Federal Assistance Programs City of Dallas, Texas September 30, 2016

Transcription

1 Federal Assistance Programs City of Dallas, Texas

2 Federal Assistance Programs Year Ended TABLE OF CONTENTS Page Schedule of Expenditures of Federal Awards 2 Notes to Schedule of Expenditures of Federal Awards 8 Report of Independent Certified Public Accountants on Internal Control over Financial Reporting and on Compliance and Other Matters Required by Government Auditing Standards 10 Report of Independent Certified Public Accountants on Compliance for Each Major Federal Program and on Internal Control over Compliance Required by Uniform Guidance 12 Report of Independent Certified Public Accountants on the Schedule of Expenditures of Federal Awards Required By Uniform Guidance 15 Schedule of Findings and Questioned Costs 16 Summary Schedule of Prior Findings 23

3 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Federal/ Program Amounts Federal grantor/ CFDA pass-through award Grant passed through pass-through grantor/ program title Number grant number amount Expenditures to subrecipients U.S. Department of Agriculture Passed through Texas Department of State Health Services Special Supplemental Nutrition Program for Women, Infants, and Children TDH - WIC $ 15,870,144 $15,839,845 Total U.S. Department of Agriculture $ 15,870,144 $15,839,845 U.S. Department of Defense Passed through U.S. Army Engineer, Fort Worth District Flood Control Projects Trinity River Corridor Project W45XMA $ 22,200,000 $ 5,038 Total U.S. Department of Defense $ 22,200,000 $ 5,038 U.S. Department of Housing and Urban Development Community Development Block Grants/Entitlement Grants Community Development Block Grant B00-MC $ 19,474,121 $ 94,221 Community Development Block Grant B-06-MC ,832, Community Development Block Grant B-97-MC ,485,706 (82,951) Community Development Block Grant B-08-MC ,714, ,965 Community Development Block Grant B-09-MC ,414, Community Development Block Grant B-10-MC ,367, ,196 Community Development Block Grant B-11-MC ,270,526 14,139 Community Development Block Grant B-12-MC ,720, ,125 Community Development Block Grant B-13-MC ,921, ,912 Community Development Block Grant B-14-MC ,572,496 3,094,414 Community Development Block Grant B-15-MC ,457,745 9,660,904 $ 847,178 Subtotal CFDA # ,231,065 14,198,253 U.S. Department of Housing and Urban Development Community Development Block Grant - S108 Loan Guarantees Community Development Block Grant - S108 Loan Guarantee B-09-MC ,600, ,624 Community Development Block Grant - S108 Loan Guarantees B-09-MC B 8,492,000 61,592 Community Development Block Grant - S108 Loan Guarantees B-09-MC A 11,750,000 90,253 Community Development Block Grant - S108 Loan Guarantees B-12-MC ,000,000 7,942,457 Subtotal CFDA # ,842,000 8,251,926 Department of Housing and Urban Development Emergency Solution Grant Program Emergency Solutions E-14-MC ,130,946 54,533 Emergency Solutions E-15-MC ,209,806 1,073, ,940 Subtotal CFDA # ,340,752 1,127, ,940 Department of Housing and Urban Development Passed through Dallas County Emergency Solution Grant Program Emergency Solutions E-14-UC ,724 - Emergency Solutions E-15-UC , ,357 Subtotal CFDA # , ,357 See Notes to Schedule of Expenditures of Federal Awards 2

