Finding Text
United States Department of the Treasury
Reference Number: 2023-009
Program: 21.026 COVID-19 Homeowner Assistance Fund Program
Federal Award Number: HAF0034
Type of Finding: Noncompliance; Significant Deficiency in Internal Controls over Compliance
Compliance Requirement: Reporting
Condition: Testing of DSHA’s December 31, 2022 and June 30, 2023 HAF quarterly reports revealed the reports submitted by DSHA reported the same amounts as expended and obligated, for Administrative Expenses and Services, and Counseling & Education. During the year ended June 30, 2023, DSHA entered various contracts for the operation of the program. DSHA’s Annual Reporting did not include data on Socially Disadvantaged Individuals assisted and Area Median Income of households assisted as required by the Program reporting requirements. DSHA did not maintain contemporaneously prepared supporting documentation for the December 31, 2022 and June 30, 2023 quarterly reports or the June 30, 2023 annual report. Criteria: The United States Department of the Treasury Homeowner Assistance Fund Guidance on Participant Compliance and Reporting Responsibilities revised on July 15, 2022, includes the following definitions: Expenditure/Expended means any HAF assistance that has been spent by a HAF participant and/or Subrecipient. Please note, cumulative Expenditures cannot exceed cumulative Obligations. Obligation/Obligated means an order placed for property and services, contracts and subawards made, and similar transactions that require payment (see 2 CFR § 200.1.). Obligated funds include funds that have been Expended. Examples of obligated funds include: HAF funds that have been committed, pledged, or otherwise promised, in writing, to a specific individual or entity as part of a HAF program; HAF funds that have been set aside to cover obligations arising from loan guarantees; HAF funds that have been committed, pledged, or otherwise promised, in writing, as part of a transaction; and HAF funds that have been committed, pledged, or promised, in writing, for allowable administrative expenses (e.g., an executed contract for services). The Homeowner Assistance Fund: Annual Report User Guide Issued October 14, 2022 (Updated October 13, 2023), requires the reporting of outcomes for assistance provided to Homeowners by Area Median Income and Socially Disadvantaged Individuals. Questioned Costs: None Effect: Reports required by the U.S. Treasury were not supported by contemporaneously prepared supporting documentation. Reports submitted to the U.S. Treasury did not include accurate reporting of program obligations. Cause: The report preparation process did not consider executed contracts and agreements to be obligations. Recommendation: We recommend DSHA enhance its policies and procedures for preparing and approving required reports prior to submission.