Finding Text
Condition: Audit testing of a statistical sample of 15 cases processed during the year ended June 30, 2024, revealed the following:
One case where applicant income was calculated incorrectly; however, the income determination did not impact the amount of assistance allowed by DSHA’s policy.
Utility assistance was paid for two cases totaling $8,352.82 under the assumption that utility cost was $500 per month. Supporting utility bills, invoices, or statements were obtained to support the payment amount; however, support was not obtained to determine the actual number of months of utility assistance provided.
In January 2023, DHSA began paying utilities using $500 per month to calculate the number of months of utility assistance provided. This policy change was not included in policy documents and DSHA did not have evidence of appropriate internal approval for the policy change. Payments of $500 per month, up to the amount owed by applicants, were disbursed without determining the number of months of utility assistance provided.
A similar income determination finding was noted during the audit of the year ended June 30, 2023. Refer to Finding 2023-004.
Context: During the year ended June 30, 2024, DSHA approved and disbursed assistance for 80 rent assistance cases totaling $349,447 and 72 utility assistance cases totaling $114,905.
Criteria: The following summarizes the applicable portions of the ERA program requirements
United States Department of the Treasury Program FAQs updated May 10, 2023:
ERA 2 allows an eligible household to receive up to 15 months of assistance (plus an additional three (3) months, if necessary, to ensure housing stability for the household, subject to the availability of funds).
Grantees must establish policies and procedures to govern the implementation of their ERA programs consistent with the statutes and the ERA program requirements.
United States Department of the Treasury Program FAQs updated May 10, 2023, requires utility assistance payments to “…be supported by a bill, invoice or evidence of payment…” (FAQ # 6). The program requirements (FAQ #s 10 & 11) limit utility assistance to 18 months. While the program allows for estimated payments in certain circumstances (FAQ # 38), the program requires excess assistance to be recovered or paid by the disbursing agency from non-federal sources if the recipient is found to be ineligible or the assistance in excess of program requirements.
Questioned Costs: None
Effect: Internal controls were not operating effectively during the period. Additionally, a change to the utility assistance controls reduced their effectiveness.
Cause: Internal controls over compliance were not appropriately designed, implemented, or operated to appropriately address the risk of noncompliance with the federal program requirements.
On January 1, 2023, DSHA implemented a program design change to allow up to $500 a month in utility assistance. This threshold was used to calculate the number of months of assistance being provided instead of using the actual utility costs for 18 months.
Recommendation: We recommend DSHA enhance its policies and procedures for processing rental assistance applications to ensure compliance with the federal program’s requirements.