Finding Reference Number: 2025-001 Finding Type: Material Weakness Assistance Listing Number: 10.185 Program Title: Local Food for Schools Cooperative Agreement Program Federal Agency: U.S. Department of Agriculture Pass-Through Entity: Florida Department of Agriculture and Consumer Services Compliance Requirement: A/B – Activities Allowed or Unallowed and Allowable Costs/Cost Principles Criteria: The Uniform Guidance, 2 CFR section 200.303 requires the recipient and subrecipient of Federal funds to establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Additionally, the Uniform Guidance, 2 CFR section 200.401, requires the recipient and subrecipient of federal funds to apply cost principles in determining allowable costs under Federal awards. Condition: During the audit, it was noted that the grant agreement between the Organization and the Florida Department of Agriculture and Consumer Services allowed for administrative funding; to be no more than 25% of total eligible food purchases. Per review of the Uniform Guidance, 2 CFR Part 200, Appendix XI (the “OMB Compliance Supplement”) for ALN 10.185, direct or indirect costs associated with developing or administering the program are not allowable. Cause: The grant agreement with the pass-through entity allowed costs that were not allowable per the OMB Compliance Supplement. The Organization was unaware that the costs were unallowed as they solely followed the guidance outlined in their signed grant agreement with the pass-through entity. Effect: Although the Organization was in compliance with their subrecipient grant agreement, they were not in compliance with the Uniform Guidance. Questioned Costs: $246,202 Recommendation: We recommend that management review the OMB Compliance Supplement in addition to the grant agreement for any future federal awards received to ensure compliance with Activities Allowed or Unallowed and Allowable Costs/Cost Principles. Views of Responsible Officials: See attached Corrective Action Plan.
Finding 2023-001 – Allowable Costs and Activities – Compliance and Control Finding Federal Award. No. 14.231 Emergency Solutions Grant Program – COVID 19 Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: Missouri Department of Social Services Criteria Or Specific Requirement: 2 CFR sections 200.400 through 200.401 provide the general provisions for cost principles. Section 200.400(b) states that the non-Federal entity assumes responsibility of administering Federal funds in a manner consistent with underlying agreements, program objectives and the terms and conditions of the Federal award. Condition: In our nonstatistical sample of 40 transactions, we noted no exceptions as a result of our testing. However, during the current fiscal year, management of the Commission identified certain questionable rental assistance payments. Certain payments have been reported to the appropriate agencies in accordance with regulatory requirements. Cause: The significant amount of Federal dollars awarded, the short period of time required to make awards available and the presence of new requirements for the program were burdensome for management to disburse in compliance with Federal guidelines. Compared to the Commission’s other Federal programs, the program involves a very large number of applications and a high volume of transactions resulting in exposure to error and irregularity. Effect: Instances of known and suspected noncompliance were identified by the Commission. Questioned Costs: The Commission has identified $320,658 of known questioned costs in fiscal year 2023. Context: Approximately 1,300 vendors are set up in the Commission’s system for application of emergency rental assistance. Of the vendors with applications approved for funding, 134 are considered to be known noncompliance for a total amount of known questioned costs of $2,112,621 since fiscal year 2021. After the identification of the first instance of noncompliance, the Commission adjusted and enhanced its procedures for evaluating current and existing applications. As the Commission reviews future applications following their updated policies and procedures, additional vendors could be flagged to investigate prior payments for potential ineligible costs. Identification As A Repeat Finding: Repeat of Finding No. 2022-001. Recommendation: We recommend that management continue to apply resources devoted to mitigating and preventing further exposure to noncompliance. Additionally, we recommend the Commission continue to provide additional training to employees as well as third parties responsible for reviewing and approving applications. Internal controls over allowable costs and activities should ensure procedural improvements are implemented properly. Views Of Responsible Officials: See Management’s review and Corrective Action Plan included at the end of the report. Anticipated Completion Date: The Commission implemented additional compliance review procedures during fiscal years 2021 and 2022, reviewed applications to identify potentially fraudulent applications during fiscal years 2022 and 2023 and expects to conclude its investigation of identified cases during fiscal year 2024. Contact Person: Steve Whitson, Director of Community Programs
Finding 2023-001 – Allowable Costs and Activities – Compliance and Control Finding Federal Award. No. 14.231 Emergency Solutions Grant Program – COVID 19 Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: Missouri Department of Social Services Criteria Or Specific Requirement: 2 CFR sections 200.400 through 200.401 provide the general provisions for cost principles. Section 200.400(b) states that the non-Federal entity assumes responsibility of administering Federal funds in a manner consistent with underlying agreements, program objectives and the terms and conditions of the Federal award. Condition: In our nonstatistical sample of 40 transactions, we noted no exceptions as a result of our testing. However, during the current fiscal year, management of the Commission identified certain questionable rental assistance payments. Certain payments have been reported to the appropriate agencies in accordance with regulatory requirements. Cause: The significant amount of Federal dollars awarded, the short period of time required to make awards available and the presence of new requirements for the program were burdensome for management to disburse in compliance with Federal guidelines. Compared to the Commission’s other Federal programs, the program involves a very large number of applications and a high volume of transactions resulting in exposure to error and irregularity. Effect: Instances of known and suspected noncompliance were identified by the Commission. Questioned Costs: The Commission has identified $320,658 of known questioned costs in fiscal year 2023. Context: Approximately 1,300 vendors are set up in the Commission’s system for application of emergency rental assistance. Of the vendors with applications approved for funding, 134 are considered to be known noncompliance for a total amount of known questioned costs of $2,112,621 since fiscal year 2021. After the identification of the first instance of noncompliance, the Commission adjusted and enhanced its procedures for evaluating current and existing applications. As the Commission reviews future applications following their updated policies and procedures, additional vendors could be flagged to investigate prior payments for potential ineligible costs. Identification As A Repeat Finding: Repeat of Finding No. 2022-001. Recommendation: We recommend that management continue to apply resources devoted to mitigating and preventing further exposure to noncompliance. Additionally, we recommend the Commission continue to provide additional training to employees as well as third parties responsible for reviewing and approving applications. Internal controls over allowable costs and activities should ensure procedural improvements are implemented properly. Views Of Responsible Officials: See Management’s review and Corrective Action Plan included at the end of the report. Anticipated Completion Date: The Commission implemented additional compliance review procedures during fiscal years 2021 and 2022, reviewed applications to identify potentially fraudulent applications during fiscal years 2022 and 2023 and expects to conclude its investigation of identified cases during fiscal year 2024. Contact Person: Steve Whitson, Director of Community Programs
