EIN: 330492302
UEI: LS4JASCRZ5M7
Audited by: BDO USA, PC
Oversight agency: 14 [Department of Housing and Urban Development]
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Data as of August 30, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on September 24, 2025. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by March 24, 2026 (159 days ago).
What is a management decision? →We noted that the Village allocated payroll expenditures to Emergency Solutions Grants Program, Continuum of Care Program, and Health Center Cluster during 2024 that lacked adequate or timely documentation. During our testing we noted instances where supervisor did not approve timesheets, instances where the incorrect allocation rate was utilized, and instances where attestations were not completed timely to support employee’s time allocated to the grant for reimbursement. • For Emergency Solutions Grants Program: o 41 out of 60 selections did not have timely completion of attestations • For Continuum of Care Program: o 2 out of 100 selections utilized the incorrect allocation rate to the grant. • For Continuum of Care Program in our testing of Matching Costs: o 2 out of 60 selections did not have approved timesheets. o 2 out of 60 selections did not have timely completion of attestations. o 1 out of 60 selections utilized the incorrect allocation rate. • For Health Center Program Cluster: o 1 out of 60 selections utilized the incorrect allocation rate to the grant. o 14 out of 60 selections did not have timely completion of attestations. Cause: The Village did not have adequate policies/procedures in place to timely prepare and complete timesheet attestations and approvals and reconcile to actual expenditures charged. Additionally, the Village relied heavily on manual processes that are more prone to error and did not have an adequate review process to identify and correct calculation errors. Effect or Potential Effect: Without adequate controls in place to detect calculation errors and ensure attestations and timesheets were reviewed in a timely manner, the Village could incorrectly charge expenditures to the Federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Emergency Solutions Grants Program: None Continuum of Care Program Known Questioned Costs: $1,575 Continuum of Care Program Likely Questioned Costs: $172,053 Health Center Program Cluster: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2024 were $377,797. Payroll costs including fringe benefits for the Continuum of Care Program in 2024 were $1,217,865. Matching costs for the Continuum of Care Program in 2024 were $1,896,728. Payroll costs including fringe benefits for the Health Center Program Cluster in 2024 were $1,714,998. Any costs not adequately supported by approved timesheet allocations or in excess of supported allocations are considered questioned costs. Repeat Finding: 2023-003, 2023-004, 2023-005 Recommendation: We recommend that the Village implement policies and procedures to ensure attestations are completed timely (i.e. quarterly) and to ensure timely review for any necessary budget to actual adjustments. Additionally, we recommend implementing system improvements to reduce manual entry and establishing policies to review reimbursement calculations before submission. Views of Responsible Officials:
Show full finding ▾Hide full finding ▴Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.231, 14.267, 93.224 & 93.527 Program: Emergency Solutions Grant Program, Continuum of Care Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HH-21-03.4, CA0802L9D012214, CA0802L9D012315, CA1348L9D012208, CA1348L9D012309, CA1510L9D012207, CA1510L9D012308, CA1883L9D012203, CA1883L9D012304, HHI-24-09, SIHI-25-07, HHI-24-04, SIHI-25-18, H80CS10606-16-00, H80CS10606-17-04, H80CS10606-17-05, H8GCS48224, H8L50900-01-00, H8NCS53911-01-04 Criteria: The Uniform Guidance in Subpart E 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Further, matching funds must also be allowable under Subpart E – Cost Principles. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the recipient or subrecipient; and (vi) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (vii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity performed; (B) Significant changes in the related work activity (as defined by the recipient’s or subrecipient’s written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient’s or subrecipient’s system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition: We noted that the Village allocated payroll expenditures to Emergency Solutions Grants Program, Continuum of Care Program, and Health Center Cluster during 2024 that lacked adequate or timely documentation. During our testing we noted instances where supervisor did not approve timesheets, instances where the incorrect allocation rate was utilized, and instances where attestations were not completed timely to support employee’s time allocated to the grant for reimbursement. • For Emergency Solutions Grants Program: o 41 out of 60 selections did not have timely completion of attestations • For Continuum of Care Program: o 2 out of 100 selections utilized the incorrect allocation rate to the grant. • For Continuum of Care Program in our testing of Matching Costs: o 2 out of 60 selections did not have approved timesheets. o 2 out of 60 selections did not have timely completion of attestations. o 1 out of 60 selections utilized the incorrect allocation rate. • For Health Center Program Cluster: o 1 out of 60 selections utilized the incorrect allocation rate to the grant. o 14 out of 60 selections did not have timely completion of attestations. Cause: The Village did not have adequate policies/procedures in place to timely prepare and complete timesheet attestations and approvals and reconcile to actual expenditures charged. Additionally, the Village relied heavily on manual processes that are more prone to error and did not have an adequate review process to identify and correct calculation errors. Effect or Potential Effect: Without adequate controls in place to detect calculation errors and ensure attestations and timesheets were reviewed in a timely manner, the Village could incorrectly charge expenditures to the Federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Emergency Solutions Grants Program: None Continuum of Care Program Known Questioned Costs: $1,575 Continuum of Care Program Likely Questioned Costs: $172,053 Health Center Program Cluster: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2024 were $377,797. Payroll costs including fringe benefits for the Continuum of Care Program in 2024 were $1,217,865. Matching costs for the Continuum of Care Program in 2024 were $1,896,728. Payroll costs including fringe benefits for the Health Center Program Cluster in 2024 were $1,714,998. Any costs not adequately supported by approved timesheet allocations or in excess of supported allocations are considered questioned costs. Repeat Finding: 2023-003, 2023-004, 2023-005 Recommendation: We recommend that the Village implement policies and procedures to ensure attestations are completed timely (i.e. quarterly) and to ensure timely review for any necessary budget to actual adjustments. Additionally, we recommend implementing system improvements to reduce manual entry and establishing policies to review reimbursement calculations before submission. Views of Responsible Officials:
Finding Number 2024-003: Activities Allowed or Unallowed; Allowable Costs/Cost Principles and Matching – Significant Deficiency in Internal Control Over Compliance and Noncompliance Corrective Action: In the immediate term, oversight of the manual process for preparing the Time & Allocation Excel Sheet and Request for Reimbursement (RFR) payroll calculations will be strengthened. Policies will be implemented to ensure quarterly attestations, timely budget-to-actual reconciliations, and documented review of reimbursement requests. Management will also work with the Payroll Service Provider to implement software upgrades that improve allocation accuracy and reduce errors through straight-through-process improvements. Name of Responsible Individual(s): Jason Brenier, Judy Bokhari, and Luz Gonzales-Toscano Anticipated Completion Date: January 2025 – immediate term and December 2026 software implementation.
2023-003, 2023-004, 2023-005
We noted that the Village allocated expenditures that were incurred prior to the start of the funding to Continuum of Care Program and Health Center Program Cluster during 2024. During our testing, we noted instances of costs that were incurred prior to the start of the applicable funding periods and were not approved in accordance with §200.308. • For Continuum of Care Program: o 1 out of 60 samples selected for testing had costs claimed in the incorrect grant period. • For Health Center Program Cluster: o 5 of the 74 samples selected for testing had costs claimed in the incorrect grant period. Cause: Due to the manual nature of the allocation process, the Village misapplied the prorated days at the end of certain pay periods. Specifically, the portion of payroll costs attributable to the final days of a pay period was assigned to the subsequent grant period, rather than to the correct, preceding period of performance. This resulted in certain payroll costs being reported and claimed in the wrong grant period, leading to inaccuracies in the allocation of expenditures across periods of performance. Additionally, the client charged rental assistance expense to a subsequent grant period. As a result, these costs were claimed in the incorrect grant period, leading to inaccuracies in the allocation of expenditures across periods of performance. Effect or Potential Effect: Without adequate controls in place to ensure costs are reported in the proper period of performance, the Village could incorrectly charge expenditures to the federal programs. Questioned Costs: Continuum of Care Program: None above the $25,000 reporting threshold. Health Center Program Cluster: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Villages compliance with specified requirements not using a statistically valid sample. Total costs under the Continuum of Care Program were $5,000,960. Total costs under the Health Center Program Cluster were $1,682,732. Repeat Finding: 2023-008 Recommendation: We recommend that only costs incurred during the appropriate funding period be charged, and that this be appropriately documented and reviewed. Views of Responsible Officials:
Show full finding ▾Hide full finding ▴Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.267, 93.224 & 93.527 Program: Continuum of Care Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: CA0802L9D012214, CA0802L9D012315, CA1348L9D012208, CA1348L9D012309, CA1510L9D012207, CA1510L9D012308, CA1883L9D012203, CA1883L9D012304, HHI-24-09, SIHI-25-07, HHI-24-04, SIHI-25-18, H80CS10606-16-00, H80CS10606-17-04, H80CS10606-17-05, H8GCS48224, H8L50900-01-00, H8NCS53911-01-04 Criteria: Where a funding period is specified, a recipient may charge to the grant only allowable costs resulting from obligations incurred during the funding period and any pre-award costs authorized by the Federal awarding agency. Unless the Federal awarding agency authorizes an extension, a recipient shall liquidate all obligations incurred under the award no later than 90 calendar days after the funding period or the date of completion as specified in the terms and conditions of the award or in agency implementing instructions. Condition: We noted that the Village allocated expenditures that were incurred prior to the start of the funding to Continuum of Care Program and Health Center Program Cluster during 2024. During our testing, we noted instances of costs that were incurred prior to the start of the applicable funding periods and were not approved in accordance with §200.308. • For Continuum of Care Program: o 1 out of 60 samples selected for testing had costs claimed in the incorrect grant period. • For Health Center Program Cluster: o 5 of the 74 samples selected for testing had costs claimed in the incorrect grant period. Cause: Due to the manual nature of the allocation process, the Village misapplied the prorated days at the end of certain pay periods. Specifically, the portion of payroll costs attributable to the final days of a pay period was assigned to the subsequent grant period, rather than to the correct, preceding period of performance. This resulted in certain payroll costs being reported and claimed in the wrong grant period, leading to inaccuracies in the allocation of expenditures across periods of performance. Additionally, the client charged rental assistance expense to a subsequent grant period. As a result, these costs were claimed in the incorrect grant period, leading to inaccuracies in the allocation of expenditures across periods of performance. Effect or Potential Effect: Without adequate controls in place to ensure costs are reported in the proper period of performance, the Village could incorrectly charge expenditures to the federal programs. Questioned Costs: Continuum of Care Program: None above the $25,000 reporting threshold. Health Center Program Cluster: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Villages compliance with specified requirements not using a statistically valid sample. Total costs under the Continuum of Care Program were $5,000,960. Total costs under the Health Center Program Cluster were $1,682,732. Repeat Finding: 2023-008 Recommendation: We recommend that only costs incurred during the appropriate funding period be charged, and that this be appropriately documented and reviewed. Views of Responsible Officials:
Finding Number 2024-004: Period of Performance and Allowable Costs/Cost Principles – Significant Deficiency in Internal over Compliance Corrective Action: Management will enhance oversight of payroll allocations and rental assistance charges, update written procedures, and train Grants Accounting staff on period of performance requirements, cost allowability, documentation, and grant closeout. Monthly meetings with grantors have been initiated to monitor spenddown, address processing issues, and ensure proper cut-off. Management will also collaborate with the Payroll Service Provider to improve allocation accuracy and reduce manual errors. A documented review and approval process at period-end will further ensure costs are charged to the correct funding period and comply with federal requirements. Name of Responsible Individual(s): Jason Brenier, Judy Bokhari, Luz Gonzales-Toscano Anticipated Completion Date: January 2025 – immediate term and December 2026 software implementation.
2023-008
During our testing of 2024 costs, we noted that 3 of the 60 payroll transactions selected for testing within the Health Center Program Cluster were incurred in 2023. This practice is not in accordance with GAAP, which require that costs be recorded in the period in which they are incurred. Cause: The Village did not have adequate policies and procedures in place to ensure that federal expenditures are properly accrued and recorded in the fiscal year in which the costs are actually incurred. Effect or Potential Effect: Failure to accrue costs in accordance with GAAP may result in expenditures being materially misstated on the SEFA that could lead to inaccurate reporting to the federal agencies. Questioned Costs: Health Center Program Cluster Known Questioned Costs: $473 Health Center Program Cluster Likely Questioned Costs: $26,444 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Health Center Program Cluster in 2024 were $1,714,998. Repeat Finding: 2023-001 Recommendation: We recommend Village implement policies and procedures to accrue for federal expenditures in the period the costs were incurred to ensure costs are being recorded in accordance with GAAP and the SEFA is representative of all federal expenditures incurred in the reporting year. Views of Responsible Officials:
Show full finding ▾Hide full finding ▴Federal Agencies: Department of Health and Human Services Federal Assistance Listing Numbers: 93.224 & 93.527 Program: Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: H80CS10606-16-00, H80CS10606-17-04, H80CS10606-17-05, H8GCS48224, H8L50900-01-00, H8NCS53911-01-04 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.403(e), costs must be in accordance with Generally Accepted Accounting Procedures (GAAP) to be allowable under Federal awards. Condition: During our testing of 2024 costs, we noted that 3 of the 60 payroll transactions selected for testing within the Health Center Program Cluster were incurred in 2023. This practice is not in accordance with GAAP, which require that costs be recorded in the period in which they are incurred. Cause: The Village did not have adequate policies and procedures in place to ensure that federal expenditures are properly accrued and recorded in the fiscal year in which the costs are actually incurred. Effect or Potential Effect: Failure to accrue costs in accordance with GAAP may result in expenditures being materially misstated on the SEFA that could lead to inaccurate reporting to the federal agencies. Questioned Costs: Health Center Program Cluster Known Questioned Costs: $473 Health Center Program Cluster Likely Questioned Costs: $26,444 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Health Center Program Cluster in 2024 were $1,714,998. Repeat Finding: 2023-001 Recommendation: We recommend Village implement policies and procedures to accrue for federal expenditures in the period the costs were incurred to ensure costs are being recorded in accordance with GAAP and the SEFA is representative of all federal expenditures incurred in the reporting year. Views of Responsible Officials:
Finding Number 2024-005: Activities Allowed or Unallowed, Allowable Costs/Cost Principles – Significant Deficiency in Internal Control Over Compliance and Noncompliance Corrective Action: To ensure compliance with GAAP and accurate reporting on the SEFA, Management will implement formal policies and procedures to accrue federal expenditures in the period in which costs are incurred. Grants Accounting will review payroll transactions and related fringe benefits at period-end to confirm proper accrual and recording. Management will also collaborate with the Payroll Service Provider to enhance accuracy and reduce errors in payroll allocations. These actions are intended to ensure federal expenditures are recorded in the correct fiscal year and prevent recurrence of prior year findings. Name of Responsible Individual(s): Jason Brenier, Judy Bokhari, and Luz Gonzales-Toscano Anticipated Completion Date: January 2025 – immediate term and December 2026 software implementation.