4 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Federal/ Program Amounts Federal grantor/ CFDA pass-through award Grant passed through pass-through grantor/ program title Number grant number amount Expenditures to subrecipients Department of Housing and Urban Development Home Investment Partnerships Program Home Investment Partnership Agreement M02-MC $ 7,703,000 $ 5,927 Home Investment Partnership Agreement M04-MC ,952,836 - Home Investment Partnership Agreement M-05-MC ,471, ,023 Home Investment Partnership Agreement M-06-MC ,960,845 5,070 Home Investment Partnership Agreement M-08-MC ,625, ,04 Home Investment Partnership Agreement M-09-MC ,492, ,446 Home Investment Partnership Agreement M-10-MC ,475,460 44,725 Home Investment Partnership Agreement M-11-MC ,480, ,262 Home Investment Partnership Agreement M-12-MC ,700, ,493 Home Investment Partnership Agreement M-13-MC ,240, ,205 Home Investment Partnership Agreement M-14-MC ,365,818 2,944,719 Home Investment Partnership Agreement M-15-MC ,956, ,664 Subtotal CFDA # ,425,416 5,190,638 Department of Housing and Urban Development Housing Opportunities for Persons with AIDS Housing Opportunities for Persons with AIDS (HOPWA) TXH14-F001 5,375, , ,108 Housing Opportunities for Persons with AIDS (HOPWA) TXH15-F001 5,637,374 4,312,515 4,017,515 Competitive Housing Opportunities for Person w/aids TX-H ,287, ,257 Competitive Housing Opportunities for Person w/aids TX-H , ,553 Subtotal CFDA # ,047,386 5,682,687 4,453,623 Department of Housing and Urban Development Continuum of Care Program Continuum of Care Grant-Permanent Housing for Homeless with HIV/AIDS TX0060L6T , ,272 Continuum of Care Grant-Permanent Housing for Homeless with HIV/AIDS TX0060L6T , , ,662 Continuum of Care Grant-Shelter Plus Care TX0072L6T ,436,890 1,078 Continuum of Care Grant-Gateway to Permanent Supportive Housing FY TX0236L6T , ,946 Continuum of Care Permanent Supportive Housing-TBRA FY TX0072L6T ,449,970 1,435,866 Continuum of Care Shelter Plus Care-ORC FY TX0050L6T ,248 93,248 Continuum of Care Grant-Rapid Re-Housing FY TX0085L6T , ,616 Subtotal CFDA # ,900,010 2,873, ,662 Department of Housing and Urban Development Fair Housing Assistance Program_State and Local Fair Housing Assistance Program (FHAP) FF206K ,943 4,823 Fair Housing Assistance Program (FHAP) FF206K , ,139 Fair Housing Assistance Program (FHAP) FF206K ,750 35,426 Fair Housing Assistance Program (FHAP) FF206K ,825 - Subtotal CFDA # ,287, ,388 Total Department of Housing and Urban Development $332,189,117 $37,720,817 $6,245,403 U.S. Department. of Justice, Office of Juvenile Justice and Delinquency Missing Children's Assistance Internet Crimes Against Children Task Force MC-FX-K036 $ 1,445,555 $ 585,121 Subtotal CFDA # ,445, ,121 See Notes to Schedule of Expenditures of Federal Awards 3

5 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Federal/ Program Amounts Federal grantor/ CFDA pass-through award Grant passed through pass-through grantor/ program title Number grant number amount Expenditures to subrecipients U.S. Department of Justice, Bureau of Justice Assistance Missing Children's Assistance Intellectual Property Taskforce Grant ZP-BX-0001 $ 400,000 $ 184,089 Subtotal CFDA # , ,089 U.S. Department of Justice Passed through the Office of Governor, Criminal Justice Division Crime Victim Assistance Dallas Police Department Victim Services/ VA-15-V ,359 56,104 Subtotal CFDA # ,359 56,104 U.S. Department of Justice Edward Byrne Memorial Justice Assistance Grant Program Edward Byrne Memorial Justice Assistance grant program DJ-BX ,597 92,177 Edward Byrne Memorial Justice Assistance grant program DJ-BX ,372 20,670 Edward Byrne Memorial Justice Assistance grant program DJ-BX , , ,221 Subtotal CFDA # ,718, , ,221 U.S. Department of Justice, Bureau of Justice Assistance Passed through the Office of Governor, Criminal Justice Division Edward Byrne Memorial Justice Assistance Grant Program NIBIN Program ,000 79,289 Digital Evidence Asset Management Grant ,769 76,769 Subtotal CFDA # , ,058 U.S. Department of Justice, Federal Bureau of Investigation Passed through the Office of Governor, Criminal Justice Division Edward Byrne Memorial Competitive Grant Program July 7 Overtime Reimbursement , ,250 Subtotal CFDA # , ,250 U.S. Department of Justice Confiscated Monies - Federal 16.unknown N/A - 3,421,105 Total Confiscated Monies - Federal - 3,421,105 Total of U.S. Department of Justice $ 5,488,833 $ 5,875,875 $ 370,221 U.S. Department of Transportation, Federal Aviation Administration Airport Improvement Program Grant Airport Improvement Program Grant Fund $ 1,669,177 $ 253,320 Airport Improvement Program Grant Fund , ,152 Airport Improvement Program Grant Fund ,900,000 7,900,000 Airport Improvement Program Grant Fund , ,175 Total CFDA # ,420,708 9,040,647 Total U.S. Department of Transportation, Federal Aviation Administration $ 11,420,708 $ 9,040,647 See Notes to Schedule of Expenditures of Federal Awards 4

