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Findings and Questioned Costs for Federal AwardsC. Compliance FindingsCompliance findings relating to the major federal awards as required to be reported in accordance with Section 2 CFR-20.516(a) are:Department of the TreasuryAgency Rental Assistance ? CFDA 21.023See Finding 2021-001Questioned costs: $31,726Finding 2021-003 The Organization did not ensure that rental assistance payments were made to applicants with adequate third-party documentation of eligibility. No secondary review of the files was performed by supervisory personnel for the required compliance criteria and the checks issued were not reviewed in conjunction with the review of the application packet.Federal Awarding agency: US Department of the TreasuryPass-Through Entity: WA Department of Commerce2021-ComTRAP-CYS-RAApplicable Compliance Component: Eligibility and Internal ControlKnown Questioned Cost Amount: Application incorrect $ 9,169Incorrect number of months paid $22,557Total questioned costs $31,726Condition:We found the Organization had inadequate internal controls to ensure material compliance with the eligibility requirements. The program requires forms that must be completed and contemporaneously signed and dated. Case managers may take verbal information and are held to the same standard of contemporaneously signing and dating of the applicable documentation. From a random sample of 25 files from the 210 applicants, four files out of 25 (16%) did not contain adequate third-party supporting documentation to support eligibility. From that same sample, eight out of 25 files (32%) paid the incorrect amount of rent. There was no secondary review of files performed by supervisory personnel, so incomplete files were not corrected prior to the issuance of rental assistance payments. The check request for rental assistance payments was approved by the same person preparing the applicant file. Check signing supervisory personnel also did not review the applicant file.The prior year audit report was issued September 2022, the program ended June 2022. Therefore, the Organization did not have adequate time to implement any changes to the program.Cause: The Organization developed program guidelines, but did not incorporate adequate internal controls to ensure the compliance criteria that third-party evidence of existence was complete.Criteria:WA Department of Commerce Guidelines for the Treasury Rent Assistance Program (T-RAP), Version 4 August 2022:4.3.1 RentHouseholds can receive assistance with only future rent if the households do not have rental arrears and/or the provider has already assisted the household with rental arrears.An additional three months of future rent assistance can be provided if the household reapplies and is still experiencing housing instability, and has not already received the maximum amount of assistance.5.1 Documenting Household StatusHouseholds must demonstrate a risk of experiencing homelessness or housing instability. This MUST (auditor emphasis) be documented and may include:?Self-declaration signed and dated by the applicant. . .5.2 Documenting Income?. Adult household members that have no income can complete a self-declaration signed and dated by the applicant. A verbal verification of no income is allowable and MUST (auditor emphasis) be signed and dated by the case manager making the call.6.2 Payment Agreement FormThe Commence T-RAP Payment agreement Form MUST (auditor emphasis) be completed for households seeking financial assistance.Effect: From the sample audited, forty-four percent (44%) of the applicant files lacked adequate document to determine eligibility. Those files resulted in $85,414 in questioned costs in rental payment disbursements. Federal regulations require the auditor to issue a finding when the known or estimated questioned costs in a Singe Audit exceed $25,000.We question costs when we find an organization has not complied with grant regulations or when it does not have adequate documented to support expenditures.Recommendation:We recommend the Organization:? Establish internal controls to obtain adequate third-party evidence to support eligibility. This documentation is to be signed by the applicant and the landlord, the one exception is the case manager may sign, but must accept responsibility that the information is complete.? Supervisory personnel should perform a secondary review of files and provide contemporaneous documentation of such review.? Supervisory personnel in accounting should perform a secondary review of payment requests to supporting documentation.? Consult with the third-party US Department of the Treasury regarding whether the known questioned cost identified should be repaid.