Finding 2023-002 – Allowable Costs and Activities, Eligibility – Compliance and Control Finding Federal Award. No. 21.023 Emergency Rental Assistance Program – COVID 19 Federal Agency: U.S. Department of Treasury Pass-Through Entity: Missouri Department of Economic Development Criteria Or Specific Requirement: 2 CFR sections 200.400 through 200.401 provide the general provisions for cost principles. Section 200.400(b) states that the non-Federal entity assumes responsibility of administering Federal funds in a manner consistent with underlying agreements, program objectives and the terms and conditions of the Federal award. Condition: In our nonstatistical sample of 40 transactions, we noted no exceptions as a result of our testing. However, during the current fiscal year, management of the Commission identified certain questionable rental assistance payments. Certain payments have been reported to the appropriate agencies in accordance with regulatory requirements and other payments are pending further investigation. Cause: The significant amount of Federal dollars awarded, the short period of time required to make awards available and the presence of new requirements under a new program were burdensome for management to disburse in compliance with Federal guidelines. Compared to the Commission’s other Federal programs, the program involves a very large number of applications and a high volume of transactions resulting in exposure to error and irregularity. Effect: Instances of known and suspected noncompliance were identified by the Commission. Questioned Costs: The Commission has identified $1,613,771 of known questioned costs and is actively investigating an additional $2,956,036 of potential questioned costs in fiscal year 2023. Context: Approximately 33,000 vendors are set up in the Commission’s system for application of emergency rental assistance. Of the vendors with applications approved for funding, 350 are considered to be known noncompliance and 225 are being investigated for potential noncompliance. Since fiscal year 2021, $22,461,431 of costs are actively being investigated by the Commission. Of this amount, the Commission has identified $12,293,592 of known questioned costs and $10,167,839 of potential questioned costs that are still being investigated. After the identification of the first instance of noncompliance, the Commission adjusted and enhanced its procedures for evaluating current and existing applications. As the Commission reviews future applications following their updated policies and procedures, additional vendors could be flagged to investigate prior payments for potential ineligible costs. As the direct rental and utility assistance provided in accordance with this program was concluded and the final disbursements made during February 2023, additional internal metrics and compliance review processes are being developed to apply a consistent process for examining any outstanding questioned costs and to make a final determination regarding the eligibility of disbursed funds. Identification As A Repeat Finding: Repeat of Finding No. 2022-002. Recommendation: We recommend that management continue to apply resources devoted to mitigating and preventing further exposure to noncompliance. Additionally, we recommend the Commission continue to provide additional training to employees as well as third parties responsible for reviewing and approving applications. Internal controls over allowable costs and activities should ensure procedural improvements are implemented properly. Views Of Responsible Officials: See Management’s review and Corrective Action Plan included at the end of the report. Anticipated Completion Date: The Commission implemented additional compliance review procedures during fiscal years 2021 and 2022 and expects to conclude its investigation of the fiscal year identified cases during calendar year 2024. Contact Person: Steve Whitson, Director of Community Programs
Finding 2023-003 – Allowable Costs and Activities, Eligibility – Compliance Finding Federal Award. No. 21.026 Homeowner Assistance Fund – COVID 19 Federal Agency: U.S. Department of Treasury Pass-Through Entity: Missouri Department of Economic Development Criteria Or Specific Requirement: 2 CFR sections 200.400 through 200.401 provide the general provisions for cost principles. Section 200.400(b) states that the non-Federal entity assumes responsibility of administering Federal funds in a manner consistent with underlying agreements, program objectives and the terms and conditions of the Federal award. Condition: The Homeowner Assistance Fund was not tested as a major program in 2023. However, during the current fiscal year, management of the Commission identified certain questionable mortgage assistance payments. Certain payments have been reported to the appropriate agencies in accordance with regulatory requirements. Cause: The significant amount of Federal dollars awarded, the short period of time required to make awards available and the presence of new requirements for the program were burdensome for management to disburse in compliance with Federal guidelines. Compared to the Commission’s other Federal programs, the program involves a very large number of applications and a high volume of transactions resulting in exposure to error and irregularity. Effect: Instances of known and suspected noncompliance were identified by the Commission. Questioned Costs: The Commission has identified $174,926 of known questioned costs in fiscal year 2023. Context: Approximately 220 mortgage loan servicers or financial institutions are set up to receive mortgage assistance payments on behalf of mortgagors. The Commission was alerted by another housing finance agency through an industry group regarding a third-party entity impersonating a mortgage company. Upon investigation, the Commission determined the entity was in noncompliance with the program requirements. The Commission reviewed its onboarding procedures for mortgage loan servicers and enhanced its documentation review to prevent noncompliant mortgage loan servicers from participating in the program. Identification As A Repeat Finding: Not a Repeat Finding. Recommendation: We recommend that management continue to apply resources devoted to mitigating and preventing further exposure to noncompliance. Additionally, we recommend the Commission review and consider improvements to its onboarding procedures and related controls for mortgage loan servicers. Views Of Responsible Officials: See Management’s review and Corrective Action Plan included at the end of the report. Anticipated Completion Date: The Commission implemented additional compliance review procedures during fiscal year 2023 and completed its investigation of the identified case. Contact Person: Steve Whitson, Director of Community Program
Finding 2023-001 – Allowable Costs and Activities – Compliance and Control Finding Federal Award. No. 14.231 Emergency Solutions Grant Program – COVID 19 Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: Missouri Department of Social Services Criteria Or Specific Requirement: 2 CFR sections 200.400 through 200.401 provide the general provisions for cost principles. Section 200.400(b) states that the non-Federal entity assumes responsibility of administering Federal funds in a manner consistent with underlying agreements, program objectives and the terms and conditions of the Federal award. Condition: In our nonstatistical sample of 40 transactions, we noted no exceptions as a result of our testing. However, during the current fiscal year, management of the Commission identified certain questionable rental assistance payments. Certain payments have been reported to the appropriate agencies in accordance with regulatory requirements. Cause: The significant amount of Federal dollars awarded, the short period of time required to make awards available and the presence of new requirements for the program were burdensome for management to disburse in compliance with Federal guidelines. Compared to the Commission’s other Federal programs, the program involves