6 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Federal/ Program Amounts Federal grantor/ CFDA pass-through award Grant passed through pass-through grantor/ program title Number grant number amount Expenditures to subrecipients National Highway and Traffic Safety Administration Passed through Texas Department of Transportation National Highway Traffic Safety Administration (NHTSA) Discretionary Safety Grants The Comprehensive Selective Traffic Enforce. Program DALLAS-S-1YG $ 999,945 $ 760,470 Subtotal CFDA # , ,470 National Highway and Traffic Safety Administration Passed through Texas Department of Transportation National Priority Safety Programs STEP-Impaired Driving Mobilization DALLAS-IDM ,915 17,671 "Click It or Ticket" Mobilization Grant DALLAS-CIOT ,989 59,762 Subtotal CFDA # ,904 77,433 Total National Highway and Traffic Safety Administration $ 1,153,849 $ 837,903 National Endowment for the Arts Promotion of the Arts_Grants to Organizations and Individuals Challenge America Grant $ 10,000 $ 10,000 Total National Endowment for the Arts $ 10,000 $ 10,000 National Endowment for the Humanities Passed through Humanities Texas Promotion of the Humanities_Federal/State Partnership Day of the Book/Dia del libro Family Reading Program $ 4,284 $ 2,687 Total National Endowment for the Humanities $ 4,284 $ 2,687 U.S. Department of Education/Inst. of Museum and Lib. Serv. Passed through Texas State Library and Archives Commission Grants to States Inter-library loan LS $ 21,903 $ 1,047 Inter-library loan LS ,824 - Inter-library loan LS ,458 57,458 Library Cooperation Grant ,638 - Special Project Grant , Special Projects Grant ,000 71,654 Library Cooperation Grant ,808 66,755 The Impact Grant ,446 6,659 The Texas Readers Grant ,000 2,986 Special Project grant ,000 4,911 Library Cooperation Grant ,000 1,854 Subtotal CFDA # $ 562,168 $ 213,402 Total U.S. Department of Education $ 562,168 $ 213,402 US Department of Health and Human Services Substance Abuse and Mental Health Services Projects of Regional and National Significance SAMHSA-Adult Treatment Drug Court Expansion Project H79TI $ 323,965 $ 825 SAMHSA-Adult Treatment Drug Court Expansion Project H79T , ,701 Subtotal CFDA # , ,526 See Notes to Schedule of Expenditures of Federal Awards 5

7 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Federal/ Program Amounts Federal grantor/ CFDA pass-through award Grant passed through pass-through grantor/ program title Number grant number amount Expenditures to subrecipients U.S. Department of Health and Human Services, National Institutes of Health South Central Region Passed through National Network of Libraries of Medicine South Central Region Medical Library Assistance 2015 Health Information Literacy HHS C $ 5,000 $ 4, Express Outreach HHS C 4, Subtotal CFDA # ,980 5,438 Total U.S. Department of Health and Human Services $ 645,235 $ 318,964 U.S. Department of Transportation, Federal Highway Administration Passed through Texas Department of Transportation Highway Planning and Construction Traffic Safety Program XXH7007 $ 400,000 $ 22,584 TxDot Signal Improve. IH CSJ , , ,195 Traffic Control and Safety Treatments for Trail Road Crossings CSJ ; STP 2011(220)TE 709, ,357 TxDot's Horseshoe Project CSJ ,275 14,061 Traffic Signal Improvement at nine intersections on Loop CSJ , ,318 Traffic Signal Improvement at three locations CSJ ,103, ,890 33,216 Traffic Signal improvement at 7 Locations CSJ ,549 23,569 Traffic Signal Improvement at seven locations CSJ , Trinity Skyline Trail from Sylvan Avenue to Campion Trail CSJ: ,989,994 1,775 Katy Trail Ext Phase III CSJ / CMAQ 2,480,000 76,428 Katy Trail Ext Phase IV -Skillman to White Rock Station CSJ / STEP ,849, ,990 Safety Improvements Along UPRR-Macon Street/Sunday Street RR Crossings CSJ , ,647 CBD Wayfinding & Signage Program Phase III CSJ , , ,295 Dolphin Road/Hatcher Street CSJ ,755, ,880 Medical District Drive from IH-35 to Harry Hines Blvd CSJ: , ,327 Subtotal CFDA # ,755,974 2,274,131 Total U.S. Department of Transportation $ 17,755,974 $ 2,274,131 U.S. Environmental Protection Agency Passed through Texas Commission on Environmental Quality: Surveys, Studies, Research, Investigation, Demonstrations, and Special Purchase Activities Relating to the Clean Air Act Texas PM 2.5 Monitoring $ 67,587 $ 67,587 Subtotal CFDA # ,587 67,587 U.S. Environmental Protection Agency Passed through Texas Commission on Environmental Quality: Performance Partnership Grants Ambient Air Monitoring , ,140 Subtotal CFDA # , ,140 Total U.S. Environmental Protection Agency $ 435,377 $ 249,727 See Notes to Schedule of Expenditures of Federal Awards 6

