Finding 501663 (2023-003)

Finding 2023-003: Controls over Matching Federal Program Title: Department of Housing and Urban Development Assistance Listing No. 14.267 – Continuum of Care Award year: IL1651L5T142002 August 1, 2021 – July 31, 2022; IL0315l5T142114 July 1, 2022 – June 30, 2023; IL1780L5T172100 and IL1651L5T142103 August 1, 2022 – July 31, 2023 Criteria: 24 CFR section 578.73 requires that Continuum of Care grant recipients must match all grant funds, except for leasing funds, with at least 25 percen%t of cash or in-kind contributions from other sources on a grant-by-grant basis. In order to ensure compliance with this requirement, the Agency should have internal controls in place to monitor matching and should document the performance of those controls. Condition: While we were able to test that the Agency was in compliance with the matching requirement, the Agency could not provide evidence of effective internal controls over the grant fund matching compliance requirement. Cause and Effect: The Agency does not have sufficient controls in place to monitor this compliance requirement. The lack of control could result in the Agency not meeting the matching requirement which would represent a compliance exception and could impact future funding. Questioned Costs: None identified. Context: We tested compliance with the matching requirement for the three grants under this program which concluded during the audit period. We did not identify any noncompliance with the matching requirement as a result of our testing. However, the Agency did not have processes or controls in place to track the sources and uses of the match and monitor it throughout the agreement for proper compliance. Repeat Finding: No. Recommendation: We recommend that management implement a process to monitor the matching of grant funds for applicable grants and document performance of that control. This should include clear identification of the funds used for matching and their related sources. Views of Responsible Officials: Management agrees with the finding. See corrective action plan.