Finding Text
Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The Authority is required to establish a reasonable rent policy and ensure that policy is followed.
Condition: During our testing, we noted Home Forward did not have adequate internal controls designed to ensure the approval of comparables is formally documented in the files.
Questioned costs: Unable to determine.
Context: During our testing, it was noted that Home Forward did not formally document approval of comparables in 4 of 40 files.
Cause: Home Forward has not been consistent with keeping formal documentation of approval of comparables in the files.
Effect: The auditor noted no instances of noncompliance with the provisions of special tests and provisions - reasonable rental rates; however, the lack of internal controls over these compliance requirements provides an opportunity for noncompliance.
Repeat Finding: No.
Recommendation: We recommend Home Forward design controls to ensure formal documentation of approval of comparables is in the files.
Views of responsible officials: There is no disagreement with the audit finding.