Finding 583369 (2023-001)

Assistance Listing Number, Federal Agency, and Program Name - 21.023, U.S. Department of the Treasury, COVID-19 - Emergency Rental Assistance Program Federal Award Identification Number and Year - ERA0415, 2023 Pass-through Entity - Michigan State Housing Development Authority Finding Type - Significant deficiency Repeat Finding - Yes Prior Year Reference Number - 2022-001 Criteria - Per 2 CFR 200.303, an entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The federal award agreement includes specific allowable costs calculated in accordance with the U.S. Treasury guidance. Condition - Controls in place did not identify an inaccurate calculation of assistance. Identification of How Questioned Costs Were Computed - Not applicable Context - Out of a sample of 60 assistance case numbers selected for allowability testing, 2 samples were not properly calculated in accordance with the U.S. Treasury guidance. The inaccurate calculation caused an overpayment and under payment in rental assistance charged to the program. Cause and Effect - While the Organization had procedures in place to review the rental assistance calculations, management's review did not prevent inaccurate assistance payments. As a result, the Organization disbursed an amount that was not calculated in accordance with the U.S. Treasury guidance. Recommendation - We recommend the Organization review its procedures and controls to ensure calculations of eligible expenses are performed accurately. Views of Responsible Officials and Corrective Action Plan - The grant is complete for direct assistance to eligible participants.