2023-001
In accordance with 24 CFR §578.51(g), we noted that: • 5 out of 60 rental payments tested did not have a comparable unit analysis conducted. • 23 out of 60 rental payments did not have a comparable unit analysis completed in a timely manner prior to the tenant’s move-in or prior to increases in rent. • 1 out of 60 rental payments tested did not have documentation for amounts charged (such as lease agreements, rent increase letters, or invoices). • 6 out of 60 rental payments tested had errors in the rent reasonableness forms. • 3 of the 55 rental payments that did have rent reasonableness performed did not have rent reasonableness analyzed in the past 12-months of the rent payment. Cause: The Village did not appropriately retain or produce documentation verifying that rent reasonableness was assessed prior to move-in or during changes to lease terms, as required by its policies. Furthermore, not all supporting documentation for initial or changes to lease terms was obtained or retained. Effect or Potential Effect: The insufficient retention or creation of rent reasonableness forms and supporting documentation has led to ineffective operation of rent reasonableness controls, thereby not appropriately identifying rental amounts for the Village’s clients in need of rental assistance. Consequently, this deficiency could result in incorrect charges being applied to the Federal program. Questioned Costs: Known Questioned Costs: $6,678 Likely Questioned Costs: $170,185 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Questioned costs were determined as the amounts paid without supporting rent reasonableness documentation. The total costs subject to rent reasonableness amounted to $2,429,908. Repeat Finding: 2023-006 Recommendation: We recommend that the Village enhance existing policies to ensure rent reasonableness is performed on all rental assistance. In addition, we recommend management ensures determinations are performed prior to move-in or rent changes being charged, and documentation is maintained for both the rent amount and reasonableness of the rent. We further recommend a policy be enacted for reviewing rent reasonableness on a periodic basis (i.e. annually) for those tenants that have not had a change in rent during the period. Views of Responsible Officials:
Show full finding ▾Hide full finding ▴Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: CA0802L9D012214, CA0802L9D012315, CA1348L9D012208, CA1348L9D012309, CA1510L9D012207, CA1510L9D012308, CA1883L9D012203, CA1883L9D012304, HHI-24-09, SIHI-25-07, HHI-24-04, SIHI-25-18 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR §578.51(g), “HUD will only provide rental assistance for a unit if the rent is reasonable. The recipient or subrecipient must determine whether the rent charged for the unit receiving rental assistance is reasonable in relation to rents being charged for comparable unassisted units, taking into account the location, size, type, quality, amenities, facilities, and management and maintenance of each unit. Reasonable rent must not exceed rents currently being charged by the same owner for comparable unassisted units.” Condition: In accordance with 24 CFR §578.51(g), we noted that: • 5 out of 60 rental payments tested did not have a comparable unit analysis conducted. • 23 out of 60 rental payments did not have a comparable unit analysis completed in a timely manner prior to the tenant’s move-in or prior to increases in rent. • 1 out of 60 rental payments tested did not have documentation for amounts charged (such as lease agreements, rent increase letters, or invoices). • 6 out of 60 rental payments tested had errors in the rent reasonableness forms. • 3 of the 55 rental payments that did have rent reasonableness performed did not have rent reasonableness analyzed in the past 12-months of the rent payment. Cause: The Village did not appropriately retain or produce documentation verifying that rent reasonableness was assessed prior to move-in or during changes to lease terms, as required by its policies. Furthermore, not all supporting documentation for initial or changes to lease terms was obtained or retained. Effect or Potential Effect: The insufficient retention or creation of rent reasonableness forms and supporting documentation has led to ineffective operation of rent reasonableness controls, thereby not appropriately identifying rental amounts for the Village’s clients in need of rental assistance. Consequently, this deficiency could result in incorrect charges being applied to the Federal program. Questioned Costs: Known Questioned Costs: $6,678 Likely Questioned Costs: $170,185 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Questioned costs were determined as the amounts paid without supporting rent reasonableness documentation. The total costs subject to rent reasonableness amounted to $2,429,908. Repeat Finding: 2023-006 Recommendation: We recommend that the Village enhance existing policies to ensure rent reasonableness is performed on all rental assistance. In addition, we recommend management ensures determinations are performed prior to move-in or rent changes being charged, and documentation is maintained for both the rent amount and reasonableness of the rent. We further recommend a policy be enacted for reviewing rent reasonableness on a periodic basis (i.e. annually) for those tenants that have not had a change in rent during the period. Views of Responsible Officials:
Finding Number 2024-006: Special Tests and Provisions – Material Weakness in Internal Control Over Compliance and Noncompliance Corrective Action: Management will enhance and enforce policies to ensure HUD-compliant rent reasonableness, conduct thorough reviews of tenant files with landlords and property managers, and implement additional oversight procedures for accounting and documentation of tenant rents. FJV compliance staff will perform quarterly checks with sub-recipients, and rent reasonableness forms will be reviewed and updated annually. These measures aim to strengthen controls, ensure compliance, and prevent incorrect charges to federal programs. Name of Responsible Individual(s): Jason Brenier, Maria Rafanan, Jesse Casement, Christina Madriles, Tatyana Gavino and Judy Bokhari Anticipated Completion Date: June 2025
2023-006
Expenditures under the award were not liquidated within the required timeline after the end of the period of performance for the HHI-24-09 award. We noted that 12 out of 14 samples selected for testing towards the grant were not liquidated in accordance with §200.344. Cause: The Village did not have policies and procedures in place to ensure that payments were made within 120 calendar days after the end of the period of performance. Effect or Potential Effect: Without adequate controls in place to timely liquidate expenditures, the Village is not in compliance with §200.344. Questioned Costs: Known Questioned Costs Continuum of Care: $5,881 Likely Questioned Costs Continuum of Care: $513,739 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Total costs under the HHI-24-09 award in 2024 were $535,495. Repeat Finding: 2023-007 Recommendation: We recommend that costs are liquidated timely, and policies and procedures are updated to ensure all obligations are liquidated within 120 days after the end of the period of performance. Views of Responsible Officials:
Show full finding ▾Hide full finding ▴Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: HHI-24-09 Criteria: Per 2 CFR §200.344(b): “Unless the Federal awarding agency or pass-through entity authorizes an extension, a non-Federal entity must liquidate all financial obligations incurred under the Federal award no later than 120 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award.” Condition: Expenditures under the award were not liquidated within the required timeline after the end of the period of performance for the HHI-24-09 award. We noted that 12 out of 14 samples selected for testing towards the grant were not liquidated in accordance with §200.344. Cause: The Village did not have policies and procedures in place to ensure that payments were made within 120 calendar days after the end of the period of performance. Effect or Potential Effect: Without adequate controls in place to timely liquidate expenditures, the Village is not in compliance with §200.344. Questioned Costs: Known Questioned Costs Continuum of Care: $5,881 Likely Questioned Costs Continuum of Care: $513,739 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Total costs under the HHI-24-09 award in 2024 were $535,495. Repeat Finding: 2023-007 Recommendation: We recommend that costs are liquidated timely, and policies and procedures are updated to ensure all obligations are liquidated within 120 days after the end of the period of performance. Views of Responsible Officials:
Finding Number 2024-007: Period of Performance – Material Weakness in Internal Control over Compliance and Noncompliance Corrective Action: To ensure compliance with 2 CFR §200.344(b), Management will implement formal policies and procedures requiring that all financial obligations under federal awards be liquidated within 120 calendar days after the end of the period of performance. Grants Accounting will establish a documented review and tracking process to monitor grant deadlines, identify outstanding obligations, and ensure timely payments. These actions are intended to strengthen controls, ensure timely liquidation of expenditures, and prevent recurrence of prior year findings. Name of Responsible Individual(s): Jason Brenier, Shelly Courtois, Judy Bokhari, and Sandra Shannon Anticipated Completion Date: September 2025
2023-007
We noted that the Village’s controls did not identify certain costs within the matching pool that were unallowable under the matching cost principles. However, the matching pool exceeded the required match, and management was able to fulfil the match without the unallowable costs in the pool. Cause: The Village did not have adequate policies and procedures in place to ensure that only allowable costs were included in the matching pool used to satisfy matching requirements. Potential Effect: Without adequate controls in place, the Village could utilize costs for matching requirements that are not in compliance with §578.73. This may impact the Village’s ability to meet the required matching threshold, result in repayment of funds, and could affect future funding. Questioned Costs: None. Context: The Village incurred total costs that exceeded the required match. As a result, they were able to offset any unallowable costs, while still meeting the required match and remaining in compliance at year end. Repeat Finding: Not a repeat finding. Recommendation: We recommend Village enhance their policies and procedures to ensure that only allowable costs are utilized to satisfy matching requirements. Views of Responsible Officials:
Show full finding ▾Hide full finding ▴Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: CA0802L9D012214, CA0802L9D012315, CA1348L9D012208, CA1348L9D012309, CA1510L9D012207, CA1510L9D012308, CA1883L9D012203, CA1883L9D012304, HHI-24-09, SIHI-25-07, HHI-24-04, SIHI-25-18 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR §578.73(b): “Notwithstanding 2 CFR 200.306(b)(5), a recipient or subrecipient may use funds from any source, including any other federal sources (excluding Continuum of Care program funds), as well as State, local, and private sources, provided that funds from the source are not statutorily prohibited to be used as a match. The recipient must ensure that any funds used to satisfy the matching requirements of this section are eligible under the laws governing the funds in order to be used as matching funds for a grant awarded under this program.” Condition: We noted that the Village’s controls did not identify certain costs within the matching pool that were unallowable under the matching cost principles. However, the matching pool exceeded the required match, and management was able to fulfil the match without the unallowable costs in the pool. Cause: The Village did not have adequate policies and procedures in place to ensure that only allowable costs were included in the matching pool used to satisfy matching requirements. Potential Effect: Without adequate controls in place, the Village could utilize costs for matching requirements that are not in compliance with §578.73. This may impact the Village’s ability to meet the required matching threshold, result in repayment of funds, and could affect future funding. Questioned Costs: None. Context: The Village incurred total costs that exceeded the required match. As a result, they were able to offset any unallowable costs, while still meeting the required match and remaining in compliance at year end. Repeat Finding: Not a repeat finding. Recommendation: We recommend Village enhance their policies and procedures to ensure that only allowable costs are utilized to satisfy matching requirements. Views of Responsible Officials:
Finding Number 2024-008: Matching – Significant Deficiency in Internal Control Over Compliance Corrective Action: The inclusion of certain costs in the matching pool was due to a misinterpretation of the requirement; the federal agency has accepted this approach for multiple years, and there was no impact as the Village exceeded the required match due to its commitment to serving the homeless. Management will further enhance its policies and procedures and implement a documented review process to ensure only allowable costs are included in the matching pool. Name of Responsible Individual(s): Jason Brenier, Judy Bokhari and Luz Gonzales-Toscano Anticipated Completion Date: June 2025
FAC accepted this audit on September 30, 2024 — management decision was due March 30, 2025.
We noted that the Village allocated payroll expenditures to Housing Opportunities for Persons with AIDS and the Continuum of Care Program during 2023 using allocations that lacked adequate support. During our testing we noted instances where employees did not track their actual time and effort for allocation to the grant, instances where the incorrect allocation rate was utilized, and/or allocations were not fully reviewed and approved. • For Housing Opportunities for Persons with AIDS: o 3 out of 60 selections had approved timesheet allocations that supported a lower rate than those utilized. o 1 out of 60 selections did not maintain a timesheet allocation. o 3 out of 60 selections did not maintain documentation of employee and/or supervisor approval of timesheet allocations. o 4 out of 60 selections had approved timesheet allocations that supported a higher rate than those utilized. • For the Continuum of Care Program: o 4 out of 83 selections did not maintain a timesheet allocation. o 2 out of 83 selections had approved timesheet allocations that supported a lower rate than those utilized. o 3 out of 83 selections did not match allocated timesheet hours to actual hours worked. Cause: The Village did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed and incorporated into calculations for amounts charged to federal grants. The Village relied heavily on manual processes which are more prone to error and did not have an adequate review process to identify and correct calculation errors. Effect or Potential Effect: Without adequate controls to detect calculation errors and ensure that costs allocated to federal programs are supported, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Housing Opportunities for Persons with AIDS Known Questioned Costs: $881 Housing Opportunities for Persons with AIDS Likely Questioned Costs: $37,747 Continuum of Care Program Known Questioned Costs: $869 Continuum of Care Program Likely Questioned Costs: $144,388 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Housing Opportunities for Persons with AIDS in 2023 were $807,050. Total costs for the Continuum of Care Program in 2023 were $5,296,450. Any costs not adequately supported by approved timesheet allocations or in excess of supported allocations are considered questioned costs. Identification as a Repeat Finding: 2022-010, 2022-017 Recommendation: We recommend implementing system improvements to reduce manual entry and establishing policies to review reimbursement calculations before submission. The Village should consistently obtain and retain timesheet allocation approvals from both employees and supervisors for each pay period requested for reimbursement. These records should be maintained until the grant is closed and required audits are completed. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Show full finding ▾Hide full finding ▴Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.241, 14.267 Program: Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS, Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: 558951, 570094, CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after the fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to Housing Opportunities for Persons with AIDS and the Continuum of Care Program during 2023 using allocations that lacked adequate support. During our testing we noted instances where employees did not track their actual time and effort for allocation to the grant, instances where the incorrect allocation rate was utilized, and/or allocations were not fully reviewed and approved. • For Housing Opportunities for Persons with AIDS: o 3 out of 60 selections had approved timesheet allocations that supported a lower rate than those utilized. o 1 out of 60 selections did not maintain a timesheet allocation. o 3 out of 60 selections did not maintain documentation of employee and/or supervisor approval of timesheet allocations. o 4 out of 60 selections had approved timesheet allocations that supported a higher rate than those utilized. • For the Continuum of Care Program: o 4 out of 83 selections did not maintain a timesheet allocation. o 2 out of 83 selections had approved timesheet allocations that supported a lower rate than those utilized. o 3 out of 83 selections did not match allocated timesheet hours to actual hours worked. Cause: The Village did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed and incorporated into calculations for amounts charged to federal grants. The Village relied heavily on manual processes which are more prone to error and did not have an adequate review process to identify and correct calculation errors. Effect or Potential Effect: Without adequate controls to detect calculation errors and ensure that costs allocated to federal programs are supported, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Housing Opportunities for Persons with AIDS Known Questioned Costs: $881 Housing Opportunities for Persons with AIDS Likely Questioned Costs: $37,747 Continuum of Care Program Known Questioned Costs: $869 Continuum of Care Program Likely Questioned Costs: $144,388 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Housing Opportunities for Persons with AIDS in 2023 were $807,050. Total costs for the Continuum of Care Program in 2023 were $5,296,450. Any costs not adequately supported by approved timesheet allocations or in excess of supported allocations are considered questioned costs. Identification as a Repeat Finding: 2022-010, 2022-017 Recommendation: We recommend implementing system improvements to reduce manual entry and establishing policies to review reimbursement calculations before submission. The Village should consistently obtain and retain timesheet allocation approvals from both employees and supervisors for each pay period requested for reimbursement. These records should be maintained until the grant is closed and required audits are completed. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Corrective Action: Management, in the immediate term, will review its oversight and controls on the manual process Grants Accounting implemented for obtaining Time & Allocation Excel Sheet and calculating payroll and benefits costs accurately onto the Request for Reimbursement (RFR). Furthermore, management plans to collaborate with its Payroll Service Provider to capitalize on software upgrades, aiming to enhance the accuracy of Time & Allocation to grants and reduce errors by designing straight-through-process improvements. Name of Responsible Individual(s): Jason Brenier, Judy Bokhari, and Luz Gonzales-Toscano Anticipated Completion Date: October 2024 – immediate term and December 2025 - software implementation.
2022-010, 2022-017
For Housing Opportunities for Persons with AIDS, for 2 out of 60 nonpayroll selections, calculation errors were found in the initial costs that were then allocated to the grant. For the Health Center Program Cluster, for 17 out of 79 payroll selections, calculation errors were found in the initial costs that were then allocated to the grant. These errors resulted in differences between actual costs and the amounts charged to the program. This is an indication that controls are not functioning at a level to detect and correct all errors. Cause: The Village relied heavily on manual processes which are more prone to errors and did not have an adequate review process to identify and correct calculation errors on initial cost calculations. Effect or Potential Effect: Calculation errors may go undetected without adequate controls in place. The Village could incorrectly charge expenditures to the Federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Nonpayroll costs for the Housing Opportunities for Persons with AIDS in 2023 were $807,050. Payroll costs including fringe benefits for the Health Center Cluster in 2023 were $1,403,324. Identification as a Repeat Finding: 2022-009 Recommendation: We recommend system improvements that require less manual entry and implement policies and procedures to review calculations and allocations of costs. Views of Responsible Officials: Management agrees with the finding. Management is in the process of implementing new processes and procedures to reduce manual errors.
