Finding Text
Federal Agency: U.S. Department of the Treasury
Federal Program Name: Homeowner’s Assistance Fund
Assistance Listing Number: 21.026
Federal Award Identification Number and Year: HAF0019 – 2023
Pass-Through Agency: State of New Jersey
Pass-Through Number(s): 21-6000928
Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
• Significant Deficiency in Internal Control over Compliance, Other Matters
Criteria or specific requirement: The HAF Guidance documents the full eligibility considerations for HAF participants to extend financial assistance to vulnerable populations without imposing undue documentation burdens. HAF participants must require all applications for assistance to include an attestation from the applicant homeowner that all information included is correct and complete. In addition, HAF participants are expected to have policies and procedures to determine homeowner eligibility in the following criteria:
Financial Hardship: HAF participants may rely on homeowners' attestations that they experienced financial hardship after January 21, 2020 (including a hardship that began before January 21, 2020, but continued after that date). The attestation must describe the nature of the financial hardship (for example, job loss, reduction in income, or increased costs due to healthcare or the need to care for a family member).
Criteria or specific requirement (Continued): Income: HAF participants may take one of two approaches to income verification: (1) the homeowner may provide a written attestation as to household income together with supporting documentation such as paystubs, W2s or other wage statements, IRS Form 1099s, tax filings, depository institution statements demonstrating regular income, or an attestation from an employer; or (2) the homeowner may provide a written attestation as to household income and the HAF participant may use a reasonable fact-specific proxy for household income, such as reliance on data regarding average incomes in the household’s geographic area. To be eligible for HAF assistance, the homeowner must have income equal to or less than 150 percent of the area median income or 100 percent of the median income for the United States, whichever is greater.
Condition: During testing of 40 eligibility files, the Agency did not have adequate internal controls in place to ensure all documents were obtained as part of the Agency’s review of applications in determining the eligibility of program participants.
Questioned costs: None
Context: 40 Files were selected from a population of over 250 participants. Exceptions noted in 2 out of 40 instances.
- 2 cases in which the IRS form 4506-C was not provided as required by the Agency’s policy.
Cause: Controls were not implemented to ensure all documents were obtained and reviewed during the application and acceptance process of a participant’s eligibility to obtain homeowner’s assistance funding.
Effect: Potentially participants that are not eligible could receive federal monies. This could impact the Agency receiving monies for similar types of programs in the future.
Repeat Finding: Yes, repeat finding of finding number 2022-001.
Recommendation: The Agency should evaluate the steps they take to ensure that any required documentation not gathered from the program participant is followed-up on and obtained, prior to finalizing an application and providing housing assistance. Any changes in this methodology should be documented in the program policies and procedures and communicated to all employees who engage in the application process.
Views of responsible officials: There is no disagreement with the audit finding.