Finding Text
FINDING 2021‐003 – Material Weakness and Material Noncompliance – Eligibility
Assistance Listing Number: 21.023
Federal Program Name: COVID-19 Emergency Rental Assistance Program
Award Year: 2021
Criteria: In accordance with the Center’s grant award and program requirements, the Center must have procedures in place for documenting and verifying eligibility in accordance with federal requirements. Specifically, “in accordance with Consolidated Appropriations Act, 2021, for ERA 1 in sections 501(c)(2)(C)(ii) of the Act concerning documentation of payments to households, sections 501(f)(2)(A) and (B) of the Act concerning signature requirements for applications and documentation required for tenants, section 501(k)(1) concerning area median income determinations, and sections 501(k)(3)(A)(I) and (II) concerning eligible household determinations and attestation requirements.”
Condition/Context: The Center’s grant funds were awarded to provide assistance payments for rent and utilities for eligible participants. The Center is required to maintain eligibility records for those participants and calculate payments based on eligibility requirements. Using a random sample selection methodology, we selected 60 payments from a total population of 414 payments made during fiscal year 2021 to test for compliance with eligibility, and we noted the following:
•An employee of the Center was also a participant whose rent was paid for 4 months to their landlord, and the same employee and participant was paid as a landlord for the same period.
•Internal controls were not designed or implemented addressing heighted risk surrounding related party transactions.
•All 60 participants tested did not have documented review controls to ensure that support and eligibility requirements were met prior to issuance of a disbursement.
•Two instances, out of a sample of 60, were missing self-declaration forms.
Cause: It appears there were inadequate internal controls over eligibility requirements.
Effect: It is possible individuals who are not eligible to receive services may have received services.
Questioned Costs: None noted.
Repeat Finding: No
Recommendation: We recommend the Center reexamine processes and design and implement controls over participant eligibility and ensure eligibility documentation is maintained for all participants in accordance with the grant agreement and the Uniform Guidance. We also recommend the Center provide additional training related to the Uniform Guidance to their personnel who administer federal funds.
Views of responsible officials and planned corrective actions: Management agrees with the finding and will implement a regular training program to review grant requirements and uniform guidance. Management will also implement the following policies:
•Related party transaction involving staff, or an immediate relative of a staff member will require a majority approval of the board
•Implementing an eligibility questionnaire/form that will be required for any assistance payouts.
•Review grant requirements and uniform guidance with staff and implement an annual training/review program
Timeline: Updated policies and reviews have been completed.
Contact Person(s):
Linda Lauch, Executive Director