8 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Federal/ Program Amounts Federal grantor/ CFDA pass-through award Grant passed through pass-through grantor/ program title Number grant number amount Expenditures to subrecipients U.S. Department of Homeland Security Passed through Federal Emergency Management Agency Disaster Grants-Public Assistance (Presidentially Declared Disasters) FEMA Public Assistance Program DR-4223 $ 10,000,000 $ 188,401 Subtotal CFDA # ,000, ,401 U.S. Department of Homeland Security Passed through Texas Department of Public Safety Emergency Management Performance Grants Emergency Management Performance Grant (EMPG) EP ,543 44,386 Emergency Management Performance Grant (EMPG) EP ,381 98,441 Subtotal CFDA # , ,827 U.S. Department of Homeland Security Passed through Federal Emergency Management Agency Assistance to Firefighters Grant 2014 Assistance to Firefighters Grant EMW-2014-FP ,412 94,404 Subtotal CFDA # ,412 94,404 U.S. Department of Homeland Security Passed through FEMA Region 6 Cooperating Technical Partners FEMA Region VI- Cooperating Technical Partners EMT-2013-CA ,000 28,236 FEMA Region VI- Cooperating Technical Partners EMW-2014-CA-APP , ,096 FEMA Region VI- Cooperating Technical Partners EMW-2015-CA , ,527 Subtotal CFDA # ,875, ,859 U.S Department of Homeland Security Passed through Texas Department of Public Safety Homeland Security Grant Program 2014 Urban Area Security Initiative - UASI EMW-2014-SS ,275,627 4,118, Urban Area Security Initiative - Law Enforcement EMW-2014-SS ,462,057 1,462, Urban Area Security Initiative - M&A EMW-2014-SS ,491 33, State Homeland Security Response System EMW-2014-SS , , Urban Area Security Initiative - UASI EMW-2015-SS S01 4,347, , Urban Area Security Initiative - Law Enforcement EMW-2015-SS S01 1,221, , Urban Area Security Initiative - M&A EMW-2015-SS S01 293, ,247 Subtotal CFDA # ,988,906 6,837,347 Total U.S. Department of Homeland Security $ 24,305,742 $ 7,917,838 Total Federal Assistance $432,041,431 $80,306,874 $6,615,624 See Notes to Schedule of Expenditures of Federal Awards 7

9 NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES General The accompanying Schedule of Expenditures of Federal Awards presents the activity of all federal award programs of the City of Dallas, Texas (the City ). The City s reporting entity is defined in Note 1 to the City s basic financial statements. All federal awards received directly by the primary government from federal agencies, as well as federal awards passed through other government agencies, are included in the scope of the Federal Single Audit requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) and are included on the Schedule of Expenditures of Federal Awards. Basis of Accounting The accompanying Schedule of Expenditures of Federal Awards is presented using accrual basis of accounting. NOTE B - RELATIONSHIP TO FEDERAL FINANCIAL REPORTS Amounts reported in the accompanying Schedule of Expenditures of Federal Awards may not agree with the amounts reported in the related federal financial reports filed with grantor agencies because those reports, in some cases, are filed on a cash basis. NOTE C - FEDERAL AWARDS RECONCILIATION (in thousands) Intergovernmental Revenues per statement of revenues, expenditures, and changes in fund balances - governmental funds $ 98,329 Nonoperating revenues to proprietary funds from intergovernmental grants 9,041 Operating revenues to proprietary funds from intergovernmental grants - AVI 58 Less intergovernmental awards from state government (state expenditures) (23,496) Less intergovernmental awards from sources other than federal and state awards (3,625) Total expenditures per schedule of expenditures of Federal Awards $ 80,307 8

