that the Village enhance existing policies to ensure rent reasonableness is performed on all rental assistance. In addition, we recommend management ensures determinations are performed prior to move-in or rent changes being charged, and documentation is maintained for both the rent amount and reasonableness of the rent. We further recommend a policy be enacted for reviewing rent reasonableness on a periodic basis (i.e. annually) for those tenants that have not had a change in rent during the period. Views of Responsible Officials: Management agrees with the finding. Management is in the process of enhancing and enforcing existing policies and procedures as well as performing a comprehensive tenant record review.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR §578.51(g), “HUD will only provide rental assistance for a unit if the rent is reasonable. The recipient or subrecipient must determine whether the rent charged for the unit receiving rental assistance is reasonable in relation to rents being charged for comparable unassisted units, taking into account the location, size, type, quality, amenities, facilities, and management and maintenance of each unit. Reasonable rent must not exceed rents currently being charged by the same owner for comparable unassisted units.” Condition: In accordance with 24 CFR §578.51(g), we noted that: • 21 out of 60 rental payments tested did not have a comparable unit analysis conducted for move-in or increases in rent. • 17 out of 60 rental payments did not have a comparable unit analysis completed in a timely manner prior to the tenant’s move-in or prior to increases in rent. • 15 of the 43 rental payments that did have rent reasonableness performed did not have rent reasonableness analyzed in the past year. • 4 out of 60 rental payments tested did not have documentation for amounts charged (such as lease agreements, rent increase letters, or invoices). • 2 out of 60 rental payments tested had errors in the rent reasonableness forms. Cause: The Village did not appropriately retain or produce documentation verifying that rent reasonableness was assessed prior to move-in or during changes to lease terms, as required by its policies. Additionally, not all supporting documentation for changes to lease terms was obtained or retained. Effect or Potential Effect: The insufficient retention or creation of rent reasonableness forms and supporting documentation has led to ineffective operation of rent reasonableness controls, thereby not appropriately identifying rental amounts for the Village’s clients in need of rental assistance. Consequently, this deficiency could result in incorrect charges being applied to the Federal program. Questioned Costs: Known Questioned Costs: $33,686 Likely Questioned Costs: $910,698 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Questioned costs were determined as the amounts paid without supporting rent reasonableness documentation. The total costs subject to rent reasonableness amounted to $2,719,260. Of the questioned costs identified above, $2,702 of known and $65,525 of likely questioned costs relate to a subrecipient’s tenants, which the Village is still responsible for ensuring rent reasonableness is properly completed. The subrecipient processed rental assistance documentation for $204,409 of tenant payments. Identification as a Repeat Finding: 2022-008 Recommendation: We recommend that the Village enhance existing policies to ensure rent reasonableness is performed on all rental assistance. In addition, we recommend management ensures determinations are performed prior to move-in or rent changes being charged, and documentation is maintained for both the rent amount and reasonableness of the rent. We further recommend a policy be enacted for reviewing rent reasonableness on a periodic basis (i.e. annually) for those tenants that have not had a change in rent during the period. Views of Responsible Officials: Management agrees with the finding. Management is in the process of enhancing and enforcing existing policies and procedures as well as performing a comprehensive tenant record review.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR §578.51(g), “HUD will only provide rental assistance for a unit if the rent is reasonable. The recipient or subrecipient must determine whether the rent charged for the unit receiving rental assistance is reasonable in relation to rents being charged for comparable unassisted units, taking into account the location, size, type, quality, amenities, facilities, and management and maintenance of each unit. Reasonable rent must not exceed rents currently being charged by the same owner for comparable unassisted units.” Condition: In accordance with 24 CFR §578.51(g), we noted that: • 21 out of 60 rental payments tested did not have a comparable unit analysis conducted for move-in or increases in rent. • 17 out of 60 rental payments did not have a comparable unit analysis completed in a timely manner prior to the tenant’s move-in or prior to increases in rent. • 15 of the 43 rental payments that did have rent reasonableness performed did not have rent reasonableness analyzed in the past year. • 4 out of 60 rental payments tested did not have documentation for amounts charged (such as lease agreements, rent increase letters, or invoices). • 2 out of 60 rental payments tested had errors in the rent reasonableness forms. Cause: The Village did not appropriately retain or produce documentation verifying that rent reasonableness was assessed prior to move-in or during changes to lease terms, as required by its policies. Additionally, not all supporting documentation for changes to lease terms was obtained or retained. Effect or Potential Effect: The insufficient retention or creation of rent reasonableness forms and supporting documentation has led to ineffective operation of rent reasonableness controls, thereby not appropriately identifying rental amounts for the Village’s clients in need of rental assistance. Consequently, this deficiency could result in incorrect charges being applied to the Federal program. Questioned Costs: Known Questioned Costs: $33,686 Likely Questioned Costs: $910,698 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Questioned costs were determined as the amounts paid without supporting rent reasonableness documentation. The total costs subject to rent reasonableness amounted to $2,719,260. Of the questioned costs identified above, $2,702 of known and $65,525 of likely questioned costs relate to a subrecipient’s tenants, which the Village is still responsible for ensuring rent reasonableness is properly completed. The subrecipient processed rental assistance documentation for $204,409 of tenant payments. Identification as a Repeat Finding: 2022-008 Recommendation: We recommend that the Village enhance existing policies to ensure rent reasonableness is performed on all rental assistance. In addition, we recommend management ensures determinations are performed prior to move-in or rent changes being charged, and documentation is maintained for both the rent amount and reasonableness of the rent. We further recommend a policy be enacted for reviewing rent reasonableness on a periodic basis (i.e. annually) for those tenants that have not had a change in rent during the period. Views of Responsible Officials: Management agrees with the finding. Management is in the process of enhancing and enforcing existing policies and procedures as well as performing a comprehensive tenant record review.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR §578.51(g), “HUD will only provide rental assistance for a unit if the rent is reasonable. The recipient or subrecipient must determine whether the rent charged for the unit receiving rental assistance is reasonable in relation to rents being charged for comparable unassisted units, taking into account the location, size, type, quality, amenities, facilities, and management and maintenance of each unit. Reasonable rent must not exceed rents currently being charged by the same owner for comparable unassisted units.” Condition: In accordance with 24 CFR §578.51(g), we noted that: • 21 out of 60 rental payments tested did not have a comparable unit analysis conducted for move-in or increases in rent. • 17 out of 60 rental payments did not have a comparable unit analysis completed in a timely manner prior to the tenant’s move-in or prior to increases in rent. • 15 of the 43 rental payments that did have rent reasonableness performed did not have rent reasonableness analyzed in the past year. • 4 out of 60 rental payments tested did not have documentation for amounts charged (such as lease agreements, rent increase letters, or invoices). • 2 out of 60 rental payments tested had errors in the rent reasonableness forms. Cause: The Village did not appropriately retain or produce documentation verifying that rent reasonableness was assessed prior to move-in or during changes to lease terms, as required by its policies. Additionally, not all supporting documentation for changes to lease terms was obtained or retained. Effect or Potential Effect: The insufficient retention or creation of rent reasonableness forms and supporting documentation has led to ineffective operation of rent reasonableness controls, thereby not appropriately identifying rental amounts for the Village’s clients in need of rental assistance. Consequently, this deficiency could result in incorrect charges being applied to the Federal program. Questioned Costs: Known Questioned Costs: $33,686 Likely Questioned Costs: $910,698 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Questioned costs were determined as the amounts paid without supporting rent reasonableness documentation. The total costs subject to rent reasonableness amounted to $2,719,260. Of the questioned costs identified above, $2,702 of known and $65,525 of likely questioned costs relate to a subrecipient’s tenants, which the Village is still responsible for ensuring rent reasonableness is properly completed. The subrecipient processed rental assistance documentation for $204,409 of tenant payments. Identification as a Repeat Finding: 2022-008 Recommendation: We recommend that the Village enhance existing policies to ensure rent reasonableness is performed on all rental assistance. In addition, we recommend management ensures determinations are performed prior to move-in or rent changes being charged, and documentation is maintained for both the rent amount and reasonableness of the rent. We further recommend a policy be enacted for reviewing rent reasonableness on a periodic basis (i.e. annually) for those tenants that have not had a change in rent during the period. Views of Responsible Officials: Management agrees with the finding. Management is in the process of enhancing and enforcing existing policies and procedures as well as performing a comprehensive tenant record review.