Show full finding ▾Hide full finding ▴Federal Agencies: Department of Housing and Urban Development, Department of Health and Human Services Federal Assistance Listing Numbers: 14.241, 93.224 & 93.527 Program: Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: 558951, 570094, H80CS10606-15-01, H80CS10606-16-00, 21H8FCS40355C6, H8GCS48224 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated…” Condition: For Housing Opportunities for Persons with AIDS, for 2 out of 60 nonpayroll selections, calculation errors were found in the initial costs that were then allocated to the grant. For the Health Center Program Cluster, for 17 out of 79 payroll selections, calculation errors were found in the initial costs that were then allocated to the grant. These errors resulted in differences between actual costs and the amounts charged to the program. This is an indication that controls are not functioning at a level to detect and correct all errors. Cause: The Village relied heavily on manual processes which are more prone to errors and did not have an adequate review process to identify and correct calculation errors on initial cost calculations. Effect or Potential Effect: Calculation errors may go undetected without adequate controls in place. The Village could incorrectly charge expenditures to the Federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Nonpayroll costs for the Housing Opportunities for Persons with AIDS in 2023 were $807,050. Payroll costs including fringe benefits for the Health Center Cluster in 2023 were $1,403,324. Identification as a Repeat Finding: 2022-009 Recommendation: We recommend system improvements that require less manual entry and implement policies and procedures to review calculations and allocations of costs. Views of Responsible Officials: Management agrees with the finding. Management is in the process of implementing new processes and procedures to reduce manual errors.
Corrective Action: Management will review all cost allocations and implement documented policies and procedures to ensure sufficient support of any allocations of costs is maintained as required by 2 CFR §200.403. In addition, Management has developed a cost allocation worksheet and framework and is in the process of implementing a new procedure to ensure it is reviewed by accounting and grant managers to ensure accurate reporting. Name of Responsible Individual(s): Jason Brenier, Judy Bokhari, and Luz Gonzales-Toscano Anticipated Completion Date: December 2025
2022-009
We noted that the Village allocated payroll expenditures to the Health Center Program Cluster and Continuum of Care Program during 2023 based on budget allocation rates or employees’ schedules. Attestations were completed at a later date, post grant close out, to support employee’s time allocated to the grant for reimbursement. • For Health Center Program Cluster: o 72 out of 79 selections did not have timely completion of attestations. • For the Continuum of Care Program: o 1 out of 56 selections did not have timely completion of attestations. Cause: The Village did not have policies and procedures in place to timely prepare and complete timesheet attestations and reconcile to actual expenditures charged. Effect or Potential Effect: Without adequate controls in place to ensure attestations were completed based on time worked, the Village could incorrectly charge expenditures to the Federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: None reported. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Health Center Program Cluster in 2023 were $1,403,324. Payroll costs including fringe benefits for the Continuum of Care Program in 2023 were $1,345,469. Identification as a Repeat Finding: 2022-004. Recommendation: We recommend that the Village implement policies and procedures to timely completed employee attestations and to ensure timely review for any necessary budget to actual adjustments. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures to ensure timely completion.
Show full finding ▾Hide full finding ▴Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.267, 93.224 & 93.527 Program: Continuum of Care Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04, H80CS10606-15-01, H80CS10606-16-00, 21H8FCS40355C6, H8GCS48224 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after the fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to the Health Center Program Cluster and Continuum of Care Program during 2023 based on budget allocation rates or employees’ schedules. Attestations were completed at a later date, post grant close out, to support employee’s time allocated to the grant for reimbursement. • For Health Center Program Cluster: o 72 out of 79 selections did not have timely completion of attestations. • For the Continuum of Care Program: o 1 out of 56 selections did not have timely completion of attestations. Cause: The Village did not have policies and procedures in place to timely prepare and complete timesheet attestations and reconcile to actual expenditures charged. Effect or Potential Effect: Without adequate controls in place to ensure attestations were completed based on time worked, the Village could incorrectly charge expenditures to the Federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: None reported. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Health Center Program Cluster in 2023 were $1,403,324. Payroll costs including fringe benefits for the Continuum of Care Program in 2023 were $1,345,469. Identification as a Repeat Finding: 2022-004. Recommendation: We recommend that the Village implement policies and procedures to timely completed employee attestations and to ensure timely review for any necessary budget to actual adjustments. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures to ensure timely completion.
Corrective Action: Management is in the process of updating its written procedures to ensure that allowable costs and cost principles comply with 2 CFR 200.403. This includes Grants Accounting implementing a manual process that empowers program employees to submit and approve Time & Allocation Excel Sheets. These sheets include attestations certifying actual labor costs monthly. This information is then taken to input by the grants accounting team into the Request for Reimbursement (RFR). This measure ensures that labor costs are accurately reflected and compliant with regulatory requirements. In addition, Management will implement policies and procedures regarding regular review of allocations for workers compensation and other similar expenses to ensure accuracy. Name of Responsible Individual(s): Jason Brenier and Judy Bokhari Anticipated Completion Date: December 2024
2022-004
In accordance with 24 CFR §578.51(g), we noted that: • 21 out of 60 rental payments tested did not have a comparable unit analysis conducted for move-in or increases in rent. • 17 out of 60 rental payments did not have a comparable unit analysis completed in a timely manner prior to the tenant’s move-in or prior to increases in rent. • 15 of the 43 rental payments that did have rent reasonableness performed did not have rent reasonableness analyzed in the past year. • 4 out of 60 rental payments tested did not have documentation for amounts charged (such as lease agreements, rent increase letters, or invoices). • 2 out of 60 rental payments tested had errors in the rent reasonableness forms. Cause: The Village did not appropriately retain or produce documentation verifying that rent reasonableness was assessed prior to move-in or during changes to lease terms, as required by its policies. Additionally, not all supporting documentation for changes to lease terms was obtained or retained. Effect or Potential Effect: The insufficient retention or creation of rent reasonableness forms and supporting documentation has led to ineffective operation of rent reasonableness controls, thereby not appropriately identifying rental amounts for the Village’s clients in need of rental assistance. Consequently, this deficiency could result in incorrect charges being applied to the Federal program. Questioned Costs: Known Questioned Costs: $33,686 Likely Questioned Costs: $910,698 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Questioned costs were determined as the amounts paid without supporting rent reasonableness documentation. The total costs subject to rent reasonableness amounted to $2,719,260. Of the questioned costs identified above, $2,702 of known and $65,525 of likely questioned costs relate to a subrecipient’s tenants, which the Village is still responsible for ensuring rent reasonableness is properly completed. The subrecipient processed rental assistance documentation for $204,409 of tenant payments. Identification as a Repeat Finding: 2022-008 Recommendation: We recommend that the Village enhance existing policies to ensure rent reasonableness is performed on all rental assistance. In addition, we recommend management ensures determinations are performed prior to move-in or rent changes being charged, and documentation is maintained for both the rent amount and reasonableness of the rent. We further recommend a policy be enacted for reviewing rent reasonableness on a periodic basis (i.e. annually) for those tenants that have not had a change in rent during the period. Views of Responsible Officials: Management agrees with the finding. Management is in the process of enhancing and enforcing existing policies and procedures as well as performing a comprehensive tenant record review.
Show full finding ▾Hide full finding ▴Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR §578.51(g), “HUD will only provide rental assistance for a unit if the rent is reasonable. The recipient or subrecipient must determine whether the rent charged for the unit receiving rental assistance is reasonable in relation to rents being charged for comparable unassisted units, taking into account the location, size, type, quality, amenities, facilities, and management and maintenance of each unit. Reasonable rent must not exceed rents currently being charged by the same owner for comparable unassisted units.” Condition: In accordance with 24 CFR §578.51(g), we noted that: • 21 out of 60 rental payments tested did not have a comparable unit analysis conducted for move-in or increases in rent. • 17 out of 60 rental payments did not have a comparable unit analysis completed in a timely manner prior to the tenant’s move-in or prior to increases in rent. • 15 of the 43 rental payments that did have rent reasonableness performed did not have rent reasonableness analyzed in the past year. • 4 out of 60 rental payments tested did not have documentation for amounts charged (such as lease agreements, rent increase letters, or invoices). • 2 out of 60 rental payments tested had errors in the rent reasonableness forms. Cause: The Village did not appropriately retain or produce documentation verifying that rent reasonableness was assessed prior to move-in or during changes to lease terms, as required by its policies. Additionally, not all supporting documentation for changes to lease terms was obtained or retained. Effect or Potential Effect: The insufficient retention or creation of rent reasonableness forms and supporting documentation has led to ineffective operation of rent reasonableness controls, thereby not appropriately identifying rental amounts for the Village’s clients in need of rental assistance. Consequently, this deficiency could result in incorrect charges being applied to the Federal program. Questioned Costs: Known Questioned Costs: $33,686 Likely Questioned Costs: $910,698 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Questioned costs were determined as the amounts paid without supporting rent reasonableness documentation. The total costs subject to rent reasonableness amounted to $2,719,260. Of the questioned costs identified above, $2,702 of known and $65,525 of likely questioned costs relate to a subrecipient’s tenants, which the Village is still responsible for ensuring rent reasonableness is properly completed. The subrecipient processed rental assistance documentation for $204,409 of tenant payments. Identification as a Repeat Finding: 2022-008 Recommendation: We recommend that the Village enhance existing policies to ensure rent reasonableness is performed on all rental assistance. In addition, we recommend management ensures determinations are performed prior to move-in or rent changes being charged, and documentation is maintained for both the rent amount and reasonableness of the rent. We further recommend a policy be enacted for reviewing rent reasonableness on a periodic basis (i.e. annually) for those tenants that have not had a change in rent during the period. Views of Responsible Officials: Management agrees with the finding. Management is in the process of enhancing and enforcing existing policies and procedures as well as performing a comprehensive tenant record review.
Corrective Action: Management will enhance and enforce existing policies and procedures over monitoring of rental reasonableness in compliance with HUD-determined fair market rent requirements. Management and Tenant Services team will perform a thorough review of all tenant files, a task executed in partnership with landlords and property management companies. Perform internal compliance checks with sub-recipients by FJV compliance staff on a quarterly basis. Finally, develop additional oversight procedures for accounting and documentation of tenant rents to guarantee accuracy within our accounting general ledgers. Name of Responsible Individual(s): Jason Brenier, Maria Rafanan, Jesse Casement, Christina Madriles, Ann Wieczorek, and Judy Bokhari Anticipated Completion Date: December 2024
2022-008
Expenditures were not liquidated within the required timeline after the end of the period of performance. We noted that 3 out of 94 samples selected for testing were not liquidated by the end of the grant period for grants with end dates during 2023. As such reimbursements were not liquidated in accordance with §200.344. Cause: The Village did not have policies and procedures in place to ensure that payments were made within 120 calendar days after the end of the period of performance. Effect or Potential Effect: Without adequate controls in place to timely liquidate expenditures, the Village is not in compliance with §200.344. Questioned Costs: Known Questioned Costs Continuum of Care: $2,616 Likely Questioned Costs Continuum of Care: $435,898 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Total costs under the program in 2023 were $5,296,450. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that costs are liquidated timely and policies and procedures are updated to ensure all obligations are liquidated within 120 days after the end of the period of performance. Views of Responsible Officials: Management agrees with this finding. Management is updating written procedures regarding liquidation of obligations to ensure obligations are liquidated within 120 days after the end of the period of performance.
Show full finding ▾Hide full finding ▴Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04 Criteria: Per 2 CFR §200.344(b): “Unless the Federal awarding agency or pass-through entity authorizes an extension, a non-Federal entity must liquidate all financial obligations incurred under the Federal award no later than 120 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award.” Condition: Expenditures were not liquidated within the required timeline after the end of the period of performance. We noted that 3 out of 94 samples selected for testing were not liquidated by the end of the grant period for grants with end dates during 2023. As such reimbursements were not liquidated in accordance with §200.344. Cause: The Village did not have policies and procedures in place to ensure that payments were made within 120 calendar days after the end of the period of performance. Effect or Potential Effect: Without adequate controls in place to timely liquidate expenditures, the Village is not in compliance with §200.344. Questioned Costs: Known Questioned Costs Continuum of Care: $2,616 Likely Questioned Costs Continuum of Care: $435,898 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Total costs under the program in 2023 were $5,296,450. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that costs are liquidated timely and policies and procedures are updated to ensure all obligations are liquidated within 120 days after the end of the period of performance. Views of Responsible Officials: Management agrees with this finding. Management is updating written procedures regarding liquidation of obligations to ensure obligations are liquidated within 120 days after the end of the period of performance.
Corrective Action: Management will update written procedures and train the Grants Accounting team regarding period of performance to ensure all requests are made within the proper period based on the period of performance. The procedures and training will include grant period close, cost allowability, requirements for documentation, and review of charges prior to requests. In addition, Grants Accounting has initiated monthly meetings with grantors to closely monitor grant spenddown, address any processing issues, and ensure proper cut-off. These meetings will be instrumental in tracking progress and oversight in our grant management process. Name of Responsible Individual(s): Jason Brenier, Shelly Courtois, and Judy Bokhari Anticipated Completion Date: April 2024
The Village allocated expenditures that were incurred prior to the start of the funding period. During our testing of costs, we noted that 1 of the 60 samples selected for testing within the Continuum of Care Program, were incurred prior to the start of the applicable funding periods and were not approved in accordance with §200.308. Cause: The Village did not have policies and procedures in place to ensure that costs were only charged as incurred during the appropriate funding period. Effect or Potential Effect: Without adequate controls in place to ensure costs are allowable and reimbursable, including controls over review of the date of incurrence, the Village could incorrectly charge expenditures to the federal programs. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Total costs under the program in 2023 were $5,296,450. Identification as a Repeat Finding: 2022-006. Recommendation: We recommend that only costs incurred during the appropriate funding period be charged, and that this be appropriately documented and reviewed. Views of Responsible Officials: Management agrees with this finding. Management is updating written procedures regarding period of performance to ensure requests of expenditures are within the proper period.
Show full finding ▾Hide full finding ▴Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: CA0802L9D012113, CA0802L9D012214, CA1348L9D012107, CA1348L9D012208, CA1510L9D012106, CA1510LD012207, CA1883L9D012102, CA1883L9D012203, HHI-23-03, HHI-24-09, HHI-23-13, HHI-24-04 Criteria: Where a funding period is specified, a recipient may charge to the grant only allowable costs resulting from obligations incurred during the funding period and any pre-award costs authorized by the Federal awarding agency. Unless the Federal awarding agency authorizes an extension, a recipient shall liquidate all obligations incurred under the award no later than 90 calendar days after the funding period or the date of completion as specified in the terms and conditions of the award or in agency implementing instructions. Condition: The Village allocated expenditures that were incurred prior to the start of the funding period. During our testing of costs, we noted that 1 of the 60 samples selected for testing within the Continuum of Care Program, were incurred prior to the start of the applicable funding periods and were not approved in accordance with §200.308. Cause: The Village did not have policies and procedures in place to ensure that costs were only charged as incurred during the appropriate funding period. Effect or Potential Effect: Without adequate controls in place to ensure costs are allowable and reimbursable, including controls over review of the date of incurrence, the Village could incorrectly charge expenditures to the federal programs. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Total costs under the program in 2023 were $5,296,450. Identification as a Repeat Finding: 2022-006. Recommendation: We recommend that only costs incurred during the appropriate funding period be charged, and that this be appropriately documented and reviewed. Views of Responsible Officials: Management agrees with this finding. Management is updating written procedures regarding period of performance to ensure requests of expenditures are within the proper period.
Corrective Action: Management will update written procedures and train the Grants Accounting team regarding period of performance to ensure all requests are made within the proper period based on the period of performance. The procedures and training will include grant period close, cost allowability, requirements for documentation, and review of charges prior to requests. In addition, Grants Accounting has initiated monthly meetings with grantors to closely monitor grant spenddown, address any processing issues, and ensure proper cut-off. These meetings will be instrumental in tracking progress and oversight in our grant management process. Name of Responsible Individual(s): Jason Brenier, Shelly Courtois, and Judy Bokhari Anticipated Completion Date: April 2024
2022-006
For two out of four reports selected for testing, appropriate documentation was not available to evidence review of the report prior to submission. Cause: While the Village has a policy in place that requires review of reports, proper documentation to support the policy was not available. Effect or Potential Effect: Reports could be submitted that are inaccurate or incomplete. The Village does not have the documentation required regarding review/approval of the performance reports. Questioned Costs: None. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. There were four reports submitted during the fiscal year. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Village implement controls to ensure proper documentation of review and approval of performance reports. Views of Responsible Officials: Management agrees with this finding. Management is updating their procedures to ensure documentation for review and approval of reports is prepared and maintained for future reports.
