Finding Text
Cost Sharing and Level of Effort Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Homeless Challenge Grant Assistance Listing Number: 93.558 Federal Award Identification Number and Year: IP004 - 2025 Pass-Through Agency: Palm Beach County Board of County Commissioners Award Period: July 1, 2024 – June 30, 2025 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria: Cash amounts reported as cost sharing may not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program. In addition, recipients are required to document and meet all level‑of‑effort requirements and maintain documentation demonstrating compliance with program service requirements as specified in the grant agreement. Condition: During testing, the Organization did not maintain adequate internal controls to ensure compliance with cost‑sharing and level‑of‑effort requirements under the Homeless Challenge Grant. Specifically, costs reported as cash matching funds included amounts paid with other federal funds, required level‑of‑effort documentation was incomplete or not reviewed, and the Organization did not meet all required service and effort benchmarks during the grant period. Questioned costs: $24,473 of the $43,664 expenses reported to the grantor were unallowable as determined by the financial reports received. Context: Audit testing identified multiple compliance failures related to cost sharing and level‑of‑effort requirements. Of the expenses reported as cash matching funds, $24,473 were paid using other federal funds. Additionally, documentation supporting required level‑of‑effort measures was incomplete, and 3 of 6 required effort benchmarks were not met during the grant period. Cause: The Organization lacked sufficient review controls and monitoring procedures to ensure that cost‑sharing expenditures were allowable, level‑of‑effort documentation was complete, and required program benchmarks were achieved. Effect: Failure to comply with cost‑sharing and level‑of‑effort requirements could, at the grantor’s discretion, jeopardize current or future funding and result in disallowed costs. Repeat finding: No Recommendation: Management should strengthen internal review controls to ensure that cost‑sharing expenditures are allowable, level‑of‑effort requirements are fully documented and reviewed, and program benchmarks are monitored throughout the grant period to ensure compliance with grant requirements. Views of responsible officials: There is no disagreement with the audit finding.