Finding 601136 (2022-001)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2023-07-09
Audit: 21274
Organization: Guild (MN)
Auditor: Eide Bailly LLP

AI Summary

  • Core Issue: Internal controls over compliance are weak, leading to untimely rent reasonableness tests and lack of documentation.
  • Impacted Requirements: All grant awards under CFDA # 14.267 must ensure rents do not exceed fair market values and are properly documented.
  • Recommended Follow-Up: Revise internal controls to ensure timely performance and review of rent reasonableness tests before payments are made.

Finding Text

Department of Housing and Urban Development, Passed through Hearth Connections, Continuum of Care, Federal Financial Assistance Listing/CFDA # 14.267 Special Tests and Provisions Material Weakness in Internal Controls Over Compliance Grant Award Number: Affects all grant awards included under Federal Financial Assistance Listing/ CFDA 14.267 on the Schedule. Criteria: When grant funds are used by the Organization to pay for rent, the Organization must ensure that the rents do not exceed rents currently being charged by the same owner for comparable unassisted units and the portion of grant funds may not exceed HUD-determined fair market rents. These calculations should be reviewed prior to the rent being paid. Condition: During our testing, we identified five instances where the participant?s file did not have documentation that the rent reasonableness test was performed in a timely manner. In addition, we identified 19 instances where the participant?s file did not have documentation that the rent reasonableness test was reviewed. Cause: The Organization?s controls did not operate as designed, which resulted in rent reasonableness tests not being performed timely and/or reviewed before the rent being paid. Effect: Inadequate internal controls over compliance could result in noncompliance with the federal program. Questioned Costs: N/A Context/Sampling: A nonstatistical sample of 34 participants out of 170 were selected for testing. Repeat Finding from Prior Years: Yes, prior year finding 2021-002. Recommendation: We recommend management revise their internal controls to make sure that rent reasonableness tests are performed and reviewed by the appropriate personnel prior to the rent being paid. Views of Responsible Officials: Management agrees with the finding.

Categories

Special Tests & Provisions HUD Housing Programs Material Weakness Internal Control / Segregation of Duties

Other Findings in this Audit

  • 24684 2022-002
    Significant Deficiency Repeat
  • 24685 2022-001
    Material Weakness Repeat
  • 24686 2022-002
    Significant Deficiency Repeat
  • 24687 2022-001
    Material Weakness Repeat
  • 24688 2022-001
    Material Weakness Repeat
  • 24689 2022-002
    Significant Deficiency Repeat
  • 24690 2022-001
    Material Weakness Repeat
  • 24691 2022-002
    Significant Deficiency Repeat
  • 24692 2022-002
    Significant Deficiency Repeat
  • 24693 2022-001
    Material Weakness Repeat
  • 24694 2022-001
    Material Weakness Repeat
  • 24695 2022-002
    Significant Deficiency Repeat
  • 24696 2022-001
    Material Weakness Repeat
  • 24697 2022-002
    Significant Deficiency Repeat
  • 24698 2022-001
    Material Weakness Repeat
  • 24699 2022-002
    Significant Deficiency Repeat
  • 24700 2022-002
    Significant Deficiency Repeat
  • 24701 2022-001
    Material Weakness Repeat
  • 24702 2022-001
    Material Weakness Repeat
  • 24703 2022-002
    Significant Deficiency Repeat
  • 24704 2022-001
    Material Weakness Repeat
  • 24705 2022-002
    Significant Deficiency Repeat
  • 24706 2022-002
    Significant Deficiency Repeat
  • 24707 2022-001
    Material Weakness Repeat
  • 24708 2022-001
    Material Weakness Repeat
  • 24709 2022-002
    Significant Deficiency Repeat
  • 24710 2022-001
    Material Weakness Repeat
  • 24711 2022-002
    Significant Deficiency Repeat
  • 24712 2022-002
    Significant Deficiency Repeat
  • 24713 2022-001
    Material Weakness Repeat
  • 601126 2022-002
    Significant Deficiency Repeat
  • 601127 2022-001
    Material Weakness Repeat
  • 601128 2022-002
    Significant Deficiency Repeat
  • 601129 2022-001
    Material Weakness Repeat
  • 601130 2022-001
    Material Weakness Repeat
  • 601131 2022-002
    Significant Deficiency Repeat
  • 601132 2022-001
    Material Weakness Repeat
  • 601133 2022-002
    Significant Deficiency Repeat
  • 601134 2022-002
    Significant Deficiency Repeat
  • 601135 2022-001
    Material Weakness Repeat
  • 601137 2022-002
    Significant Deficiency Repeat
  • 601138 2022-001
    Material Weakness Repeat
  • 601139 2022-002
    Significant Deficiency Repeat
  • 601140 2022-001
    Material Weakness Repeat
  • 601141 2022-002
    Significant Deficiency Repeat
  • 601142 2022-002
    Significant Deficiency Repeat
  • 601143 2022-001
    Material Weakness Repeat
  • 601144 2022-001
    Material Weakness Repeat
  • 601145 2022-002
    Significant Deficiency Repeat
  • 601146 2022-001
    Material Weakness Repeat
  • 601147 2022-002
    Significant Deficiency Repeat
  • 601148 2022-002
    Significant Deficiency Repeat
  • 601149 2022-001
    Material Weakness Repeat
  • 601150 2022-001
    Material Weakness Repeat
  • 601151 2022-002
    Significant Deficiency Repeat
  • 601152 2022-001
    Material Weakness Repeat
  • 601153 2022-002
    Significant Deficiency Repeat
  • 601154 2022-002
    Significant Deficiency Repeat
  • 601155 2022-001
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.267 Continuum of Care Program $315,992
93.150 Projects for Assistance in Transition From Homelessness (path) $145,050
14.231 Emergency Solutions Grant Program $42,606