Finding 1028882 (2022-101)

Assistance Listings number and name: 14.231 COVID-19 - Emergency Solutions Grant ProgramAward numbers and years: E-21-UC-04-0501, August 9, 2021 through August 8, 2023E-20-UW-04-0501 August 27, 2020 through November 22, 2022Federal agency: U.S. Department of Housing and Urban DevelopmentCompliance requirement: Special tests and provisions?Obligation, expenditure and payment requirementsQuestioned costs: Not applicableCondition?Contrary to federal regulation and the County?s award terms, the County?s Human Services Department did not pay subrecipients for program expenditures they incurred and requested reimbursement for within the required 30 days for 42 percent of the requests we tested. Specifically, of the 12 subrecipient reimbursement requests we tested, the Department paid 5 of those requests, totaling $78,992, 10 to 51 days late. This amount comprised 7.8 percent of total program expenditures the County reimbursed to subrecipients for the year and 3.4 percent of total program expenditures the County incurred for the year.Effect?The Department?s failure to pay subrecipients within the required 30 days may place an undue financial burden on those entities, which are primarily nonprofit organizations that are helping the County administer the federal program, placing the services provided by those entities at an increased risk of being interrupted.Cause?The Department reported it needed additional time to obtain complete reimbursement requests from its subrecipients; however, the Department did not document its attempts to obtain complete requests or the dates when the completed requests were obtained. Further, the Department did not have written policies and procedures for paying subrecipients within the required 30-day period.Criteria?Both federal regulation and the County?s award terms require the County to pay subrecipients for allowable costs they incur for the program within 30 days of receiving their completed reimbursement requests (24 Code of Federal Regulation [CFR] ?576.203). In addition, the County must establish and maintain effective internal control over federal awards that provides reasonable assurance that federal programs are being administered in compliance with all applicable laws, regulations, and award terms (2 CFR 200.303).Recommendations?The Department should:1. Develop and implement written policies and procedures to pay subrecipients for program expenditures they incur and request reimbursement for within the required 30 days of receiving their completed reimbursement requests.2. Document its attempts to obtain complete reimbursement requests from subrecipients or the dates when the completed requests were obtained.The County?s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.