UNITED WAY OF NORTH CENTRAL FLORIDA, INCNon-Profit

Finding 2022-001: Unallowable costs charged by subrecipients and submitted for reimbursement Department of Housing and Urban Development Emergency Solutions Grants Program ? Federal Assistance Listing #14.231 Passed through Florida Department of Children and Families Contract No. CP005 Grant period: Year ended June 30, 2022 Criteria: In accordance with 2 CFR 200.303, non-Federal entities must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and terms and conditions of the Federal award. Condition: Emergency Solutions Grant Program funds were paid to two sub-recipients, during the year ended June 30, 2022, which were subsequently determined to be unallowable costs as a result of the sub-recipients? noncompliance with the grant contract. Cause: Control procedures in place related to monitoring of sub-recipients? compliance with the grant contract were not consistently applied in order to prevent disallowed costs paid to sub-recipients and submitted for reimbursement from the pass-through granting agency. Effect: Noncompliance with allowable costs/cost principles required under the Federal grant award. Certain costs charged to the grant have been disallowed and certain costs have been requested to be paid back to the pass-through granting agency. Questioned Costs: Undeterminable. Context: During the audit, the auditors were notified by the Organization?s management that $120,000 of Emergency Solutions Grant Program funds were paid to one sub-recipient, during the year ended June 30, 2022, and were later notified by the pass-through granting agency that the sub-recipient did not submit required documentation for the costs incurred. Therefore, $60,000 already reimbursed by the grant, has been requested to be paid back, and another $60,000 submitted for reimbursement, was not reimbursed by the grant. The Organization is continuing to work with the agency and the sub-recipient to rectify the noncompliance, which could result in the costs being allowed. In addition, there was $245,172 paid to another sub-recipient, during the year ended June 30, 2022, of which the Organization discovered during regular monitoring of the sub-recipient that the sub-recipient was not in compliance with their agreement. Therefore, the Organization terminated the agreement with the sub-recipient and requested the funds be returned. The Organization returned the funds back to the pass-through granting agency in the next fiscal year. Recommendation: The Organization should apply control procedures in place consistently over monitoring of sub-recipients? compliance and over all costs incurred by sub-recipients to ensure that only allowable costs for grants are submitted for reimbursement. Management?s Response: Management agrees with the finding. See ?Corrective Action Plan? section.