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR §578.51(g), “HUD will only provide rental assistance for a unit if the rent is reasonable. The recipient or subrecipient must determine whether the rent charged for the unit receiving rental assistance is reasonable in relation to rents being charged for comparable unassisted units, taking into account the location, size, type, quality, amenities, facilities, and management and maintenance of each unit. Reasonable rent must not exceed rents currently being charged by the same owner for comparable unassisted units.” Condition: In accordance with 24 CFR §578.51(g), we noted that: • 21 out of 60 rental payments tested did not have a comparable unit analysis conducted for move-in or increases in rent. • 17 out of 60 rental payments did not have a comparable unit analysis completed in a timely manner prior to the tenant’s move-in or prior to increases in rent. • 15 of the 43 rental payments that did have rent reasonableness performed did not have rent reasonableness analyzed in the past year. • 4 out of 60 rental payments tested did not have documentation for amounts charged (such as lease agreements, rent increase letters, or invoices). • 2 out of 60 rental payments tested had errors in the rent reasonableness forms. Cause: The Village did not appropriately retain or produce documentation verifying that rent reasonableness was assessed prior to move-in or during changes to lease terms, as required by its policies. Additionally, not all supporting documentation for changes to lease terms was obtained or retained. Effect or Potential Effect: The insufficient retention or creation of rent reasonableness forms and supporting documentation has led to ineffective operation of rent reasonableness controls, thereby not appropriately identifying rental amounts for the Village’s clients in need of rental assistance. Consequently, this deficiency could result in incorrect charges being applied to the Federal program. Questioned Costs: Known Questioned Costs: $33,686 Likely Questioned Costs: $910,698 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Questioned costs were determined as the amounts paid without supporting rent reasonableness documentation. The total costs subject to rent reasonableness amounted to $2,719,260. Of the questioned costs identified above, $2,702 of known and $65,525 of likely questioned costs relate to a subrecipient’s tenants, which the Village is still responsible for ensuring rent reasonableness is properly completed. The subrecipient processed rental assistance documentation for $204,409 of tenant payments. Identification as a Repeat Finding: 2022-008 Recommendation: We recommend that the Village enhance existing policies to ensure rent reasonableness is performed on all rental assistance. In addition, we recommend management ensures determinations are performed prior to move-in or rent changes being charged, and documentation is maintained for both the rent amount and reasonableness of the rent. We further recommend a policy be enacted for reviewing rent reasonableness on a periodic basis (i.e. annually) for those tenants that have not had a change in rent during the period. Views of Responsible Officials: Management agrees with the finding. Management is in the process of enhancing and enforcing existing policies and procedures as well as performing a comprehensive tenant record review.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR §578.51(g), “HUD will only provide rental assistance for a unit if the rent is reasonable. The recipient or subrecipient must determine whether the rent charged for the unit receiving rental assistance is reasonable in relation to rents being charged for comparable unassisted units, taking into account the location, size, type, quality, amenities, facilities, and management and maintenance of each unit. Reasonable rent must not exceed rents currently being charged by the same owner for comparable unassisted units.” Condition: In accordance with 24 CFR §578.51(g), we noted that: • 21 out of 60 rental payments tested did not have a comparable unit analysis conducted for move-in or increases in rent. • 17 out of 60 rental payments did not have a comparable unit analysis completed in a timely manner prior to the tenant’s move-in or prior to increases in rent. • 15 of the 43 rental payments that did have rent reasonableness performed did not have rent reasonableness analyzed in the past year. • 4 out of 60 rental payments tested did not have documentation for amounts charged (such as lease agreements, rent increase letters, or invoices). • 2 out of 60 rental payments tested had errors in the rent reasonableness forms. Cause: The Village did not appropriately retain or produce documentation verifying that rent reasonableness was assessed prior to move-in or during changes to lease terms, as required by its policies. Additionally, not all supporting documentation for changes to lease terms was obtained or retained. Effect or Potential Effect: The insufficient retention or creation of rent reasonableness forms and supporting documentation has led to ineffective operation of rent reasonableness controls, thereby not appropriately identifying rental amounts for the Village’s clients in need of rental assistance. Consequently, this deficiency could result in incorrect charges being applied to the Federal program. Questioned Costs: Known Questioned Costs: $33,686 Likely Questioned Costs: $910,698 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Questioned costs were determined as the amounts paid without supporting rent reasonableness documentation. The total costs subject to rent reasonableness amounted to $2,719,260. Of the questioned costs identified above, $2,702 of known and $65,525 of likely questioned costs relate to a subrecipient’s tenants, which the Village is still responsible for ensuring rent reasonableness is properly completed. The subrecipient processed rental assistance documentation for $204,409 of tenant payments. Identification as a Repeat Finding: 2022-008 Recommendation: We recommend that the Village enhance existing policies to ensure rent reasonableness is performed on all rental assistance. In addition, we recommend management ensures determinations are performed prior to move-in or rent changes being charged, and documentation is maintained for both the rent amount and reasonableness of the rent. We further recommend a policy be enacted for reviewing rent reasonableness on a periodic basis (i.e. annually) for those tenants that have not had a change in rent during the period. Views of Responsible Officials: Management agrees with the finding. Management is in the process of enhancing and enforcing existing policies and procedures as well as performing a comprehensive tenant record review.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR §578.51(g), “HUD will only provide rental assistance for a unit if the rent is reasonable. The recipient or subrecipient must determine whether the rent charged for the unit receiving rental assistance is reasonable in relation to rents being charged for comparable unassisted units, taking into account the location, size, type, quality, amenities, facilities, and management and maintenance of each unit. Reasonable rent must not exceed rents currently being charged by the same owner for comparable unassisted units.” Condition: In accordance with 24 CFR §578.51(g), we noted that: • 21 out of 60 rental payments tested did not have a comparable unit analysis conducted for move-in or increases in rent. • 17 out of 60 rental payments did not have a comparable unit analysis completed in a timely manner prior to the tenant’s move-in or prior to increases in rent. • 15 of the 43 rental payments that did have rent reasonableness performed did not have rent reasonableness analyzed in the past year. • 4 out of 60 rental payments tested did not have documentation for amounts charged (such as lease agreements, rent increase letters, or invoices). • 2 out of 60 rental payments tested had errors in the rent reasonableness forms. Cause: The Village did not appropriately retain or produce documentation verifying that rent reasonableness was assessed prior to move-in or during changes to lease terms, as required by its policies. Additionally, not all supporting documentation for changes to lease terms was obtained or retained. Effect or Potential Effect: The insufficient retention or creation of rent reasonableness forms and supporting documentation has led to ineffective operation of rent reasonableness controls, thereby not appropriately identifying rental amounts for the Village’s clients in need of rental assistance. Consequently, this deficiency could result in incorrect charges being applied to the Federal program. Questioned Costs: Known Questioned Costs: $33,686 Likely Questioned Costs: $910,698 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Questioned costs were determined as the amounts paid without supporting rent reasonableness documentation. The total costs subject to rent reasonableness amounted to $2,719,260. Of the questioned costs identified above, $2,702 of known and $65,525 of likely questioned costs relate to a subrecipient’s tenants, which the Village is still responsible for ensuring rent reasonableness is properly completed. The subrecipient processed rental assistance documentation for $204,409 of tenant payments. Identification as a Repeat Finding: 2022-008 Recommendation: We recommend that the Village enhance existing policies to ensure rent reasonableness is performed on all rental assistance. In addition, we recommend management ensures determinations are performed prior to move-in or rent changes being charged, and documentation is maintained for both the rent amount and reasonableness of the rent. We further recommend a policy be enacted for reviewing rent reasonableness on a periodic basis (i.e. annually) for those tenants that have not had a change in rent during the period. Views of Responsible Officials: Management agrees with the finding. Management is in the process of enhancing and enforcing existing policies and procedures as well as performing a comprehensive tenant record review.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR §578.51(g), “HUD will only provide rental assistance for a unit if the rent is reasonable. The recipient or subrecipient must determine whether the rent charged for the unit receiving rental assistance is reasonable in relation to rents being charged for comparable unassisted units, taking into account the location, size, type, quality, amenities, facilities, and management and maintenance of each unit. Reasonable rent must not exceed rents currently being charged by the same owner for comparable unassisted units.” Condition: In accordance with 24 CFR §578.51(g), we noted that: • 21 out of 60 rental payments tested did not have a comparable unit analysis conducted for move-in or increases in rent. • 17 out of 60 rental payments did not have a comparable unit analysis completed in a timely manner prior to the tenant’s move-in or prior to increases in rent. • 15 of the 43 rental payments that did have rent reasonableness performed did not have rent reasonableness analyzed in the past year. • 4 out of 60 rental payments tested did not have documentation for amounts charged (such as lease agreements, rent increase letters, or invoices). • 2 out of 60 rental payments tested had errors in the rent reasonableness forms. Cause: The Village did not appropriately retain or produce documentation verifying that rent reasonableness was assessed prior to move-in or during changes to lease terms, as required by its policies. Additionally, not all supporting documentation for changes to lease terms was obtained or retained. Effect or Potential Effect: The insufficient retention or creation of rent reasonableness forms and supporting documentation has led to ineffective operation of rent reasonableness controls, thereby not appropriately identifying rental amounts for the Village’s clients in need of rental assistance. Consequently, this deficiency could result in incorrect charges being applied to the Federal program. Questioned Costs: Known Questioned Costs: $33,686 Likely Questioned Costs: $910,698 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Questioned costs were determined as the amounts paid without supporting rent reasonableness documentation. The total costs subject to rent reasonableness amounted to $2,719,260. Of the questioned costs identified above, $2,702 of known and $65,525 of likely questioned costs relate to a subrecipient’s tenants, which the Village is still responsible for ensuring rent reasonableness is properly completed. The subrecipient processed rental assistance documentation for $204,409 of tenant payments. Identification as a Repeat Finding: 2022-008 Recommendation: We recommend that the Village enhance existing policies to ensure rent reasonableness is performed on all rental assistance. In addition, we recommend management ensures determinations are performed prior to move-in or rent changes being charged, and documentation is maintained for both the rent amount and reasonableness of the rent. We further recommend a policy be enacted for reviewing rent reasonableness on a periodic basis (i.e. annually) for those tenants that have not had a change in rent during the period. Views of Responsible Officials: Management agrees with the finding. Management is in the process of enhancing and enforcing existing policies and procedures as well as performing a comprehensive tenant record review.
