Finding Text
2023-003 ALLOWABLE ACTIVITIES AND ALLOWABLE COSTS – SIGNIFICANT DEFICIENCY Federal Program Emergency Rental Assistance ALN 21.023; passed through the County of Berks Criteria 2 CFR Section 200.400 requires recipients and subrecipients of federal grant funds to maintain adequate documentation to support costs charged to a federal award. FAQ #5 issued by the Department of Treasury related to this program indicates that Grantees must obtain, if available, a current lease, signed by the applicant and the landlord or sublessor, that identifies the unit where the applicant resides and establishes the rental payment amount. Additionally, FAQ #6 notes that all payments for utilities and home energy costs should be supported by a bill, invoice, or evidence of payment to the provider of the utility or home energy service. Condition/Cause For 23 out of 60 cases tested, the amount paid for rent or utilities did not agree to a lease agreement or bills on file for the following reasons: (1) clerical errors, (2) duplicate payments due to multiple staff working on the same file, or (3) failure to request or maintain support before payment was made. Known questioned costs associated with the 23 exceptions noted in our testing were $9,867. Based on the projection of the sampling results to the remaining population, we project additional likely questioned costs of approximately $173,400. The Authority did not have controls in place to detect the noncompliance prior to issuing payments. Effect The Authority is not in compliance with the 2 CFR Part 200 requirement to maintain adequate documentation to support costs charged to a federal program. Questioned Costs Known questioned costs are $9,868, projected costs $173,400. Repeat Finding Yes; 2022-005. Recommendation We recommend the Authority revisit and strengthen internal controls over tracking individual payments for transactions entered as batches, particularly when related to federal awards. We encourage the Authority to continue working to identify the individual transactions making up the remainder of the federal expenditures under this program. We also recommend the Authority revisit and strengthen internal controls over allowable activities and allowable costs related to grant programs. Management Response The Authority launched the Emergency Rental Assistance Program (ERAP) with little administrative guidance from the U.S. Treasury. The Authority contracted with the Berks Coalition to End Homelessness (BCEH) to undertake various aspects of the Emergency Rental Assistance Program and in the late fall of 2021, the Authority began reviewing all case documentation provided by BCEH. This review eliminated the vast majority of the errors noted. The Authority also updated case documentation checklists as well as provided training for staff involved with ERAP. Current Status of Corrective Action Plan The Authority has resolved this finding subsequent to December 31, 2023. An additional review was added at the close of each case.