Finding Text
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: CA0802L9D012214, CA0802L9D012315, CA1348L9D012208, CA1348L9D012309, CA1510L9D012207, CA1510L9D012308, CA1883L9D012203, CA1883L9D012304, HHI-24-09, SIHI-25-07, HHI-24-04, SIHI-25-18 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR §578.73(b): “Notwithstanding 2 CFR 200.306(b)(5), a recipient or subrecipient may use funds from any source, including any other federal sources (excluding Continuum of Care program funds), as well as State, local, and private sources, provided that funds from the source are not statutorily prohibited to be used as a match. The recipient must ensure that any funds used to satisfy the matching requirements of this section are eligible under the laws governing the funds in order to be used as matching funds for a grant awarded under this program.” Condition: We noted that the Village’s controls did not identify certain costs within the matching pool that were unallowable under the matching cost principles. However, the matching pool exceeded the required match, and management was able to fulfil the match without the unallowable costs in the pool. Cause: The Village did not have adequate policies and procedures in place to ensure that only allowable costs were included in the matching pool used to satisfy matching requirements. Potential Effect: Without adequate controls in place, the Village could utilize costs for matching requirements that are not in compliance with §578.73. This may impact the Village’s ability to meet the required matching threshold, result in repayment of funds, and could affect future funding. Questioned Costs: None. Context: The Village incurred total costs that exceeded the required match. As a result, they were able to offset any unallowable costs, while still meeting the required match and remaining in compliance at year end. Repeat Finding: Not a repeat finding. Recommendation: We recommend Village enhance their policies and procedures to ensure that only allowable costs are utilized to satisfy matching requirements. Views of Responsible Officials: