Finding Text
2023-005 (2021-006) – FEDERAL MATCHING COMPLIANCE
Type of Finding: (F, G) – Significant Deficiency in Internal Control Over Compliance of Federal Awards and Instance of Non-Compliance Related to Federal Awards
Funding Agency: U.S. Department of Housing and Urban Development (HUD)
Title: Emergency Solution Grant (ESG) Program
AL #: 14.231
Award #: 22-02-HDH-EHA-001
Award Period: July 1, 2022 – June 30, 2023
Questioned Costs: None
Statement of Condition
During our review of internal controls covering matching funds, we noted that Heading Home did not have formal documentation to demonstrate compliance with the matching requirements of the ESG program related to agreements 22-02-HDH-EHA-001.
Context
Heading Home was required to match $79,403, during fiscal year 2023. Heading Home was ultimately deemed to be compliant with the required match. Heading Home was ultimately deemed compliant with the required match, as it had secured significant funding from other non-federal sources. Additionally, they demonstrated compliance retroactively, further supporting their compliance. However, there was no formal process to document and track the matching requirement related to federal expenses.
Criteria
The ESG program requires recipients to match the funding provided by HUD. Per 24 CFR 576.201(a) “The recipient must make matching contributions to supplement the recipient's ESG program in an amount that equals the recipient's fiscal year grant for ESG.”
Cause
Heading Home lacks internal controls to ensure matching requirements are adequately evaluated, documented, and fulfilled.
Effect
When related matches for federal expenses are not tracking, Heading Home would not know if they are in compliance.
Recommendation
We recommend Heading Home develop and implement internal controls to ensure that matching requirements of the ESG program are fulfilled and appropriately documented.
View of Responsible Official and Corrective Action Plan
Heading Home management agrees with this finding and is currently developing controls to ensure compliance with all grant matching requirements. The new controls will address a thorough review of each grant agreement, documentation of matching funds contributed by the organization, including cash contributions, in-kind donations, and volunteer hours, and the method of tracking match progress by either spreadsheet and/or within the accounting system. An appropriate individual will be assigned the responsibility for monitoring compliance and the internal controls over matching compliance including document retention and recordkeeping.
Management is confident the match would have been met, but did not maintain the documentation necessary to prove this.
Management anticipates the corrective action plan will be fully implemented by July 1, 2025. The personnel responsible for overseeing implementation include Connie Chavez, Chief Executive Officer; Debbie Brickman, Chief Financial Officer; and Armando Sanchez, contract accountant team lead.