Finding Text
2022-005 (2021-006) – FEDERAL MATCHING COMPLIANCE
Type of Finding: (E, F) – Significant Deficiency in Internal Control Over Compliance of Federal Awards and Instance of Non-Compliance Related to Federal Awards
Funding Agency: U.S. Department of Housing and Urban Development (HUD)
Title: Emergency Solution Grant (ESG) Program
AL #: 14.231
Award #: 202101171, 202200142, 20-02-HDH-EHA-001
Award Period: July 1, 2021 – June 30, 2022
Questioned Costs: None
Statement of Condition
During our review of internal controls covering matching funds, we noted Heading Home did not have formal documentation to demonstrate compliance with the matching requirements of the ESG program related to contracts 202101171, 202200142, 20-02-HDH-EHA-001.
Context
Heading Home was required to match $396,366.16, $319,604.90, and $32,562.55, respectively during fiscal year 2022. Heading Home was ultimately deemed to be compliant with the required match, however, there is no formal process to document and track the match requirement related to federal expenses.
Criteria
The ESG program requires recipients to match the funding provided by HUD.
Cause
Heading Home does not have internal controls to ensure matching requirements are adequately evaluated, documented, and met.
Effect
When related matches for federal expenses are not tracking, Heading Home would not know if they are in compliance.
Recommendation
We recommend Heading Home design and implement internal controls to ensure that matching requirements of the ESG program are met and appropriately documented.
View of Responsible Official and Corrective Action Plan
Heading Home management is in agreement with this finding and is currently developing controls to ensure compliance with all grant matching requirements. The new controls will address a thorough review of each grant agreement, documentation of matching funds contributed by the organization, including cash contributions, in-kind donations, and volunteer hours, and the method of tracking match progress by either spreadsheet and/or within the accounting system. An appropriate individual will be assigned the responsibility for monitoring compliance and the internal controls over matching compliance including document retention and recordkeeping.
Management anticipates the above corrective action plan to be fully implemented by June 30, 2024. Personnel responsible for ensuring implementation include Connie Chavez, Chief Executive Officer, Debbie Brickman, Chief Financial Officer, and Armando Sanchez, contract accountants team lead.