Finding Text
Finding 2023-001 - Eligibility (Material Weakness); Material Noncompliance
Federal Program: COVID-19: Emergency Rental Assistance Program
Federal Agency: U.S. Department of Treasury
Pass-Through Entity: PA Department of Human Services and Carbon County
Assistance Listing Number: 21.023
Federal Award Year: July 1, 2022 to June 30, 2023
Repeat of Prior Year Audit Finding 2022-001
Criteria: The Consolidated Appropriations Act of 2021 and the American Rescue Plan Act included funding for states to establish emergency rental assistance programs (ERAP). Recipients must comply with the requirements for Emergency Rental Assistance (“ERA 1”), Division N, Title V, Section 501 of the Consolidated appropriations Act, 2021, Pub. L. No. 116-260 (December 27, 2020) and codified as 15 USC 9058a and Emergency Rental Assistance (“ERA 2”), Title III, Subtitle B, Section 3201 of the American Rescue Plan Act, 2021, Pub. L. No. 117-2 (March 11, 2021) codified as 15 USC 9058c.
The U.S. Department of Treasury issued Emergency Rental Assistance Frequently Asked Questions (FAQ) as guidance regarding the requirements of ERA1 and ERA2. FAQ 5 states Grantees must obtain, if available, a current lease, signed by the applicant and the landlord or sublessor, that identifies the unit where the applicant resides and establishes the rental payment amount. If a household does not have a signed lease, documentation of residence may include evidence of paying utilities for the residential unit, an attestation by a landlord who can be identified as the verified owner or management agent of the unit, or other reasonable documentation as determined by the grantee.
Condition/Context: During our audit, 8 out of 40 individual files selected for eligibility testing did not contain evidence that the Organization obtained or reviewed a lease to support the eligibility of the individual who received a direct assistance payment. Further, there was no evidence of alternative documentation of residence when a lease could not be obtained.
The sample was not a statistically valid sample.
Cause: Catholic Charities Diocese of Allentown was the only entity in Carbon County administering ERAP funding; no other agency would agree to undertake the obligations of administering this magnitude of a program, which assisted economically insecure renters with over $2.3 million funding during applicable fiscal year. The volume of inquiries and processed applications quickly overwhelmed the staff of Catholic Charities, with immense pressure from the administrative entities to process the applications as quickly as possible. This pressure on limited staff to process applications quickly led to errors in documentation.
Effect: The accuracy of client records depends heavily on the accuracy and timeliness of the staff review. If the Organization does not complete or review within a timely manner, records may be inaccurate or incomplete and potentially ineligible direct assistance payments may be rendered.
Questioned Costs: $26,072 of direct assistance payments were paid despite not having appropriate eligibility documentation on file.
Recommendation: The Organization should develop a process to review the applications that were previously accepted to ensure they include all of the required supporting documentation.
Views of Responsible Officials and Planned Corrective Actions: Catholic Charities Diocese of Allentown declined to administer the second round of ERAP funding. Significant leadership changes have been implemented in May 2023, including a new Managing Director. Catholic Charities is in the process of designing an enhanced training program to ensure all programs complete all documentation required to substantiate eligibility under each program administered, whether privately or publicly funded. Cause: The Consolidated Appropriations Act of 2021 and the American Rescue Plan Act included funding for states to establish emergency rental assistance programs (ERAP). Pennsylvania and its counties received approximately $1.3 billion to administer assistance to renters who had been affected by the COVID-19 pandemic and economic insecurity. Catholic Charities Diocese of Allentown was the only entity in Carbon County administering ERAP funding; no other agency would agree to undertake the obligations of administering this magnitude of a program, which assisted economically insecure renters with over $2.3 million funding during applicable fiscal year. The volume of inquiries and processed applications quickly overwhelmed the staff of Catholic Charities, with immense pressure from the administrative entities to process the applications as quickly as possible. This pressure on limited staff to process applications quickly led to errors in documentation.
Effect: The accuracy of client records depends heavily on the accuracy and timeliness of the staff review. If the Organization does not complete or review within a timely manner, records may be inaccurate or incomplete.
Questioned Costs: $26,072 of direct assistance payments were paid despite not having appropriate eligibility documentation on file.
Recommendation: The Organization should develop a process to review the applications that were previously accepted to ensure they include all of the required supporting documentation.
Views of Responsible Officials and Planned Corrective Actions: Catholic Charities Diocese of Allentown declined to administer the second round of ERAP funding. Significant leadership changes have been implemented in May 2023, including a new Managing Director. Catholic Charities is in the process of designing an enhanced training program to ensure all programs complete all documentation required to substantiate eligibility under each program administered, whether privately or publicly funded.