U.S. Department of Education, Congressionally Funded Community Projects, Assistance Listing Number 84.215K – Internal Control Over Compliance, Approval of Payroll Transactions – Allowable Costs Compliance Requirement Criteria: As defined in 2 CFR 200.303, a recipient of federal grant funding must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: During our audit, we tested all payroll transactions drawn from Federal grant funds for three pay periods during the fiscal year. We discovered that for one employee during one pay period, no evidence of approval of the transaction was maintained. Cause: The Foundation’s internal controls over payroll transactions were not operating effectively. Effect: Improperly operating internal controls over payroll transactions could result in unallowable costs charged to federally sourced grant funds. Repeat Finding: No Recommendation: We recommend that management develop a system of internal controls that requires evidence of approval be maintained for all payroll transactions charged to federally sourced grants. Views of responsible officials and planned corrective actions: To ensure that only proper labor costs are included in grant funding requests, the invoice reported to the grant issuing agency is reviewed by the Project Manager and evidenced by his signature. This review includes reviewing the individual labor charges prior to signing the invoice. All individuals who support the grant purpose and are funded by a grant will be separately identified and the ratio of allowable time to total time will be determined for each pay period. Allowable cost for each individual will be aggregated to the total labor cost for the period and be included in the invoice requesting fund draws. These procedures will be in effect as of the date of this writing.
FINDING 2023-003 Subject: Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: U.S. Department of Treasury Assistance Listing Number: 21.027 Federal Award Number: FY 2021 Pass-Through Entity: Direct grant Compliance Requirements: Procurement and Suspension and Debarment Audit Findings: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ‘Standards for Internal Control in the Federal Government’ issued by the Comptroller General of the United States or the ‘Internal Control Integrated Framework’, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)….” 31 CFR 19.300 states: “When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person.” Condition: The City elected to receive the standard revenue loss allowance, allowing them to claim its total State and Local Fiscal Recovery Funds (SLFRF) allocation as revenue loss to use for government services. As such, all SLFRF program funds were expended under the revenue loss eligible use category. The U.S. Department of the Treasury (Treasury) determined that there are no subawards under this eligible use category, and that recipients’ use of revenue loss funds would not give rise to subrecipient relationships given that there is no federal program or purpose to carry out in the case of the revenue loss portion of the award. Prior to entering into subawards and covered transactions with SLFRF award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. “Covered transactions” include, but are not limited to contracts for goods and services awarded under a non-procurement transaction (i.e. grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAM exclusions, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. Due to the Treasury’s determination that the revenue loss eligible use category does not give rise to subawards, the City was only required to comply with suspension and debarment requirements related to covered transactions. Cause: Management had not established a system of internal control that would have ensured proper Suspension and Debarment procedures are followed. Context: We noted there was one vendor that the City entered into contract within the current year that exceeded $25,000 paid from SLFRF funds. This transaction, totaling $364,374 was selected for testing. The City was not able to provide support proving that the City had verified the vendor was not suspended or debarred prior to entering into the contract. Management asserts that this is being done, but support is not maintained. Effect: Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Identification as a repeat finding, if applicable: Yes. Comment appeared in prior year as Finding 2022- 002. Recommendation: We recommended that the City’s management establish controls related to the grant agreement and the Suspension and Debarment compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Criteria: According to 2 CFR 200.303(a), Organizations must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: During our testing of cash draws, it was noted that the same individual was preparing, reviewing, and initiating cash draws for the Organization. A similar situation was noted in our testing of internal controls over reporting in that the same individual was preparing, reviewing, and submitting the financial reports. Cause: Per discussion with Management, due to turnover and transitions within the accounting department and outsourced accountants there was a period of time where segregation of duties was not maintained. Effect: The internal controls over cash draws and reporting were not in compliance with federal guidelines. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization take steps to ensure proper segregation of duties and implement alternatives if or when sufficient staffing is not available in traditional roles.
FINDING 2023-003 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY 21 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-002. Condition and Context The City received a State and Local Fiscal Recovery Funds (SLFRF) allocation of $11,167,161. During the audit period, the City expended funds under the revenue loss category and the infrastructure investment category. Prior to entering into subawards and covered transactions with SLFRF award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. Due to the U.S. Department of the Treasury's determination that the revenue loss eligible use category does not give rise to subawards, the County was only required to comply with suspension and debarment requirements related to covered transactions. INDIANA STATE BOARD OF ACCOUNTS 17 CITY OF LAWRENCE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The City did not have a formal written policy covering the suspension and debarment requirements. A population of three covered transactions for goods or services that equaled or exceeded $25,000 paid from SLFRF funds during the audit period were identified. All three vendors with covered transactions were selected for testing. The contract for one of the vendors, who received payments from the City during 2023 totaling $435,290, included a suspension and debarment clause in the contract. For the remaining two vendors, who received payments from the City during 2023 totaling $536,500 and $134,979, evidence was not provided that the City verified the vendors' suspension and debarment status prior to entering into the covered transactions. The City did not provide a formal policy or have procedures in place to verify that contractors engaged in covered transactions are neither suspended nor debarred or otherwise excluded or disqualified from participating in federal assistance programs or activities. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you do business is not excluded or disqualified. You do this by: (a) Checking the EPLS, or (b) Collecting a certification from that person if allowed by this rule, or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by management of the City. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the City's management of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. At the time the City entered into the contracts tested, the City was unaware of the requirements for verifying whether or not vendors were suspended or debarred. INDIANA STATE BOARD OF ACCOUNTS 18 CITY OF LAWRENCE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, vendors to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded. Payments to vendors that are suspended or debarred would be unallowable and could be recovered by the awarding agency. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the City. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the City establish a proper system of internal controls and develop policies and procedures to ensure contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Reporting Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY 21 Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context Recipients are required to submit quarterly or annually Project and Expenditure (P&E) reports to the U.S. Department of the Treasury (Treasury). The reporting periods, as well as the respective due dates, are based upon type of recipient and its population, as well as the recipient's allocation amount. Information to be reported includes projects funded, expenditures, and contracts for the appropriate reporting period. Recipients are required to submit quarterly or annually P&E reports to the Treasury. The reporting periods, as well as the respective due dates, are based upon type of recipient and its population, as well as the recipient's allocation amount. Information to be reported includes projects funded, expenditures, and contracts for the appropriate reporting period. INDIANA STATE BOARD OF ACCOUNTS 19 CITY OF LAWRENCE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The City was classified as a metropolitan City with a population below 250,000 residents that received an allocation of more than $10 million in State and Local Fiscal Recovery Funds. As such, the City was required to submit four quarterly P&E reports during the audit period. The reports to be submitted during 2023 were for quarters ending December 31, 2022, March 31, 2023, June 30, 2023, and August 31, 2023. The City did not provide audit evidence that the P&E report for the quarter ended December 31, 2022, was prepared and submitted. Additionally, a single employee prepared and submitted the remaining three P&E reports without evidence of oversight and review. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was related to the P&E report for the quarter ended December 31, 2022. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 31 CFR 35.4(c) states in part: "Reporting and requests for other information. During the period of performance, recipients shall provide to the Secretary periodic reports providing detailed accounting of the uses of funds, . . ." Coronavirus State and Local Fiscal Recovery Funds Compliance and Reporting Guidance, page 10, states in part: ". . . 10. Reporting. All recipients of federal funds must complete financial, performance, and compliance reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Your organization should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. . . ." Cause A proper system of internal controls was not designed by management of the City, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the City's management of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. The City was not aware the P&E report for the quarter ending December 31, 2022, had not been filed. INDIANA STATE BOARD OF ACCOUNTS 20 CITY OF LAWRENCE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, a quarterly report was not filed with the Treasury. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the City design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight of federal reports are taking place. We also recommended that all quarterly reports be filed timely with the awarding agency. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 21
Finding 2023-002: Section 8 Project-Based Cluster Federal Assistance Number: 14.182 and 14.195 U.S. Department of Housing and Urban Development (Repeat of Finding 2022-002) Compliance Requirements: Cash Management, Eligibility, Reporting, Special Tests and Provisions Type of finding: Internal Control Over Compliance (significant deficiency) Criteria: The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards require that the non-Federal entity establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award (2 CFR 200.303(a)). Condition: The Organization has not implemented a review or monitoring process to ensure propriety in eligibility determinations, tenant lease agreements, housing assistance payment requests, and return of funds for vacant units and rent adjustments to contract rent included on the monthly Housing Assistance Payment vouchers. Cause: The compliance responsibilities of the Organization are performed by a few people which has made it difficult to establish a proper review process over cash management, eligibility, reporting, and special tests and provisions requirements. Effect: Noncompliance with the Section 8 Project-Based Cluster requirements may exist and not be detected by the Organization. Recommendation: The Organization should strengthen its internal controls with adopted policies and procedures to ensure a review process is established through adequate segregation of duties. The Organization should consider assessing and realigning the duties and responsibilities of administrative staff allowing the administrator to act in a more supervisory position. Grantee’s Response: See corrective action plan.