a very large number of applications and a high volume of transactions resulting in exposure to error and irregularity. Effect: Instances of known and suspected noncompliance were identified by the Commission. Questioned Costs: The Commission has identified $320,658 of known questioned costs in fiscal year 2023. Context: Approximately 1,300 vendors are set up in the Commission’s system for application of emergency rental assistance. Of the vendors with applications approved for funding, 134 are considered to be known noncompliance for a total amount of known questioned costs of $2,112,621 since fiscal year 2021. After the identification of the first instance of noncompliance, the Commission adjusted and enhanced its procedures for evaluating current and existing applications. As the Commission reviews future applications following their updated policies and procedures, additional vendors could be flagged to investigate prior payments for potential ineligible costs. Identification As A Repeat Finding: Repeat of Finding No. 2022-001. Recommendation: We recommend that management continue to apply resources devoted to mitigating and preventing further exposure to noncompliance. Additionally, we recommend the Commission continue to provide additional training to employees as well as third parties responsible for reviewing and approving applications. Internal controls over allowable costs and activities should ensure procedural improvements are implemented properly. Views Of Responsible Officials: See Management’s review and Corrective Action Plan included at the end of the report. Anticipated Completion Date: The Commission implemented additional compliance review procedures during fiscal years 2021 and 2022, reviewed applications to identify potentially fraudulent applications during fiscal years 2022 and 2023 and expects to conclude its investigation of identified cases during fiscal year 2024. Contact Person: Steve Whitson, Director of Community Programs
Finding 2023-001 – Allowable Costs and Activities – Compliance and Control Finding Federal Award. No. 14.231 Emergency Solutions Grant Program – COVID 19 Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: Missouri Department of Social Services Criteria Or Specific Requirement: 2 CFR sections 200.400 through 200.401 provide the general provisions for cost principles. Section 200.400(b) states that the non-Federal entity assumes responsibility of administering Federal funds in a manner consistent with underlying agreements, program objectives and the terms and conditions of the Federal award. Condition: In our nonstatistical sample of 40 transactions, we noted no exceptions as a result of our testing. However, during the current fiscal year, management of the Commission identified certain questionable rental assistance payments. Certain payments have been reported to the appropriate agencies in accordance with regulatory requirements. Cause: The significant amount of Federal dollars awarded, the short period of time required to make awards available and the presence of new requirements for the program were burdensome for management to disburse in compliance with Federal guidelines. Compared to the Commission’s other Federal programs, the program involves a very large number of applications and a high volume of transactions resulting in exposure to error and irregularity. Effect: Instances of known and suspected noncompliance were identified by the Commission. Questioned Costs: The Commission has identified $320,658 of known questioned costs in fiscal year 2023. Context: Approximately 1,300 vendors are set up in the Commission’s system for application of emergency rental assistance. Of the vendors with applications approved for funding, 134 are considered to be known noncompliance for a total amount of known questioned costs of $2,112,621 since fiscal year 2021. After the identification of the first instance of noncompliance, the Commission adjusted and enhanced its procedures for evaluating current and existing applications. As the Commission reviews future applications following their updated policies and procedures, additional vendors could be flagged to investigate prior payments for potential ineligible costs. Identification As A Repeat Finding: Repeat of Finding No. 2022-001. Recommendation: We recommend that management continue to apply resources devoted to mitigating and preventing further exposure to noncompliance. Additionally, we recommend the Commission continue to provide additional training to employees as well as third parties responsible for reviewing and approving applications. Internal controls over allowable costs and activities should ensure procedural improvements are implemented properly. Views Of Responsible Officials: See Management’s review and Corrective Action Plan included at the end of the report. Anticipated Completion Date: The Commission implemented additional compliance review procedures during fiscal years 2021 and 2022, reviewed applications to identify potentially fraudulent applications during fiscal years 2022 and 2023 and expects to conclude its investigation of identified cases during fiscal year 2024. Contact Person: Steve Whitson, Director of Community Programs
Finding 2023-002 – Allowable Costs and Activities, Eligibility – Compliance and Control Finding Federal Award. No. 21.023 Emergency Rental Assistance Program – COVID 19 Federal Agency: U.S. Department of Treasury Pass-Through Entity: Missouri Department of Economic Development Criteria Or Specific Requirement: 2 CFR sections 200.400 through 200.401 provide the general provisions for cost principles. Section 200.400(b) states that the non-Federal entity assumes responsibility of administering Federal funds in a manner consistent with underlying agreements, program objectives and the terms and conditions of the Federal award. Condition: In our nonstatistical sample of 40 transactions, we noted no exceptions as a result of our testing. However, during the current fiscal year, management of the Commission identified certain questionable rental assistance payments. Certain payments have been reported to the appropriate agencies in accordance with regulatory requirements and other payments are pending further investigation. Cause: The significant amount of Federal dollars awarded, the short period of time required to make awards available and the presence of new requirements under a new program were burdensome for management to disburse in compliance with Federal guidelines. Compared to the Commission’s other Federal programs, the program involves a very large number of applications and a high volume of transactions resulting in exposure to error and irregularity. Effect: Instances of known and suspected noncompliance were identified by the Commission. Questioned Costs: The Commission has identified $1,613,771 of known questioned costs and is actively investigating an additional $2,956,036 of potential questioned costs in fiscal year 2023. Context: Approximately 33,000 vendors are set up in the Commission’s system for application of emergency rental assistance. Of the vendors with applications approved for funding, 350 are considered to be known noncompliance and 225 are being investigated for potential noncompliance. Since fiscal year 2021, $22,461,431 of costs are actively being investigated by the Commission. Of this amount, the Commission has identified $12,293,592 of known questioned costs and $10,167,839 of potential questioned costs that are still being investigated. After the identification of the first instance of noncompliance, the Commission adjusted and enhanced its procedures for evaluating current and existing applications. As the Commission reviews future applications following their updated policies and procedures, additional vendors could be flagged to investigate prior payments for potential ineligible costs. As the direct rental and utility assistance provided in accordance with this program was concluded and the final disbursements made during February 2023, additional internal metrics and compliance review processes are being developed to apply a consistent process for examining any outstanding questioned costs and to make a final determination regarding the eligibility of disbursed funds. Identification As A Repeat Finding: Repeat of Finding No. 2022-002. Recommendation: We recommend that management continue to apply resources devoted to mitigating and preventing further exposure to noncompliance. Additionally, we recommend the Commission continue to provide additional training to employees as well as third parties responsible for reviewing and approving applications. Internal controls over allowable costs and activities should ensure procedural improvements are implemented properly. Views Of Responsible Officials: See Management’s review and Corrective Action Plan included at the end of the report. Anticipated Completion Date: The Commission implemented additional compliance review procedures during fiscal years 2021 and 2022 and expects to conclude its investigation of the fiscal year identified cases during calendar year 2024. Contact Person: Steve Whitson, Director of Community Programs
