Finding Text
Current Year Finding - Major Federal Award Programs Audit 2022-001 ? Fraud Affecting Federal Program Federal Awarding Agency ? U.S. Department of the Treasury Pass-Through Entity ? Texas Department of Housing and Community Affairs Assistance Listing and Title ? 21.023 Emergency Rental Assistance Program Condition: Through an internal review, BR3T identified twenty cases where rental assistance payments were made for security deposits, utility deposits, and application fees based on fraudulent applications and false documentation submitted to BR3T by a contracted housing provider. For three of the cases, assistance payments amounted to $1,800 during the year ended December 31, 2022. For the remaining seventeen cases, assistance payments totaled $16,637.50 and were made in 2023. Criteria: Per 2 CRF section 200.516(a)(6), an auditor must report known or likely fraud affecting a federal program award. Effect: BR3T issued rental assistance payments to a housing provider based on fraudulent documentation. Cause of Condition: The housing provider supplied fraudulent documentation to BR3T in order to receive rental assistance payments. Recommendation: We recommend management terminate its relationship with the housing provider and return the federal funds to the grantor for the cases identified by BR3T. In addition, we recommend management enhance its procedures to verify and ensure that communication with clients is from a valid source. Management Response: Management accepts the finding and recommendation.