Finding Text
Finding 2023-003: Lack of sufficient documentation to evidence controls over Allowability of Activities and Allowable Costs
Identification of the federal programs:
Program Titles: Emergency Solutions Grant Program, Second Chance Act Reentry Initiative
Assistance Listing Numbers: 14.231, 16.812
Award Identification: CT8006 SG 2023-0063, CT8006 SG 2024-0026, CT 8006 SG 2023-0042, N L 20 70C-4, S-L-20-70C-1
Federal Agencies: United States Department of Housing and Urban Development, United States Department of Justice
Pass-through entities: City of Cleveland Department of Community Development, Ohio Development Services Agency
Criteria: The Code of Federal Regulations (2 CFR 200.303(a)) requires that each 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.”
Condition: Lutheran Metropolitan Ministry was not able to provide documentation to evidence the review and approval of certain costs charged to the Emergency Solutions Grant Program and the Second Chance Act Reentry Initiative.
Cause: Lutheran Metropolitan Ministry’s processes and controls established for review and approval of costs charged to the Emergency Solutions Grant Program and the Second Chance Act Reentry Initiative did not allow for the retention of documentation to evidence such review and approval was completed for certain costs tested.
Effect: There is an increased risk of improper use of grant funds and/or errors in reporting requirements.
Questioned costs: None
Context: Lutheran Metropolitan Ministry was not able to provide evidence for review and approval for four out of 40 non-payroll costs tested.
Recommendation: Lutheran Metropolitan Ministry should evaluate policies and procedures surrounding document retention and ensure that all costs charged to federal programs have sufficient evidence that proper review was performed.
Views of responsible individuals: Management concurs with and will implement the recommendation. See corrective action plan.