Show full finding ▾Hide full finding ▴Federal Agencies: Department of Health and Human Services Federal Assistance Listing Numbers: 93.224 & 93.527 Program: Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: H80CS10606-15-01, H80CS10606-16-00, 21H8FCS40355C6, H8GCS48224 Criteria: Recipients of federal awards must establish verifiable controls over reports that are prepared and submitted. Condition: For two out of four reports selected for testing, appropriate documentation was not available to evidence review of the report prior to submission. Cause: While the Village has a policy in place that requires review of reports, proper documentation to support the policy was not available. Effect or Potential Effect: Reports could be submitted that are inaccurate or incomplete. The Village does not have the documentation required regarding review/approval of the performance reports. Questioned Costs: None. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. There were four reports submitted during the fiscal year. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Village implement controls to ensure proper documentation of review and approval of performance reports. Views of Responsible Officials: Management agrees with this finding. Management is updating their procedures to ensure documentation for review and approval of reports is prepared and maintained for future reports.
Corrective Action: Management has experienced turnover in recent years which has made agency report submissions challenging for proper review due to limited user access. Management added additional users to agency filing websites and will continue to enforce evidence of review and approver for all reports prior to submission. Name of Responsible Individual(s): Jason Brenier, Ann Wieczorek, Christina Madriles, and Judy Bokhari Anticipated Completion Date: October 2024
FAC accepted this audit on February 2, 2024 — management decision was due August 2, 2024.
We noted that the Village allocated payroll expenditures to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster during 2022 based on budget allocation rates or employees’ schedules. For the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster, the majority of employees did not track actual time and effort for comparison to budget allocations or employees’ schedules. There was no procedure in place to determine if a true-up was necessary from allocated costs. 180 timesheets were tested during the audit (60 for each program). All 60 were charged based on employee schedules for Health Center Program Cluster. 59 timesheets of the 60 tested were charged based on budgets for the CDBG-Entitlement Grants Cluster. Lastly, 45 timesheets of the 60 tested were based on budgets for the Emergency Solutions Grants Program. Cause: The Village did not have policies and procedures in place to review and reconcile the estimated amounts of payroll expenditures charged to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster to the actual expenditures incurred. Effect or Potential Effect: Without adequate controls in place to ensure costs based on budgeted allocations are reasonable and reconcile to the actual time spent on the program, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known CDBG-Entitlement Grants Cluster: $16,765 Likely CDBG-Entitlement Grants Cluster: $842,671 Known Emergency Solutions Grants Program: $9,453 Likely Emergency Solutions Grants Program: $1,646,760 Known Health Center Cluster Program: $27,601 Likely Health Center Cluster Program: $2,133,947 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the CDBG-Entitlement Grants Cluster in 2022 were $848,919. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $2,052,649. Payroll costs including fringe benefits for the Health Center Program Cluster in 2022 were $2,133,947. Any payroll costs not adequately support by time and effort reports are considered questioned costs. Identification as a Repeat Finding: 2021-007. Recommendation: We recommend that the Village implement policies and procedures to review for any necessary budget to actual adjustments, and we recommend that sufficient documentation be maintained to support any adjustments made as required by 2 CFR §200.430. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Show full finding ▾Hide full finding ▴Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.218, 14.231, 93.224 & 93.527 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770, 19H80CS10606, 21H8FCS40355C6 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster during 2022 based on budget allocation rates or employees’ schedules. For the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster, the majority of employees did not track actual time and effort for comparison to budget allocations or employees’ schedules. There was no procedure in place to determine if a true-up was necessary from allocated costs. 180 timesheets were tested during the audit (60 for each program). All 60 were charged based on employee schedules for Health Center Program Cluster. 59 timesheets of the 60 tested were charged based on budgets for the CDBG-Entitlement Grants Cluster. Lastly, 45 timesheets of the 60 tested were based on budgets for the Emergency Solutions Grants Program. Cause: The Village did not have policies and procedures in place to review and reconcile the estimated amounts of payroll expenditures charged to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster to the actual expenditures incurred. Effect or Potential Effect: Without adequate controls in place to ensure costs based on budgeted allocations are reasonable and reconcile to the actual time spent on the program, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known CDBG-Entitlement Grants Cluster: $16,765 Likely CDBG-Entitlement Grants Cluster: $842,671 Known Emergency Solutions Grants Program: $9,453 Likely Emergency Solutions Grants Program: $1,646,760 Known Health Center Cluster Program: $27,601 Likely Health Center Cluster Program: $2,133,947 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the CDBG-Entitlement Grants Cluster in 2022 were $848,919. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $2,052,649. Payroll costs including fringe benefits for the Health Center Program Cluster in 2022 were $2,133,947. Any payroll costs not adequately support by time and effort reports are considered questioned costs. Identification as a Repeat Finding: 2021-007. Recommendation: We recommend that the Village implement policies and procedures to review for any necessary budget to actual adjustments, and we recommend that sufficient documentation be maintained to support any adjustments made as required by 2 CFR §200.430. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Corrective Action: Management is in the process of updating its written procedures to ensure that allowable costs and cost principles comply with 2 CFR 200.403. This includes Grants Accounting implementing a manual process that empowers program employees to submit and approve Time & Allocation Excel Sheets. These sheets include attestations certifying actual labor costs on a monthly basis. This information is then taken to inputted by the grants accounting team into the Request for Reimbursement (RFR). This measure ensures that labor costs are accurately reflected and compliant with regulatory requirements. In addition, Management will implement policies and procedures regarding regular review of allocations for workers compensation and other similar expenses to ensure accuracy. Finally, Management is committed to optimizing the efficiency and accuracy of its Time & Allocation to Grants by leveraging its Payroll Software Technology to strengthening its accounting process and internal controls. Name of Responsible Individual(s): Jason Brenier, CFO Anticipated Completion Date: April 2024.
2021-007
The Village allocated expenditures to programs during 2022 based on a direct allocation methodology. This allocation is done manually, and the support was inconsistently maintained. During our testing of costs (excluding payroll and fringe benefits, see finding 2022-004), we noted in accordance with §200.403(g) that 12 of the 60 samples selected for testing within Housing Opportunities for Persons with AIDS, did not have sufficient support for the allocation of the costs, or the costs themselves. Cause: The Village did not have policies and procedures in place to ensure that sufficient documentation was maintained to support the allocation of costs. Effect or Potential Effect: Without adequate controls in place to ensure costs are allowable and reimbursable, including controls over review of allocation methodologies, the Village could incorrectly charge expenditures to the federal programs. Questioned Costs: Known Questioned Costs Housing Opportunities for Persons with AIDS: $6,830 Likely Questioned Costs Housing Opportunities for Persons with AIDS: $234,595 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Nonpayroll costs for the Housing Opportunities for Persons with AIDS in 2022 were $1,173,061. Questioned costs consist of amounts lacking underlying support or amounts in excess of supported allocations. Identification as a Repeat Finding: This is a repeat of prior year finding 2021-008. Recommendation: We recommend that sufficient documentation be maintained to support any allocations of costs as required by §200.403. Views of Responsible Officials: Management agrees with this finding. Management is developing a cost allocation worksheet and implementing new procedures to ensure accurate expenditure reporting.
Show full finding ▾Hide full finding ▴Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.241 Program: Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS Award/Pass-Through Entity Identifying Numbers: 558951 Criteria: The Uniform Guidance in 2 CFR §200.403 states that for costs to be allowable under Federal awards, they must be adequately documented and there must be sufficient documentation. “Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. See also §200.306(b). (g) Be adequately documented. See also §200.300 through §200.309. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to §200.308(e)(3).” Condition: The Village allocated expenditures to programs during 2022 based on a direct allocation methodology. This allocation is done manually, and the support was inconsistently maintained. During our testing of costs (excluding payroll and fringe benefits, see finding 2022-004), we noted in accordance with §200.403(g) that 12 of the 60 samples selected for testing within Housing Opportunities for Persons with AIDS, did not have sufficient support for the allocation of the costs, or the costs themselves. Cause: The Village did not have policies and procedures in place to ensure that sufficient documentation was maintained to support the allocation of costs. Effect or Potential Effect: Without adequate controls in place to ensure costs are allowable and reimbursable, including controls over review of allocation methodologies, the Village could incorrectly charge expenditures to the federal programs. Questioned Costs: Known Questioned Costs Housing Opportunities for Persons with AIDS: $6,830 Likely Questioned Costs Housing Opportunities for Persons with AIDS: $234,595 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Nonpayroll costs for the Housing Opportunities for Persons with AIDS in 2022 were $1,173,061. Questioned costs consist of amounts lacking underlying support or amounts in excess of supported allocations. Identification as a Repeat Finding: This is a repeat of prior year finding 2021-008. Recommendation: We recommend that sufficient documentation be maintained to support any allocations of costs as required by §200.403. Views of Responsible Officials: Management agrees with this finding. Management is developing a cost allocation worksheet and implementing new procedures to ensure accurate expenditure reporting.
Corrective Action: Management will review all cost allocations and implement documented policies and procedures to ensure sufficient support of any allocations of costs is maintained as required by 2 CFR §200.403. In addition, Management has developed a cost allocation worksheet and framework and is in the process of implementing a new procedure to ensure it is reviewed by accounting and grant managers to ensure accurate reporting. Name of Responsible Individual(s): Jason Brenier, CFO Anticipated Completion Date: March 2024
2021-008
The Village allocated expenditures that were incurred prior to the start of the funding period. During our testing of costs, we noted that 6 of the 60 samples selected for testing within the Continuum of Care Program, were incurred prior to the start of the applicable funding periods and were not approved in accordance with §200.308. We noted that 7 of the 127 samples selected for testing within the CDBG-Entitlement Grants Cluster, were incurred prior to the start of the applicable funding periods and were not approved in accordance with §200.308 Cause: The Village did not have policies and procedures in place to ensure that costs were only charged as incurred during the appropriate funding period. Effect or Potential Effect: Without adequate controls in place to ensure costs are allowable and reimbursable, including controls over review of the date of incurrence, the Village could incorrectly charge expenditures to the federal programs. Questioned Costs: Known Questioned Costs Continuum of Care: $5,666 Likely Questioned Costs Continuum of Care: $135,894 Known Questioned Costs CDBG-Entitlement Grants Cluster: $5,770 Likely Questioned Costs CDBG-Entitlement Grants Cluster: $33,675 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Costs in the first and last months of the grant period for the Continuum of Care Program in 2022 were $847,523. Costs in the first month of the grant period for the CDBG-Entitlement Grants Cluster in 2022 were $59,606. Identification as a Repeat Finding: This is a repeat of prior year finding 2021-009. Recommendation: We recommend that only costs incurred during the appropriate funding period be charged, and that this be appropriately documented and reviewed. Views of Responsible Officials: Management agrees with this finding. Management is updating written procedures regarding period of performance to ensure requests of expenditures are within the proper period.
Show full finding ▾Hide full finding ▴Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.218, 14.267 Program: CDBG-Entitlement Grants Cluster, Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, CA0802L9D012012, CA0802L9D012113, CA1348L9D012006, CA1348L9D012107, CA1510L9D012005, CA1510L9D012106, CA1883L9D012001, CA1883L9D012102, HHI-22-07, HHI-23-03, HHI-22-26, HHI-23-13 Criteria: Where a funding period is specified, a recipient may charge to the grant only allowable costs resulting from obligations incurred during the funding period and any pre-award costs authorized by the Federal awarding agency. Unless the Federal awarding agency authorizes an extension, a recipient shall liquidate all obligations incurred under the award no later than 90 calendar days after the funding period or the date of completion as specified in the terms and conditions of the award or in agency implementing instructions. Condition: The Village allocated expenditures that were incurred prior to the start of the funding period. During our testing of costs, we noted that 6 of the 60 samples selected for testing within the Continuum of Care Program, were incurred prior to the start of the applicable funding periods and were not approved in accordance with §200.308. We noted that 7 of the 127 samples selected for testing within the CDBG-Entitlement Grants Cluster, were incurred prior to the start of the applicable funding periods and were not approved in accordance with §200.308 Cause: The Village did not have policies and procedures in place to ensure that costs were only charged as incurred during the appropriate funding period. Effect or Potential Effect: Without adequate controls in place to ensure costs are allowable and reimbursable, including controls over review of the date of incurrence, the Village could incorrectly charge expenditures to the federal programs. Questioned Costs: Known Questioned Costs Continuum of Care: $5,666 Likely Questioned Costs Continuum of Care: $135,894 Known Questioned Costs CDBG-Entitlement Grants Cluster: $5,770 Likely Questioned Costs CDBG-Entitlement Grants Cluster: $33,675 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Costs in the first and last months of the grant period for the Continuum of Care Program in 2022 were $847,523. Costs in the first month of the grant period for the CDBG-Entitlement Grants Cluster in 2022 were $59,606. Identification as a Repeat Finding: This is a repeat of prior year finding 2021-009. Recommendation: We recommend that only costs incurred during the appropriate funding period be charged, and that this be appropriately documented and reviewed. Views of Responsible Officials: Management agrees with this finding. Management is updating written procedures regarding period of performance to ensure requests of expenditures are within the proper period.