Finding 2023-003 – Allowable Costs and Activities, Eligibility – Compliance Finding Federal Award. No. 21.026 Homeowner Assistance Fund – COVID 19 Federal Agency: U.S. Department of Treasury Pass-Through Entity: Missouri Department of Economic Development Criteria Or Specific Requirement: 2 CFR sections 200.400 through 200.401 provide the general provisions for cost principles. Section 200.400(b) states that the non-Federal entity assumes responsibility of administering Federal funds in a manner consistent with underlying agreements, program objectives and the terms and conditions of the Federal award. Condition: The Homeowner Assistance Fund was not tested as a major program in 2023. However, during the current fiscal year, management of the Commission identified certain questionable mortgage assistance payments. Certain payments have been reported to the appropriate agencies in accordance with regulatory requirements. Cause: The significant amount of Federal dollars awarded, the short period of time required to make awards available and the presence of new requirements for the program were burdensome for management to disburse in compliance with Federal guidelines. Compared to the Commission’s other Federal programs, the program involves a very large number of applications and a high volume of transactions resulting in exposure to error and irregularity. Effect: Instances of known and suspected noncompliance were identified by the Commission. Questioned Costs: The Commission has identified $174,926 of known questioned costs in fiscal year 2023. Context: Approximately 220 mortgage loan servicers or financial institutions are set up to receive mortgage assistance payments on behalf of mortgagors. The Commission was alerted by another housing finance agency through an industry group regarding a third-party entity impersonating a mortgage company. Upon investigation, the Commission determined the entity was in noncompliance with the program requirements. The Commission reviewed its onboarding procedures for mortgage loan servicers and enhanced its documentation review to prevent noncompliant mortgage loan servicers from participating in the program. Identification As A Repeat Finding: Not a Repeat Finding. Recommendation: We recommend that management continue to apply resources devoted to mitigating and preventing further exposure to noncompliance. Additionally, we recommend the Commission review and consider improvements to its onboarding procedures and related controls for mortgage loan servicers. Views Of Responsible Officials: See Management’s review and Corrective Action Plan included at the end of the report. Anticipated Completion Date: The Commission implemented additional compliance review procedures during fiscal year 2023 and completed its investigation of the identified case. Contact Person: Steve Whitson, Director of Community Program
Finding 2022-001 ? Allowable Costs and Activities ? Compliance and Control Finding Federal Award. No. 14.231 Emergency Solutions Grant Program ? COVID 19 Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: Missouri Department of Social Services Criteria Or Specific Requirement: 2 CFR sections 200.400 through 200.401 provide the general provisions for cost principles. Section 200.400(b) states that the non-Federal entity assumes responsibility of administering Federal funds in a manner consistent with underlying agreements, program objectives and the terms and conditions of the Federal award. Condition: In our nonstatistical sample of 40 transactions, we noted no exceptions as a result of our testing. However, during the current fiscal year, management of the Commission identified certain questionable rental assistance payments. Certain payments have been reported to the appropriate agencies in accordance with regulatory requirements and other payments are pending further investigation. Cause: The significant amount of Federal dollars awarded, the short period of time required to make awards available and the presence of new requirements for the program were burdensome for management to disburse in compliance with Federal guidelines. Compared to the Commission?s other Federal programs, the program involves a very large number of applications and a high volume of transactions resulting in exposure to error and irregularity. Effect: Instances of known and suspected noncompliance were identified by the Commission. Questioned Costs: $2,087,937 of costs are actively being investigated by the Commission. Of this amount, the Commission has identified $1,791,963 of known questioned costs and $295,974 of potential questioned costs that are still being investigated. Context: Approximately 1,300 vendors are set up in the Commission?s system for application of emergency rental assistance. Of the vendors with applications approved for funding, 133 are considered to be known noncompliance and 15 are being investigated for potential noncompliance. After the identification of the first instance of noncompliance, the Commission adjusted and enhanced its procedures for evaluating current and existing applications. As the Commission reviews future applications following their updated policies and procedures, additional vendors could be flagged to investigate prior payments for potential ineligible costs. Identification As A Repeat Finding: Repeat of Finding No. 2021-001. Recommendation: We recommend that management continue to apply resources devoted to mitigating and preventing further exposure to noncompliance. Additionally, we recommend the Commission continue to provide additional training to employees as well as third parties responsible for reviewing and approving applications. Internal controls over allowable costs and activities should ensure procedural improvements are implemented properly. Views Of Responsible Officials: The Commission administered direct assistance according to the program rules and regulations. The Commission collected the required information and documentation to review and approve applications. Applicants submitted certified applications meeting the requirements of the program. However, the Commission staff discovered through its noncompliance review and identification processes that some program applicants provided false information and fraudulent documentation that continues to be investigated and reported to the proper authorities. Internal controls have been enhanced to mitigate and identify instances of potential noncompliance. The funding for the direct rental assistance under this program was concluded and the final disbursements made in early May 2021. The Commission hired an Internal Compliance Manager in May 2021 and has engaged a third party law firm and a consulting group to provide consultative assistance to improve processes and to assist in investigating applications deemed to be questionable. A formal fraud, waste and abuse policy was adopted in July 2021. During fiscal year 2022, the Commission undertook extensive efforts to detect instances of ineligible applicants and documentation irregularities, which resulted in identification of these instances of applicant noncompliance. Anticipated Completion Date: The Commission implemented additional compliance review procedures during fiscal year 2021 and expects to conclude its investigation of identified cases during calendar year 2023. Contact Person: Steve Whitson, Director of Community Programs
Finding 2022-001 ? Allowable Costs and Activities ? Compliance and Control Finding Federal Award. No. 14.231 Emergency Solutions Grant Program ? COVID 19 Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: Missouri Department of Social Services Criteria Or Specific Requirement: 2 CFR sections 200.400 through 200.401 provide the general provisions for cost principles. Section 200.400(b) states that the non-Federal entity assumes responsibility of administering Federal funds in a manner consistent with underlying agreements, program objectives and the terms and conditions of the Federal award. Condition: In our nonstatistical sample of 40 transactions, we noted no exceptions as a result of our testing. However, during the current fiscal year, management of the Commission identified certain questionable rental assistance payments. Certain payments have been reported to the appropriate agencies in accordance with regulatory requirements and other payments are pending further investigation. Cause: The significant amount of Federal dollars awarded, the short period of time required to make awards available and the presence of new requirements for the program were burdensome for management to disburse in compliance with Federal guidelines. Compared to the Commission?s other Federal programs, the program involves a very large number of applications and a high volume of transactions resulting in exposure to error and irregularity. Effect: Instances of known and suspected noncompliance were identified by the Commission. Questioned Costs: $2,087,937 of costs are actively being investigated by the Commission. Of this amount, the Commission has identified $1,791,963 of known questioned costs and $295,974 of potential questioned costs that are still being investigated. Context: Approximately 1,300 vendors are set up in the Commission?s system for application of emergency rental assistance. Of the vendors with applications approved for funding, 133 are considered to be known noncompliance and 15 are being investigated for potential noncompliance. After the identification of the first instance of noncompliance, the Commission adjusted and enhanced its procedures for evaluating current and existing applications. As the Commission reviews future applications following their updated policies and procedures, additional vendors could be flagged to investigate prior payments for potential ineligible costs. Identification As A Repeat Finding: Repeat of Finding No. 2021-001. Recommendation: We recommend that management continue to apply resources devoted to mitigating and preventing further exposure to noncompliance. Additionally, we recommend the Commission continue to provide additional training to employees as well as third parties responsible for reviewing and approving applications. Internal controls over allowable costs and activities should ensure procedural improvements are implemented properly. Views Of Responsible Officials: The Commission administered direct assistance according to the program rules and regulations. The Commission collected the required information and documentation to review and approve applications. Applicants submitted certified applications meeting the requirements of the program. However, the Commission staff discovered through its noncompliance review and identification processes that some program applicants provided false information and fraudulent documentation that continues to be investigated and reported to the proper authorities. Internal controls have been enhanced to mitigate and identify instances of potential noncompliance. The funding for the direct rental assistance under this program was concluded and the final disbursements made in early May 2021. The Commission hired an Internal Compliance Manager in May 2021 and has engaged a third party law firm and a consulting group to provide consultative assistance to improve processes and to assist in investigating applications deemed to be questionable. A formal fraud, waste and abuse policy was adopted in July 2021. During fiscal year 2022, the Commission undertook extensive efforts to detect instances of ineligible applicants and documentation irregularities, which resulted in identification of these instances of applicant noncompliance. Anticipated Completion Date: The Commission implemented additional compliance review procedures during fiscal year 2021 and expects to conclude its investigation of identified cases during calendar year 2023. Contact Person: Steve Whitson, Director of Community Programs
Finding 2022-001 ? Allowable Costs and Activities ? Compliance and Control Finding Federal Award. No. 14.231 Emergency Solutions Grant Program ? COVID 19 Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: Missouri Department of Social Services Criteria Or Specific Requirement: 2 CFR sections 200.400 through 200.401 provide the general provisions for cost principles. Section 200.400(b) states that the non-Federal entity assumes responsibility of administering Federal funds in a manner consistent with underlying agreements, program objectives and the terms and conditions of the Federal award. Condition: In our nonstatistical sample of 40 transactions, we noted no exceptions as a result of our testing. However, during the current fiscal year, management of the Commission identified certain questionable rental assistance payments. Certain payments have been reported to the appropriate agencies in accordance with regulatory requirements and other payments are pending further investigation. Cause: The significant amount of Federal dollars awarded, the short period of time required to make awards available and the presence of new requirements for the program were burdensome for management to disburse in compliance with Federal guidelines. Compared to the Commission?s other Federal programs, the program involves a very large number of applications and a high volume of transactions resulting in exposure to error and irregularity. Effect: Instances of known and suspected noncompliance were identified by the Commission. Questioned Costs: $2,087,937 of costs are actively being investigated by the Commission. Of this amount, the Commission has identified $1,791,963 of known questioned costs and $295,974 of potential questioned costs that are still being investigated. Context: Approximately 1,300 vendors are set up in the Commission?s system for application of emergency rental assistance. Of the vendors with applications approved for funding, 133 are considered to be known noncompliance and 15 are being investigated for potential noncompliance. After the identification of the first instance of noncompliance, the Commission adjusted and enhanced its procedures for evaluating current and existing applications. As the Commission reviews future applications following their updated policies and procedures, additional vendors could be flagged to investigate prior payments for potential ineligible costs. Identification As A Repeat Finding: Repeat of Finding No. 2021-001. Recommendation: We recommend that management continue to apply resources devoted to mitigating and preventing further exposure to noncompliance. Additionally, we recommend the Commission continue to provide additional training to employees as well as third parties responsible for reviewing and approving applications. Internal controls over allowable costs and activities should ensure procedural improvements are implemented properly. Views Of Responsible Officials: The Commission administered direct assistance according to the program rules and regulations. The Commission collected the required information and documentation to review and approve applications. Applicants submitted certified applications meeting the requirements of the program. However, the Commission staff discovered through its noncompliance review and identification processes that some program applicants provided false information and fraudulent documentation that continues to be investigated and reported to the proper authorities. Internal controls have been enhanced to mitigate and identify instances of potential noncompliance. The funding for the direct rental assistance under this program was concluded and the final disbursements made in early May 2021. The Commission hired an Internal Compliance Manager in May 2021 and has engaged a third party law firm and a consulting group to provide consultative assistance to improve processes and to assist in investigating applications deemed to be questionable. A formal fraud, waste and abuse policy was adopted in July 2021. During fiscal year 2022, the Commission undertook extensive efforts to detect instances of ineligible applicants and documentation irregularities, which resulted in identification of these instances of applicant noncompliance. Anticipated Completion Date: The Commission implemented additional compliance review procedures during fiscal year 2021 and expects to conclude its investigation of identified cases during calendar year 2023. Contact Person: Steve Whitson, Director of Community Programs
