Finding Text
Finding 2022-004: Material Weakness Due to Unsupported Administration and Program Operations Costs.
Federal Agency: U.S. Department of Treasury
Program Title: Emergency Rental Assistance Program
Assistance Listing Numbers (ALN): 21.023
Federal Award Years: Year ended December 31, 2022
Pass-through Grantor and identifying numbers: Pierce County; SC-108282, SC-108719
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
January 1, 2022 through February 28, 2022 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 period January 1, 2022 through February 28, 2022.
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: $76,284
Repeat Finding: This is a partially repeated finding of 2021-004.
Recommendation: Our testing of information for the months of March to December 2022 indicated that
the client made significant improvements in their documentation, and we did not find similar questioned
outside of the time period from January 1, 2022 to February 2028, 2022. We recommend that Helping
Hand House continue to 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.