Finding 2021-004: Material Weakness Due to Unsupported Administration and Program Operations Costs Federal Agency: U.S. Department of Treasury Program Title: Emergency Rental Assistance Program and Corona Virus Relief Fund Assistance Listing Numbers (ALN): 21.023 and 21.019 Federal Award Years: Year ended December 31, 2023 Pass-through Grantor and identifying numbers: Pierce County; SC-108112, SC-108282, SC-108719, SC- 108080 Criteria: Charges to federal awards must meet the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart E - Cost Principles. Specifically CFR 200.400(d) indicates the Organization must support the accumulation of costs and provide for adequate documentation to support costs charged to the Federal award. Condition and Context: Administration and program operation costs charged to the award for the period ended December 31, 2021 lacked supporting documentation to verify whether there were equivalent administrative and program operation expenses incurred by the Organization. All budgets approved by the Pass-through Grantor allowed for such costs to be reimbursed by the award as long as adequate documentation of how the costs were determined was retained. Since the organization did not retain any such documentation, there is no way of knowing if a portion or all of those administration or program operation costs related to actual activities that were performed related to these programs. The Organization most certainly did incur administration and program operation costs that were legitimate to be remitted to the award. However, with no controls in place to ensure that these costs were appropriately accumulated and documented, the amounts reimbursed by the programs might not be appropriate. During our audit, we were able to fully quantify the full amount of administration and program operations costs that were inappropriately supported through discussions with management of the Organization and reviewing the reimbursement requests that were submitted to the Pass-through Grantor. The amounts included in the questioned costs below is the entire amount of such costs that were charged to the program during the year ended December 31, 2021. Cause: Helping Hand House did not have processes and controls in place to ensure that documentation to ensure that administrative and program operation costs that were charged to the program were appropriately documented. Effect: There is the potential that the Pass-through grantor may require a repayment of a portion or all of the program and administrative costs that were paid for by the program. As such, a loss contingency disclosure has been included in the notes to the financial statements to indicate that there is the potential that the Pass-through Grantor may require some of these amounts to be repaid. This also is the reason for the qualified opinion in the Report On Compliance for Each Major Federal Program. Known Questioned Costs for ALN 21.023: $329,572 Known Questioned Costs for ALN 21.019: $164,757 Repeat Finding: Not applicable. Recommendation: We recommend that Helping Hand House develop and document procedures and controls for how administrative and program operation costs will be allocated to the federal awards. This information should be retained so that it can be made available at the request of the Pass-through Grantor, the auditor or other relevant parties. Views of Responsible Official: See Corrective Action Plan.