Finding Text
Criteria: The Services and Transitional Housing for Trafficking Victims program requires that costs charged to the Federal award shall be allowable and supportable in accordance with 2 CFR § 200.403. Adequate source documentation must be retained to support reimbursed costs. Condition: During the audit, it was noted that while the original lease agreements were obtained and retained, lease extension agreement was neither obtained nor retained to support the expenses for 3 of the 31 Rent Assistance items selected for testing. Cause: The condition occurred because management did not obtain or retain an extension to the original lease agreement to cover the month in which assistance was provided. This gap indicates a lapse in the organization’s document retention requirements, which resulted in the lease not aligning with the period of expenditure. Questioned Cost: $-0- Effect: As a result of the lease not covering the month for which assistance was provided, there is a risk that the related expenditure may be considered unsupported. This could lead to questioned costs, audit findings, or other financial reporting and compliance issues. Recommendation:Managementshould tracklease expirations andensureextensions orrenewals are obtained andretained,implementa checklistto verifyalllease documentation iscurrent,providestafftrainingontheimportanceof maintainingvalid agreements,andconductperiodic reviews to confirmdocumentation aligns with rentalassistance periods. Classification:Compliancefindingandcontroldeficiency in internalcontrols