Finding Text
2022-003—LACK OF INTERNAL CONTROL OVER COMPLIANCE FOR ELIGIBILITY
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Name: Housing Opportunities For Persons With Aids
Assistance Listing Number: 14.241
Federal Award Identification Number and Year: NMH200032-2020 and NMH2001W068- 2020
Award Period: 6/9/2020 – 06/9/2023 for Grant68 and 05/20/2021 – 05/20/2024 for Grant32
Questioned Costs: None
Type of Finding
(E) Significant Deficiency in Internal Control Over Compliance of Federal Awards
Statement of Condition
During our testing of eligibility, we noted a lack of evidence of internal controls over compliance for the Housing Opportunities For Persons With Aids grants NMH200032 and NMH2001W068.
Context
5 transactions out of 8 tested did not have evidence of management review of approval of the participant’s eligibility.
Criteria
As set forth in 2 CFR part 200 internal controls:
• The organization should maintain written policies and procedures outlining processes and control activities for determining eligibility of participants and amounts awarded, as applicable.
• Evidence of the review of the eligibility determinations by a knowledgeable supervisor should be documented.
Cause
The auditee did not have adequate policies and procedures to verify and document the eligibility of the recipients.
Effect
The organization does not appear to have sufficient internal controls in place and does not appear to be in compliance with grant requirements as set forth in 2 CFR part 200. A potential effect of noncompliance of the federal award or future funding decisions could result in suspension or termination of the award.
Recommendation
We recommend the organization:
• maintain written policies and procedures outlining processes and control activities for determining eligibility of participants and amounts awarded, as applicable.
• Document evidence of the review of the eligibility determinations by a knowledgeable supervisor.
View of Responsible Officials and Corrective Action Plan
Response. Agreed. Where feasible, the Housing Trust will aim to improve management of all federal grants. A process of documentation verification prior to any requests made for financial draws will include employee, supervisor, business operations manager, and executive director level approvals to ensure compliance and availability of funds. A monthly federal request for reimbursements with all grantee information will be used and reconciled monthly with QuickBooks. This report will mirror the SEFA form so auditors will receive the information in a timely manner. For any quarterly reports, the three months of reporting will again be reconciled prior to submission. All new processes and compliance will be updated in the policies and procedure manual. As the Executive Director prepares the 2024 budget, a reorganization of the business operations department will be sought. A new position to prepare and work on all federal grant tasks will be hired and report to the Business Operations Manager. In the meantime, the Business Operations Manager has started to develop checks and balances.
Corrective Action Plan Timeline:
Immediately
Designation Of Employee Position Responsible For Meeting Deadline:
Business Operations Manager