The Empowerment Program, Inc.Non-Profit

Condition and Criteria: Empowerment used unallowable sources to meet the matching requirement. Cause: For a sample of two quarterly reports prepared by staff that were selected during the year, each report showed federal funds through a passthrough source were being used to provide the match, which are not an acceptable source of matching funds. Effect: Empowerment may not meet the matching requirement set forth under each of the grant agreements. Recommendation: We recommend management and staff obtain a thorough understanding of what match requirements are allowed under Uniform Guidance to ensure the matching funds being reported are from allowable sources. We also recommend the use of a spreadsheet to document and itemize each revenue source being used as a match.

Criteria and Condition: The Organization used unallowable sources to meet the matching requirements. Additionally, the matching requirement is 100% of the grant award but was being calculated as 25% of the grant award. Cause: Until March 2021 when the FY 2020 audit concluded, management was unaware that the matching sources used, which are related to program participants? completion of therapy sessions and medication costs paid for by third parties and were not recorded on the Organization?s books, are not an acceptable source of matching funds. Management misread the grant agreements, which indicate that 25% of the match must be reported quarterly, and because the grantor only requires annual reporting, management believed they needed to match only 25% instead of 100%. Additionally, management was unaware that the federal funds are not an acceptable source of matching funds without prior approval. Effect: The Organization may not meet the matching requirements set forth under each of the grant agreements. Context: The Organization has a sufficient amount of non-federal revenue that can be used to satisfy matching requirements at 100% of the grant award. Questioned Costs: This finding did not result in any questioned costs. Identification of Repeat Findings: This finding is a partial repeat of prior-year finding 2020-003 Matching ? Significant Deficiency in Internal Control over Compliance. Recommendation: We recommend management obtain a thorough understanding of what match requirements are allowed under Uniform Guidance to ensure the matching funds being reported are from allowable sources. We also recommend the use of a spreadsheet to document and itemize each revenue source being used as a match.

Criteria and Condition: The Organization used unallowable sources to meet the matching requirements. Cause: Management was unaware that the matching sources used, which are related to program participants completion of therapy sessions and medication costs paid for by third parties and are not recorded on the Organization?s books, are not an acceptable source of matching funds. Effect: The Organization may not meet the matching requirements set forth under each of the grant agreements. Context: The Organization has a sufficient amount of non-federal revenue that can be used to satisfy matching requirements. Questioned Costs: This finding did not result in any questioned costs. Recommendation: We recommend management obtain a thorough understanding of what matching requirements are allowed under Uniform Guidance to ensure the matching funds being reported are from allowable sources.

Criteria and Condition: Subrecipient awards did not contain elements required under Uniform Guidance. Also, established subrecipient monitoring policies were not followed with regard to documenting the annual review over subrecipient activities nor did the policies include requesting and reviewing the subrecipient?s annual audit report and following-up when issues are identified. Cause and Context: Management was unaware of the elements required to be included in subrecipient grant agreements under the Uniform Guidance when the grant began in 2015. Management was not aware that they must review the annual audit report and follow-up when issues are identified. Management did not document their annual review of subrecipient activities as required by their internal audit policies for the year under audit. Effect: Not informing the subrecipient of the CFDA number and other Uniform Guidance requirements and not requesting a copy of the annual audit or following-up on issues identified may result in misuse of grant funds that may not be identified and corrected on a timely basis. Questioned Costs: This finding did not result in any questioned costs. Recommendation: We recommend management review Uniform Guidance Part 6 and update their accounting policies to ensure proper internal control procedures are in place for effective subrecipient monitoring. We recommend management follow their updated accounting policies and document their annual review process.

Criteria and Condition: When grants are used to pay rent, the rent paid must be reasonable in relation to rents being charged for comparable unassisted units. Cause and Context: The Organization has unassisted rental units which are leased at below market rates. There are several long-term tenants housed in these units, and as the Denver housing market has quickly accelerated, management has not raised these tenants? rent at the same pace. Effect: The Organization is receiving a higher rental rate for units paid under the grant than for units paid by self-paying individuals who do not receive assistance. Questioned Costs: This finding did not result in any questioned costs because this grant is for rental assistance and is not a reimbursement based grant. Recommendation: We recommend management increase the rent for any unassisted units that are below the market rate being paid by the grant for comparable units.

GSA_MIGRATION