10 NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS - CONTINUED NOTE D - RELATIONSHIP OF EXPENDITURES The negative expenditures primarily represent a reallocation of grant expenditures between grant program years or reimbursements of grant expenditures by the General Fund resulting from grant budget overruns in the fiscal year after the year of expenditure recognition. Amounts reported as expenditures on the accompanying Schedule of Expenditures of Federal Awards are equal to total grant revenues received as adjusted for the effect of the year-end accruals (Note C), plus the City s required matching contributions. NOTE E - CONTINGENCIES The City participates in several federal grant programs, which are governed by various rules and regulations of the grantor agencies. Costs charged to the respective grant programs are subject to audit and adjustment by the grantor agencies; therefore, to the extent that the City has not complied with the rules and regulations governing the grants, refunds of any money received may be required and the collectability of any related receivable at may be impaired. Additionally, the City has received notification of potential non-compliance with certain federal programs and is responding to those letters. In the opinion of management, there are no significant contingent liabilities relating to compliance with the rules and regulations governing the respective grants. NOTE F - COMMUNITY DEVELOPMENT BLOCK GRANTS The City has outstanding loan balances for the Community Development Block Grant - Section 108 loans as of as follows (in thousands): Program Federal CFDA # Amount S108 loan to developer outstanding at 09/30/2016, FY2016: FC DALLAS TIF, LLC (#VC ) $ 5,420 City Wide Community Development Corp. (#VS ) ,492 Hamilton Atmos LP (#VS ) ,494 Teof Hotel, LP (VS86833) ,160 $31,566 NOTE G - INDIRECT COST RATE The City uses the applicable federally negotiated indirect cost rate and has elected not to use the ten percent de minimis indirect cost rate allowed under the Uniform Guidance. 9

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17 SCHEDULE OF FINDINGS AND QUESTIONED COSTS SECTION I - SUMMARY OF AUDITORS RESULTS Financial Statements Type of auditors report issued: Internal control over financial reporting: Material weakness identified? Unmodified No Significant deficiencies identified that are not considered to be material weaknesses? None reported Noncompliance material to financial statements noted? None reported Federal Awards Internal control over major programs: Material weakness identified? Yes Significant deficiencies identified that are not considered to be material weaknesses? None reported Type of auditor s report issued on compliance for major programs: Any audit findings disclosed that are required to be reported under Uniform Guidance? Identification of Major Programs: Federal CFDA Number Unmodified Yes Federal Program or Cluster Special Supplemental Nutrition Program for Women, Infants and Children (WIC) Community Development Block Grants Continuum of Care Program 16.unknown Confiscated Monies Dollar threshold used to distinguish between type A and type B programs $2,409,206 Auditee qualified as low-risk auditee? No 16

18 SCHEDULE OF FINDINGS AND QUESTIONED COSTS SECTION II - FINDINGS RELATED TO THE BASIC FINANCIAL STATEMENTS REPORTED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS None noted. SECTION III - FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS Finding #: CFDA Number: Federal Title: Federal Agency: Federal Award Number: Continuum of Care (CoC) Program U.S. Department of Housing and Urban Development TX0236L6T001406/ TX0072L6T001407/ TX0050L6T Program Year: Compliance Requirement: Type of Finding: Eligibility, Housing Quality Standards, Reasonable Rental Rates Material weakness Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires that non-federal entities receiving Federal awards establish and maintain internal control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. 17

19 SCHEDULE OF FINDINGS AND QUESTIONED COSTS SECTION III - FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS - Continued According to 24 CFR section 578.3, to be eligible to receive assistance under the CoC Program an individual or family must lack a fixed, regular, and adequate nighttime residence, which is defined as: (1) having a primary nighttime residence that is a public or private place not meant for human habitation; (2) living in a publicly or privately operated shelter designated to provide temporary living arrangements (including congregate shelters, transitional housing, and hotel and motels paid for by charitable organizations or by Federal, State, or local government programs); or (3) exiting an institution where (s)he has resided for 90 days or less and residing in an emergency shelter or place not meant for human habitation immediately before entering that institution. Controls for Eligibility should provide reasonable assurance that only eligible individuals and organizations receive assistance under Federal award programs, and that amounts provided to or on behalf of eligible individuals or groups of individuals were calculated in accordance with program requirements. According to 24 CFR Section , housing assisted under the CoC Program must meet applicable housing quality standards. Before any assistance is provided on behalf of a participant, the non-federal entity, or another entity acting on behalf of the non-federal entity (other than the owner of the housing), must physically inspect each unit to assure that the unit meets housing quality standards. Non-Federal entities must also inspect all units annually during the grant period to ensure that units continue to meet housing quality standards. Controls related to Housing Quality Standards (HQS) should provide reasonable assurance of compliance with the applicable housing quality standards, and that inspections occur at the proper intervals during the grant period to ensure that the units continue to meet HQS. According to 24 CFR section (b)(1), when 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. Controls related to Reasonable Rental Rates should provide reasonable assurance that Federal awards are expended only for rent that has been determined to be reasonable and that amounts are properly calculated and valued. Condition: We noted that there was a lack of appropriate and sufficient review of participant files to ensure the accuracy and completeness of these files, including the review of the information included in the files to support the provision of services. Eligibility: Three (3) of sixty (60) client files reviewed were missing the Payment Request Worksheet used to support a supervisory review and approval prior to providing benefits; and three (3) of sixty (60) participant files reviewed were missing the Tenant Rent Calculation Worksheet used to support the calculation and determination of monthly rent amounts to be paid on the participant s behalf in accordance with eligibility requirements. Housing Quality Standards: Three (3) of sixty (60) participant files reviewed were missing the Housing Quality Inspection Report used to support and document the performance of an annual inspection. 18

