Finding Text
2022-004 Department of Housing and Urban Development Federal Assistance Listing #14.267 Continuum of Care Program Period of Performance Significant Deficiency in Internal Control over Compliance and Other Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Organization claimed a portion of expenses that benefited the period outside of the period of performance, which was November 1, 2021, to October 31, 2023. During our testing, there was no documentation of review and approval of expenses for a portion of the sample selected. Cause: The Organization did not have an internal control process in place to ensure that allowable expenses excluded costs incurred prior to the period of performance. Effect: The Organization incorrectly submitted allowable expenses to the grant outside of the grant period of performance. Questioned Costs: There were no questioned costs in excess of $25,000 required to be reported. A nonstatistical sample of 60 ($21,300) out of 1,240 direct program expenditures were tested for period of performance. Of these 60 items, there was an error in one of the expenditures tested relating to $335 of costs benefiting 2021 and this error was determined to be isolated in nature. Of these 60, 45 did not show evidence of proper review and approval prior to payment. Repeat Finding from Prior Years: No Recommendation: We recommend that the Organization enhance internal control policies to ensure all allowable expenses submitted under the grant are reviewed and approved prior to payment in order to make sure it is in the correct period of performance. Views of Responsible Officials: Management agrees with the finding.