Institutional Federal Compliance Report 2021

STATE OF NEW YORK

Schedule of Findings and Questioned Costs

Year ended March 31, 2018

Additionally section 200.303(a) 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 adequate annual management review controls in place, at a level of precision necessary to ensure proper classification of the amount of expenditures passed through to subrecipients on the State of New York Schedule of Expenditures of Federal Awards (SEFA). The Corporation reported a total of $17,027,504 in amounts passed through to subrecipients. This included $8,445,205 in capital loans made directly with developers for the Multi-Family Capital Projects program and $8,582,299 paid to Local Program Administrators (LPAs). The amounts provided under the Multi-Family Capital Projects programs were not made to subrecipients as the recipients of the funds were the ultimate beneficiaries. As a result, the Corporation inappropriately identified the $8,445,205 as pass-through expenditures that should have been reported as direct expenditures in the SEFA. Cause The condition results from the Corporation’s annual management review controls not being performed at a level of precision, to ensure proper classification of the amount of expenditures passed through to subrecipients were accurate. Possible Asserted Effect Failure to appropriately ensure the accuracy of the expenditure amounts reported on the SEFA may result in inaccurate reporting to the U.S. Department of Housing and Urban Development and may inhibit its ability to effectively monitor and evaluate the State’s performance relative to the HOME Investment Partnerships Program. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs None. Recommendation We recommend that the Corporation enhance their process including their management review control to ensure the properly classification of expenditures are presented on the SEFA. Views of Responsible Officials Recommendation accepted. Corrective action has been implemented and the issue is resolved.

136