20 SCHEDULE OF FINDINGS AND QUESTIONED COSTS SECTION III - FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS - Continued Reasonable Rental Rates: Four (4) of sixty (60) participant files reviewed were missing a properly completed Rent Reasonableness Determination form documenting that the City performed the reasonable rental rates analysis, and the Tenant Rent Calculation Worksheet used to support the calculation and determination of monthly rent amounts to be paid on the participant s behalf. The sample was randomly selected. Questioned Costs: None. Identification of a repeat finding: This is a repeat finding from the immediate previous audit ( ). Effect: Failure to have adequate support for rent calculations and supervisory approval of client eligibility determination could result in participants who are not eligible of receiving assistance, and incorrect rental amounts being paid for by the City. Failure to complete or perform the Housing Quality Inspection Report could result in the leasing of units that do not meet the applicable Housing Quality Standards. Failure to perform and document the reasonable rental rates analysis, documented by the completion of the Rent Reasonableness Determination form and the Tenant Rent Calculation Worksheet, could result in the City paying rental rates that exceed the rates paid in comparable areas for comparable space, and that exceed rents currently being charged by the same owner for comparable unassisted space. Cause: Case Managers (1) failed to complete all appropriate documentation for eligibility determination prior to submitting the file to supervisor for review and approval; (2) failed to ensure the completion of the Housing Quality Inspection Report as support and documentation that the inspection was performed, and; (3) failed to complete all appropriate documentation to support the calculation of rent amounts to determine reasonable rental rates are being paid. Program supervisor failed to provide appropriate and sufficient review of all aspects of the participant files after completion by the case manager to ensure all supporting documentation was obtained and adequately completed prior to final approval for provision of services to the participant. 19

21 SCHEDULE OF FINDINGS AND QUESTIONED COSTS SECTION III - FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS - Continued Recommendation: We recommend that the City have appropriate and sufficient controls in place to ensure that (1) each participant s eligibility for rental amounts and rental payments is properly documented; (2) such documentation be maintained in the participant s files to support all amounts paid on the participant s behalf; and (3) the documentation is reviewed and approved by the supervisor. Additionally, appropriate and sufficient controls should be in place to ensure housing quality standards inspections are performed and properly documented and that such documentation be maintained in the participants files to document the performance of the inspection. Also, controls should be in place to ensure that reasonable rental rates analysis is performed for all participants and that all files include the properly prepared and completed documentation to support the calculated rent amounts and determination of reasonableness. Additionally, we recommend that stronger internal controls be put in place to make certain a detailed supervisory review of client files is performed prior to the provision of services. View of Responsible Officials and Planned Corrective Action: Management agrees with the finding and recommendation. This issue is a repeat finding from the fiscal year 2015 audit. The issues that were identified during 2016 took place prior to the implementation of updated policies and procedures requiring the program managers to conduct a detailed review of client files and eligibility documents before the execution of a Rental Assistance Payment agreement and payment approval for respective clients. Updated policies and procedures were implemented during March 2016 and the finding was remediated. Finding #: CFDA Number: Federal Title: Federal Award Number: Continuum of Care (CoC) Program TX0236L6T001406/ TX0072L6T001407/ TX0050L6T Program year: Compliance Requirement: Type of Finding: Reasonable Rental Rates Noncompliance 20

