Community Services & Development: Recurring Significant Internal Control Deficiencies
||First Year Reported
|Low-Income Home Energy Assistance
||Period of Performance. CSD misinterpreted the period of performance compliance requirement and understood the obligation period to be five federal fiscal years. However, CSD must obligate the funds within the first two federal fiscal years but then has five federal fiscal years in which to expend and liquidate the federal funds awarded under the grant awards. CSD is not in compliance with the required period of performance pursuant to the “Terms and Conditions Addendum: Additional Financial Requirements” and Section 8626 of Title 42 of the U.S. Code. For fiscal year 2014-15, CSD obligated $29,279,877 and $13,610,556 in federal funds related to the 2012 and 2013 grant award year, respectively, which fell outside the period of performance.
|Partially Corrected. CSD has adjusted its procedures to correct for this requirement beginning with Program Year 2016. Unexpended funds are no longer recaptured from prior grants and reallocated. Rather, contracts will be extended where funds are still available to maximize federal funding. In addition, any funds (i.e., returned utility payments, proceeds from litigation, etc.) that are returned to CSD after the period of performance are then forwarded to the U.S. Department of Health and Human Services (HHS). HHS has indicated that it is acceptable to remedy this going forward and has not requested that the questioned costs be returned. CSD memorialized this understanding in a letter to HHS dated September 9, 2016.