Institutional Federal Compliance Report 2021

STATE OF NEW YORK

Schedule of Findings and Questioned Costs

Year ended March 31, 2018

24 CFR 570.504(b)(1) states program income received before grant closeout may be retained by the recipient if the income is treated as additional CDBG funds subject to all applicable requirements governing the use of CDBG funds. 24 CFR 570.504(c) also states the written agreement between the recipient and the subrecipient, as required by 24 CFR 570.503, shall specify whether program income received is to be returned to the recipient or retained by the subrecipient. Where program income is to be retained by the subrecipient, the agreement shall specify the activities that will be undertaken with the program income and that all provisions of the written agreement shall apply to the specified activities. When the subrecipient retains program income, transfers of grant funds by the recipient to the subrecipient shall be adjusted according to the principles described in paragraphs (b)(2) (i) and (ii) of this section. Any program income on hand when the agreement expires, or received after the agreement’s expiration, shall be paid to the recipient as required by 24 CFR 570.503(b)(8). 24 CFR 570.506(h) states financial records, in accordance with the applicable requirements listed in 24 CFR 570.502, including source documentation for entities not subject to Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements . Grantees shall maintain evidence to support how the CDBG funds provided to such entities are expended. Such documentation must include, to the extent applicable, invoices, schedules containing comparisons of budgeted amounts and actual expenditures, construction progress schedules signed by appropriate parties (e.g., general contractor and/or a project architect), and/or other documentation appropriate to the nature of the activity. Grantee records pertaining to obligations, expenditures, and drawdowns must be able to relate financial transactions to either a specific origin year grant or to program income received during a specific program year. Lastly Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements , section 200.303 states the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition The Housing Trust Fund Corporation (the Corporation) did not have policies or procedures in place to quantify the program income received by its subrecipients for the fiscal year under audit. Subrecipients reported program income to the Corporation through the Annual Performance Report, which is submitted annually for all open subrecipient agreements. However, the Corporation did not aggregate the amounts reported and did not monitor the subrecipient’s usage of program income for the fiscal year under audit. Therefore, the Performance and Evaluation Report (PER) submitted by the Corporation for the program year inaccurately reported $0 of program income for each grant. Cause The condition found is due to a lack of implemented policies and procedures to track program income generated from Federal funds passed through to subrecipients for the period under audit. Further, the Corporation does not have a monitoring control in place to ensure the Corporation’s policies and procedures capture all Federal program compliance requirements.

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