Finding Text
2023-004 – Eligibility – Internal Control Over Eligibility
Identification of the Federal Program:
Assistance Listing Number: 21.023
Assistance Listing Title: Emergency Rental Assistance Program
Federal Agency: Department of Treasury
Pass-Through Entity: State of California Department of Finance
Federal Award Identification Number: N/A
Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation):
Pursuant to the May 2023 Compliance Supplement, Eligibility:
This approach to eligibility was implemented in accordance with 15 USC 9058a, for ERA 1 in 15 USC
9058a(c)(2)(C)(ii) concerning documentation of payments to households, 15 USC 9058a(f)(2)(A) and (B) of the
Act concerning signature requirements for applications and documentation required for tenants, 15 USC 9058a
(k)(1) concerning area median income determinations, and 15 USC 9058a (k)(3)(A)(I) and (II) concerning
eligible household determinations and attestation requirements. This treatment is further explained in the ERA
FAQs; 15 USC 9058a; and the Treasury, Department of Justice and Department of Housing and Urban
Development joint letter issued August 27, 2021 (https://home.treasury.gov/system/files/136/Eviction-
Moratorium-Joint-Letter.pdf).
To the extent that a grantee has established and consistently followed its own reasonable procedures for
implementing an eligibility determination process, consistent with Treasury’s guidance, it is not Treasury’s
expectation that grantees should seek additional documentation from a beneficiary after the initial determination
of eligibility has been completed, including for those determined to be eligible using self-attestation, categorical
eligibility, or fact-specific proxies in qualifying circumstances. Testing of individual household eligibility-related
documentation should be limited to material already collected by the grantee during application as much as
possible to avoid imposing undue burden on households that remain at risk of housing instability.
Condition:
During our audit, we noted five (5) samples out of nine (9) samples selected for the eligibility requirement testing
with internal control deficiency related to the income eligibility verification. The city failed to collect the zero
income attestation document from applicant. The amount of income shown in documents uploaded by applicant
was different from the amount shown in application/system, check box for income verification was not ticked off
by supervisor though the verification was completed. However, we recalculated those five applicants’ income
based on the income verification support provided and those applicants were eligible to receive the grant subsidy
based on the income limit.
Cause:
The City did not have proper internal controls in place to review the process performed.
Effect or Potential Effect:
The City could potentially be out of compliance with the eligibility requirement due to the error in executing the
internal control procedures.
Questioned Costs:
None.
Context:
See condition above for the context of the finding.
Identification as a Repeat Finding, If Applicable:
Yes. See prior year finding 2022-003.
Recommendation:
We recommend the City enhance its internal control by implementing policies and procedures over eligibility
requirement.
Views of Responsible Officials:
Management concurs with the finding.