Finding Text
Condition: Testing of DSHA’s December 31, 2023, and June 30, 2024 HAF quarterly reports revealed the reports submitted by DSHA reported the same amounts as expended and obligated, for Administrative Expenses and Services, and Counseling & Education. During the year ended June 30, 2024, DSHA entered various contracts for the operation of the program.
DSHA’s Annual Report had an extended due date of November 23, 2023, but was not filed until November 29, 2023. Evidence of an additional extension could not be provided.
A similar finding was noted during the audit of the year ended June 30, 2023. Refer to finding 2023-009.
Criteria: The United States Department of the Treasury Homeowner Assistance Fund Guidance on Participant Compliance and Reporting Responsibilities includes the following definitions:
Expenditure/Expended means any HAF assistance that has been spent by a HAF participant and/or Subrecipient. Please note, cumulative Expenditures cannot exceed cumulative Obligations.
Obligation/Obligated means an order placed for property and services, contracts and subawards made, and similar transactions that require payment (see 2 CFR § 200.1.). Obligated funds include funds that have been Expended.
Examples of obligated funds include: HAF funds that have been committed, pledged, or otherwise promised, in writing, to a specific individual or entity as part of a HAF program; HAF funds that have been set aside to cover obligations arising from loan guarantees; HAF funds that have been committed, pledged, or otherwise promised, in writing, as part of a transaction; and HAF funds that have been committed, pledged, or promised, in writing, for allowable administrative expenses (e.g., an executed contract for services).
The Homeowner Assistance Fund: Annual Report User Guide Issued October 14, 2022 (Updated October 13, 2023), requires the reporting of outcomes for assistance provided to Homeowners by Area Median Income and Socially Disadvantaged Individuals.
Questioned Costs: None
Effect: Reports required by the U.S. Treasury were not supported by contemporaneously prepared supporting documentation. Reports submitted to the U.S. Treasury did not include accurate reporting of program obligations. Reports required by the U.S. Treasury were not submitted timely.
Cause: The report preparation process did not consider executed contracts and agreements to be obligations.
Recommendation: We recommend DSHA enhance its policies and procedures for preparing and approving required reports prior to submission.