Corrective Action: Management will update written procedures and train the Grants Accounting team regarding period of performance to ensure all requests are made within the proper period based on the period of performance. The procedures and training will include grant period close, cost allowability, requirements for documentation, and review of charges prior to requests. In addition, Grants Accounting has initiated monthly meetings with Government Agencies to closely monitor grant spenddown, address any processing issues, and ensure proper cut-off. These meetings will be instrumental in tracking progress and oversight in our grant management process. Name of Responsible Individual(s): Jason Brenier, CFO Anticipated Completion Date: January 2024
2021-009
The Village’s procurement policy does not have a level of specificity to fully comply with Federal procurement regulations. The Village has an organization wide procurement process. However, the records do not adequately differentiate between procurement for federal grants and other funding sources. The Village was unable to provide vendor selection documentation of the bidding process associated with two of the two transactions selected for the Emergency Solutions Grants Program, and four of the four selections for the Health Center Program Cluster. Additionally, the Village’s written processes do not have specific control procedures to check for suspension and debarment and, therefore, the Village did not verify that vendors or contractors were not excluded or disqualified prior to entering into these arrangements. During the audit, vendors were subsequently checked for suspension and debarment and no ineligible vendors were noted. Cause: The Village’s personnel did not adhere to the Village’s documented policies and procedures for ensuring complete documentation of the history of the procurement and the Village did not have adequate internal controls in place to identify the need to ensure a check for suspended or debarred vendors on contractors occurred prior to entering into those agreements. Effect or Potential Effect: Failure to maintain proper documentation for vendor selection process and failure to obtain vendor solicitation for procurements is noncompliance with Federal regulations and the Village’s policy. Potential for entering into contracts with suspended or debarred vendors. Questioned Costs: Known Questioned Costs Health Center Program Cluster: $146,704 Known Questioned Costs Emergency Solutions Grants Program: $680,586 Likely Questioned Costs Emergency Solutions Grants Program: $943,378 Context: This is a condition identified per review of the Village’s compliance with specified requirements on a policy level and testing of representative transactions. The total population for procurement testing was $146,704 for the Health Center Program Cluster. All four transactions subject to procurement were selected for testing and did not have proper documentation to support the procurement decision. The total population for procurement testing was $943,378 for the Emergency Solutions Grants Program. Two transactions selected for testing subject to procurement did not have proper documentation to support the procurement decision. Identification as a Repeat Finding: This is a repeat of prior year finding 2021-010. Recommendation: We recommend management and those charged with governance continue to review and improve its internal controls over procurement to ensure compliance with the Village’s procurement policy and Federal regulations as well as relevant suspension and debarment requirements included in §200.214. Views of Responsible Officials: Management agrees with the finding. Management is in the process of updating and strengthening policies and procedures over suspension, and debarment and retaining sufficient supporting documentation to support procurement
Show full finding ▾Hide full finding ▴Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services. Federal Assistance Listing Numbers: 14.231, 93.224 & 93.527. Programs: Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster. Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-21-35, HHI-20-21, 563770, 19H80CS10606, 21H8FCS40355C6. Criteria: In accordance with §200.318, the non-federal entity must use its own documented procurement procedures which reflect applicable laws and regulations, provided that the procurements conform to applicable federal law and the standards identified. Additionally, the non-federal entity must maintain records sufficient to detail the history of the procurement. These records are required to include but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. All procurement transactions must be conducted in in accordance with §200.317 through §200.327. In accordance with §200.214 non-federal entities cannot enter into awards, subawards, or contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Non-federal entities must either check for exclusions in the System for Award Management (SAM); collect a certification from the entity, or add a clause or condition to the covered transaction with the entity prior to entering into a covered transaction with a non-federal entity. Condition: The Village’s procurement policy does not have a level of specificity to fully comply with Federal procurement regulations. The Village has an organization wide procurement process. However, the records do not adequately differentiate between procurement for federal grants and other funding sources. The Village was unable to provide vendor selection documentation of the bidding process associated with two of the two transactions selected for the Emergency Solutions Grants Program, and four of the four selections for the Health Center Program Cluster. Additionally, the Village’s written processes do not have specific control procedures to check for suspension and debarment and, therefore, the Village did not verify that vendors or contractors were not excluded or disqualified prior to entering into these arrangements. During the audit, vendors were subsequently checked for suspension and debarment and no ineligible vendors were noted. Cause: The Village’s personnel did not adhere to the Village’s documented policies and procedures for ensuring complete documentation of the history of the procurement and the Village did not have adequate internal controls in place to identify the need to ensure a check for suspended or debarred vendors on contractors occurred prior to entering into those agreements. Effect or Potential Effect: Failure to maintain proper documentation for vendor selection process and failure to obtain vendor solicitation for procurements is noncompliance with Federal regulations and the Village’s policy. Potential for entering into contracts with suspended or debarred vendors. Questioned Costs: Known Questioned Costs Health Center Program Cluster: $146,704 Known Questioned Costs Emergency Solutions Grants Program: $680,586 Likely Questioned Costs Emergency Solutions Grants Program: $943,378 Context: This is a condition identified per review of the Village’s compliance with specified requirements on a policy level and testing of representative transactions. The total population for procurement testing was $146,704 for the Health Center Program Cluster. All four transactions subject to procurement were selected for testing and did not have proper documentation to support the procurement decision. The total population for procurement testing was $943,378 for the Emergency Solutions Grants Program. Two transactions selected for testing subject to procurement did not have proper documentation to support the procurement decision. Identification as a Repeat Finding: This is a repeat of prior year finding 2021-010. Recommendation: We recommend management and those charged with governance continue to review and improve its internal controls over procurement to ensure compliance with the Village’s procurement policy and Federal regulations as well as relevant suspension and debarment requirements included in §200.214. Views of Responsible Officials: Management agrees with the finding. Management is in the process of updating and strengthening policies and procedures over suspension, and debarment and retaining sufficient supporting documentation to support procurement
Corrective Action: Management will update and strengthen policies and procedures over procurement and retain sufficient supporting documentation to comply with federal regulations. Additionally, management will implement policies to ensure all required vendors are checked for suspension and debarment. Management will assess and implement system changes to detail a complete history of procurement transactions. Management will also provide training to appropriate staff as needed. Some of the changes in process include: Procurement Process Implementation: Management introducing procurement policy and procedures to facilitate proper coding and tracking of costs to Grants. Simultaneously, we are developing procedures to ensure the Purchase/Procurement Department is centralized for assignment of requisition and purchase orders to align with Accounts Payable (AP) invoices and are correctly coded within our NetSuite system. Name of Responsible Individual(s): Jason Brenier, CFO Anticipated Completion Date: April 2024
2021-010
For 26 out of 60 rental payments tested, a comparable unit analysis was not completed for updated HUD Fair Market Rate’s (FMR) or lease modifications subsequent to move in. These amounts are excluded from questioned costs as it is not known if any rents were paid over the amount considered reasonable. For 16 out of the 60 rental payments tested, rent charges were unsupported by underlying leases, rent reasonableness forms, or rent charges were in excess of FMR, without appropriate waivers. Cause: The Village did not appropriately retain or produce documentation that rent reasonableness was checked prior to move-in or at changes to lease terms in accordance with its policies. Additionally, not all supporting documentation for changes to terms were obtained or retained. Effect or Potential Effect: Insufficient retention or creation of rent reasonableness forms and supporting documentation resulted in rent reasonableness controls not operating effectively to appropriately identify rental amounts for the Village’s clients in need of rental assistance. The Village could incorrectly charge expenditures to the federal program as a result. Questioned Costs: Known Questioned Costs: $9,720 Likely Questioned Costs: $261,268 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Questioned costs were calculated as the amounts paid above FMR or unsupported. Total costs subject to rent reasonableness were $2,125,224. Identification as a Repeat Finding: 2021-011. Recommendation: We recommend that the Village enforce existing policies and procedures and implement additional policies and procedures for maintaining and monitoring rental reasonableness documentation to ensure compliance with HUD-determined fair market rents requirements. Views of Responsible Officials: Management agrees with the finding. Management is in the process of enhancing and enforcing existing policies and procedures as well as performing a comprehensive tenant record review.
Show full finding ▾Hide full finding ▴Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: CA0802L9D012012, CA0802L9D012113, CA1348L9D012006, CA1348L9D012107, CA1510L9D012005, CA1510L9D012106, CA1883L9D012001, CA1883L9D012102, HHI-22-26, HHI-23-13 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR §578.49(b)(1), “Where grants are used to pay for rent for all or a part of a structure or structures, the rent paid must be reasonable in relation to rents being charged in the area for comparable space. In addition, the rent may not exceed rents currently being charged by the same owner for comparable unassisted space.” Per 24 CFR §§578.49(b)(2) and 578.51(g), “When grants are used to pay rent for individual housing units, the rent paid must be reasonable in relation to rents being charged for comparable units, taking into account the location, size, type, quality, amenities, facilities, and management services. In addition, the rents may not exceed rents currently being charged for comparable units, and the rent paid may not exceed HUD-determined fair market rents.” “HUD will only provide rental assistance for a unit if the rent is reasonable. The recipient or subrecipient must determine whether the rent charged for the unit receiving rental assistance is reasonable in relation to rents being charged for comparable unassisted units, taking into account the location, size, type, quality, amenities, facilities, and management and maintenance of each unit. Reasonable rent must not exceed rents currently being charged by the same owner for comparable unassisted units.” Condition: For 26 out of 60 rental payments tested, a comparable unit analysis was not completed for updated HUD Fair Market Rate’s (FMR) or lease modifications subsequent to move in. These amounts are excluded from questioned costs as it is not known if any rents were paid over the amount considered reasonable. For 16 out of the 60 rental payments tested, rent charges were unsupported by underlying leases, rent reasonableness forms, or rent charges were in excess of FMR, without appropriate waivers. Cause: The Village did not appropriately retain or produce documentation that rent reasonableness was checked prior to move-in or at changes to lease terms in accordance with its policies. Additionally, not all supporting documentation for changes to terms were obtained or retained. Effect or Potential Effect: Insufficient retention or creation of rent reasonableness forms and supporting documentation resulted in rent reasonableness controls not operating effectively to appropriately identify rental amounts for the Village’s clients in need of rental assistance. The Village could incorrectly charge expenditures to the federal program as a result. Questioned Costs: Known Questioned Costs: $9,720 Likely Questioned Costs: $261,268 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Questioned costs were calculated as the amounts paid above FMR or unsupported. Total costs subject to rent reasonableness were $2,125,224. Identification as a Repeat Finding: 2021-011. Recommendation: We recommend that the Village enforce existing policies and procedures and implement additional policies and procedures for maintaining and monitoring rental reasonableness documentation to ensure compliance with HUD-determined fair market rents requirements. Views of Responsible Officials: Management agrees with the finding. Management is in the process of enhancing and enforcing existing policies and procedures as well as performing a comprehensive tenant record review.
Corrective Action: Management will enhance and enforce existing policies and procedures over monitoring of rental reasonableness in compliance with HUD-determined fair market rent requirements. Management has initiated a comprehensive overhaul of our tenant records, driven by our commitment to precision and compliance. Here are the key aspects of our improvement plan: Tenant File Review: Accounting Asset Management has embarked on a thorough review of all tenant files, a task executed in partnership with our Property Management Company. The oversight and coordination of this effort are provided by Father Joe's Asset Management Team, ensuring a rigorous examination of our tenant records. Internal Audit: To guarantee completeness and accuracy, Management is taking the additional step of having Accounting review 20% of tenant files prior to the 2023 audit. Enhanced Procedures and Processes: Concurrently, enhanced procedures and processes are being developed to have additional oversight by property case managers and asset management team. These procedures are designed to guarantee the accuracy and compliance of tenant rent charges within our accounting general ledgers. This multifaceted approach underscores Management’s unwavering commitment to financial accuracy, compliance, and transparency. By meticulously reviewing tenant records and implementing enhanced processes, we aim to fortify our financial management practices and deliver more precise reporting in the future. Name of Responsible Individual(s): Jason Brenier, CFO Anticipated Completion Date: December 2023/March 2024
2021-011
For the Housing Opportunities for Persons with AIDS, for 12 out of 60 sample selections, calculation errors were found in the request for reimbursement resulting in small differences between actual payroll costs and the amounts charged to the program. We also noted that in 14 of the 60 samples selections for the Emergency Solution Grant Program, had similar calculation errors. This is an indication that controls are not functioning at a level to detect and correct all errors. Cause: The Village relied heavily on manual processes which are more prone to errors, and did not have an adequate review process to identify and correct calculation errors within the request for reimbursement. Effect or Potential Effect: Calculation errors may go undetected without adequate controls in place. The Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known Questioned Costs Emergency Solutions Grants Program: $277 Likely Questioned Costs Emergency Solutions Grants Program: $44,276 Known Questioned Costs Housing Opportunities for Persons with AIDS: None above the $25,000 reporting threshold. Likely Questioned Costs Housing Opportunities for Persons with AIDS: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $1,529,275. Payroll costs including fringe benefits for the Housing Opportunities for Persons with AIDS in 2022 were $708,148 with known questioned costs of $427 and likely questioned costs of $18,245. Identification as a Repeat Finding: 2021-012. Recommendation: We recommend system improvements that require less manual entry and implement policies and procedures to review calculations within the requests for reimbursement prior to submission. Views of Responsible Officials: Management agrees with the finding. Management is in the process of upgrading the system utilized for time and entry allocations to grants to reduce manual errors.
Show full finding ▾Hide full finding ▴Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.231, 14.241 Program: Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-21-35, HHI-20-21, 563770, 558951 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated…” Condition: For the Housing Opportunities for Persons with AIDS, for 12 out of 60 sample selections, calculation errors were found in the request for reimbursement resulting in small differences between actual payroll costs and the amounts charged to the program. We also noted that in 14 of the 60 samples selections for the Emergency Solution Grant Program, had similar calculation errors. This is an indication that controls are not functioning at a level to detect and correct all errors. Cause: The Village relied heavily on manual processes which are more prone to errors, and did not have an adequate review process to identify and correct calculation errors within the request for reimbursement. Effect or Potential Effect: Calculation errors may go undetected without adequate controls in place. The Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known Questioned Costs Emergency Solutions Grants Program: $277 Likely Questioned Costs Emergency Solutions Grants Program: $44,276 Known Questioned Costs Housing Opportunities for Persons with AIDS: None above the $25,000 reporting threshold. Likely Questioned Costs Housing Opportunities for Persons with AIDS: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $1,529,275. Payroll costs including fringe benefits for the Housing Opportunities for Persons with AIDS in 2022 were $708,148 with known questioned costs of $427 and likely questioned costs of $18,245. Identification as a Repeat Finding: 2021-012. Recommendation: We recommend system improvements that require less manual entry and implement policies and procedures to review calculations within the requests for reimbursement prior to submission. Views of Responsible Officials: Management agrees with the finding. Management is in the process of upgrading the system utilized for time and entry allocations to grants to reduce manual errors.
Corrective Action: Management, in the immediate term, will review its oversight and controls on the manual process Grants Accounting implemented for obtaining Time & Allocation Excel Sheet and calculating payroll and benefits costs accurately onto the Request for Reimbursement (RFR). Furthermore, management plans to collaborate with its Payroll Service Provider to capitalize on software upgrades, aiming to enhance the accuracy of Time & Allocation to grants and reduce errors by designing straight-through-process improvements. Name of Responsible Individual(s): Jason Brenier, CFO Anticipated Completion Date: April 2024
2021-012
The Village did not maintain the records for timesheet approvals by the employee and/or direct supervisor. We noted in accordance with §200.430(i) that 34 out of 60 samples selected for testing within the Community Development Grants Program, did not have employee and/or supervisor approval. We noted 19 out of 60 samples selected for testing within the Health Center Program Cluster, that did not have documentation of employee and/or supervisor approval. We noted 44 out of 60 samples selected for testing within the Emergency Solutions Grants Program, did not have documentation of employee and/or supervisor approval. Cause: The Village did not have policies and procedures in place to timely receive and retain sufficient documentation over the approval of timesheets. Effect or Potential Effect: Without adequate controls in place to ensure timesheets are adequately reviewed and approved, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known Questioned Costs Community Development Block Grant: $7,528 Likely Questioned Costs Community Development Block Grant: $378,395 Known Questioned Costs Health Center Program Cluster: $16,397 Likely Questioned Costs Health Center Program Cluster: $1,267,711 Known Questioned Costs Emergency Solutions Grants Program: $9,472 Likely Questioned Costs Emergency Solutions Grants Program: $1,649,038 Context: Payroll costs including fringe benefits for the CDBG-Entitlement Grants Cluster in 2022 were $848,919. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $2,052,649. Payroll costs including fringe benefits for the Health Center Program Cluster in 2022 were $2,133,947. Questioned costs consist of amounts lacking documentation of fully approved timesheets. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Village consistently obtain and retain timesheet approvals by both the employee and supervisor for each pay period requested for reimbursement by the grantor. These records should be maintained at least through the close out of the grant and completion of required audits. Views of Responsible Officials: Management agrees with the finding. Management is in the process of upgrading the system utilized for time and entry allocations to grants to ensure accurate and timely time entry record keeping.
Show full finding ▾Hide full finding ▴Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.218, 14.231, 93.224 & 93.527 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770, 19H80CS10606, 21H8FCS40355C6 Criteria: Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: The Village did not maintain the records for timesheet approvals by the employee and/or direct supervisor. We noted in accordance with §200.430(i) that 34 out of 60 samples selected for testing within the Community Development Grants Program, did not have employee and/or supervisor approval. We noted 19 out of 60 samples selected for testing within the Health Center Program Cluster, that did not have documentation of employee and/or supervisor approval. We noted 44 out of 60 samples selected for testing within the Emergency Solutions Grants Program, did not have documentation of employee and/or supervisor approval. Cause: The Village did not have policies and procedures in place to timely receive and retain sufficient documentation over the approval of timesheets. Effect or Potential Effect: Without adequate controls in place to ensure timesheets are adequately reviewed and approved, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known Questioned Costs Community Development Block Grant: $7,528 Likely Questioned Costs Community Development Block Grant: $378,395 Known Questioned Costs Health Center Program Cluster: $16,397 Likely Questioned Costs Health Center Program Cluster: $1,267,711 Known Questioned Costs Emergency Solutions Grants Program: $9,472 Likely Questioned Costs Emergency Solutions Grants Program: $1,649,038 Context: Payroll costs including fringe benefits for the CDBG-Entitlement Grants Cluster in 2022 were $848,919. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $2,052,649. Payroll costs including fringe benefits for the Health Center Program Cluster in 2022 were $2,133,947. Questioned costs consist of amounts lacking documentation of fully approved timesheets. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Village consistently obtain and retain timesheet approvals by both the employee and supervisor for each pay period requested for reimbursement by the grantor. These records should be maintained at least through the close out of the grant and completion of required audits. Views of Responsible Officials: Management agrees with the finding. Management is in the process of upgrading the system utilized for time and entry allocations to grants to ensure accurate and timely time entry record keeping.
