Finding 1140681 (2024-002)

Significant deficiency in internal control over compliance related to matching compliance requirements. Federal Agency: US Department of Treasury Pass-Through Entity: State of Colorado Department of Local Affairs - Division of Housing Program Title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Number: H4HRG23147 Criteria Nonfederal entities must follow the standards for documentation of personnel expenses set out at 2 CFR section 200.306(a). Under this guidance, the entity that accepts any cost share funds (including cash and third-party in-kind contributions, and also including funds committed by the recipient, subrecipient, or third parties) as part of the recipient's or subrecipient's contributions to a program when the funds among others: 1) are verifiable in the recipient's or subrecipient’s records. Section III - Reportable Findings and Questioned Costs for Federal Awards Condition/Context/Cause The Organization entered into an agreement with match requirements to qualify for a federal match. The agreement stipulates the Organization has until September 2026 to expend the necessary matching funds. During our testing of matching for this award we noted that the Organization did not have controls in place to track and monitor compliance with the matching requirement. Effect The effect is that the Organization was not tracking spending to date that qualifies to meet the matching requirement for this award in compliance with the requirements of 2 CFR section 200.306. Questioned Costs None. Repeat Finding This is not a repeat finding. Recommendation We recommend management update its internal control process for a tracking system of matching funds to ensure compliance with 2 CFR 200.306 is met. This includes maintaining detailed records and documentation of all matching contributions. Views of Responsible Official and Corrective Action Plan Management agrees with the finding and has provided the accompanying corrective action plan.