22 SCHEDULE OF FINDINGS AND QUESTIONED COSTS SECTION III - FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS - Continued Criteria: According to 24 CFR section (b)(1), when 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: Four (4) of sixty (60) participant files reviewed were missing properly completed Rent Reasonableness Determination form documenting that the City performed the reasonable rental rates analysis, and the Tenant Rent Calculation Worksheet used to support the calculation and determination of monthly rental amounts to be paid on the participant s behalf. The sample was randomly selected. Identification of a repeat finding: This is a repeat finding from the immediate previous audit ( ). Questioned Costs: None Effect: Failure to perform and document the reasonable rental rates analysis, documented by the completion of the Rent Reasonableness Determination form and the Tenant Rent Calculation Worksheet, could result in the City paying rental rates that exceed the rates paid in comparable areas for comparable space, and that exceed rents currently being charged by the same owner for comparable unassisted space. Cause: Case Managers failed to complete all appropriate documentation to support the calculation of rental amounts to determine reasonable rental rates are being paid. Recommendation: We recommend that all files include the properly prepared and completed documentation to support the calculated rent amounts and determination of reasonableness and a supervisory review is performed to ensure that reasonable rental rates analysis are performed for all participants. 21

23 SCHEDULE OF FINDINGS AND QUESTIONED COSTS SECTION III - FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS - Continued View of Responsible Officials and Planned Corrective Action: Management agrees with the finding and recommendation. This issue is a repeat finding from the fiscal year 2015 audit. The issues that were identified during 2016 took place prior to implementation of policies and procedures as recommended in the previous audit, which requires the program manager to conduct a detailed review of eligibility documents, evidenced by a program manager s signature. Policies and procedures were implemented during March 2016 and the finding was remediated. 22

24 SUMMARY SCHEDULE OF PRIOR FINDINGS SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS Finding #: CFDA Number: Federal Title: Federal Agency: Federal Award Number: Continuum of Care (CoC) Program U.S. Department of Housing and Urban Development TX0236L6T001305/ TX0050L6T001306/ TX0072L6T Program Year: Compliance Requirement: Type of Finding: Eligibility, Housing Quality Standards, Reasonable Rental Rates Material weakness Criteria: The A-102 Common Rule and OMB Circular A-110 (2 CFR part 215) require that non-federal entities receiving Federal awards establish and maintain internal control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. According to 24 CFR section 578.3, to be eligible to receive assistance under the CoC Program an individual or family must lack a fixed, regular, and adequate nighttime residence, which is defined as: (1) having a primary nighttime residence that is a public or private place not meant for human habitation; (2) living in a publicly or privately operated shelter designated to provide temporary living arrangements (including congregate shelters, transitional housing, and hotel and motels paid for by charitable organizations or by Federal, State, or local government programs); or (3) exiting an institution where (s)he has resided for 90 days or less and residing in an emergency shelter or place not meant for human habitation immediately before entering that institution. Controls for Eligibility should provide reasonable assurance that only eligible individuals and organizations receive assistance under Federal award programs, and that amounts provided to or on behalf of eligible individuals or groups of individuals were calculated in accordance with program requirements. According to 24 CFR Section , housing assisted under the CoC Program must meet applicable housing quality standards. Before any assistance is provided on behalf of a participant, the non-federal entity, or another entity acting on behalf of the non-federal entity (other than the owner of the housing), must physically inspect each unit to assure that the unit meets housing quality standards. Non-Federal entities must also inspect all units annually during the grant period to ensure that units continue to meet housing quality standards. Controls related to Housing Quality Standards (HQS) should provide reasonable assurance of compliance with the applicable housing quality standards, and that inspections occur at the proper intervals during the grant period to ensure that the units continue to meet HQS. According to 24 CFR section (b)(1), when 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. Controls related to Reasonable Rental Rates should provide reasonable assurance that Federal awards are expended only for rent that has been determined to be reasonable and that amounts are properly calculated and valued. 23

