Finding 51409 (2022-006)

2022-006 Eligibility Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of the Treasury Program: 21.023 COVID-19 ? Emergency Rental Assistance Program Criteria: Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Per the County's Federal Emergency Rental Assistance Program Guide for Tenant Application, the County is to obtain a written attestation if the participant household has no qualifying income or does not have documentation of all current income. In addition, per the U.S. Department of the Treasury's Emergency Rental Assistance Frequently Asked Questions, revised July 27, 2022, a grantee may rely on a written attestation without further documentation of household income under three approaches, self-attestation being one of these approaches; and the cost of a hotel or motel room may be covered using Emergency Rental Assistance provided that documentation of the hotel or motel stay is provided. The cost of the hotel or motel stay would not include expenses incidental to the charge for the room. Condition: In a sample of 19 participant?s eligibility documentation tested, the following exceptions were detected: ? One payment to a participant?s landlord exceeded the amount in the agreement; ? Three participants did not have documentation to support household income; and ? All participants did not have documentation originating from the hotel or shelter supporting the payment amount on behalf of the participant, including that incidental expenses were not included; or the hotel invoice did not agree to the actual payment amount. Questioned Costs: Less than $25,000 Context: The County informed us that its procedures are to take attendance daily for participants housed at hotels or shelters, and reconcile it to monthly attendance confirmations provided by the hotels or shelters. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The County is not in compliance with requirements determined by the U.S. Department of the Treasury, as well as the County is not following procedures as outlined in its Federal Emergency Rental Assistance Program Guide for Tenant Application. Cause: For the damage deposit discrepancy noted, the County believes that the incorrect damage deposit amount was noted in the lease by the landlord in error. The County informed us that it allowed verbal attestation in some cases for income verifications. Lastly, the County was unable to provide documentation of its reconciliation procedures over participant attendance at hotels or shelters. Recommendation: We recommend the County ensure its policies and procedures are being followed. In addition, we recommend the County review guidance provided by the U.S. Department of the Treasury to ensure it is meeting all applicable compliance requirements. View of Responsible Official: Acknowledge