Finding 2023-002: Section 8 Project-Based Cluster Federal Assistance Number: 14.182 and 14.195 U.S. Department of Housing and Urban Development (Repeat of Finding 2022-002) Compliance Requirements: Cash Management, Eligibility, Reporting, Special Tests and Provisions Type of finding: Internal Control Over Compliance (significant deficiency) Criteria: The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards require that the non-Federal entity establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award (2 CFR 200.303(a)). Condition: The Organization has not implemented a review or monitoring process to ensure propriety in eligibility determinations, tenant lease agreements, housing assistance payment requests, and return of funds for vacant units and rent adjustments to contract rent included on the monthly Housing Assistance Payment vouchers. Cause: The compliance responsibilities of the Organization are performed by a few people which has made it difficult to establish a proper review process over cash management, eligibility, reporting, and special tests and provisions requirements. Effect: Noncompliance with the Section 8 Project-Based Cluster requirements may exist and not be detected by the Organization. Recommendation: The Organization should strengthen its internal controls with adopted policies and procedures to ensure a review process is established through adequate segregation of duties. The Organization should consider assessing and realigning the duties and responsibilities of administrative staff allowing the administrator to act in a more supervisory position. Grantee’s Response: See corrective action plan.
Finding 2023-002: Federal Funding Accountability and Transparency Act Reporting Compliance Requirement: Reporting Type: Significant Deficiency in Internal Control over Compliance Federal Awarding Agency: HHS AL Numbers and Titles: 93.592 - Family Violence Prevention and Services/Discretionary Federal Award Number: 90EV0531 Questioned Costs: None Repeat Finding: No Criteria: According to 2 CFR §170 prime recipients of Federal awards are required to report each sub-award action to the Federal Subaward Reporting System (FSRS) by the end of the month following the month in which the sub-award was obligated. In addition, 2 CFR 200.303 requires that recipients of federal awards establish and maintain effective internal controls over the administration of the federal program to provide reasonable assurance of compliance with applicable federal statutes, regulations, and terms and conditions of the award. Condition: We reviewed all four subawards associated with the program during the audit period and noted that sub-award information for all four subrecipients was not submitted to the FSRS by the required submission deadline. Although all other compliance requirements were met, the late submission represents a deficiency in reporting controls. Cause: Caminar Latino did not have a control in place to ensure the timely submission of sub-award information to the FSRS. Effect: The grantee did not comply with the FFATA reporting requirement, which could result in a lack of transparency and accountability for the use of Federal funds. Recommendation: We recommend that Caminar Latino implement internal controls to ensure compliance with the FSRS reporting deadlines. Specifically, we recommend establishing a process that includes reminders or system alerts to ensure that subaward information is submitted on time. Views of Responsible Officials Corrective Actions: Caminar Latino, Inc. agrees with this finding. Please refer to the Corrective Action Plan.
FINDING 2023-002 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY 2023 Pass-Through Entity: Monroe County Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Condition and Context Prior to entering into subawards and covered transactions with Coronavirus State and Local Fiscal Recovery Funds (SLFRF) award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is done by checking the Excluding Parties List System (EPLS), collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. The District did not have a policy related to SLFRF suspension and debarment requirements. Three vendors were identified as having transactions that equaled or exceeded $25,000. All three vendors were selected for testing. The three vendors were reviewed, and only one of the vendors had documented audit evidence to show that the vendor was checked for suspension, debarment, or other exclusion prior to entering into the transactions. This was due to the utilization of a purchasing cooperative for this purchase. The other two vendors, with total expenditures of $66,575, did not have documented audit evidence to show that the vendors were checked for suspension, debarment, or other exclusion prior to entering into the transactions. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 15 MONROE FIRE PROTECTION DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management of the District had not developed a system of internal controls that addressed the need to verify suspension, debarment, or other exclusions prior to entering into transactions with vendors. Effect Without the proper design and implementation of an effectively designed system of internal controls, the District cannot ensure the vendors paid with federal funds are eligible to participate in federal programs. Any program funds the District used to pay vendors that have been suspended and debarred would be unallowable. Furthermore, noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future funding to the District. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the District's management establish a proper system of internal controls and develop policies and procedures to ensure contractors are not suspended, debarred, or otherwise excluded prior to entering into contracts. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-003 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY 2023 Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance Audit Findings: Material Weakness, Modified Opinion Condition and Context Prior to receipt of direct COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF) award funds, all eligible entities were required to execute a Financial Assistance Agreement (Agreement) which included the Award Terms and Conditions that recipients must comply with in carrying out the objectives of their award. Per the Agreement, the Town was responsible for the effective administration of the federal award as well as the application of sound management practices and administration of federal funds in a manner consistent with program objectives and terms and conditions of the award. Recipients may use SLFRF funds for any eligible expenses subject to the restrictions set forth in sections 602 and 603 of the Social Security Act as added by section 9901 of the American Rescue Plan Act of 2021 and amended by the Consolidated Appropriations Act of 2023. The SLFRF program provides substantial flexibility for each recipient to meet local needs within seven separate eligible use categories. Recipients may use SLFRF funds to: Respond to the COVID-19 public health emergency and its negative economic impacts; Respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay to eligible workers of eligible employers that have eligible workers who are performing essential work; INDIANA STATE BOARD OF ACCOUNTS 17 TOWN OF UPLAND SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Provide government services, to the extent COVID-19 caused a reduction in revenues collected in the most recent full fiscal year of the recipient; Make necessary investments in water, sewer, or broadband infrastructure. Provide emergency relief from natural disasters or their negative economic impacts. Fund eligible Surface Transportation projects; and Fund Title I projects that are eligible activities under the Community Development Block Grant and Indiana Community Development Block Grant programs. As part of sound management of the federal award, the Town was responsible for implementing a system of internal controls that would ensure compliance with the applicable requirements. The Town had not properly designed or implemented such a system. There was no evidence of segregation of duties, such as an oversight, review, or approval process, that would have ensured that expenditures of award funds were made only for activities and costs that were allowable under the federal award and federal regulations and that were within the period of performance. The Town completed five transfers totaling $224,050 to the Town Utility funds. The amounts transferred to these Utility funds were commingled with other receipts; therefore, the expenditures that went with the SLFRF money, if any, could not be identified. Therefore, the $224,050 could not be tested to ensure compliance with the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Period of Performance compliance requirements. The lack of internal controls and noncompliance were isolated to the transfers noted above. Criteria 2 CFR 200.302 states in part: "(a) Each state must expend and account for the Federal award in accordance with state laws and procedures for expending and accounting for the state's own funds. In addition, the state's and the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and programspecific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. . . . (b) The financial management system of each non-Federal entity must provide for the following . . . (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number and year, name of the Federal agency, and name of the pass-through entity, if any. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . INDIANA STATE BOARD OF ACCOUNTS 18 TOWN OF UPLAND SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. (4) Effective control over, and accountability for, all funds, property, and other assets. . . ." 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause A proper system of internal controls was not designed by management of the Town. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the Town's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Due to the lack of internal controls, the Town was unable to differentiate expenditures made from federal and nonfederal funds once it commingled nonfederal funds and federal grant awards. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system was not effective in preventing, or detecting and correcting, material noncompliance within the grant. The Town was unable to identify all the expenditures paid with federal funds and cannot ensure, nor can we determine, expenditures of the grant were allowable activity, within the proper period, and were an allowable cost. Questioned Costs We identified $224,050 in known questioned costs as noted above in the Condition and Context. Recommendation We recommended that management of the Town establish a system of internal controls to ensure that grant award funds are accounted for and tracked in a designated grant fund. All activity of the grant should be in this fund with supporting documentation for each transaction. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY 2023 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context Prior to entering into subawards and covered transactions with COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF), recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking SAM.gov, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. Due to the U.S. Department of the Treasury's determination that the revenue loss eligible use category does not give rise to subawards, the Town was only required to comply with suspension and debarment requirements related to covered transactions. The Town did not have a formal written policy covering the suspension and debarment requirements. The population of covered transactions for goods or services that equaled or exceeded $25,000 paid from SLFRF funds during the audit period were identified. All vendors with covered transactions were selected for testing. Evidence was not provided that the Town verified the vendors' suspension and debarment status prior to entering into the covered transactions. The Town did not provide a formal policy or have procedures in place to verify that contractors engaged in covered transactions are neither suspended nor debarred or otherwise excluded or disqualified from participating in federal assistance programs or activities. The lack of internal controls and noncompliance was systemic throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you do business is not excluded or disqualified. You do this by: INDIANA STATE BOARD OF ACCOUNTS 20 TOWN OF UPLAND SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by management of the Town. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the Town's management of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. At the time the Town entered into the contracts tested, the Town was unaware of the requirements for verifying whether or not vendors were suspended or debarred. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the suspension and debarment status of vendors paid $25,000 or more was not verified. Payments to vendors that are suspended or debarred would be unallowable and could be recovered by the awarding agency. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the Town. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the Town establish a proper system of internal controls and develop policies and procedures to ensure contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-005 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Reporting Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY 2023 Compliance Requirement: Reporting Audit Finding: Material Weakness INDIANA STATE BOARD OF ACCOUNTS 21 TOWN OF UPLAND SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context Recipients are required to quarterly or annually submit Project and Expenditure (P&E) reports to the U.S. Department of the Treasury (Treasury). The reporting periods, as well as the respective due dates, are based upon type of recipient and its population, as well as the recipient's allocation amount. Information to be reported includes projects funded, expenditures, and contracts for the appropriate reporting period. The Town was classified as a town with a population below 250,000 residents that received an allocation of less than $10 million in COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF). As such, the initial P&E report, covering the period from March 3, 2022 to March 31, 2023, was required to be submitted to the Treasury by April 30, 2023. The subsequent annual reports are to cover one calendar year and must be submitted to the Treasury by April 30 each year. The Town submitted one P&E report during the audit period; however, the report was submitted without a review or oversight process in place to prevent, or detect and correct, errors. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Coronavirus State and Local Fiscal Recovery Funds Compliance and Reporting Guidance, page 10, states in part: ". . . 10. Reporting. All recipients of federal funds must complete financial, performance, and compliance reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Your organization should appropriately maintain accounting records for com-piling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. . . ." 31 CFR 35.4(c) states in part: "Reporting and requests for other information. During the period of performance, recipients shall provide to the Secretary periodic reports providing detailed accounting of the uses of funds, . . ." Cause A proper system of internal controls was not designed by management of the Town. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the Town's management of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. INDIANA STATE BOARD OF ACCOUNTS 22 TOWN OF UPLAND SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the Town strengthen its system of internal controls to provide for segregation of duties in the preparation and review of federal reports to ensure appropriate reviews, approvals, and oversight are taking place. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-001 Subject: Airport Improvement Program - Equipment and Real Property Management Federal Agency: Department of Transportation Federal Program: Airport Improvement Program, COVID-19 Airports Programs, and Infrastructure Investment and Jobs Act Programs Assistance Listings Number: 20.106 Federal Award Number and Year (or Other Identifying Number): 3-18-0082-050 Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 13 TERRE HAUTE REGIONAL AIRPORT AUTHORITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context Detailed capital asset records are to be maintained by the entity. The records should contain the equipment description (including serial number or other identification number), source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. The Authority provided a capital asset list that only included the asset description and value amount. The listing did not include all the requirements as stated above. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. . . ." Cause The Authority was unaware that they needed to maintain detailed capital asset records with requirements as stated above. Effect Without the proper implementation of an effectively designed system of internal controls, the Authority cannot ensure that all capital assets are being included in the records of the Authority. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 14 TERRE HAUTE REGIONAL AIRPORT AUTHORITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that the Authority's management strengthen its system of internal controls to ensure that they maintain detailed capital asset records that include all the requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: Airport Improvement Program - Reporting Federal Agency: Department of Transportation Federal Program: Airport Improvement Program, COVID-19 Airports Programs, and Infrastructure Investment and Jobs Act Programs Assistance Listings Number: 20.106 Federal Award Number and Year (or Other Identifying Number): 3-18-0082-054 Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context Annual reports are to be filed with the awarding agency if the entity does not report on the accrual basis of accounting. As the Authority reports on the regulatory basis of accounting, the Authority was required to file an SF-271: Outlay report and Request for Reimbursement for Construction Programs and an SF-425: Federal Financial Report for each project. During the audit period, a total of eight reports were to be filed. One of the eight reports, the SF-425: Federal Financial Report for the AIP 54 project, was not submitted. As such, we could not determine the accuracy of that report. The lack of internal controls and noncompliance were isolated to the SF-425: Federal Financial Report for the AIP 54 project. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 31 CFR 35.49(c) states in part: "Reporting and requests for other information. During the period of performance, recipients shall provide to the Secretary periodic reports detailed accounting of the uses of funds. . . ." INDIANA STATE BOARD OF ACCOUNTS 15 TERRE HAUTE REGIONAL AIRPORT AUTHORITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The Authority was unable to provide documentation to show it had filed the SF-425: Federal Financial Report. Effect Without the proper implementation of an effectively designed system of internal controls, the Authority cannot ensure the required reports are filed with the awarding agency. As such, the awarding agency does not have accurate and current information to discern the financial status of the Authority's project. Furthermore, noncompliance with the provisions of federal statutes, regulations, and the terms and conditions or the federal award could result in the loss of future federal funding to the Town. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the Authority's management strengthen its system of internal controls to ensure that all required reports are filed. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding 2023-002 – Equipment and real property management Program Name (ALN): Public Transportation Emergency Relief Program (ALN 20.527) Federal Agency: U.S. Department of Transportation Federal Grant Numbers and Years: NJ-44-X004 (April 1, 2014 – November 5, 2023) Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample Prior Year Finding: Not applicable Finding Type: Material weakness and material noncompliance Criteria: Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the Federal award identification number), who holds title, the acquisition date, cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property (2 CFR Section 200.313(d)(1)). A physical inventory of the property must be taken, and the results reconciled with the property records at least once every two years as required by 2 CFR Section 200.313(d)(2). In addition, under 2 CFR section 200.303(a), a non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: The Port Authority of New York and New Jersey (the Port Authority) used the Public Transportation Emergency Relief Program to purchase equipment to perform maintenance and inspection of the track damaged by Superstorm Sandy, repair the damage, and allow the Port Authority to be more resilient in future events. We noted the Port Authority did not perform a physical inventory of the equipment within the required two-year period. Further, during our physical observation of fifteen pieces of equipment, we noted for four items, the serial numbers included on the equipment’s tag did not match the serial number included in the Port Authority’s property records. Cause: In discussing these conditions with the Port Authority’s management, they stated inadequate staffing resources due to staff turnover contributed to the finding. Effect: Failure to perform an inventory at least once every two years and maintaining accurate property records may prohibit the Port Authority from properly safeguarding and maintaining equipment in accordance with federal requirements. Questioned Costs: None. Recommendation: We recommend that the Port Authority strengthen its processes to ensure a physical inventory of equipment acquired with federal funds is performed at least once during each two-year period. Views of Responsible Officials: The Port Authority acknowledges an internal control deficiency in performing a physical equipment inventory of equipment as required under CFR 200 for the Public Transportation Emergency Relief Program 2013 49 U.S.C. 5324 (Grant award NJ-44-X004 PATH-H.) PATH successfully performed a physical inventory of equipment in 2018, the first year it was required. In 2020, the performance of a physical inventory coincided with the COVID-19 pandemic which facilitated the retirement of key personnel in PATH who were responsible for performing the physical inventory of the equipment that was federally funded. This staff transition led to a loss of PATH system expertise necessary to pick up the process previously developed, resulting in the inadvertent lapse in performing the physical inventory in 2020 and 2022. To mitigate this deficiency PATH has performed a physical inventory in 2024 and updated its procedures as they relate to performing the physical inventory of equipment and to have staffing redundancies in place to account for staff turnover. In addition, PATH updated its equipment inventory log to reflect the correct serial numbers on the four pieces of equipment that KPMG identified.
Subject: 2023-002 Coronavirus State and Local Fiscal Recovery Funds – Reporting Federal Agency: Department of the Treasury Federal Program: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Compliance Requirement: Reporting Audit Finding: Significant Deficiency and Noncompliance Criteria: 2 CFR 200.303 includes requirements related to internal controls for federal award programs, including that the Agency must, among other things, “establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)”. Condition and Context: We noted the City submitted a report required under the Coronavirus State and Local Fiscal Recovery Funds which did not have adequate review of the report for accuracy of the information or inclusion of the appropriate key line items. This finding is a repeat finding of 2021-003 and 2022-002. Cause and Effect: We noted lack of internal controls surrounding the reporting process resulted in key line items to be misstated and the errors were identified subsequent to the initial submission. There were no questioned costs related to this issue. Recommendation: We recommend the City implement procedures to ensure reports are being reviewed by an individual or third-party familiar with the program prior to submission. Views of Responsible Officials and Planned Corrective Actions: The City agrees with the recommendation and plans to implement the recommendation during 2024.