Corrective Action: Management, in the immediate term, will review its oversight and controls on the manual process Grants Accounting implemented for obtaining Time & Allocation Excel Sheet and calculating payroll and benefits costs accurately onto the Request for Reimbursement (RFR). Furthermore, management plans to collaborate with its Payroll Service Provider to capitalize on software upgrades, aiming to enhance the accuracy of Time & Allocation to grants and reduce errors by designing straight-through-process improvements. Name of Responsible Individual(s): Jason Brenier, CFO Anticipated Completion Date: April 2024
The Village did not comply with the required submission date of the data collection form and reporting package to the FAC for the fiscal year ended December 31, 2022. Cause: The Village did not comply with the controls in place to ensure that the reporting package was submitted to the FAC within the required timeframe. Effect or Potential Effect: The Village could be exposed to a reduction or elimination of funds by the Federal awarding agencies. Questioned Costs: None. Context: This was a condition noted per review of Villages’ compliance with the specified requirements. The submission was due September 30, 2023. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Village closely monitor and comply to the established controls to ensure the reporting package is submitted to the FAC annually within the required timeframe. Views of Responsible Officials: Management agrees with the finding. Management has experienced significant turnover in recent years and is working to enhance the internal accounting team to expedite year end close processes.
Show full finding ▾Hide full finding ▴Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.218, 14.231, 14.241, 14.267, 93.224 & 93.527 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program, Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS, Continuum of Care Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-03, HHI-21-35, HHI-20-21, 563770, 558951, CA0802L9D012012, CA0802L9D012113, CA1348L9D012006, CA1348L9D012107, CA1510L9D012005, CA1510L9D012106, CA1883L9D012001, CA1883L9D012102, HHI-22-07, HHI-23-03, HHI-22-26, HHI-23-13, 19H80CS10606, 21H8FCS40355C6 Criteria: The Uniform Guidance in 2 CFR §200.512, Report submission, states that the audit must be completed and the data collection form and reporting package must be submitted to the Federal Audit Clearinghouse (FAC) within the earlier of 30 calendar days after receipt of the auditor’s report or nine (9) months after the end of the audit period. Condition: The Village did not comply with the required submission date of the data collection form and reporting package to the FAC for the fiscal year ended December 31, 2022. Cause: The Village did not comply with the controls in place to ensure that the reporting package was submitted to the FAC within the required timeframe. Effect or Potential Effect: The Village could be exposed to a reduction or elimination of funds by the Federal awarding agencies. Questioned Costs: None. Context: This was a condition noted per review of Villages’ compliance with the specified requirements. The submission was due September 30, 2023. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Village closely monitor and comply to the established controls to ensure the reporting package is submitted to the FAC annually within the required timeframe. Views of Responsible Officials: Management agrees with the finding. Management has experienced significant turnover in recent years and is working to enhance the internal accounting team to expedite year end close processes.
Corrective Action: Management has experienced turnover in recent years which has made internal deadline unachievable. Management has hired and will continue to hire accounting staff for resiliency so accounting operations continue to meet deadlines. Additionally, Accounting is working closely with its auditors for mapping out a 2023 audit timeline to ensure audits are finalized and issued prior to the Federal Audit Clearinghouse (FAC) deadline. Name of Responsible Individual(s): Jason Brenier, CFO Anticipated Completion Date: January 2024
Of the one transaction subject to equipment real property management requirements in 2022 we noted that: (1) There is no separate listing of equipment purchased using federal funds being maintained. However, no additional equipment was noted and no sales of equipment purchased with federal funding occurred in 2022. (2) No physical inventory count was performed for equipment purchased using federal funds in 2022. However, one would not be considered overdue until 2023. Cause: The Village does not have adequate policies and procedures in place regarding monitoring of equipment acquired under Federal awards. Effect or Potential Effect: There is a risk that inadequate recordkeeping of equipment could lead to misappropriation of assets and noncompliance with Federal regulations resulting in a return of Federal awards received. Questioned Costs: None. Context: This is a condition identified per review of the Village’s compliance with the specified requirements of one transaction. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that Village implement policies, procedures, and controls that will ensure that equipment purchased under Federal awards are tracked and maintained, in order to adhere to Federal regulations related to equipment and its related maintenance. Views of Responsible Officials: Management agrees with the finding. Management will enhance and enforce existing policies regarding Equipment and Real Property management.
Show full finding ▾Hide full finding ▴Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.218 Program: CDBG-Entitlement Grants Cluster Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Additionally, per the Uniform Guidance in 2 CFR §200.313, Equipment, property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. Further, a physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR §200.313(d)(2)). Condition: Of the one transaction subject to equipment real property management requirements in 2022 we noted that: (1) There is no separate listing of equipment purchased using federal funds being maintained. However, no additional equipment was noted and no sales of equipment purchased with federal funding occurred in 2022. (2) No physical inventory count was performed for equipment purchased using federal funds in 2022. However, one would not be considered overdue until 2023. Cause: The Village does not have adequate policies and procedures in place regarding monitoring of equipment acquired under Federal awards. Effect or Potential Effect: There is a risk that inadequate recordkeeping of equipment could lead to misappropriation of assets and noncompliance with Federal regulations resulting in a return of Federal awards received. Questioned Costs: None. Context: This is a condition identified per review of the Village’s compliance with the specified requirements of one transaction. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that Village implement policies, procedures, and controls that will ensure that equipment purchased under Federal awards are tracked and maintained, in order to adhere to Federal regulations related to equipment and its related maintenance. Views of Responsible Officials: Management agrees with the finding. Management will enhance and enforce existing policies regarding Equipment and Real Property management.
Corrective Action: Management will enhance and enforce existing policies and procedures regarding Equipment and Real Property Management to segregate equipment purchased by state, local, and federal grants. Additionally, the CAPEx Committee will provide oversight on fixed asset expenditures purchased through government grants so accounting can identify and reconcile to its fixed asset schedule. Name of Responsible Individual(s): Jason Brenier, CFO Anticipated Completion Date: January 2024
During our testing over nonpayroll costs, for one out of 60 selections, the Village requested reimbursement for an eligible expenditure. However, the item was reimbursed by the vendor through a credit to the Village’s account from an item previously reimbursed. The original credit was required to be returned to the grantor upon receipt. Cause: The Village did not maintain internal control procedures to ensure that credits reduced the funds requested. Effect or Potential Effect: The Village charged through expenditures that were not appropriately reduced by vendor credits, which could result in disallowances or costs reimbursed in excess of costs incurred. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend the Village implements internal controls to ensure any credits are not requested for reimbursement or are refunded, as appropriate, to the Federal agency. Views of Responsible Officials: Management agrees with the finding. Management will enhance and enforce existing policies over the proper treatment of credit memos obtained and the timely return of funds to the grantor.
Show full finding ▾Hide full finding ▴Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.241 Program: Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS Award/Pass-Through Entity Identifying Numbers: 558951 Criteria: The Uniform Guidance in 2 CFR §200.406 requires that non-Federal entities receiving Federal awards must reduce the funds requested by any applicable credits. Per 2 CFR §200.406 Applicable Credits: “(a) Applicable credits refer to those receipts or reduction-of-expenditure-type transactions that offset or reduce expense items allocable to the Federal award as direct or indirect (F&A) costs. Examples of such transactions are: purchase discounts, rebates or allowances, recoveries or indemnities on losses, insurance refunds or rebates, and adjustments of overpayments or erroneous charges. To the extent that such credits accruing to or received by the non-Federal entity relate to allowable costs, they must be credited to the Federal award either as a cost reduction or cash refund, as appropriate.” Condition: During our testing over nonpayroll costs, for one out of 60 selections, the Village requested reimbursement for an eligible expenditure. However, the item was reimbursed by the vendor through a credit to the Village’s account from an item previously reimbursed. The original credit was required to be returned to the grantor upon receipt. Cause: The Village did not maintain internal control procedures to ensure that credits reduced the funds requested. Effect or Potential Effect: The Village charged through expenditures that were not appropriately reduced by vendor credits, which could result in disallowances or costs reimbursed in excess of costs incurred. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend the Village implements internal controls to ensure any credits are not requested for reimbursement or are refunded, as appropriate, to the Federal agency. Views of Responsible Officials: Management agrees with the finding. Management will enhance and enforce existing policies over the proper treatment of credit memos obtained and the timely return of funds to the grantor.
Corrective Action: Management will enhance existing procedures within the Grant Accounting process for Request for Reimbursement, aiming to identify controls to ensure credits appropriately reduce the requested funds or that any additional funds are promptly returned in compliance with 2 CFR §200.406. Additionally, the Grant Accounting team will conduct extra training sessions for accounting staff and accounts payable personnel to enhance their proficiency in recognizing refunds and credits associated with grant expenses. Name of Responsible Individual(s): Jason Brenier, CFO Anticipated Completion Date: January 2024
For 34 out of 40 selections of the rent expenditures requested, appropriate supporting documentation was not available to support the reasonableness of the amount paid and appropriate period of performance of the rent costs requested for reimbursement. Cause: The Village did not appropriately retain or produce documentation that rent reasonableness was determined prior to submitting for reimbursement. Effect or Potential Effect: Insufficient retention of underlying lease documents resulted in controls not operating effectively to appropriately identify rental amounts for the Village’s clients in need of rental assistance. The Village could incorrectly charge expenditures to the federal program as a result. Questioned Costs: Known Questioned Costs: $13,926 Likely Questioned Costs: $668,925 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Total costs under the grant subject to testing were $925,334. Questioned costs were calculated as amounts lacking documentation. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Village enforce existing policies and procedures and implement additional policies and procedures for maintaining lease documentation. Views of Responsible Officials: Management agrees with the finding. Management is implementing a check on all claims to ensure proper period of performance for grants.
Show full finding ▾Hide full finding ▴Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: HHI-22-07, HHI-23-03 Criteria: Where a funding period is specified, a recipient may charge to the grant only allowable costs resulting from obligations incurred during the funding period and any pre-award costs authorized by the Federal awarding agency. Unless the Federal awarding agency authorizes an extension, a recipient shall liquidate all obligations incurred under the award not later than 90 calendar days after the funding period or the date of completion as specified in the terms and conditions of the award or in agency implementing instructions. Condition: For 34 out of 40 selections of the rent expenditures requested, appropriate supporting documentation was not available to support the reasonableness of the amount paid and appropriate period of performance of the rent costs requested for reimbursement. Cause: The Village did not appropriately retain or produce documentation that rent reasonableness was determined prior to submitting for reimbursement. Effect or Potential Effect: Insufficient retention of underlying lease documents resulted in controls not operating effectively to appropriately identify rental amounts for the Village’s clients in need of rental assistance. The Village could incorrectly charge expenditures to the federal program as a result. Questioned Costs: Known Questioned Costs: $13,926 Likely Questioned Costs: $668,925 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Total costs under the grant subject to testing were $925,334. Questioned costs were calculated as amounts lacking documentation. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Village enforce existing policies and procedures and implement additional policies and procedures for maintaining lease documentation. Views of Responsible Officials: Management agrees with the finding. Management is implementing a check on all claims to ensure proper period of performance for grants.
Corrective Action: The Grants Accounting team has internally enforced a two-way check on all claims. Claims are reviewed by peer first, then either a Supervisor or Manager of Grants accounting. This two-way review of all claims will ensure that claims are made for invoices during the period of performance. Grants Accountants are also being required to take Financial Management courses online yearly to remain fiscally responsible in their positions. A part of being fiscally responsible is knowing Periods of Performances for grants. Name of Responsible Individual(s): Jason Brenier, CFO Anticipated Completion Date: January 2024
During our testing of costs (excluding payroll and fringe benefits, see finding 2022-004), we noted in accordance with §200.403(g) that 10 of the 60 samples selected for testing within CDBG- Entitlement Grants Cluster, did not have sufficient support for their rationale regarding the allocation of the costs. For the Emergency Solutions Grants Program, 29 of the 60 samples selected for testing did not have sufficient support for their rationale regarding the allocation of the costs. Cause: The Village allocates many costs between individual grants and grant programs, without maintaining adequate support for the rationale behind the allocation of costs. Effect or Potential Effect: Without adequate support for the rationale behind cost allocations, the Village cannot adequately document that costs are fairly charged between individual grants and grant programs. The Village could charge expenses to federal programs that are not based on the programs usage. Questioned Costs: Known Questioned Costs CDBG-Entitlement Grants Cluster: None above the $25,000 reporting threshold. Likely Questioned Costs CDBG-Entitlement Grants Cluster: None above the $25,000 reporting threshold. Known Questioned Costs Emergency Solutions Grants Program: $6,232 Likely Questioned Costs Emergency Solutions Grants Program: $38,701 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Nonpayroll costs for the CDBG-Entitlement Grants Cluster in 2022 were $444,085 with known questioned costs of $7,732 and likely questioned costs of $20,400. Nonpayroll costs for the Emergency Solutions Grants Program in 2022 were $1,854,771. Questioned costs consist of amounts lacking underlying support or amounts in excess of supported allocations. Identification as a Repeat Finding: This is a repeat of prior year finding 2021-008. Recommendation: We recommend that the Village carefully document the rationale or justification for cost allocations. Views of Responsible Officials: Management agrees with this finding. Management is developing a cost allocation worksheet, which will include documentation for the rationale or justification for cost allocations.
Show full finding ▾Hide full finding ▴Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.218, 14.231 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770 Criteria: The Uniform Guidance in 2 CFR §200.403 states that for costs to be allowable under Federal awards, they must be adequately documented and there must be sufficient documentation. “Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. See also §200.306(b). (g) Be adequately documented. See also §200.300 through §200.309. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to §200.308(e)(3).” Condition: During our testing of costs (excluding payroll and fringe benefits, see finding 2022-004), we noted in accordance with §200.403(g) that 10 of the 60 samples selected for testing within CDBG- Entitlement Grants Cluster, did not have sufficient support for their rationale regarding the allocation of the costs. For the Emergency Solutions Grants Program, 29 of the 60 samples selected for testing did not have sufficient support for their rationale regarding the allocation of the costs. Cause: The Village allocates many costs between individual grants and grant programs, without maintaining adequate support for the rationale behind the allocation of costs. Effect or Potential Effect: Without adequate support for the rationale behind cost allocations, the Village cannot adequately document that costs are fairly charged between individual grants and grant programs. The Village could charge expenses to federal programs that are not based on the programs usage. Questioned Costs: Known Questioned Costs CDBG-Entitlement Grants Cluster: None above the $25,000 reporting threshold. Likely Questioned Costs CDBG-Entitlement Grants Cluster: None above the $25,000 reporting threshold. Known Questioned Costs Emergency Solutions Grants Program: $6,232 Likely Questioned Costs Emergency Solutions Grants Program: $38,701 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Nonpayroll costs for the CDBG-Entitlement Grants Cluster in 2022 were $444,085 with known questioned costs of $7,732 and likely questioned costs of $20,400. Nonpayroll costs for the Emergency Solutions Grants Program in 2022 were $1,854,771. Questioned costs consist of amounts lacking underlying support or amounts in excess of supported allocations. Identification as a Repeat Finding: This is a repeat of prior year finding 2021-008. Recommendation: We recommend that the Village carefully document the rationale or justification for cost allocations. Views of Responsible Officials: Management agrees with this finding. Management is developing a cost allocation worksheet, which will include documentation for the rationale or justification for cost allocations.
Corrective Action: Management will review all cost allocations and implement documented policies and procedures to ensure sufficient support of any allocations of costs is maintained as required by 2 CFR §200.403. In addition, Management has developed a cost allocation worksheet and framework and is in the process of implementing a new procedure to ensure it is reviewed by accounting and grant managers to ensure accurate reporting. Name of Responsible Individual(s): Jason Brenier, CFO Anticipated Completion Date: March 2024
2021-008
The Village did not maintain all records for timesheet approvals by the employee and/or direct supervisor. We noted 7 out of 60 samples selected for testing within the Housing Opportunities for Persons with AIDS, that did not have documentation of employee and/or supervisor approval. Cause: The Village’s record retention policy within its payroll system allows for certain details related to timecards and employee and supervisor approvals to be deleted after one year. Because of this policy, records were not available for inspection during the audit to verify that costs were appropriately reviewed and approved in accordance with 2 CFR 200.430. Effect or Potential Effect: The Village could not provide appropriate evidence to verify that internal controls functioned during the audit period and costs were charged to the federal program in accordance with the requirements of 2 CFR.430. Questioned Costs: Known Questioned Costs: None above the $25,000 reporting threshold. Likely Questioned Costs: None above the $25,000 reporting threshold. Context: Payroll costs including fringe benefits in 2022 were $708,148 with known questioned costs of $373 and likely questioned costs of $15,947. Questioned costs consist of amounts lacking documentation of fully approved timesheets. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Village consistently retain timesheet records and approvals by both the employee and supervisor for each pay period requested for reimbursement by the grantor. These records should be maintained at least through the close out of the grant and completion of required audits. Views of Responsible Officials: Management agrees with the finding. Management is in the process of upgrading the system utilized for time and entry allocations to grants to ensure accurate and timely time entry record keeping. The record retention policy for timesheets will be extended.
