Finding Text
Finding: Lack of Full Compliance with Program Requirements Finding Number/Disposition: 2022-002 / Noncompliance Compliance Requirement: Eligibility Applicable Program: 14.218 Community Development Block Grant (CDBG)/CARES Act (CDBG-CV) Criteria: Per review of the executed subrecipient agreement between the City of Merced (pass thru agency) and Sierra Saving Grace Homeless Project ("SSG"), SSG is required to use the CDBG funds for the acquisition and rehabilitation of properties benefitting extremely low-income, low-income, and formerly homeless individuals and families. Additionally, all participants of the program are required to enter into a 1-year lease agreement with one-year lease renewals thereafter. Condition: During our review of the documentation to determine eligibility of program participants, we noted SSG management executed leases on a month to month basis; however, we determined that the program participant was eligible to receive program benefits during our audit period. Cause: Management does not have adequate internal controls and systems in place to fully adhere to federal program requirements. Effect: The Organization is not in full compliance with the federal program requirements. Questioned Costs: Unknown Recommendation: We recommend management develop and implement sufficient internal controls and systems to ensure full compliance with federal grant program requirements. Views of Responsible Officials: Refer to the Attached Management's Formal Response and Corrective Action Plan.