Finding 480053 (2022-007)

Material Weakness Repeat Finding
Requirement
E
Questioned Costs
-
Year
2022
Accepted
2024-07-31

AI Summary

  • Core Issue: The Organization lacks proper controls to verify eligibility for grant funds, leading to a material weakness in compliance.
  • Impacted Requirements: Failure to maintain eligibility documentation violates grant agreement terms, as outlined in the 2023 Compliance Supplement.
  • Recommended Follow-Up: Implement controls to ensure eligibility verification and proper retention of documentation to prevent future noncompliance.

Finding Text

Department of Housing & Urban Development Emergency Solutions Grants (ESG) Program, Assistance Listing Number 14.231 Pass Through Virginia Department of Housing and Community Development, Pass Through Entity Identifying Number 22-VHSP-07 and 20-CHERP-077 Pass Through Fairfax County, Pass Through Entity Identifying Number 4400010031 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: The Organization is required to maintain controls to ensure compliance with the terms of the grants which it negotiates with the federal government and is required to comply with the terms of the grant agreements to include eligibility, per the 2023 Compliance Supplement. Condition: During the period of the grant, we noted the Organization did not have documented controls in place to ensure that individuals were eligible to receive funds. Context: 16 of 42 individuals receiving services under the grant selected for testing did not have documented eligibility forms to reflect that the individuals were eligible to receive funds or services. The sample was not intended to be, and was not, a statistically valid sample. Cause/Effect: Evidence of eligibility was not available over some individuals. Without appropriate documentation of eligibility, there is no degree of certainty that the individual was eligible to receive funds from Cornerstones, Inc. Questioned costs: Unknown Identification of Repeat Finding: Repeat Finding 2021-005 Recommendation: The Organization should ensure that it has controls in place to monitor compliance with eligibility to include proper retention of eligibility forms. Views of responsible officials and planned corrective actions: Management’s response is reported in “Management’s Views and Corrective Action Plan” included at the end of this report.

Corrective Action Plan

Cornerstones acknowledges that our files were incomplete. It is our position that the COVID-19 pandemic created immense need to which Cornerstones responded by expanding rapidly and mobilizing funding and program requests that did not receive the benefit of comprehensive planning; the focus was on health prevention, isolation and quarantine activities, and temporary shelter for homeless and other low-income, vulnerable seniors and disabled persons. We served those in need and our intake processes and recordkeeping did not keep pace. Additionally, given the time that has passed since the services in question, it is possible that records that did exist were misplaced. Staff turnover, resulting from the pandemic burden, made it challenging to go back to the work that had been done. In the time since these events Cornerstones has further emphasized the compliance and documentation needs of the case management process, and we have filled turned-over positions with experienced staff that also understand intake and documentation requirements. We have also hired a Senior Director, Finance with over 20 years of federal contracts experience that is an integral part of increased program compliance and operational oversight responsibilities within the Finance/Operations function. This Senior Director and Cornerstones’ Chief Financial & Operating Officer, Executive Vice President of Housing and Community Programs, and other program leaders and staff, will all work together to ensure that the file construction process is complete and timely for all participants. Due to timing of receiving this finding, remediation processes began in fiscal year 2024 and will be applied fully to the fiscal year 2025, beginning 7/1/2024, files.

Categories

Eligibility Material Weakness Internal Control / Segregation of Duties

Other Findings in this Audit

  • 480049 2022-001
    Material Weakness
  • 480050 2022-003
    Significant Deficiency
  • 480051 2022-004
    Significant Deficiency
  • 480052 2022-005
    Significant Deficiency
  • 480054 2022-007
    Material Weakness Repeat
  • 480055 2022-007
    Material Weakness Repeat
  • 480056 2022-007
    Material Weakness Repeat
  • 480057 2022-007
    Material Weakness Repeat
  • 480058 2022-001
    Material Weakness
  • 480059 2022-003
    Significant Deficiency
  • 480060 2022-004
    Significant Deficiency
  • 480061 2022-005
    Significant Deficiency
  • 1056491 2022-001
    Material Weakness
  • 1056492 2022-003
    Significant Deficiency
  • 1056493 2022-004
    Significant Deficiency
  • 1056494 2022-005
    Significant Deficiency
  • 1056495 2022-007
    Material Weakness Repeat
  • 1056496 2022-007
    Material Weakness Repeat
  • 1056497 2022-007
    Material Weakness Repeat
  • 1056498 2022-007
    Material Weakness Repeat
  • 1056499 2022-007
    Material Weakness Repeat
  • 1056500 2022-001
    Material Weakness
  • 1056501 2022-003
    Significant Deficiency
  • 1056502 2022-004
    Significant Deficiency
  • 1056503 2022-005
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.239 Home Investment Partnerships Program $3.70M
14.231 Emergency Solutions Grant Program $645,931
14.218 Community Development Block Grants/entitlement Grants $375,916
93.558 Temporary Assistance for Needy Families $145,055
93.569 Community Services Block Grant $73,822
14.169 Housing Counseling Assistance Program $44,900
10.558 Child and Adult Care Food Program $40,335
97.024 Emergency Food and Shelter National Board Program $20,011