Show full finding ▾Hide full finding ▴Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.241 Program: Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS Award/Pass-Through Entity Identifying Numbers: 558951 Criteria: The Uniform Guidance in 2 CFR §200.430(i) states that “charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: The Village did not maintain all records for timesheet approvals by the employee and/or direct supervisor. We noted 7 out of 60 samples selected for testing within the Housing Opportunities for Persons with AIDS, that did not have documentation of employee and/or supervisor approval. Cause: The Village’s record retention policy within its payroll system allows for certain details related to timecards and employee and supervisor approvals to be deleted after one year. Because of this policy, records were not available for inspection during the audit to verify that costs were appropriately reviewed and approved in accordance with 2 CFR 200.430. Effect or Potential Effect: The Village could not provide appropriate evidence to verify that internal controls functioned during the audit period and costs were charged to the federal program in accordance with the requirements of 2 CFR.430. Questioned Costs: Known Questioned Costs: None above the $25,000 reporting threshold. Likely Questioned Costs: None above the $25,000 reporting threshold. Context: Payroll costs including fringe benefits in 2022 were $708,148 with known questioned costs of $373 and likely questioned costs of $15,947. Questioned costs consist of amounts lacking documentation of fully approved timesheets. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Village consistently retain timesheet records and approvals by both the employee and supervisor for each pay period requested for reimbursement by the grantor. These records should be maintained at least through the close out of the grant and completion of required audits. Views of Responsible Officials: Management agrees with the finding. Management is in the process of upgrading the system utilized for time and entry allocations to grants to ensure accurate and timely time entry record keeping. The record retention policy for timesheets will be extended.
Corrective Action: Management, in the immediate term, will review its oversight and controls on the manual process Grants Accounting implemented for obtaining Time & Allocation Excel Sheet and calculating payroll and benefits costs accurately onto the Request for Reimbursement (RFR). Furthermore, management plans to collaborate with its Payroll Service Provider to capitalize on software upgrades, aiming to enhance the accuracy of Time & Allocation to grants and reduce errors by designing straight-through-process improvements. Name of Responsible Individual(s): Jason Brenier, CFO Anticipated Completion Date: April 2024
FAC accepted this audit on April 16, 2023 — management decision was due October 16, 2023.
We noted that the Village allocated payroll expenditures to the Emergency Solutions Grant Program, and the Health Center Program Cluster during 2021 based on budget allocation rates or employees? schedules. For the Health Center Program Cluster and Emergency Solutions Grant program, employees did not track actual time and effort for comparison to budget allocations or employees? schedules. There was no procedure in place to determine if a true-up was necessary from allocated costs. Eighty timesheets were tested during the audit (40 for each program), and all were charged based on budgeted allocated rates. Context: This is a condition identified per review of the Village?s compliance with specified requirements using a statistically valid sample. Payroll costs including fringe benefits for the Emergency Solutions Grant Program in 2021 were $804,417. Payroll costs including fringe benefits for the Health Center Program Cluster in 2021 were $1,566,629. As payroll and related costs were not adequately supported by documentation of time and effort for the Emergency Solutions Grant Program, and Health Center Program Cluster, all payroll costs are considered to be questioned costs. Cause: The Village did not have policies and procedures in place to review and reconcile the estimated amounts of payroll expenditures charged to the Emergency Solutions Grant Program, and the Health Center Program Cluster to the actual expenditures incurred. Effect or Potential Effect: Without adequate controls in place to ensure costs based on budgeted allocations are reasonable and reconcile to the actual time spent on the program, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Emergency Solutions Grant Program: $804,417 Health Center Cluster Program: $1,566,629 Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: We recommend that the Village implement policies and procedures to review for any necessary budget to actual adjustments, and we recommend that sufficient documentation be maintained to support any adjustments made as required by 2 CFR 200.430. In addition, we recommend management carefully review allocations for workers? compensation and other similar expenses to ensure proper rates are used. Views of Responsible Officials: Management agrees with the finding. Management will implement policies and procedures to ensure a true up between budget and actual is completed and ensure all actual and adjusting reimbursements are properly supported.
Show full finding ▾Hide full finding ▴Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.231, 93.224, 93.527 Program: Emergency Solutions Grant Program, and Health Center Program Cluster Pass-Through Entity Identifying Numbers: HHI-21-03, 563770 (COVID-19), 19H80CS10606, 20H8DCS35772C3 (COVID-19), 20H8ECS38356C4 (COVID-19), 21H8FCS40355C6 (COVID-19), 20C14CS39821, 19H80CS10606 Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.430 Compensation ? Personal Services: ?Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity?s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity?s system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.? Condition: We noted that the Village allocated payroll expenditures to the Emergency Solutions Grant Program, and the Health Center Program Cluster during 2021 based on budget allocation rates or employees? schedules. For the Health Center Program Cluster and Emergency Solutions Grant program, employees did not track actual time and effort for comparison to budget allocations or employees? schedules. There was no procedure in place to determine if a true-up was necessary from allocated costs. Eighty timesheets were tested during the audit (40 for each program), and all were charged based on budgeted allocated rates. Context: This is a condition identified per review of the Village?s compliance with specified requirements using a statistically valid sample. Payroll costs including fringe benefits for the Emergency Solutions Grant Program in 2021 were $804,417. Payroll costs including fringe benefits for the Health Center Program Cluster in 2021 were $1,566,629. As payroll and related costs were not adequately supported by documentation of time and effort for the Emergency Solutions Grant Program, and Health Center Program Cluster, all payroll costs are considered to be questioned costs. Cause: The Village did not have policies and procedures in place to review and reconcile the estimated amounts of payroll expenditures charged to the Emergency Solutions Grant Program, and the Health Center Program Cluster to the actual expenditures incurred. Effect or Potential Effect: Without adequate controls in place to ensure costs based on budgeted allocations are reasonable and reconcile to the actual time spent on the program, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Emergency Solutions Grant Program: $804,417 Health Center Cluster Program: $1,566,629 Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: We recommend that the Village implement policies and procedures to review for any necessary budget to actual adjustments, and we recommend that sufficient documentation be maintained to support any adjustments made as required by 2 CFR 200.430. In addition, we recommend management carefully review allocations for workers? compensation and other similar expenses to ensure proper rates are used. Views of Responsible Officials: Management agrees with the finding. Management will implement policies and procedures to ensure a true up between budget and actual is completed and ensure all actual and adjusting reimbursements are properly supported.
Finding Number 2021-007: Allowable Costs/Cost Principles (Personnel Services) Corrective Action: Management implemented policies and procedures to ensure a true up between budget and actual is completed to ensure all actual and adjusting reimbursements are properly supported as required by 2 CFR ?200.403. In addition, management will implement policies and procedures regarding regular review of allocations for workers compensation and other similar expenses to ensure accuracy. Name of Responsible Individual(s): Melinda Mallie, Erwan Martin, Alison Windsor, and Judy Bokhari Anticipated Completion Date: April 2023
The Village allocated expenditures to programs during 2021 based on a direct allocation methodology. This allocation is done manually, and the support was inconsistently maintained. During our testing of costs (excluding payroll and fringe benefits), we noted in accordance with ?200.403(g) that 2 of the 40 samples selected for testing within Housing Opportunities for Persons with AIDS, did not have sufficient support for the allocation of the costs. We noted 16 out of 40 samples selected for testing within the Emergency Solutions Grant Program did not have sufficient support for the allocation of the costs. Context: This is a condition identified per review of the Village?s compliance with specified requirements using a statistically valid sample. Nonpayroll costs for the Emergency Solutions Grant Program in 2021 were $606,543. Nonpayroll costs for the Housing Opportunities for Persons with AIDS in 2021 were $525,118. Cause: The Village did not have policies and procedures in place to ensure that sufficient documentation was maintained to support the allocation of costs. Effect or Potential Effect: Without adequate controls in place to ensure costs are allowable and reimbursable, including controls over review of allocation methodologies, the Village could incorrectly charge expenditures to the federal programs. Questioned Costs: Below reporting threshold. Identification as a Repeat Finding: This is a repeat of prior year finding 2020-003. Recommendation: We recommend that sufficient documentation be maintained to support any allocations of costs as required by ?200.403. Views of Responsible Officials: Management agrees with the finding. Management will create and maintain documentation to support any allocations of costs required.
Show full finding ▾Hide full finding ▴Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.231, 14.241 Program: Emergency Solutions Grant Program and Housing Opportunities for Persons with AIDS Pass-Through Entity Identifying Numbers: HHI-21-03, 563770, 558939, 558951, 558951 (COVID-19) Criteria: The Uniform Guidance Section ?200.403(g) states that for costs to be allowable under Federal awards, they must be adequately documented and there must be sufficient documentation. ?Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. See also ?200.306(b). (g) Be adequately documented. See also ?200.300 through 200.309. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to ?200.308(e)(3).? Condition: The Village allocated expenditures to programs during 2021 based on a direct allocation methodology. This allocation is done manually, and the support was inconsistently maintained. During our testing of costs (excluding payroll and fringe benefits), we noted in accordance with ?200.403(g) that 2 of the 40 samples selected for testing within Housing Opportunities for Persons with AIDS, did not have sufficient support for the allocation of the costs. We noted 16 out of 40 samples selected for testing within the Emergency Solutions Grant Program did not have sufficient support for the allocation of the costs. Context: This is a condition identified per review of the Village?s compliance with specified requirements using a statistically valid sample. Nonpayroll costs for the Emergency Solutions Grant Program in 2021 were $606,543. Nonpayroll costs for the Housing Opportunities for Persons with AIDS in 2021 were $525,118. Cause: The Village did not have policies and procedures in place to ensure that sufficient documentation was maintained to support the allocation of costs. Effect or Potential Effect: Without adequate controls in place to ensure costs are allowable and reimbursable, including controls over review of allocation methodologies, the Village could incorrectly charge expenditures to the federal programs. Questioned Costs: Below reporting threshold. Identification as a Repeat Finding: This is a repeat of prior year finding 2020-003. Recommendation: We recommend that sufficient documentation be maintained to support any allocations of costs as required by ?200.403. Views of Responsible Officials: Management agrees with the finding. Management will create and maintain documentation to support any allocations of costs required.
Finding Number 2021-008: Allowable Costs/Cost Principles Corrective Action: Management will review all cost allocations and implement documented policies and procedures to ensure sufficient support of any allocations of costs is maintained as required by 2 CFR ?200.403. Name of Responsible Individual(s): Melinda Mallie, Alison Windsor, and Judy Bokhari Anticipated Completion Date: March 2023
2020-003
The Village allocated expenditures that were incurred prior to the start of the funding period. During our testing of costs, we noted that 3 of the 40 samples selected for testing were incurred prior to the start of the funding period and were not approved in accordance with ?200.308. Context: This is a condition identified per review of the Village?s compliance with specified requirements using a statistically valid sample. Costs for the Continuum of Care Program in 2021 were $2,132,746. Cause: The Village did not have policies and procedures in place to ensure that costs were only charged as incurred during the appropriate funding period. Effect or Potential Effect: Without adequate controls in place to ensure costs are allowable and reimbursable, including controls over review of the date of incurrence, the Village could incorrectly charge expenditures to the federal programs. Questioned Costs: Below reporting threshold. Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: We recommend that only costs incurred during the appropriate funding period be charged, and that this be appropriately documented and reviewed. Views of Responsible Officials: Management agrees with the finding. Management will enhance controls over the period of performance to ensure all requests are made within the proper period based on the period of performance.
Show full finding ▾Hide full finding ▴Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Pass-Through Entity Identifying Numbers: CA0802L9D011911, CA0802L9D012012, CA1348L9D011905, CA1348L9D012006, CA1510L9D011904, CA1510L9D012005, CA1883L9D011900, CA1883L9D012001, HHI-21-10, HHI-22-26 Criteria: Where a funding period is specified, a recipient may charge to the grant only allowable costs resulting from obligations incurred during the funding period and any pre-award costs authorized by the Federal awarding agency. Unless the Federal awarding agency authorizes an extension, a recipient shall liquidate all obligations incurred under the award not later than 90 calendar days after the funding period or the date of completion as specified in the terms and conditions of the award or in agency implementing instructions. Condition: The Village allocated expenditures that were incurred prior to the start of the funding period. During our testing of costs, we noted that 3 of the 40 samples selected for testing were incurred prior to the start of the funding period and were not approved in accordance with ?200.308. Context: This is a condition identified per review of the Village?s compliance with specified requirements using a statistically valid sample. Costs for the Continuum of Care Program in 2021 were $2,132,746. Cause: The Village did not have policies and procedures in place to ensure that costs were only charged as incurred during the appropriate funding period. Effect or Potential Effect: Without adequate controls in place to ensure costs are allowable and reimbursable, including controls over review of the date of incurrence, the Village could incorrectly charge expenditures to the federal programs. Questioned Costs: Below reporting threshold. Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: We recommend that only costs incurred during the appropriate funding period be charged, and that this be appropriately documented and reviewed. Views of Responsible Officials: Management agrees with the finding. Management will enhance controls over the period of performance to ensure all requests are made within the proper period based on the period of performance.
Finding Number 2021-009: Period of Performance Corrective Action: Management will update written procedures and train the Grants Accounting team regarding period of performance to ensure all requests are made within the proper period based on the period of performance. The procedures and training will include cost allowability, requirements for documentation, and review of charges prior to requests. Name of Responsible Individual(s): Melinda Mallie, Alison Windsor, and Judy Bokhari Anticipated Completion Date: April 2023
The Village?s procurement policy does not have a level of specificity to fully comply with Federal procurement regulations. The Village has an organization wide procurement process. However, the records do not adequately differentiate between procurement for federal grants and other funding sources. The Village was able to provide vendor selection documentation of the bidding process associated with the procurement transactions selected. Additionally, the Village?s written processes do not have specific control procedures to check for suspension and debarment and, therefore, the Village did not verify that vendors or contractors were not excluded or disqualified prior to entering into these arrangements. Context: This is a condition identified per review of the Village?s compliance with specified requirements using a statistically valid sample. The total population for procurement testing was $128,589 for the Health Center Program Cluster. Two transactions of the four were selected for testing. Cause: The Village?s personnel did not adhere to the Village?s documented policies and procedures for ensuring complete documentation of the history of the procurement and the Village did not have adequate internal controls in place to identify the need to ensure a check for suspended or debarred vendors on contractors occurred prior to entering into those agreements Effect or Potential Effect: Failure to maintain proper documentation for vendor selection process and failure to obtain vendor solicitation for procurements is noncompliance with Federal regulations and the Village?s policy. Potential for entering into contracts with suspended or debarred vendors. Questioned Costs: None. Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: We recommend management and those charged with governance continue to review and improve its internal controls over procurement to ensure compliance with the Village?s procurement policy and Federal regulations as well as relevant suspension and debarment requirements included in ?200.214. Views of Responsible Officials: Management agrees with the finding. Management will strengthen policies and procedures over procurement and retain sufficient supporting documentation to comply with federal regulations. Additionally, management will implement policies to ensure all required vendors are checked for suspension and debarment.
