Finding Text
Department of Housing and Urban Development
Continuum of Care, Federal Financial Assistance Listing 14.267
Special Tests
Material Weakness in Internal Control 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 Catholic Charities to pay for rent, Catholic Charities 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 nine instances where the participant’s file did not have documentation that the rent reasonableness test was performed in a timely manner.
Cause: Catholic Charities’ internal controls did not operate as designed, which resulted in rent reasonableness tests not being performed timely and/or reviewed before the rent was paid.
Effect: Inadequate internal controls over compliance could result in noncompliance with the federal program.
Questioned Costs: None reported.
Context/Sampling: A nonstatistical sample of 60 were selected out of 510 rent payments that were paid.
Repeat Finding from Prior Years: No
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 is in agreement with this finding.