Finding Text
2022-003 - Eligibility ? Internal Control Over Eligibility Identification of the Federal Program: Assist Listing Number:21.023 Assistance Listing Title: Emergency Rental Assistance Program Federal Agency: Department of Treasury Pass-Through Entity: State of California Department of Finance Federal Award Identification Number: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Pursuant to the April 2022 Compliance Supplement, Eligibility: This approach to eligibility was implemented in accordance with Consolidated Appropriations Act, 2021, for ERA 1 in sections 501(c)(2)(C)(ii) of the Act concerning documentation of payments to households, sections 501(f)(2)(A) and (B) of the Act concerning signature requirements for applications and documentation required for tenants, section 501(k)(1) concerning area median income determinations, and sections 501(k)(3)(A)(I) and (II) concerning eligible household determinations and attestation requirements. This treatment is further explained in the ERA FAQs; the Consolidated Appropriations Act, 2021; and the Treasury, Department of Justice and Department of Housing and Urban Development joint letter issued August 27, 2021 (https://home.treasury.gov/system/files/136/Eviction-Moratorium-Joint-Letter.pdf). To the extent that a grantee has established and consistently followed its own reasonable procedures for implementing an eligibility determination process, consistent with Treasury?s guidance, it is not Treasury?s expectation that grantees should seek additional documentation from a beneficiary after the initial determination of eligibility has been completed, including for those determined to be eligible using self-attestation, categorical eligibility, or fact-specific proxies in qualifying circumstances. Testing of individual household eligibility-related documentation should be limited to material already collected by the grantee during application as much as possible to avoid imposing undue burden on households that remain at risk of housing instability. Condition: During our audit, we noted 4 samples out of 40 samples selected for the eligibility requirement testing with internal control deficiency related to the income eligibility verification. The application reviewer made errors on data input and reported those applicants? income as zero instead of the actual income provided by the applicants. However, we recalculated those four applicants? income based on the income verification support provided and those applicants were eligible to receive the grant subsidy based on the income limit. Cause: The City did not have proper internal controls in place to review the data input performed by the application reviewer. Effect or Potential Effect: The City could potentially be out of compliance with the eligibility requirement due to the error in executing the internal control procedures. Questioned Costs: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend the City enhance its internal control by implementing policies and procedures over eligibility requirement. Views of Responsible Officials: Management concurs the finding.