Show full finding ▾Hide full finding ▴Federal Agencies: Department of Health and Human Services Federal Assistance Listing Numbers: 93.224, 93.527 Program: Health Center Program Cluster Pass-Through Entity Identifying Numbers: 19H80CS10606, 20H8DCS35772C3 (COVID-19), 20H8ECS38356C4 (COVID-19), 21H8FCS40355C6 (COVID-19), 20C14CS39821 Criteria: In accordance with ?200.318, the non-federal entity must use its own documented procurement procedures which reflect applicable laws and regulations, provided that the procurements conform to applicable federal law and the standards identified. Additionally, the non-federal entity must maintain records sufficient to detail the history of the procurement. These records are required to include but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. All procurement transactions must be conducted in in accordance with ?200.317 through ?200.327. In accordance with ?200.214 non-federal entities cannot enter into awards, subawards, or contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Non-federal entities must either check for exclusions in the System for Award Management (SAM); collect a certification from the entity, or add a clause or condition to the covered transaction with the entity prior to entering into a covered transaction with a non-federal entity. Condition: The Village?s procurement policy does not have a level of specificity to fully comply with Federal procurement regulations. The Village has an organization wide procurement process. However, the records do not adequately differentiate between procurement for federal grants and other funding sources. The Village was able to provide vendor selection documentation of the bidding process associated with the procurement transactions selected. Additionally, the Village?s written processes do not have specific control procedures to check for suspension and debarment and, therefore, the Village did not verify that vendors or contractors were not excluded or disqualified prior to entering into these arrangements. Context: This is a condition identified per review of the Village?s compliance with specified requirements using a statistically valid sample. The total population for procurement testing was $128,589 for the Health Center Program Cluster. Two transactions of the four were selected for testing. Cause: The Village?s personnel did not adhere to the Village?s documented policies and procedures for ensuring complete documentation of the history of the procurement and the Village did not have adequate internal controls in place to identify the need to ensure a check for suspended or debarred vendors on contractors occurred prior to entering into those agreements Effect or Potential Effect: Failure to maintain proper documentation for vendor selection process and failure to obtain vendor solicitation for procurements is noncompliance with Federal regulations and the Village?s policy. Potential for entering into contracts with suspended or debarred vendors. Questioned Costs: None. Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: We recommend management and those charged with governance continue to review and improve its internal controls over procurement to ensure compliance with the Village?s procurement policy and Federal regulations as well as relevant suspension and debarment requirements included in ?200.214. Views of Responsible Officials: Management agrees with the finding. Management will strengthen policies and procedures over procurement and retain sufficient supporting documentation to comply with federal regulations. Additionally, management will implement policies to ensure all required vendors are checked for suspension and debarment.
Finding Number 2021-010: Procurement Corrective Action: Management will update and strengthen policies and procedures over procurement and retain sufficient supporting documentation to comply with federal regulations. Additionally, management will implement policies to ensure all required vendors are checked for suspension and debarment. Management will assess and implement system changes to detail a complete history of procurement transactions. Management will also provide training to appropriate staff as needed. Name of Responsible Individual(s): Melinda Mallie, Rocio Hammershaimb, Erwan Martin, David McGregor-Lambert Anticipated Completion Date: April 2023 (the date of completion for any needed system changes is yet to be determined, but will be implemented as soon as feasibly possible)
For 11 out of the 40 rental payments tested, the rental reasonableness form used by the Villages was unable to be provided. Management was able to recreate the rent reasonableness form for five out of the 11 rental payments tested missing the rent reasonableness form to show that the rent was reasonable at the time the lease was signed. For 3 out of the 40 rental payments tested, the applicable lease agreement or change in terms was not available. Context: This is a condition identified per review of the Village?s compliance with specified requirements using a statistically valid sample. Cause: The Village did not appropriately retain or produce documentation that rent reasonableness was checked prior to move-in or at changes to lease terms in accordance with its policies. Additionally, not all supporting documentation for changes to terms were obtained or retained. Effect or Potential Effect: Insufficient retention or creation of rent reasonableness forms and supporting documentation resulted in rent reasonableness controls not operating effectively to appropriately identify rental amounts for the Village?s clients in need of rental assistance. The Village could incorrectly charge expenditures to the federal program as a result. Known Questioned Costs: $13,477. Likely Questioned Costs: $194,673. Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: We recommend that the Village enforce existing policies and procedures and implement additional policies and procedures for maintaining and monitoring rental reasonableness documentation to ensure compliance with HUD-determined fair market rents requirements. Views of Responsible Officials: Management agrees with the finding. Management will enhance and enforce existing policies and procedures over monitoring of rental reasonableness in compliance with HUD-determined fair market rents requirements.
Show full finding ▾Hide full finding ▴Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Pass-Through Entity Identifying Numbers: CA0802L9D011911, CA0802L9D012012, CA1348L9D011905, CA1348L9D012006, CA1510L9D011904, CA1510L9D012005, CA1883L9D011900, CA1883L9D012001, HHI-21-10, HHI-22-26 Criteria: Per 2 CFR ?200.303 non-Federal entities receiving Federal awards (i.e., auditee management) are required to establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 24 CFR ?578.49(b)(1), ?Where grants are used to pay for rent for all or a part of a structure or structures, the rent paid must be reasonable in relation to rents being charged in the area for comparable space. In addition, the rent may not exceed rents currently being charged by the same owner for comparable unassisted space.? Per 24 CFR ??578.49(b)(2) and 578.51(g), ?When grants are used to pay rent for individual housing units, the rent paid must be reasonable in relation to rents being charged for comparable units, taking into account the location, size, type, quality, amenities, facilities, and management services. In addition, the rents may not exceed rents currently being charged for comparable units, and the rent paid may not exceed HUD-determined fair market rents.? ?HUD will only provide rental assistance for a unit if the rent is reasonable. The recipient or subrecipient must determine whether the rent charged for the unit receiving rental assistance is reasonable in relation to rents being charged for comparable unassisted units, taking into account the location, size, type, quality, amenities, facilities, and management and maintenance of each unit. Reasonable rent must not exceed rents currently being charged by the same owner for comparable unassisted units.? Condition: For 11 out of the 40 rental payments tested, the rental reasonableness form used by the Villages was unable to be provided. Management was able to recreate the rent reasonableness form for five out of the 11 rental payments tested missing the rent reasonableness form to show that the rent was reasonable at the time the lease was signed. For 3 out of the 40 rental payments tested, the applicable lease agreement or change in terms was not available. Context: This is a condition identified per review of the Village?s compliance with specified requirements using a statistically valid sample. Cause: The Village did not appropriately retain or produce documentation that rent reasonableness was checked prior to move-in or at changes to lease terms in accordance with its policies. Additionally, not all supporting documentation for changes to terms were obtained or retained. Effect or Potential Effect: Insufficient retention or creation of rent reasonableness forms and supporting documentation resulted in rent reasonableness controls not operating effectively to appropriately identify rental amounts for the Village?s clients in need of rental assistance. The Village could incorrectly charge expenditures to the federal program as a result. Known Questioned Costs: $13,477. Likely Questioned Costs: $194,673. Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: We recommend that the Village enforce existing policies and procedures and implement additional policies and procedures for maintaining and monitoring rental reasonableness documentation to ensure compliance with HUD-determined fair market rents requirements. Views of Responsible Officials: Management agrees with the finding. Management will enhance and enforce existing policies and procedures over monitoring of rental reasonableness in compliance with HUD-determined fair market rents requirements.
Finding Number 2021-011: Special Tests and Provisions Corrective Action: Management will enhance and enforce existing policies and procedures over monitoring of rental reasonableness in compliance with HUD-determined fair market rents requirements. Management will provide training to appropriate staff as needed. Name of Responsible Individual(s): Melinda Mallie, Contract Compliance, and Program Management Anticipated Completion Date: March 2023
For the Housing Opportunities for Persons with AIDS Program, for 11 out of 40 sample selections, calculation errors were found in the request for reimbursement resulting in small differences between actual payroll costs and the amounts charged to the program. We also noted that in 3 of the 40 samples selections for the Emergency Solution Grant Program, had similar calculation errors. This is an indication that controls are not functioning at a level to detect and correct all errors. Context: This is a condition identified per review of the Village?s compliance with specified requirements using a statistically valid sample. Cause: The Village relied heavily on manual processes which are more prone to errors, and did not have an adequate review process to identify and correct calculation errors within the request for reimbursement. Effect or Potential Effect: Calculation errors may go undetected without adequate controls in place. The Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Emergency Solutions Grant Program: None. Housing Opportunities for Persons with AIDS Program: Below reporting threshold. Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: We recommend system improvements that require less manual entry and implement policies and procedures to review calculations within the requests for reimbursement prior to submission. Views of Responsible Officials: Management agrees with the finding. Management will consider system improvement and implement policies and procedures for the review of calculations.
Show full finding ▾Hide full finding ▴Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.241, 14.231 Program: Housing Opportunities for Persons with Aids Program, and Emergency Solutions Grant Program Pass-Through Entity Identifying Numbers: 558939, 558951, 558951 (COVID-19), HHI-21-03, 563770 (COVID-19) Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.430 Compensation ? Personal Services: ?Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity?s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity?s system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.? Condition: For the Housing Opportunities for Persons with AIDS Program, for 11 out of 40 sample selections, calculation errors were found in the request for reimbursement resulting in small differences between actual payroll costs and the amounts charged to the program. We also noted that in 3 of the 40 samples selections for the Emergency Solution Grant Program, had similar calculation errors. This is an indication that controls are not functioning at a level to detect and correct all errors. Context: This is a condition identified per review of the Village?s compliance with specified requirements using a statistically valid sample. Cause: The Village relied heavily on manual processes which are more prone to errors, and did not have an adequate review process to identify and correct calculation errors within the request for reimbursement. Effect or Potential Effect: Calculation errors may go undetected without adequate controls in place. The Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Emergency Solutions Grant Program: None. Housing Opportunities for Persons with AIDS Program: Below reporting threshold. Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: We recommend system improvements that require less manual entry and implement policies and procedures to review calculations within the requests for reimbursement prior to submission. Views of Responsible Officials: Management agrees with the finding. Management will consider system improvement and implement policies and procedures for the review of calculations.
Finding Number 2021-012: Allowable Costs/Cost Principles (Personnel Services) Corrective Action: In 2022, Management expanded the team, adding a Manager of Grants Accounting whose primary responsibility is to monitor and manage grant activities. In addition, Management added a Supervisor of Grants Accounting to review monthly grant activity reconciliations. Management will establish written procedures to timely prepare and reconcile all grant activities and perform regular review of calculations to ensure accuracy of requests for reimbursement prior to submission. In addition, Management will assess and implement system changes to reduce manual entry where possible. Management will also provide training to all appropriate staff as needed. Name of Responsible Individual(s): Melinda Mallie, Erwan Martin, Alison Windsor, and Judy Bokhari Anticipated Completion Date: Partial completion is anticipated by May 2023 (the date of completion for any needed system changes is yet to be determined and will be implemented as soon as feasibly possible).
FAC accepted this audit on March 15, 2022 — management decision was due September 15, 2022.
Finding Number 2020-003: Allowable Costs/Cost Principles, 14.218 Community Development Block Grants, 14.231 Emergency Solution Grants Program, and 14.241 Housing Opportunities for Persons with AIDS, Grant Award Period Year Ended December 31, 2020 Criteria Per Part 6 of the Compliance Supplement, controls need to be designed such that they would prevent or detect potential noncompliance. Management should implement control activities through policies. Condition The Village is not consistently performing a detail review of internally prepared schedules, and the related supporting documentation, used to support program expenses prior to the submission of the Request for Reimbursement (?RFR?). Cause The Village?s policies and processes regarding review of underlying detail of program expenses were not consistently applied. Effect Expenses submitted for reimbursement may include material amounts of un-allowable costs due to errors. Additionally, expenses submitted for reimbursement may exclude material amounts of allowable costs due to errors. Identification as a repeat finding No. Recommendation We recommend that the Village grant department detail review, and consistently follow, established policies and processes of detail review, including vouching to supporting documents, of expenses reported to funding agencies. Views of responsible official Management acknowledges these deficiencies which were due to the resignation of a key staff member ? the grants fiscal supervisor. However, due to the inability to hire a replacement, this lack of review continued through 2021. A year-end audit of RFR?s will be performed in order to ascertain if corrections need to be made.
Show full finding ▾Hide full finding ▴Finding Number 2020-003: Allowable Costs/Cost Principles, 14.218 Community Development Block Grants, 14.231 Emergency Solution Grants Program, and 14.241 Housing Opportunities for Persons with AIDS, Grant Award Period Year Ended December 31, 2020 Criteria Per Part 6 of the Compliance Supplement, controls need to be designed such that they would prevent or detect potential noncompliance. Management should implement control activities through policies. Condition The Village is not consistently performing a detail review of internally prepared schedules, and the related supporting documentation, used to support program expenses prior to the submission of the Request for Reimbursement (?RFR?). Cause The Village?s policies and processes regarding review of underlying detail of program expenses were not consistently applied. Effect Expenses submitted for reimbursement may include material amounts of un-allowable costs due to errors. Additionally, expenses submitted for reimbursement may exclude material amounts of allowable costs due to errors. Identification as a repeat finding No. Recommendation We recommend that the Village grant department detail review, and consistently follow, established policies and processes of detail review, including vouching to supporting documents, of expenses reported to funding agencies. Views of responsible official Management acknowledges these deficiencies which were due to the resignation of a key staff member ? the grants fiscal supervisor. However, due to the inability to hire a replacement, this lack of review continued through 2021. A year-end audit of RFR?s will be performed in order to ascertain if corrections need to be made.
Management acknowledges these deficiencies which were due to the resignation of a key staff member ? the grants fiscal supervisor. However, due to the inability to hire a replacement, this lack of review continued through 2021. A year end audit of RFR?s will be performed in order to ascertain if corrections need to be made.
FAC accepted this audit on December 1, 2020 — management decision was due June 1, 2021.
Finding Number 2019-003: Special Tests and Provisions, Continuum of Care, CFDA No. 14.267, Grant Award Period Year Ended December 31, 2019 Criteria Where grants are used to pay for rent for all or a part of a structure, the rent paid must be reasonable in relation to rents being charged in the area for comparable space. In addition, the rent may not exceed rents currently being charged by the same owner for comparable unassisted space. Condition The Village is not consistently performing rent reasonableness checks for individuals in the program. Cause The Village?s policies and processes regarding performance of rent reasonableness checks were not consistently applied. Effect Rents paid may be in excess of rents being charged in the area for comparable space. Identification as a repeat finding Prior year finding 2018-004. Recommendation We recommend that the Village review policies and processes for performance of rent reasonableness checks.
Show full finding ▾Hide full finding ▴Finding Number 2019-003: Special Tests and Provisions, Continuum of Care, CFDA No. 14.267, Grant Award Period Year Ended December 31, 2019 Criteria Where grants are used to pay for rent for all or a part of a structure, the rent paid must be reasonable in relation to rents being charged in the area for comparable space. In addition, the rent may not exceed rents currently being charged by the same owner for comparable unassisted space. Condition The Village is not consistently performing rent reasonableness checks for individuals in the program. Cause The Village?s policies and processes regarding performance of rent reasonableness checks were not consistently applied. Effect Rents paid may be in excess of rents being charged in the area for comparable space. Identification as a repeat finding Prior year finding 2018-004. Recommendation We recommend that the Village review policies and processes for performance of rent reasonableness checks.
Finding Number 2019-003: Special Tests and Provisions, Continuum of Care, CFDA No. 14.267, Grant Award Period Year Ended December 31, 2019 Condition: The Village is not consistently performing rent reasonableness checks for individuals in the program. Views of Responsible Officials and Planned Corrective Actions: Management acknowledges these deficiencies and has taken steps to fix the problems. A new policy was put in place during 2019 for the program that was deficient in this area and new procedures were established to ensure that a rent reasonableness test was performed prior to any new lease being signed. An internal audit will also be performed to ensure compliance with the new policies and procedures. Name of Contact Person: Robert Dorsey Proposed Completion Date: December 31, 2020
2018-004
FAC accepted this audit on July 24, 2019 — management decision was due January 24, 2020.
GSA_MIGRATION
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2017-001
FAC accepted this audit on June 20, 2018 — management decision was due December 20, 2018.
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2016-004
FAC accepted this audit on August 17, 2017 — management decision was due February 17, 2018.
GSA_MIGRATION
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