Finding Text
Period of Performance and Earmarking
Low-Income Home Energy Assistance ALN# 93.568
US Department of Health and Human Services
Passed through Oregon Housing and Community Services
Federal Grant/Contract Number: 2021ORLIEA, 2022ORLIEA, 2102ORE5C, 2101ORLWC5, 2102ORLWC6
Grant period – 2021 & 2022
Criteria – Per the 2021-2023 Master Grant Agreement. Subgrantee shall, and shall cause and shall require its subrecipients by contract to administer the program in a manner satisfactory to OHCS and in compliance with all program requirements, including but not limited to the following terms and conditions:
(1) Assure that program funds are used only for program services consistent with program requirements.
(3) Ensure that program funds are expended within the time limitations set by OHCS. Program funds not expended within the time period may be recaptured by OHCS.
(8) Be responsible for maintaining an internal controls framework, satisfactory to OHCS, which assures compliance with program requirements.
(10) Maintain accurate financial records satisfactory to the department, which document, among other things, the receipt and disbursement of all funds provided through the program by the department; and have an accounting system in place satisfactory to the department, which meets, among other things, generally accepted accounting principles.
Condition – Our testing noted the following exceptions:
• 22 instances where check request and invoice could not be produced from a sample of 62
• 4 instances where the journal entry and corresponding back up could not be produced from a sample of 23.
Moreover, $809,022 of costs associated with benefit services provided were not captured by the Agency. These amounts were noted during the review of Eligibility. However, these costs were noted by batches uploaded to the pass-through entity of the client. A detail of the expenses as it relates to payment of the disbursements to vendors could not be obtained and therefore not tested.
These amounts represented benefit payments to individuals. A detail of the expenses was not available, as records supporting the batches under which reimbursement was requested were not retained. As a result, the auditors were unable to test these payments. We were unable to obtain sufficient, appropriate audit evidence related to these amounts.
Cause – Supporting invoices or required documentation were not retained by the Agency to substantiate period of performance and earmarking costs. The Agency was not properly accounting for expenses incurred during the correct period.
Effect – Expenditures could be made outside of the period of performance or costs could be captured incorrectly resulting in noncompliance with earmarking. Not properly recording the expenditures could result in expenditures being booked in the wrong grant period.
Questioned Costs – $ 258,313, based on the populations sampled. An additional $809,022 was not recorded properly and was not able to be tested.
Recommendation – Documentation should be prepared, reviewed, and retained to support the period of performance and earmarking. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
The Agency should review applications for when benefit was incurred to ensure that expenses are recorded in the proper period as opposed to when paid.
Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.