Finding Text
Identification as a Repeat Finding: Repeat of Finding 2021-002. Finding: The SEFA provided for audit omitted a major program and federal contracts and either understated or overstated the federal contracts listed in the condition and context section below, which resulted in an understatement of federal awards of $1.8 million. All errors were corrected in the attached SEFA; however, the errors indicate gaps in internal controls over financial reporting. Criteria: The Organization is responsible for maintaining accurate information about all federal programs and reporting requirements. The Organization is responsible for using this information to comply with the Uniform Guidance in carrying out federal programs. Sample Size and Population: N/A Condition and Context: The original SEFA provided for audit contained errors in identifying programs, program clusters and expenditures of federal awards including the following: Department of Housing and Urban Development: ? ALN 14.218 ? Community Development Block Grants: City of Seattle award 2022-001 expenditures overstated $60,748. ? ALN 14.169 ? Housing Counseling Assistance: Mon Valley award Oct. 2021 - Sept. 2022 understated $73,561. ? ALN 14.239 ? HOME Investment Partnerships: King County loan of $816,940 omitted. ? ALN 14.252 ? Section 4 Capacity Building: Award 40646-0063 expenditures of $30,247 omitted. Department of Treasury: ? ALN 21.011 ? Capital Magnet Fund: Award 181CM05555 expenditures of $134,433 omitted. ? ALN 21.020 ? Community Development Financial Institutions (CDFI): CDFI Fund Assistance Agreement award expenditures of $93,000 omitted. CDFI Program award expenditures overstated by $105,000.? ALN 21.024 ? CDFI Rapid Response (Major Program): Award expenditures of $527,565 omitted. ? ALN 21.026 ? Homeowner Assistance Fund (Major Program): Award expenditures understated by $134,192. ? ALN 21.027 ? Coronavirus State and Local Fiscal Recovery Funds: City of Seattle award N2021-0454 expenditures of $51,785 omitted. NeighborWorks America: ? ALN 21.000 ? Award 2019 Lending Capital expenditures of $125,620 omitted and award NWINVEST2019 expenditures of $2,650 omitted. Effect: Inaccurate identification of programs subject to the Single Audit increases the risk that the Organization will not comply with the terms and conditions of federal programs. Cause: HomeSight experienced finance and accounting staff turnover in early 2022. Gaps in staffing resulted in a lack of documentation and communication of accounting treatment for federal contracts as the Organization did not have a central repository for this information to guide new staff. Recommendation: The Organization must continue to increase its familiarity with federal grant compliance requirements and establish a process for timely identification of federal programs and a system for tracking contracts in order to ensure compliance with federal award programs and to ensure completeness and accuracy in SEFA reporting. Questioned Costs: None Management Response: Management response is reported in the ?Corrective Action Plan? at the end of this report. Contact Person: Tammie Anders, Director of Finance