Finding Text
Criteria: According to the Compliance Supplement 2CFR Part 200, Appendix XI and the terms of the Continuum of Care Program Grant Agreement and HUD regulations, recipients are required to provide a non-federal match of 25% to complement the federal funds provided. The matching funds must be appropriately documented and reported to ensure compliance with the grant terms.
Condition: During our review of the Continuum of Care Program grant funded by the U.S. Department of Housing and Urban Development (HUD), we noted that the Organization failed to meet the required match for the grant period of April 1, 2022 to March 31, 2023. The grant agreement stipulates a matching contribution of 25%, which has not been fully met. The HUD was already aware of this noncompliance and has advised the Organization to ensure that there is 25% matching contribution moving forward in its budget.
Cause:The Organization did not properly allocate sufficient resources to meet the matching requirement or did not obtain adequate non-federal funds to satisfy the grant conditions.
Effect: Failure to comply with the matching requirement places the organization in violation of the grant agreement, which may result in penalties including the withholding of future grant funds, required repayment of HUD funds, or other administrative actions by HUD. Additionally, the noncompliance may negatively affect the organization’s eligibility for future HUD funding.
Recommendation: We recommend that Organization take immediate corrective action to satisfy the matching requirement. This may involve allocating additional non-federal resources to meet the match or revising current financial strategies. The organization should also ensure that all matching contributions are properly documented and reported to HUD as required. Additionally, we suggest developing a process to regularly monitor compliance with grant terms to prevent future instances of noncompliance.