Finding 2022-002 ? Allowable Costs and Activities, Eligibility ? Compliance and Control Finding Federal Award. No. 21.023 Emergency Rental Assistance Program ? COVID 19 Federal Agency: U.S. Department of Treasury Pass-Through Entity: Missouri Department of Economic Development Criteria Or Specific Requirement: 2 CFR sections 200.400 through 200.401 provide the general provisions for cost principles. Section 200.400(b) states that the non-Federal entity assumes responsibility of administering Federal funds in a manner consistent with underlying agreements, program objectives and the terms and conditions of the Federal award. Condition: In our nonstatistical sample of 40 transactions, we noted no exceptions as a result of our testing. However, during the current fiscal year, management of the Commission identified certain questionable rental assistance payments. Certain payments have been reported to the appropriate agencies in accordance with regulatory requirements and other payments are pending further investigation. Cause: The significant amount of Federal dollars awarded, the short period of time required to make awards available and the presence of new requirements under a new program were burdensome for management to disburse in compliance with Federal guidelines. Compared to the Commission?s other Federal programs, the program involves a very large number of applications and a high volume of transactions resulting in exposure to error and irregularity. Effect: Instances of known and suspected noncompliance were identified by the Commission. Questioned Costs: $6,743,299 of costs are actively being investigated by the Commission. Of this amount, the Commission has identified $3,861,548 of known questioned costs and $2,881,751 of potential questioned costs that are still being investigated. Context: Approximately 20,000 vendors are set up in the Commission?s system for application of emergency rental assistance. Of the vendors with applications approved for funding, 172 are considered to be known noncompliance and 76 are being investigated for potential noncompliance. After the identification of the first instance of noncompliance, the Commission adjusted and enhanced its procedures for evaluating current and existing applications. As the Commission reviews future applications following their updated policies and procedures, additional vendors could be flagged to investigate prior payments for potential ineligible costs. Identification As A Repeat Finding: Repeat of Finding No. 2021-002. Recommendation: We recommend that management continue to apply resources devoted to mitigating and preventing further exposure to noncompliance. Additionally, we recommend the Commission continue to provide additional training to employees as well as third parties responsible for reviewing and approving applications. Internal controls over allowable costs and activities should ensure procedural improvements are implemented properly. Views Of Responsible Officials: The Commission administered direct assistance according to the program rules and regulations. The Commission collected the required information and documentation to review and approve applications. Applicants submitted certified applications meeting the requirements of the program. However, the Commission staff discovered through its noncompliance review and identification processes that some program applicants provided false information and fraudulent documentation that continues to be investigated and reported to the proper authorities. Internal controls have been enhanced to mitigate and help prevent further exposure to noncompliance. This includes the adoption of a formal fraud, waste, and abuse policy in July 2021 as well as providing additional training to employees and third parties that are responsible for reviewing and approving applications in order to better detect invalid applicants to prevent funding these applicants. In May 2021, the Commission hired an Internal Compliance Manager and has engaged a third party law firm and a consulting group to provide consultative assistance to improve processes and to assist in investigating applications deemed to be questionable. Further, internal staffing capacity continues to be expanded with the creation of the Community Programs Processes Department in fall 2021 and the Data and Analytics Department in early 2022. Additional investigative techniques such as ?mass denial metrics? and tiered level reviews have been implemented into weekly application processing. Processes will continue to be implemented in response to changes in behavior by ineligible actors and ineligible application submission attempts. Commission staff has set regular internal coordination meetings to improve communication and aid in the identification of new indicators. Internal compliance staff actively participates in national groups administering similar programs, and explores and adopts new preventative measures demonstrated to be effective in other states. Anticipated Completion Date: The Commission implemented additional compliance review procedures during fiscal year 2021 and expects to conclude its investigation of identified cases during calendar year 2023. Contact Person: Steve Whitson, Director of Community Programs
Finding 2022-001 ? Allowable Costs and Activities ? Compliance and Control Finding Federal Award. No. 14.231 Emergency Solutions Grant Program ? COVID 19 Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: Missouri Department of Social Services Criteria Or Specific Requirement: 2 CFR sections 200.400 through 200.401 provide the general provisions for cost principles. Section 200.400(b) states that the non-Federal entity assumes responsibility of administering Federal funds in a manner consistent with underlying agreements, program objectives and the terms and conditions of the Federal award. Condition: In our nonstatistical sample of 40 transactions, we noted no exceptions as a result of our testing. However, during the current fiscal year, management of the Commission identified certain questionable rental assistance payments. Certain payments have been reported to the appropriate agencies in accordance with regulatory requirements and other payments are pending further investigation. Cause: The significant amount of Federal dollars awarded, the short period of time required to make awards available and the presence of new requirements for the program were burdensome for management to disburse in compliance with Federal guidelines. Compared to the Commission?s other Federal programs, the program involves a very large number of applications and a high volume of transactions resulting in exposure to error and irregularity. Effect: Instances of known and suspected noncompliance were identified by the Commission. Questioned Costs: $2,087,937 of costs are actively being investigated by the Commission. Of this amount, the Commission has identified $1,791,963 of known questioned costs and $295,974 of potential questioned costs that are still being investigated. Context: Approximately 1,300 vendors are set up in the Commission?s system for application of emergency rental assistance. Of the vendors with applications approved for funding, 133 are considered to be known noncompliance and 15 are being investigated for potential noncompliance. After the identification of the first instance of noncompliance, the Commission adjusted and enhanced its procedures for evaluating current and existing applications. As the Commission reviews future applications