Finding 574044 (2022-003)

Federal Program Information Federal Agency: Department of the Treasury Award Name: COVID-19 Emergency Rental Assistance Program Assistance Listing Number: 21.023 Award Year: 2022 Compliance Requirement: Reporting Type of Finding Compliance Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement Per 2 CFR 200.303, the County is required to establish and maintain effective internal controls over federal programs to provide reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of the award. Program guidance requires timely and accurate submission of quarterly financial and performance reports, as well as monthly performance reports, to the U.S. Department of the Treasury in accordance with established deadlines. Condition and Context During our testing of the reporting compliance requirement for ERA 1 and ERA 2 awards over the quarterly financial reports, quarterly performance reports and monthly performance reports, we noted the following exceptions: • Of the 2 quarterly financial reports (SF-425) tested, both the ERA 1 and ERA 2 reports for quarter end 9/30/2021 were submitted on 12/31/2021 after the required deadline of 10/29/2021. The County indicated the late submissions were due to the inability to retrieve the information required to compile the reports due to an ERAP system error. • Of the 4 monthly performance reports tested, the County was unable to provide documentation showing the date of submission for the ERA 1 and ERA 2 reports for the month of October 2021. The remaining 2 monthly performance reports for the month of April 2022 were submitted in July 2022, and no approved extension was on file. • Of the 2 quarterly performance reports tested, the ERA 1 report for quarter end 9/30/2021 was submitted on 12/31/2021 after the required deadline of 10/29/2021 due to the inability to retrieve the information required to compile the reports due to an ERA system error. The other quarterly performance report tested for ERA 2 for the quarter ending 6/30/2022 was not submitted on time as evidence by a notification email from Treasury after the due date had passed. Cause The County did not establish sufficient procedures or controls to ensure timely submission of all required reports or retention of sufficient evidence to support timeliness of filing. In addition, the County did not have a contingency process in place to address system errors affecting timely reporting. Effect or Potential Effect Due to the weakness in internal controls noted above, there is an increased risk that required program information may not be reported to the granting agency in a timely manner consistent with federal reporting requirements. Additionally, the lack of supporting documentation impedes the ability to verify compliance with reporting deadlines. No questioned costs are reported as the requirement is procedural in nature. Recommendation The County should strengthen internal controls in place over the timely submission and documentation of required reports for the program. This should include maintaining sufficient evidence of the date and method of submission and considering the implementation of backup procedures in the event system issues affect timely reporting. The County should ensure any delays are documented and, if necessary, approved by the granting agency in writing. Views of Responsible Official and Planned Corrective Action Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.