Finding Text
Program Information:
U.S. Department of Housing and Urban Development
Indian Housing Block Grant
Assistance Listing #14.867
Award Numbers: 55-IH-53-18320
Award Period: 10/18/2011 – 09/30/2034
Criteria: Per the 2024 OMB Compliance Supplement:
Program regulations provide that a tribe may assume responsibilities for environmental review and decision making under the requirements of 24 CFR Part 58 or it may allow HUD to retain these responsibilities. The tribe is the responsible entity, whether or not a TDHE is authorized to receive IHBG grant amounts on behalf of the tribe (24 CFR section 58.2(a)(7)(ii)). If HUD retains the responsibilities, HUD will do reviews under the provisions of 24 CFR Part 50 (24 CFR section 1000.20). A HUD environmental review must be completed for any activities not excluded before a recipient may acquire, rehabilitate, convert, lease, repair, or construct property, or commit HUD or local funds (24 CFR section 1000.20(a)).
If the tribe assumes these responsibilities, the following applies: An environmental review must be prepared for each project or activity. Funds may not be committed to a grant activity or project before the completion of the environmental review and approval of the Request for Release of Funds (RROF) and environmental certification. If the responsible entity tribe determines that it met a criterion specified in the regulations that would qualify the project as exempt or qualify the project for certain categorical exclusions, the RROF and environmental certification requirements do not apply (24 CFR sections 58.34 and 58.35(b), 24 CFR section 1000.20(b)(3)).
2 CFR § 200.303 - Internal controls states, the non-federal entity must:
(a) Establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government,” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition/Context: During testing, we noted that 1 of 3 environmental review samples had expenditures prior to approval of the environmental review.
[ X ] Compliance Finding [ X ] Significant Deficiency [ ] Material Weakness
Cause: Lack of internal controls over environmental reviews.
Effect: If funds are expended prior to completion of the environmental review, they may be in violation of environmental laws and out of compliance with the program. The funds may also be used for projects where the review determines there were significant or unavoidable environmental impacts, and it should not have started.
Questioned Cost: N/A – Although expenditures were incurred prior to approval of the environmental review, the costs tested were ultimately allowable under the program, supported by adequate documentation, and not prohibited by regulation. Therefore, no costs required adjustment or repayment.
Prior Year Finding: No.
Recommendation: We recommend YNHA ensure environmental reviews are approved prior to beginning work on the project.
Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.