following their updated policies and procedures, additional vendors could be flagged to investigate prior payments for potential ineligible costs. Identification As A Repeat Finding: Repeat of Finding No. 2021-001. Recommendation: We recommend that management continue to apply resources devoted to mitigating and preventing further exposure to noncompliance. Additionally, we recommend the Commission continue to provide additional training to employees as well as third parties responsible for reviewing and approving applications. Internal controls over allowable costs and activities should ensure procedural improvements are implemented properly. Views Of Responsible Officials: The Commission administered direct assistance according to the program rules and regulations. The Commission collected the required information and documentation to review and approve applications. Applicants submitted certified applications meeting the requirements of the program. However, the Commission staff discovered through its noncompliance review and identification processes that some program applicants provided false information and fraudulent documentation that continues to be investigated and reported to the proper authorities. Internal controls have been enhanced to mitigate and identify instances of potential noncompliance. The funding for the direct rental assistance under this program was concluded and the final disbursements made in early May 2021. The Commission hired an Internal Compliance Manager in May 2021 and has engaged a third party law firm and a consulting group to provide consultative assistance to improve processes and to assist in investigating applications deemed to be questionable. A formal fraud, waste and abuse policy was adopted in July 2021. During fiscal year 2022, the Commission undertook extensive efforts to detect instances of ineligible applicants and documentation irregularities, which resulted in identification of these instances of applicant noncompliance. Anticipated Completion Date: The Commission implemented additional compliance review procedures during fiscal year 2021 and expects to conclude its investigation of identified cases during calendar year 2023. Contact Person: Steve Whitson, Director of Community Programs
Finding 2022-001 ? Allowable Costs and Activities ? Compliance and Control Finding Federal Award. No. 14.231 Emergency Solutions Grant Program ? COVID 19 Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: Missouri Department of Social Services Criteria Or Specific Requirement: 2 CFR sections 200.400 through 200.401 provide the general provisions for cost principles. Section 200.400(b) states that the non-Federal entity assumes responsibility of administering Federal funds in a manner consistent with underlying agreements, program objectives and the terms and conditions of the Federal award. Condition: In our nonstatistical sample of 40 transactions, we noted no exceptions as a result of our testing. However, during the current fiscal year, management of the Commission identified certain questionable rental assistance payments. Certain payments have been reported to the appropriate agencies in accordance with regulatory requirements and other payments are pending further investigation. Cause: The significant amount of Federal dollars awarded, the short period of time required to make awards available and the presence of new requirements for the program were burdensome for management to disburse in compliance with Federal guidelines. Compared to the Commission?s other Federal programs, the program involves a very large number of applications and a high volume of transactions resulting in exposure to error and irregularity. Effect: Instances of known and suspected noncompliance were identified by the Commission. Questioned Costs: $2,087,937 of costs are actively being investigated by the Commission. Of this amount, the Commission has identified $1,791,963 of known questioned costs and $295,974 of potential questioned costs that are still being investigated. Context: Approximately 1,300 vendors are set up in the Commission?s system for application of emergency rental assistance. Of the vendors with applications approved for funding, 133 are considered to be known noncompliance and 15 are being investigated for potential noncompliance. After the identification of the first instance of noncompliance, the Commission adjusted and enhanced its procedures for evaluating current and existing applications. As the Commission reviews future applications following their updated policies and procedures, additional vendors could be flagged to investigate prior payments for potential ineligible costs. Identification As A Repeat Finding: Repeat of Finding No. 2021-001. Recommendation: We recommend that management continue to apply resources devoted to mitigating and preventing further exposure to noncompliance. Additionally, we recommend the Commission continue to provide additional training to employees as well as third parties responsible for reviewing and approving applications. Internal controls over allowable costs and activities should ensure procedural improvements are implemented properly. Views Of Responsible Officials: The Commission administered direct assistance according to the program rules and regulations. The Commission collected the required information and documentation to review and approve applications. Applicants submitted certified applications meeting the requirements of the program. However, the Commission staff discovered through its noncompliance review and identification processes that some program applicants provided false information and fraudulent documentation that continues to be investigated and reported to the proper authorities. Internal controls have been enhanced to mitigate and identify instances of potential noncompliance. The funding for the direct rental assistance under this program was concluded and the final disbursements made in early May 2021. The Commission hired an Internal Compliance Manager in May 2021 and has engaged a third party law firm and a consulting group to provide consultative assistance to improve processes and to assist in investigating applications deemed to be questionable. A formal fraud, waste and abuse policy was adopted in July 2021. During fiscal year 2022, the Commission undertook extensive efforts to detect instances of ineligible applicants and documentation irregularities, which resulted in identification of these instances of applicant noncompliance. Anticipated Completion Date: The Commission implemented additional compliance review procedures during fiscal year 2021 and expects to conclude its investigation of identified cases during calendar year 2023. Contact Person: Steve Whitson, Director of Community Programs
Finding 2022-001 ? Allowable Costs and Activities ? Compliance and Control Finding Federal Award. No. 14.231 Emergency Solutions Grant Program ? COVID 19 Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: Missouri Department of Social Services Criteria Or Specific Requirement: 2 CFR sections 200.400 through 200.401 provide the general provisions for cost principles. Section 200.400(b) states that the non-Federal entity assumes responsibility of administering Federal funds in a manner consistent with underlying agreements, program objectives and the terms and conditions of the Federal award. Condition: In our nonstatistical sample of 40 transactions, we noted no exceptions as a result of our testing. However, during the current fiscal year, management of the Commission identified certain questionable rental assistance payments. Certain payments have been reported to the appropriate agencies in accordance with regulatory requirements and other payments are pending further investigation. Cause: The significant amount of Federal dollars awarded, the short period of time required to make awards available and the presence of new requirements for the program were burdensome for management to disburse in compliance with Federal guidelines. Compared to the Commission?s other Federal programs, the program involves a very large number of applications and a high volume of transactions resulting in exposure to error and irregularity. Effect: Instances of known and suspected noncompliance were