Finding 392813 (2022-001)

2022 – 001-Special Provisions Federal agency: Department of Housing and Urban Development Federal program title: Emergency Solutions Grant Assistance Listing Number: 14.231 Pass-Through Agency: State of Florida Department of Children and Families Award Period: January 1, 2022 – December 31, 2022 Type of Finding: Material Weakness in Internal Control over Compliance/Other Matters Criteria or specific requirement: Per the Compliance Supplement, the Organization must pay each subrecipient for allowable costs within 30 days after receiving the subrecipient’s complete payment request. Per the Organization’s contract with the State, the Organization must make payments to any subcontractor within 7 working days after full or partial payments from the State, unless otherwise stated in the contract between the Organization and subcontractor. Per the Organization’s subcontracting agreements, the Organization must pay subrecipients within 5 days of receipt of funds from the State. Condition: The Compliance Supplement, State contract, and subcontracts contain specific payment requirements. Out of the sample of 9 subrecipient payments, there were 9 exceptions noted. Questioned costs: None Context: Out of the valid sample of 9 monthly subrecipient invoices, there were 9 overall exceptions noted. All related to the subrecipients not being paid within 5 days from the date of receipt from the State as required by the related subcontracting agreements. We also noted that there were 9 exceptions noted where subrecipients were not paid within 7 days from the date of receipt from the State per the contract with the State and that there were 7 exceptions noted where subrecipients were not paid within 30 days from the date of receipt from the State per the Compliance Supplement. Cause: The Organization did not follow proper payment guidelines per 1) the Compliance Supplement for the Federal Program, 2) their contract with the State of Florida, or 3) their subcontracting agreements with local agencies. A lack of conciseness between payment requirements and delayed payment from the State of Florida contributed to the lack of prompt payment. Effect: The Organization is not paying subrecipients timely. Repeat Finding: No Recommendation: We recommend that the Organization update their payment requirement in their subcontracts to match the State's requirement and that they pay subrecipients within 7 days of their receipt from the State, per their contract with the State. Views of responsible official: There is no disagreement with the finding.