25 SUMMARY SCHEDULE OF PRIOR FINDINGS Condition: Grant Thornton noted that there was a lack of appropriate and sufficient review of participant files to ensure the accuracy and completeness of participant files, including the review of the information included in the files to support the provision of services. Eligibility: Two (2) of sixty (60) client files reviewed were missing the Payment Request Worksheet used to support a supervisory review and approval prior to providing benefits; and two (2) of (60) participant files reviewed were missing the Tenant Rent Calculation Worksheet used to support the calculation and determination of monthly rent amounts to be paid on the participant s behalf in accordance with eligibility requirements. Housing Quality Standards: One (1) of sixty (60) participant files reviewed was missing the Housing Quality Inspection Report used to support and document the performance of an annual inspection. Reasonable Rental Rates: One (1) of sixty (60) participant files reviewed was missing a properly completed Rent Reasonableness Determination form documenting that the City performed the reasonable rental rates analysis, and the Tenant Rent Calculation Worksheet used to support the calculation and determination of monthly rent amounts to be paid on the participant s behalf. Questioned Costs: None. Effect: Failure to have adequate support for rent calculations and supervisory approval of client eligibility determination could result in participants who are not eligible receiving assistance, and incorrect rental amounts being paid for by the City. Failure to complete or perform the Housing Quality Inspection Report could result in the leasing of units that do not meet the applicable Housing Quality Standards. Failure to perform and document the reasonable rental rates analysis, documented by the completion of the Rent Reasonableness Determination form and the Tenant Rent Calculation Worksheet, could result in the City paying rental rates that exceed the rates paid in comparable areas for comparable space, and that exceed rents currently being charged by the same owner for comparable unassisted space. Cause: Case Managers (1) failed to complete all appropriate documentation for eligibility determination prior to submitting to supervisor for review and approval; (2) failed to ensure the completion of the Housing Quality Inspection Report as support and documentation that the inspection was performed, and; (3) failed to complete all appropriate documentation to support the calculation of rent amounts to determine reasonable rental rates are being paid. 24

26 SUMMARY SCHEDULE OF PRIOR FINDINGS Program supervisor failed to provide appropriate and sufficient review of all aspects of the participant files after completion by the case manager to ensure all supporting documentation was obtained and adequately completed prior to final approval for provision of services to the participant. Recommendation: It was recommended that the City have appropriate and sufficient controls in place to ensure that (1) each participant s eligibility for rental amounts and rental payments is properly documented; (2) such documentation be maintained in the participant s files to support all amounts paid on the participant s behalf; (3) the documentation is reviewed and approved by the supervisor. Additionally, appropriate and sufficient controls should be in place to ensure housing quality standards inspections are performed and properly documented and that such documentation be maintained in the participant s files to document the performance of the inspection. Also, controls should be in place to ensure that reasonable rental rates analysis is performed for all participants and that all files include the properly prepared and completed documentation to support the calculated rent amounts and determination of reasonableness. Additionally, it was recommend that stronger internal controls be put in place to make certain a detailed supervisory review of client files is performed prior to the provision of services. Status of Prior Year Finding: Management updated policies and procedures requiring the program managers to conduct a detailed review of client files and eligibility documents before the execution of a Rental Assistance Payment agreement and payment approval for respective clients. The finding was repeated during fiscal year 2016, because the updated policies and procedures were not implemented until March The finding was remediated during March Finding #: CFDA Number: Federal Title: Federal Award Number: Continuum of Care (CoC) Program TX0072L6T001306/ TX0050L6T Program year: Compliance Requirement: Type of Finding: Reasonable Rental Rates Noncompliance Criteria: According to 24 CFR section (b)(1), when grants are used to pay for rent for all or a part of a structure, 25

27 SUMMARY SCHEDULE OF PRIOR FINDINGS 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: One (1) of sixty (60) participant files reviewed was missing properly completed Rent Reasonableness Determination form documenting that the City performed the reasonable rental rates analysis, and the Tenant Rent Calculation Worksheet used to support the calculation and determination of monthly rental amounts to be paid on the participant s behalf. Questioned Costs: None Effect: Failure to perform and document the reasonable rental rates analysis, documented by the completion of the Rent Reasonableness Determination form and the Tenant Rent Calculation Worksheet, could result in the City paying rental rates that exceed the rates paid in comparable areas for comparable space, and that exceed rents currently being charged by the same owner for comparable unassisted space. Cause: Case Managers failed to complete all appropriate documentation to support the calculation of rental amounts to determine reasonable rental rates are being paid. Recommendation: It was recommended that all files include the properly prepared and completed documentation to support the calculated rent amounts and determination of reasonableness and a supervisory review is performed to ensure that reasonable rental rates analysis are performed for all participants. Status of Prior Year Finding: Management implemented policies and procedures as recommended in the last audit which required the program manager to conduct a detailed review of eligibility documents, evidenced by a program manager s signature. The finding was repeated during fiscal year 2016, because policies and procedures were not implemented until March The finding was remediated during March