Finding Text
Section III: Federal Award Findings
Finding 2022-003: Material weakness due to a lack of segregation of duties and effective internal controls.
Federal Agency: U.S. Department of Treasury
Program Title: Emergency Rental Assistance Program and Coronavirus State and Local Fiscal Recovery
Funds
Assistance Listing Numbers (ALN): 21.023 and 21.027
Federal Award Years: Year ended December 31, 2022
Pass-through Grantor and identifying numbers: Pierce County; SC-108282, SC-108719, SC-109199
Criteria: 2 CFR 200.303(a) requires that “the non-Federal entity must establish and maintain effective
internal control over the Federal award that provides reasonable assurance that the non-Federal entity is
managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the federal award. These internal controls should be in compliance with guidance in
“Standards for Internal Control in the Federal Government” issued by the Comptroller General of the
United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).”
Condition and Context: Helping Hand House has a lack of segregation of duties and internal controls when
it comes to the processes related to the requirements of activities allowed, allowable costs / cost
principles, period of performance, and reporting. Through the samples related to testing internal controls,
we identified the following:
27 out of 60 selections for ALN 21.023 and 7 out of 60 selections for ALN 21.027 in which the same
person was involved in preparing the underlying support for expenditures, approving them, and
also reviewing and approving the invoices remitted to the Pass-through Grantor for
reimbursements. In many cases, the same person was also signing the related check disbursement
to the landlord.
This is a condition identified using a statistically valid sample.
Cause: Management failed to implement proper segregation of duties and internal controls related to the
activities surrounding the administration of the federal award programs.
Effect: The lack of segregation of duties related to these areas heightens the risk of potential errors and
even fraud as it relates to ensuring that the expenditures are appropriate for the award and appropriately
remitted for reimbursement. This also weakens the Organization’s ability to ensure compliance with the
awards’ requirements.
Question Costs: None.
Repeat Finding: This is a partially repeated finding of 2021-003.
Recommendation: We recommend that Helping Hand House establish written policies and procedures
related to the programs stating explicit roles of each individual involved in the process. We also
recommend that management conduct regular risk assessments and conduct monitoring functions over
the internal controls to ensure that they are effectively working and appropriately documented.
Views of Responsible Officials: See Corrective Action Plan.