Finding Text
2023-002 PROGRAM INCOME - MATERIAL WEAKNESS Federal Program Community Development Block Grant/Entitlement Grant Cluster ALN 14.218; passed through the County of Berks and HOME Investment Partnership Program ALN 14.239; passed through the County of Berks Criteria Per 2 CFR section 200.307(a), program income must be expended prior to requesting Federal Funds. The Authority receives program income under the above grants and must report the receipt and application of program income within the United States Department of Housing and Urban Development Integrated Disbursement and Information System (IDIS). Condition/Cause During our testing of program income received during 2023, it was noted that the Authority did not report all program income received into IDIS. As a result of not entering all program income into IDIS, our testing indicated that new entitlement funds were drawn down prior to utilizing all available program income on hand. The Authority utilizes a separate general ledger account in the financial reporting software to record all program income received for each federal grant program. The Fiscal Officer enters the program income into IDIS. No internal control existed to ensure the completeness or accuracy of the program income information entered into IDIS. Effect As a result of not recording all program income received timely after it’s receipt, new entitlement funding draws were made before all available program income received was applied to grant expenditures within IDIS. Questioned Costs Home Investment Partnership Program - $34,720 Community Development Block Grant/Entitlement Grant - $326,712 Context The entire population of program income received as reported in the reconciled grant-specific program income general ledger account was reviewed. For the Community Development Block Grant program, three receipts of program income totaling $326,712 were not entered into IDIS. For the HOME Investment Partnership Program, seven receipts totaling $34,720 were not entered into IDIS. Repeat Finding Yes; 2022-007 Recommendation We recommend the Authority develop and implement an internal control procedure to ensure that all program income is entered timely within the IDIS system. Prior to drawing down new entitlement funding, the program income general ledger account associated with the grant program should be reviewed and compared to the program income reported within IDIS to ensure all program income is recorded and fully utilized before drawing down additional entitlement funding. Management Response The Authority implemented a new policy to track and document program income: a. Upon receipt of program income, it shall be entered individually into IDIS and assigned to an activity or activities within fifteen (15) calendar days of receipt. b. At the next request for funds for an activity which includes funding from program income, program income shall be used prior to requesting federal funds for the activity. c. The request for federal funds shall be prepared by the Fiscal Officer and reviewed by one of the Assistant Fiscal Officers to determine if program income is being used prior to the request of federal funds. d. If it has been determined and documented that program income is being used prior to the request for federal funds, the request shall be forwarded to the Executive Director for approval. Current Status of Corrective Action Plan This finding has been resolved by management. The new policy was implemented on April 1, 2025.