Finding 553974 (2024-002)

Department of Housing and Urban Development Federal Financial Assistance Listing #14.241 Housing Opportunities for Persons with AIDS (HOPWA) Reporting Material Weakness in Internal Control Over Compliance and Material Noncompliance Criteria Grantees receiving funding through the HOPWA program must complete and submit the HUD-4155 Consolidated Annual Performance Report (APR) and Consolidated Annual Performance and Evaluation Report (CAPER) (Consolidated APR/CAPER) no later than 90 days after the close of their program or operating year. The Consolidate APR/CAPER provides information on program accomplishments that supports program evaluation and the ability to measure program beneficiary outcomes as related to maintaining housing stability, preventing homelessness, and improving access to care and support. Condition Certain information related to Short-Term Rent, Mortgage and Utility (STRMU) expenditures and Permanent Housing Placement (PHP) expenditures did not reconcile between the Consolidated APR/CAPER and the general ledger. In addition, the Consolidated APR/CAPER was not reviewed by someone other than the preparer prior to submission. Cause Internal controls in place did not ensure that the monthly expenditure information that was summarized and used to prepare the Consolidated APR/CAPER was reconciled to the general ledger. The monthly expenditure information did not take into account any reconciling or other entries recorded after the monthly information was generated which led to differences between the expenditures report in the Consolidated APR/CAPER and the actual STRMU and PHP expenditures as reflected in the general ledger. Internal controls were also not in place to ensure review of the supporting documentation and the Consolidated APR/CAPER prior to submission. Effect The lack of a reconciliation process from the expenditure information reported in the Consolidated APR/CAPER to the general ledger increases the risk that information contained in the Consolidated APR/CAPER and reported to the Department of Housing and Urban Development will contain errors that are not detected and corrected by employees. The Organization submitted a Consolidated APR/CAPER with incorrect information. Questioned Costs None reported. Context The STRMU expenditures and the PHP expenditures were both tested and both amounts reported in the Consolidated APR/CAPER did not agree to the general ledger. Repeat Finding From Prior Years No Recommendation We recommend that the Organization enhance internal control policies to ensure all amounts reported and submitted to federal agencies ar adequately documented and supported. We also recommend that the Organization enhance internal control policies to ensure that any required reports are properly reviewed prior to submission to ensure all key line items are correct and supported. This review should be documented. Views of Responsible Officials Management agrees with the finding and has immediately initiated corrected reports with the grantor and implemented extra procedures to review program required reporting between Program and Finance Leadership prior to submission.