Finding Text
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: ARRA Tax Credit Assistance Program (TCAP) Assistance Listing Number: 14.258 Federal Award Identification Number and Year: M-09-ES-35-0100 - 2022 Award Period: October 1, 2021 through September 30, 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters Criteria or specific requirement: A pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: ? Reviewing financial and programmatic (performance and special reports) required by the PTE. ? Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. ? Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Criteria or specific requirement (Continued): Grantees must perform asset management functions, or contract for performance of these services at the owner?s expense, to ensure compliance with Section 42 of the IRC and with the long term viability of projects funded by TCAP (ARRA, 123 Stat. 221). Condition: During our testing, we noted the Authority did not have adequate internal controls designed to properly monitor its? subrecipients. Questioned costs: None Context: During our testing of subrecipient monitoring, it was noted that there was not proper follow up conducted for one out of five subrecipients tested. The Authority did not follow its policies and procedures to ensure findings and questions were properly addressed by the subrecipient. The sample was a statistically valid sample. Cause: The Authority does not have a policy in place to ensure that subrecipients were responding to its monitoring reports in a timely manner. Effect: The lack of internal controls over this compliance requirement provides an opportunity for noncompliance by subrecipients of the grant. Recommendation: We recommend the Authority design controls to ensure subrecipients are responding to and addressing questions and findings within its monitoring reports. Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding. The Authority uses the Tracker database to track monitoring deadlines electronically. The Tracker automatically sends reminders to all staff in the department every two weeks to follow up with pending and outstanding monitoring issues. However, some staff were not using the Tracker as intended. The Director will enforce and monitor the use of the Tracker and ensure staff follow up on the monitorings by the required deadlines. Name of the contact person responsible for corrective action: Chief Housing Officer Planned completion date for corrective action plan: November 30, 2022