FINDING 2023-003 Program Information: COVID-19 Education Stabilization Fund (ALN #84.425C) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) (2 CFR 200.303). M. Subrecipient Monitoring - Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved (2 CFR 200.332(d). Condition: The Organization’s control processes failed to detect unallowable costs included in quarterly reimbursement requests by local club subrecipients. Although these amounts were not approved by the State agency and ultimately were not reimbursed, the Alliance did not have sufficient internal controls in place in order to independently detect unallowable costs submitted by subrecipients and to provide reasonable assurance the Alliance is managing the Federal award in compliance with the award terms. Cause: Lack of sufficient controls in place over subrecipient monitoring, allowable costs, and reporting compliance requirements. Effect or Potential Effect: For 3 out of 3 quarterly reports, the Organization failed to detect unallowable costs requested for reimbursement by local club subrecipients, resulting in inaccurate reporting and insufficient subrecipient monitoring. The control failure was determined to be a material weakness in internal controls over subrecipient monitoring, allowable costs, and reporting compliance requirements. Questioned Costs: None Context: The Organization approved unallowable costs for reimbursement, which demonstrated ineffective management oversight related to subrecipient monitoring, allowable costs, and reporting compliance requirements. As the control failed to detect unallowable costs for all 3 quarters of the grant period during the fiscal year, and there were no compensating controls to mitigate the severity of the deficiency, we determined the control deficiency to be a material weakness. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend that the Organization enhance its procedures and internal controls with respect to subrecipient monitoring, allowable costs, and reporting compliance requirements. Views of Responsible Officials and Planned Corrective Actions: The Organization will enhance its procedures and internal controls with respect to monitoring subrecipient activities, and reimbursement payments, by working with the State of Montana grantor to ensure local clubs are using subawards for authorized purposes.
Assistance Listing Number and Program: 21.027 COVID-19 State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of Treasury Pass-Through Entity and Award Number: Wisconsin Public Service Commission / 5-BF-2022 Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of 2 CFR 200.303(a), which requires an entity to establish and maintain effective internal control over the Federal award to ensure compliance with Federal statutes, regulations and the terms and conditions of the federal award. Recipients of COVID-19 State and Local Fiscal Recovery Fund payments from the Wisconsin Public Service Commission (PSC) must also comply with the reporting requirements described in the terms and conditions of the PSC agreement. Condition: The Reedsburg Utility Commission did not have a process to review and approve the quarterly progress reports prior to submission to the PSC by someone other than the preparer. Additionally, estimates were used to report costs incurred in those quarterly reports. We tested four quarterly reports submitted for the Iowa County and Witwen projects. Our sample was not statistically valid. Cause: The Reedsburg Utility Commission did not have a control process in place to ensure that the reports were being reviewed by someone other than the preparer prior to submission to the PSC and that actual costs were used in the reports. Effect: Reports could contain errors due to estimation and lack of review. Questioned Costs: None reported. Recommendation: The Utility Commission should review its internal control procedures to ensure there are proper review and approval processes over completeness and accuracy of reports in place before submissions to state agencies are completed. Actual amounts supported by the financial software should be used in those reports. Management's Response: The Utility Commission General Manager or Communications System Supervisor will review the quarterly progress reports prepared by someone else. Section II of the Project Status Report instructions states “Answer each question to the best of your ability.” The work orders do not include all costs related to labor benefits and taxes, and also the electronics and customer premise equipment associated with the projects. These costs are calculated and added in when the project is completed and is being closed out. Estimating these items for the quarterly Project Status Report is providing the project costs spent through the respective quarter to the best of our ability due to the limitations of the work order reporting process.
FINDING 2023-001 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Numbers): SLFRP0752, TRSW222154-MACE STORMWATER Pass-Through Entity: Indiana Finance Authority Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 13 MONTGOMERY COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-004. Condition and Context The County elected to receive the standard revenue loss allowance, allowing the County to claim its total COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF) allocation of $7,446,707 as revenue loss to use for government services. As such, all SLFRF program funds were expended under the revenue loss eligible use category. The U.S Department of the Treasury (Treasury) determined that there are no subawards under this eligible use category, and that recipients' use of revenue loss funds would not give rise to subrecipient relationships given that there is no federal program or purpose to carry out in the case of the revenue loss portion of the award. Prior to entering into subawards and covered transactions with SLFRF award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. Due to the Treasury's determination that the revenue loss eligible use category does not give rise to subawards, the County was only required to comply with suspension and debarment requirements related to covered transactions. Upon inquiry of the County in order to review the procedures in place for verifying that an entity with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the County divulged that they established Ordinance 2023-11 dated August 14, 2023, indicating that all public works contracts were to include a suspension and debarment clause and were aware of the suspension and debarment requirements related to the SLFRF awards. There was only one covered transaction for goods or services that equaled or exceeded $25,000 paid from SLFRF funds during the audit period in the amount of $679,002. The County did not verify the vendors' suspension and debarment status prior to payment due to the County not having policies or procedures in place prior to entering into the contract with the vendor to verify that contractor was neither suspended nor debarred, or otherwise excluded or disqualified from participating in federal assistance programs or activities. The County reported that verification of suspension and debarment was attempted on the Sam.Gov website, but no results were returned. The lack of internal controls and noncompliance were systematic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 14 MONTGOMERY COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by management of the County. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the County's management of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, vendors to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the County. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County establish a proper system of internal controls and develop policies and procedures to ensure contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Reporting Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): SLFRP0752 Compliance Requirement: Reporting Audit Finding: Material Weakness INDIANA STATE BOARD OF ACCOUNTS 15 MONTGOMERY COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context Recipients are required to submit quarterly or annually Project and Expenditure (P&E) reports to the U.S. Department of the Treasury (Treasury). The reporting periods, as well as the respective due dates, are based upon type of recipient and its population, as well as the recipient's allocation amount. Information to be reported includes projects funded, expenditures, and contracts for the appropriate reporting period. The County was classified as a county with a population below 250,000 residents that received an allocation of less than $10 million in State and Local Fiscal Recovery Funds. As such, the P&E report, covering the period from April 1, 2022 to March 31, 2023, was required to be submitted to the Treasury by April 30, 2023. The County submitted the P&E report by April 30, 2023, as required; however, there were no internal controls in place that would likely be effective in preventing, or detecting and correcting, noncompliance related to the P&E report. The County Auditor prepared and submitted the report without an oversight or review process. The lack of internal controls was a systemic issue throughout the audit period. 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause A proper system of internal controls over the P&E report was not designed by management of the County, which would include segregation of key functions to ensure the County provided the Treasury with complete and accurate information related to the SLFRF awards. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the County's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system may not have prevented or detected material noncompliance. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the County. In addition, not meeting the SLFRF reporting requirements increases the likelihood that the public will not have access to transparent and accurate information regarding expenditures of federal awards. INDIANA STATE BOARD OF ACCOUNTS 16 MONTGOMERY COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County design and implement a proper system of internal controls with review and oversight of the P&E report, including policies and procedures to ensure that the County provides the Treasury with complete and accurate information for the P&E report. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 17
FINDING 2023-001 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Numbers): SLFRP0752, TRSW222154-MACE STORMWATER Pass-Through Entity: Indiana Finance Authority Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 13 MONTGOMERY COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-004. Condition and Context The County elected to receive the standard revenue loss allowance, allowing the County to claim its total COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF) allocation of $7,446,707 as revenue loss to use for government services. As such, all SLFRF program funds were expended under the revenue loss eligible use category. The U.S Department of the Treasury (Treasury) determined that there are no subawards under this eligible use category, and that recipients' use of revenue loss funds would not give rise to subrecipient relationships given that there is no federal program or purpose to carry out in the case of the revenue loss portion of the award. Prior to entering into subawards and covered transactions with SLFRF award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. Due to the Treasury's determination that the revenue loss eligible use category does not give rise to subawards, the County was only required to comply with suspension and debarment requirements related to covered transactions. Upon inquiry of the County in order to review the procedures in place for verifying that an entity with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the County divulged that they established Ordinance 2023-11 dated August 14, 2023, indicating that all public works contracts were to include a suspension and debarment clause and were aware of the suspension and debarment requirements related to the SLFRF awards. There was only one covered transaction for goods or services that equaled or exceeded $25,000 paid from SLFRF funds during the audit period in the amount of $679,002. The County did not verify the vendors' suspension and debarment status prior to payment due to the County not having policies or procedures in place prior to entering into the contract with the vendor to verify that contractor was neither suspended nor debarred, or otherwise excluded or disqualified from participating in federal assistance programs or activities. The County reported that verification of suspension and debarment was attempted on the Sam.Gov website, but no results were returned. The lack of internal controls and noncompliance were systematic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 14 MONTGOMERY COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by management of the County. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the County's management of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, vendors to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the County. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County establish a proper system of internal controls and develop policies and procedures to ensure contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-003 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY2023 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context The County elected to receive the standard revenue loss allowance, allowing the County to claim its total COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF) allocation of $9,273,712 as revenue loss to use for government services. The U.S. Department of the Treasury (Treasury) determined that there are no subawards under this eligible use category and that recipients' use of revenue loss funds would not give rise to subrecipient relationships given that there is no federal program or purpose to carry out in the case of the revenue loss portion of the award. Prior to entering into subawards and covered transactions with SLFRF award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person or entity, or adding a clause or condition to the covered transaction with that person or entity. Due to the Treasury's determination that the revenue loss eligible use category does not give rise to subawards, the County was only required to comply with suspension and debarment requirements related to covered transactions. Upon inquiry of the County's policies and procedures related to suspension and debarment requirements, the County disclosed its process was for the County Auditor to ensure that the agreements or contracts include language related to suspension and debarment. There were 18 covered transactions for goods or services that equaled or exceeded $25,000 that were paid from SLFRF funds during the audit period were identified. Of the 18 covered transactions, 3 were selected for testing. Each transaction was examined to determine whether the County verified the suspension and debarment status of the vendor prior to payment. The first covered transaction, in the amount of $319,064, was made to a contractor for the design development of the courthouse renovation. While the contract was reviewed and approved by a County official, no suspension or debarment clause was present in the contract. No other method was used to verify that the vendor was neither suspended nor debarred, or otherwise excluded or disqualified, from participating in federal assistance programs or activities prior to payment. The second transaction, in the amount of $1,259,834, was made to a contractor for renovation work completed on the county jail. While the contract was reviewed and approved by a County official, no suspension or debarment clause was present in the contract. No other method was used to verify that the vendor was neither suspended nor debarred, or otherwise excluded or disqualified, from participating in federal assistance programs or activities prior to payment. The third transaction, in the amount of $135,900, was made on the roof to replace a portion of the renovation work completed on the county jail. While the contract was reviewed and approved by a County official, no suspension or debarment clause was present in the contract. No other method was used to verify that the vendor was neither suspended nor debarred, or otherwise excluded or disqualified, from participating in federal assistance programs or activities prior to payment. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause After the last audit, the County established procedures to include a suspension and debarment clause in agreements or contracts. However, the County did not amend agreements or contracts entered into prior to the implementation of this policy. Effect Without the proper implementation of an effectively designed system of internal controls, the County cannot ensure the contractors paid with federal funds are eligible to participate in federal programs. Any program funds the County used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County strengthen its system of internal controls to ensure that all covered transactions that are $25,000 or more, all or in part with federal funds, are not suspended, debarred, or otherwise excluded from participating in federal programs prior to entering into any contracts. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding 2023-002: Lack of sufficient documentation to evidence controls over Suspension and Debarment Identification of the federal programs: Program Titles: Emergency Solutions Grant Program, Second Chance Act Reentry Initiative Assistance Listing Numbers: 14.231, 16.812 Award Identification: CT8006 SG 2023-0063, CT8006 SG 2024-0026, CT 8006 SG 2023-0042, N L 20 70C-4, S-L-20-70C-1 Federal Agencies: United States Department of Housing and Urban Development, United States Department of Justice Pass-through entities: City of Cleveland Department of Community Development, Ohio Development Services Agency Criteria: The Code of Federal Regulations (2 CFR 200.303(a)) requires that each non-Federal entity must “Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition: Lutheran Metropolitan Ministry was not able to provide documentation to evidence controls surrounding Suspension and Debarment compliance requirement for both the Emergency Solutions Grant Program and the Second Chance Act Reentry Initiative. Cause: Lutheran Metropolitan Ministry’s processes and controls established for Suspension and Debarment compliance requirement related to the major programs did not allow for the retention of documentation to evidence such review and approval was completed. Effect: There is an increased risk of procuring with vendors that are suspended and debarred. Questioned costs: None Context: Lutheran Metropolitan Ministry was not able to evidence controls surrounding the Suspension and Debarment compliance requirement for six out of six vendors tested under the Emergency Solutions Grant Program and for four out of four vendors tested under the Second Chance Act Reentry Initiative. Recommendation: Lutheran Metropolitan Ministry should evaluate policies and procedures surrounding document retention and ensure that all vendor files include evidence of search and verification that vendors are not suspended and debarred. Views of responsible individuals: Management concurs with and will implement the recommendation. See corrective action plan.
Finding 2023-002: Lack of sufficient documentation to evidence controls over Suspension and Debarment Identification of the federal programs: Program Titles: Emergency Solutions Grant Program, Second Chance Act Reentry Initiative Assistance Listing Numbers: 14.231, 16.812 Award Identification: CT8006 SG 2023-0063, CT8006 SG 2024-0026, CT 8006 SG 2023-0042, N L 20 70C-4, S-L-20-70C-1 Federal Agencies: United States Department of Housing and Urban Development, United States Department of Justice Pass-through entities: City of Cleveland Department of Community Development, Ohio Development Services Agency Criteria: The Code of Federal Regulations (2 CFR 200.303(a)) requires that each non-Federal entity must “Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition: Lutheran Metropolitan Ministry was not able to provide documentation to evidence controls surrounding Suspension and Debarment compliance requirement for both the Emergency Solutions Grant Program and the Second Chance Act Reentry Initiative. Cause: Lutheran Metropolitan Ministry’s processes and controls established for Suspension and Debarment compliance requirement related to the major programs did not allow for the retention of documentation to evidence such review and approval was completed. Effect: There is an increased risk of procuring with vendors that are suspended and debarred. Questioned costs: None Context: Lutheran Metropolitan Ministry was not able to evidence controls surrounding the Suspension and Debarment compliance requirement for six out of six vendors tested under the Emergency Solutions Grant Program and for four out of four vendors tested under the Second Chance Act Reentry Initiative. Recommendation: Lutheran Metropolitan Ministry should evaluate policies and procedures surrounding document retention and ensure that all vendor files include evidence of search and verification that vendors are not suspended and debarred. Views of responsible individuals: Management concurs with and will implement the recommendation. See corrective action plan.
Finding 2023-002: Lack of sufficient documentation to evidence controls over Suspension and Debarment Identification of the federal programs: Program Titles: Emergency Solutions Grant Program, Second Chance Act Reentry Initiative Assistance Listing Numbers: 14.231, 16.812 Award Identification: CT8006 SG 2023-0063, CT8006 SG 2024-0026, CT 8006 SG 2023-0042, N L 20 70C-4, S-L-20-70C-1 Federal Agencies: United States Department of Housing and Urban Development, United States Department of Justice Pass-through entities: City of Cleveland Department of Community Development, Ohio Development Services Agency Criteria: The Code of Federal Regulations (2 CFR 200.303(a)) requires that each non-Federal entity must “Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition: Lutheran Metropolitan Ministry was not able to provide documentation to evidence controls surrounding Suspension and Debarment compliance requirement for both the Emergency Solutions Grant Program and the Second Chance Act Reentry Initiative. Cause: Lutheran Metropolitan Ministry’s processes and controls established for Suspension and Debarment compliance requirement related to the major programs did not allow for the retention of documentation to evidence such review and approval was completed. Effect: There is an increased risk of procuring with vendors that are suspended and debarred. Questioned costs: None Context: Lutheran Metropolitan Ministry was not able to evidence controls surrounding the Suspension and Debarment compliance requirement for six out of six vendors tested under the Emergency Solutions Grant Program and for four out of four vendors tested under the Second Chance Act Reentry Initiative. Recommendation: Lutheran Metropolitan Ministry should evaluate policies and procedures surrounding document retention and ensure that all vendor files include evidence of search and verification that vendors are not suspended and debarred. Views of responsible individuals: Management concurs with and will implement the recommendation. See corrective action plan.
Finding 2023-002: Lack of sufficient documentation to evidence controls over Suspension and Debarment Identification of the federal programs: Program Titles: Emergency Solutions Grant Program, Second Chance Act Reentry Initiative Assistance Listing Numbers: 14.231, 16.812 Award Identification: CT8006 SG 2023-0063, CT8006 SG 2024-0026, CT 8006 SG 2023-0042, N L 20 70C-4, S-L-20-70C-1 Federal Agencies: United States Department of Housing and Urban Development, United States Department of Justice Pass-through entities: City of Cleveland Department of Community Development, Ohio Development Services Agency Criteria: The Code of Federal Regulations (2 CFR 200.303(a)) requires that each non-Federal entity must “Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition: Lutheran Metropolitan Ministry was not able to provide documentation to evidence controls surrounding Suspension and Debarment compliance requirement for both the Emergency Solutions Grant Program and the Second Chance Act Reentry Initiative. Cause: Lutheran Metropolitan Ministry’s processes and controls established for Suspension and Debarment compliance requirement related to the major programs did not allow for the retention of documentation to evidence such review and approval was completed. Effect: There is an increased risk of procuring with vendors that are suspended and debarred. Questioned costs: None Context: Lutheran Metropolitan Ministry was not able to evidence controls surrounding the Suspension and Debarment compliance requirement for six out of six vendors tested under the Emergency Solutions Grant Program and for four out of four vendors tested under the Second Chance Act Reentry Initiative. Recommendation: Lutheran Metropolitan Ministry should evaluate policies and procedures surrounding document retention and ensure that all vendor files include evidence of search and verification that vendors are not suspended and debarred. Views of responsible individuals: Management concurs with and will implement the recommendation. See corrective action plan.
