We audited the County of San Diego’s Continuum of Care program funds received from the U.S. Department of Housing and Urban Development (HUD). We audited the County because HUD had not reviewed its Continuum of Care grant program in more than 10 years and as a spinoff of an audit of a County subgrantee, Mental Health Systems, Inc. (2017-LA-1003, issued June 2, 2017). Our audit objective was to determine whether the County administered its Continuum of Care grants in accordance with HUD requirements, focusing on match requirements and payroll costs.
The County did not have adequate records to support a portion of the match fund requirement for its subgrantees. This condition occurred because the County did not adequately verify match contribution amounts identified by its subgrantees. As a result, HUD had no assurance that the County’s subgrantee met the match requirement for $54,473 in Continuum of Care grant funds, and the County was at risk of having to repay HUD due to a lack of sufficient documentation to support that it complied with Federal regulations regarding matching contributions.
Also, the County did not have adequate records to support retroactive administrative expenses for payroll for one employee. As a result, HUD had no assurance that at least $12,109 charged to the various Continuum of Care grants belonged to those grants and was spent appropriately.
We recommend that the Director of HUD’s Los Angeles Office of Community Planning and Development require the County to (1) support match fund amounts from one of its subgrantees or repay HUD $54,473 from non-Federal funds, (2) develop written subgrantee monitoring procedures to include confirmation of match funds, (3) develop and implement a written plan for its subgrantees to submit match supporting documentation, (4) support retroactive payroll costs or repay HUD $12,109 from non-Federal funds, (5) identify and support retroactive payroll for the remaining grants, and (6) develop additional procedures and controls to ensure that payroll costs charged to the grant reconcile to actual hours worked on the grants.
Recommendations
Community Planning and Development
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Status2018-LA-1002-001-AOpenClosed$54,473.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Closed on Marzo 29, 2024Support the unsupported amount of match for its subgrantee or repay HUD $54,473 from non-Federal funds (appendix D).
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Status2018-LA-1002-001-BOpenClosed
Implement written procedures to include the confirmation of match funds as part of its annual monitoring reviews of each subgrantee.
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Status2018-LA-1002-001-COpenClosed
Develop and implement a written plan for its subgrantees to provide and submit supporting documentation for match funds at the end of each grant term.
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Status2018-LA-1002-002-AOpenClosed$12,109.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Closed on Marzo 29, 2024Support sampled retroactive payroll costs totaling $12,109, which correspond to the actual time attributed to grants CA0689L9D011502, CA0880L9D011501, CA0881L9D011501, and CA0945L9D011506, or reimburse HUD from non-Federal funds.
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Status2018-LA-1002-002-BOpenClosed
Identify retroactive payroll for remaining grants (CA1162L9D011504, CA1024L9D011501, CA0694L9D011508, and CA0693L9D011508) and provide adequate documentation to support the cost or repay HUD from non-Federal funds.
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Status2018-LA-1002-002-COpenClosed
Develop and implement additional procedures and controls to ensure that payroll costs charged to the grant reconcile to actual hours worked on the grants.