Finding Text
Summary of Audit Results:
1. The audited financial statements were prepared in accordance with GAAP.
2. The auditor’s report expresses an unmodified opinion on the financial statements of HFF.
3. No material weaknesses were identified in relation to internal control over financial reporting.
4. No significant deficiencies were reported in relation to internal control over financial reporting.
5. No instances of noncompliance material to the financial statements of HFF were disclosed during the audit.
6. One material weakness related to internal control over major federal programs was identified during the audit.
7. The auditor’s report on compliance for the major federal award programs for HFF expresses an unmodified opinion.
8. There was one audit finding relative to the major federal award programs for HFF in accordance with 2 CFR 200.516(a).
9. One audit finding was disclosed that is required to be reported in accordance with 2 CFR 200.516(a).
10. Identification of major federal programs:
Assistance Listing Number 14.267
11. The programs tested as major programs were:
Assistance Listing Number 14.267
12. The threshold for distinguishing Types A and B programs was $750,000.
13. HFF was determined not to be a low-risk auditee.
Part B:
Findings at the financial statement level: None
Part C:
Findings and Questioned Costs – Major Federal Award Program Audit:
1) Finding 2023-001: Assistance Listing #14.267
US Department of Housing and Urban Development
Passed through Community Shelter Board – Transitional Age Youth Program
Condition: Subrecipients not reimbursed on a timely basis (Cash Management)
During the period, the Organization oversaw subrecipient grantees under AL #14.267. The Organization received and held funds from grantor intended for subrecipients for an amount of time in excess of what is considered timely for reimbursement.
Criteria: This is deemed a matter of untimely subrecipient reimbursement.
Cause: The Organization had an incorrect understanding of their role as sub-grantee, in which they believed that additional information was required to be provided by subrecipient before funds were disbursed. Effect: The result is a backlog of monthly reimbursements not disbursed to subrecipients in a timely manner.
Recommendations: That the Organization implement controls to align subrecipient reimbursement requests with collection of required subrecipient information, as well as establish a formal timeline for approving reimbursements to subrecipients.
Comments: The above finding was identified and disclosed during the audit for the period ending December 31, 2022, and was addressed by Board and Management at that time. However, the timing of the audit and subsequent finding lead to the issue continuing through mid-2023, when the audit took place.
The Corrective Action Plan was certified by Board and Management effective September 26, 2023, and additional controls surrounding their subrecipient relationships were implemented at that time.
It should be noted that the Organization does not maintain subrecipient relationships under any other federal grants, and hence, the issue at hand does not impact other grants/programs.