The Center for the Homeless, Inc

SIGNIFICANT DEFICIENCY 2020-001 PERIOD OF PERFORMANCE Federal Agency: Department of Housing and Urban Development Federal Program: Continuum of Care Program CFDA Number: 14.267 Federal Award Numbers and Years: Award Period 4/1/2019 - 6/30/2020: IN0180L5H021803 Condition: The Organization prepaid rent for July 2020 in the amount of $15,943 for multiple clients and claimed reimbursements for these expenses from a federal grant that ended on June 30, 2020. The rent expense was recorded in the fiscal year ended June 30, 2020. Criteria: Period of performance guidelines under the Uniform Guidance require expenses charged to federal grants to be incurred within or for the Organization to be encumbered for future expenditures during the period of the grant award. GAAP requires expenditures for future periods to be recognized as prepaid expenses. Cause: The new grant period began July 1, 2020 and the grant is generally consistent. Rent payments are due the first of the month. For cash flow reasons, the cash was pulled down in June 2020. Effect: The Organization claimed expenses and received reimbursement from an incorrect federal award and recorded the expense in an incorrect period. Identification of Repeat Findings Not a repeat finding. Recommendation: We recommend that management apply proper cutoff to avoid issues with period of performance and comply with GAAP. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and the Executive Director and/or the Treasurer of the board of directors will review grant claims monthly. The Treasurer will review the grant claims to ensure compliance with period of performance.