Finding 968606 (2021-005)

Program Name – Continuum of Care CFDA Number – 14.267 Pass-through Entity – N/A Finding Type – Material Weakness and Noncompliance Criteria – A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity. Condition and Description – For 3 grants the Organization drew funds prior to the period of performance. Questioned Costs – $85,606. Identification of a Repeat Finding – This is not a repeat finding and it was not as finding in the 2020 single audit. Cause/Effect The Organization drew funds prior to the operating start date of the grant. The draws were outside of the period of performance and are to be returned to the US Department of Housing and Urban Development. Recommendation – The Organization should ensure that grant funds are not drawn until after the operating start date of the grant. View of Responsible Official and Corrective Action Plan – We agree with the auditors' comments, and the following action will be taken to improve the situation. We have adjusted the Organization’s Accounting Policies & Procedure Manual to include a detailed review of the General Ledger detail supporting each draw request. Accounting personnel will ensure the Organization’s General Ledger specifically details the month of rent and utility allowance being provided so eligible costs are clearly delineated. Someone other than the preparer will perform a review of each drawdown request to ensure that costs are not being drawn down prior to the operating start date of each individual grant. This issue was discussed with HUD in March 2024 at which time procedural changes were implemented. Effective March 2024 the preparer is required to include the month of rent and utility allowance being provided in the General Ledger detail. A review of the General Ledger detail supporting each draw request will be performed by someone other than the preparer to ensure that costs are not being drawn down prior to the operating start date of each individual grant.