Finding 2023-002: Lack of sufficient documentation to evidence controls over Suspension and Debarment Identification of the federal programs: Program Titles: Emergency Solutions Grant Program, Second Chance Act Reentry Initiative Assistance Listing Numbers: 14.231, 16.812 Award Identification: CT8006 SG 2023-0063, CT8006 SG 2024-0026, CT 8006 SG 2023-0042, N L 20 70C-4, S-L-20-70C-1 Federal Agencies: United States Department of Housing and Urban Development, United States Department of Justice Pass-through entities: City of Cleveland Department of Community Development, Ohio Development Services Agency Criteria: The Code of Federal Regulations (2 CFR 200.303(a)) requires that each non-Federal entity must “Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition: Lutheran Metropolitan Ministry was not able to provide documentation to evidence controls surrounding Suspension and Debarment compliance requirement for both the Emergency Solutions Grant Program and the Second Chance Act Reentry Initiative. Cause: Lutheran Metropolitan Ministry’s processes and controls established for Suspension and Debarment compliance requirement related to the major programs did not allow for the retention of documentation to evidence such review and approval was completed. Effect: There is an increased risk of procuring with vendors that are suspended and debarred. Questioned costs: None Context: Lutheran Metropolitan Ministry was not able to evidence controls surrounding the Suspension and Debarment compliance requirement for six out of six vendors tested under the Emergency Solutions Grant Program and for four out of four vendors tested under the Second Chance Act Reentry Initiative. Recommendation: Lutheran Metropolitan Ministry should evaluate policies and procedures surrounding document retention and ensure that all vendor files include evidence of search and verification that vendors are not suspended and debarred. Views of responsible individuals: Management concurs with and will implement the recommendation. See corrective action plan.
Finding 2023-003: Lack of sufficient documentation to evidence controls over Allowability of Activities and Allowable Costs Identification of the federal programs: Program Titles: Emergency Solutions Grant Program, Second Chance Act Reentry Initiative Assistance Listing Numbers: 14.231, 16.812 Award Identification: CT8006 SG 2023-0063, CT8006 SG 2024-0026, CT 8006 SG 2023-0042, N L 20 70C-4, S-L-20-70C-1 Federal Agencies: United States Department of Housing and Urban Development, United States Department of Justice Pass-through entities: City of Cleveland Department of Community Development, Ohio Development Services Agency Criteria: The Code of Federal Regulations (2 CFR 200.303(a)) requires that each non-Federal entity must “Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition: Lutheran Metropolitan Ministry was not able to provide documentation to evidence the review and approval of certain costs charged to the Emergency Solutions Grant Program and the Second Chance Act Reentry Initiative. Cause: Lutheran Metropolitan Ministry’s processes and controls established for review and approval of costs charged to the Emergency Solutions Grant Program and the Second Chance Act Reentry Initiative did not allow for the retention of documentation to evidence such review and approval was completed for certain costs tested. Effect: There is an increased risk of improper use of grant funds and/or errors in reporting requirements. Questioned costs: None Context: Lutheran Metropolitan Ministry was not able to provide evidence for review and approval for four out of 40 non-payroll costs tested. Recommendation: Lutheran Metropolitan Ministry should evaluate policies and procedures surrounding document retention and ensure that all costs charged to federal programs have sufficient evidence that proper review was performed. Views of responsible individuals: Management concurs with and will implement the recommendation. See corrective action plan.
Finding 2023-003: Lack of sufficient documentation to evidence controls over Allowability of Activities and Allowable Costs Identification of the federal programs: Program Titles: Emergency Solutions Grant Program, Second Chance Act Reentry Initiative Assistance Listing Numbers: 14.231, 16.812 Award Identification: CT8006 SG 2023-0063, CT8006 SG 2024-0026, CT 8006 SG 2023-0042, N L 20 70C-4, S-L-20-70C-1 Federal Agencies: United States Department of Housing and Urban Development, United States Department of Justice Pass-through entities: City of Cleveland Department of Community Development, Ohio Development Services Agency Criteria: The Code of Federal Regulations (2 CFR 200.303(a)) requires that each non-Federal entity must “Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition: Lutheran Metropolitan Ministry was not able to provide documentation to evidence the review and approval of certain costs charged to the Emergency Solutions Grant Program and the Second Chance Act Reentry Initiative. Cause: Lutheran Metropolitan Ministry’s processes and controls established for review and approval of costs charged to the Emergency Solutions Grant Program and the Second Chance Act Reentry Initiative did not allow for the retention of documentation to evidence such review and approval was completed for certain costs tested. Effect: There is an increased risk of improper use of grant funds and/or errors in reporting requirements. Questioned costs: None Context: Lutheran Metropolitan Ministry was not able to provide evidence for review and approval for four out of 40 non-payroll costs tested. Recommendation: Lutheran Metropolitan Ministry should evaluate policies and procedures surrounding document retention and ensure that all costs charged to federal programs have sufficient evidence that proper review was performed. Views of responsible individuals: Management concurs with and will implement the recommendation. See corrective action plan.
Finding 2023-003: Lack of sufficient documentation to evidence controls over Allowability of Activities and Allowable Costs Identification of the federal programs: Program Titles: Emergency Solutions Grant Program, Second Chance Act Reentry Initiative Assistance Listing Numbers: 14.231, 16.812 Award Identification: CT8006 SG 2023-0063, CT8006 SG 2024-0026, CT 8006 SG 2023-0042, N L 20 70C-4, S-L-20-70C-1 Federal Agencies: United States Department of Housing and Urban Development, United States Department of Justice Pass-through entities: City of Cleveland Department of Community Development, Ohio Development Services Agency Criteria: The Code of Federal Regulations (2 CFR 200.303(a)) requires that each non-Federal entity must “Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition: Lutheran Metropolitan Ministry was not able to provide documentation to evidence the review and approval of certain costs charged to the Emergency Solutions Grant Program and the Second Chance Act Reentry Initiative. Cause: Lutheran Metropolitan Ministry’s processes and controls established for review and approval of costs charged to the Emergency Solutions Grant Program and the Second Chance Act Reentry Initiative did not allow for the retention of documentation to evidence such review and approval was completed for certain costs tested. Effect: There is an increased risk of improper use of grant funds and/or errors in reporting requirements. Questioned costs: None Context: Lutheran Metropolitan Ministry was not able to provide evidence for review and approval for four out of 40 non-payroll costs tested. Recommendation: Lutheran Metropolitan Ministry should evaluate policies and procedures surrounding document retention and ensure that all costs charged to federal programs have sufficient evidence that proper review was performed. Views of responsible individuals: Management concurs with and will implement the recommendation. See corrective action plan.
Finding 2023-003: Lack of sufficient documentation to evidence controls over Allowability of Activities and Allowable Costs Identification of the federal programs: Program Titles: Emergency Solutions Grant Program, Second Chance Act Reentry Initiative Assistance Listing Numbers: 14.231, 16.812 Award Identification: CT8006 SG 2023-0063, CT8006 SG 2024-0026, CT 8006 SG 2023-0042, N L 20 70C-4, S-L-20-70C-1 Federal Agencies: United States Department of Housing and Urban Development, United States Department of Justice Pass-through entities: City of Cleveland Department of Community Development, Ohio Development Services Agency Criteria: The Code of Federal Regulations (2 CFR 200.303(a)) requires that each non-Federal entity must “Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition: Lutheran Metropolitan Ministry was not able to provide documentation to evidence the review and approval of certain costs charged to the Emergency Solutions Grant Program and the Second Chance Act Reentry Initiative. Cause: Lutheran Metropolitan Ministry’s processes and controls established for review and approval of costs charged to the Emergency Solutions Grant Program and the Second Chance Act Reentry Initiative did not allow for the retention of documentation to evidence such review and approval was completed for certain costs tested. Effect: There is an increased risk of improper use of grant funds and/or errors in reporting requirements. Questioned costs: None Context: Lutheran Metropolitan Ministry was not able to provide evidence for review and approval for four out of 40 non-payroll costs tested. Recommendation: Lutheran Metropolitan Ministry should evaluate policies and procedures surrounding document retention and ensure that all costs charged to federal programs have sufficient evidence that proper review was performed. Views of responsible individuals: Management concurs with and will implement the recommendation. See corrective action plan.