Finding 1150485 (2022-002)

2022-002 Improve Internal Controls and Documentation over Allowable Costs and Eligibility Determinations Federal Program Information Federal Agency: Department of the Treasury Award Name: COVID-19 Emergency Rental Assistance Program Assistance Listing Number: 21.023 Award Year: 2022 Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Eligibility Type of Finding Compliance Internal Control over Compliance – Material Weakness Criteria or Specific Requirement Per 2 CFR 200.303, the County is required to establish and maintain effective internal controls over federal programs to provide reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of the award. Additionally, 2 CFR 200.334 requires the retention of records and supporting documentation to demonstrate eligibility determinations and allowability of expenditures under the program. Condition and Context During our audit, we tested a sample of 40 selections for allowable costs, as well as a sample of 40 for individual eligibility determinations under the program in which 35 selections were leveraged between the two tests. For 8 of the items selected for testing under allowable cost compliance and eligibility requirements, the County was unable to provide some or all of the required supporting documentation to demonstrate that individuals met the program’s eligibility requirements and that costs were allowable. The documentation was retained in an online portal to which the County no longer had access at the time of our audit procedures. Cause The County did not establish sufficient procedures or controls to ensure ongoing access to required supporting documentation maintained in the external portal used for program administration. Effect or Potential Effect Due to the weakness in internal controls noted above, the County could not demonstrate compliance with eligibility and allowable cost requirements for the sampled transactions. This also constitutes noncompliance with record retention requirements and impairs the ability for sufficient procedures to be performed over the program. Questioned Costs Due to the condition noted above, we were unable to determine if the costs charged to the applicable grant are allowable. Recommendation The County should implement policies and procedures to ensure required documentation for the program is retained in a manner that ensures continued access, even if administration platforms change or external portals are no longer accessible. The County should also periodically verify that it retains all necessary support for program transactions as required under federal regulations. Views of Responsible Official and Planned Corrective Action Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.