identified by the Commission. Questioned Costs: $2,087,937 of costs are actively being investigated by the Commission. Of this amount, the Commission has identified $1,791,963 of known questioned costs and $295,974 of potential questioned costs that are still being investigated. Context: Approximately 1,300 vendors are set up in the Commission?s system for application of emergency rental assistance. Of the vendors with applications approved for funding, 133 are considered to be known noncompliance and 15 are being investigated for potential noncompliance. After the identification of the first instance of noncompliance, the Commission adjusted and enhanced its procedures for evaluating current and existing applications. As the Commission reviews future applications following their updated policies and procedures, additional vendors could be flagged to investigate prior payments for potential ineligible costs. Identification As A Repeat Finding: Repeat of Finding No. 2021-001. Recommendation: We recommend that management continue to apply resources devoted to mitigating and preventing further exposure to noncompliance. Additionally, we recommend the Commission continue to provide additional training to employees as well as third parties responsible for reviewing and approving applications. Internal controls over allowable costs and activities should ensure procedural improvements are implemented properly. Views Of Responsible Officials: The Commission administered direct assistance according to the program rules and regulations. The Commission collected the required information and documentation to review and approve applications. Applicants submitted certified applications meeting the requirements of the program. However, the Commission staff discovered through its noncompliance review and identification processes that some program applicants provided false information and fraudulent documentation that continues to be investigated and reported to the proper authorities. Internal controls have been enhanced to mitigate and identify instances of potential noncompliance. The funding for the direct rental assistance under this program was concluded and the final disbursements made in early May 2021. The Commission hired an Internal Compliance Manager in May 2021 and has engaged a third party law firm and a consulting group to provide consultative assistance to improve processes and to assist in investigating applications deemed to be questionable. A formal fraud, waste and abuse policy was adopted in July 2021. During fiscal year 2022, the Commission undertook extensive efforts to detect instances of ineligible applicants and documentation irregularities, which resulted in identification of these instances of applicant noncompliance. Anticipated Completion Date: The Commission implemented additional compliance review procedures during fiscal year 2021 and expects to conclude its investigation of identified cases during calendar year 2023. Contact Person: Steve Whitson, Director of Community Programs
Finding 2022-002 ? Allowable Costs and Activities, Eligibility ? Compliance and Control Finding Federal Award. No. 21.023 Emergency Rental Assistance Program ? COVID 19 Federal Agency: U.S. Department of Treasury Pass-Through Entity: Missouri Department of Economic Development Criteria Or Specific Requirement: 2 CFR sections 200.400 through 200.401 provide the general provisions for cost principles. Section 200.400(b) states that the non-Federal entity assumes responsibility of administering Federal funds in a manner consistent with underlying agreements, program objectives and the terms and conditions of the Federal award. Condition: In our nonstatistical sample of 40 transactions, we noted no exceptions as a result of our testing. However, during the current fiscal year, management of the Commission identified certain questionable rental assistance payments. Certain payments have been reported to the appropriate agencies in accordance with regulatory requirements and other payments are pending further investigation. Cause: The significant amount of Federal dollars awarded, the short period of time required to make awards available and the presence of new requirements under a new program were burdensome for management to disburse in compliance with Federal guidelines. Compared to the Commission?s other Federal programs, the program involves a very large number of applications and a high volume of transactions resulting in exposure to error and irregularity. Effect: Instances of known and suspected noncompliance were identified by the Commission. Questioned Costs: $6,743,299 of costs are actively being investigated by the Commission. Of this amount, the Commission has identified $3,861,548 of known questioned costs and $2,881,751 of potential questioned costs that are still being investigated. Context: Approximately 20,000 vendors are set up in the Commission?s system for application of emergency rental assistance. Of the vendors with applications approved for funding, 172 are considered to be known noncompliance and 76 are being investigated for potential noncompliance. After the identification of the first instance of noncompliance, the Commission adjusted and enhanced its procedures for evaluating current and existing applications. As the Commission reviews future applications following their updated policies and procedures, additional vendors could be flagged to investigate prior payments for potential ineligible costs. Identification As A Repeat Finding: Repeat of Finding No. 2021-002. Recommendation: We recommend that management continue to apply resources devoted to mitigating and preventing further exposure to noncompliance. Additionally, we recommend the Commission continue to provide additional training to employees as well as third parties responsible for reviewing and approving applications. Internal controls over allowable costs and activities should ensure procedural improvements are implemented properly. Views Of Responsible Officials: The Commission administered direct assistance according to the program rules and regulations. The Commission collected the required information and documentation to review and approve applications. Applicants submitted certified applications meeting the requirements of the program. However, the Commission staff discovered through its noncompliance review and identification processes that some program applicants provided false information and fraudulent documentation that continues to be investigated and reported to the proper authorities. Internal controls have been enhanced to mitigate and help prevent further exposure to noncompliance. This includes the adoption of a formal fraud, waste, and abuse policy in July 2021 as well as providing additional training to employees and third parties that are responsible for reviewing and approving applications in order to better detect invalid applicants to prevent funding these applicants. In May 2021, the Commission hired an Internal Compliance Manager and has engaged a third party law firm and a consulting group to provide consultative assistance to improve processes and to assist in investigating applications deemed to be questionable. Further, internal staffing capacity continues to be expanded with the creation of the Community Programs Processes Department in fall 2021 and the Data and Analytics Department in early 2022. Additional investigative techniques such as ?mass denial metrics? and tiered level reviews have been implemented into weekly application processing. Processes will continue to be implemented in response to changes in behavior by ineligible actors and ineligible application submission attempts. Commission staff has set regular internal coordination meetings to improve communication and aid in the identification of new indicators. Internal compliance staff actively participates in national groups administering similar programs, and explores and adopts new preventative measures demonstrated to be effective in other states. Anticipated Completion Date: The Commission implemented additional compliance review procedures during fiscal year 2021 and expects to conclude its investigation of identified cases during calendar year 2023. Contact Person: Steve Whitson, Director of Community Programs