Finding Text
Criteria: United Way of Monterey County (?UWMC?) must establish and maintain effective internal controls over subrecipient monitoring of Emergency Rental Assistance Program (ERAP) federal awards with pass through agencies, contracted with UWMC to assist in administering ERAP awards. Condition: UWMC utilizes partnering agencies to approve eligibility and distribute ERAP funding. The partnering agencies submit the approved recipient?s information and the total approved financial assistance through an online software, maintained by UWMC. UWMC then reimburses the agencies for the approved financial assistance and related administrative costs, based on a contracted amount. Cause: In October 2021, UWMC discontinued the use of its initial online software, Smart Referral Network (SRN) software, as it was determined to be ineffective and was not being properly utilized by the partnering agencies. From October 2021 through March 2022, UWMC requested all partnering agencies to submit total ERAP expenditures directly to UWMC for reimbursement, on a monthly basis. Effective March 2022, a new online software (Neighborly) was employed and is required to be used by the partnering agencies. During the change in systems, no formal reconciliation was performed by UWMC to verify total expenditures accrued for by UWMC agreed to total expenditures by the partnering agencies. Effect: Expenditures and related payables accrued for by UWMC did not agree to the records of the partnering agencies for the total ERAP expenditures for the fiscal year ended June 30, 2022. This resulted in an overstatement of ERAP award expenditures and accrued payables to the partnering agencies of $967,865. Recommendation: We recommend UWMC ensure timely reconciliations are completed with the partnering agencies. We recommend UWMC require the partnering agencies to submit all expenditures and required recipient information through the online software to constitute an allowable reimbursement. This will ensure the use of federal funds by partnering agencies is accurately accounted for and that proper documentation is maintained for approved ERAP recipients.