oversight

The County of San Diego, San Diego, CA, Did Not Support Continuum of Care Match and Payroll Costs in Accordance With Requirements

Published by the Department of Housing and Urban Development, Office of Inspector General on 2018-02-23.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                    County of San Diego,
                      San Diego, CA
                       Continuum of Care Grants




Office of Audit, Region 9            Audit Report Number: 2018-LA-1002
Los Angeles, CA                                       February 23, 2018
To:            William Vasquez, Director, Los Angeles Office of Community Planning and
               Development, 9DD

               //SIGNED//
From:          Tanya E. Schulze, Regional Inspector General for Audit, 9DGA
Subject:       The County of San Diego, San Diego, CA, Did Not Support Continuum of Care
               Match and Payroll Costs in Accordance With Requirements


Attached is the U.S. Department of Housing and Urban Development (HUD), Office of Inspector
General’s (OIG) final results of our review of the County of San Diego’s Continuum of Care
grants.
HUD Handbook 2000.06, REV-4, sets specific timeframes for management decisions on
recommended corrective actions. For each recommendation without a management decision,
please respond and provide status reports in accordance with the HUD Handbook. Please furnish
us copies of any correspondence or directives issued because of the audit.
The Inspector General Act, Title 5 United States Code, section 8M, requires that OIG post its
publicly available reports on the OIG website. Accordingly, this report will be posted at
http://www.hudoig.gov.
If you have any questions or comments about this report, please do not hesitate to call me at
213-534-2471.
                   Audit Report Number: 2018-LA-1002
                   Date: February 23, 2018

                   The County of San Diego, San Diego, CA, Did Not Support Continuum of
                   Care Match and Payroll Costs in Accordance With Requirements


Highlights

What We Audited and Why
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.

What We Found
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.

What We Recommend
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.
Table of Contents
Background and Objective......................................................................................3

Results of Audit ........................................................................................................5
         Finding 1: The County Did Not Have Adequate Records To Support That
         Subgrantees Met Match Fund Requirements ................................................................ 5
         Finding 2: The County Did Not Adequately Support Retroactive Payroll Expenses 7

Scope and Methodology ...........................................................................................9

Internal Controls ....................................................................................................11

Appendixes ..............................................................................................................13
         A. Schedule of Questioned Costs .................................................................................. 13
         B. Auditee Comments and OIG’s Evaluation ............................................................. 14
         C. Criteria ....................................................................................................................... 18
         D. Match Questioned Costs ........................................................................................... 20
         E. Grants Reviewed for Match and Retroactive Payroll ........................................... 21




                                                                     2
Background and Objective
The Continuum of Care program was authorized under the McKinney-Vento Homeless
Assistance Act, as amended by the Homeless Emergency Assistance and Rapid Transition to
Housing Act of 2009. 1 The Continuum of Care program (1) promotes communitywide
commitment to the goal of ending homelessness; (2) provides funding for efforts by nonprofit
providers and State and local governments to quickly rehouse homeless individuals and families
while minimizing the trauma and dislocation caused to homeless individuals, families, and
communities by homelessness; (3) promotes access to and effective use of mainstream programs
by homeless individuals and families; and (4) optimizes self-sufficiency among individuals and
families experiencing homelessness.

The County of San Diego’s Department of Housing and Community Development provides
housing assistance and community improvements that benefit low- and moderate-income
persons. The Department provides services to County residents through rental assistance, minor
home improvement loans, first-time home-buyer assistance, and public improvement programs.
These programs reduce blight, improve neighborhoods, and alleviate substandard housing. They
also increase the supply of affordable housing by preserving housing stock and stimulating
private-sector production of lower income housing units.

The Continuum of Care program is designed to promote communitywide commitment to end
homelessness. The program funds nonprofit providers and State and local governments that
quickly rehouse homeless individuals and families.

The County received 33 Continuum of Care grants between 2014 and 2017 2 from the U.S.
Department of Housing and Urban Development (HUD) totaling more than $7.8 million, which
it passed on to various subgrantees to administer the grants (appendix E). The subgrantees
included in our review were

    •   Mental Health Systems, Inc.,
    •   Solutions for Change,
    •   Interfaith Community Services,
    •   County of San Diego Housing Authority,
    •   Kurdish Human Rights, and
    •   Crisis House.




1
  The Act streamlined HUD’s homeless grant programs by consolidating the Supportive Housing Program, Shelter
Plus Care, and Single Room Occupancy grant programs into the Continuum of Care program. Unless otherwise
noted in this audit report, the term “program” refers to the Supportive Housing Program, the Continuum of Care
program, or both programs.
2
  This number includes original Shelter Plus Care grants (see footnote 1) that had a 5-year grant term and started
before 2014 but ended within our scope.


                                                         3
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.




                                              4
Results of Audit

Finding 1: The County Did Not Have Adequate Records To
Support That Subgrantees Met Match Fund Requirements
The County did not have adequate records to support a portion of the match fund requirement for
one of 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.

The County Did Not Verify Amounts Listed on Self-Certifications
Program regulations under 2 CFR (Code of Federal Regulations) 200.306 state that match funds
need to be verifiable (appendix C); however, the County did not ensure that this was the case.
Before receiving a Continuum of Care grant from the County, a subgrantee provided a
commitment letter to the County, stating the amount of in-kind matching services it would
provide for the duration of the grant. Once the grant ended, the subgrantee provided the County
with a supportive services match report for its grant. This document showed the supportive
service(s) provided and the value of such services. Contained in this report was the match
requirement total and the total service match, along with a signature. However, both the County
and subgrantees stated that the County did not verify the match amounts. The County also did
not review the support as part of annual subgrantee monitoring. It believed the self-certifications
were adequate and relied on the contracts between the County and each subgrantee, which stated,
“Subrecipient must maintain records of the following: documentation verifying compliance with
match requirements.”

The Subgrantees Lacked Adequate Supporting Match Documentation
We contacted subgrantees Mental Health Systems, Inc., Solutions for Change, Interfaith
Community Services, and the County of San Diego Housing Authority3 to determine whether
they had supporting documentation for a sample of match fund amounts reported to the County.
Solutions for Change, Interfaith Community Services, and the County of San Diego Housing
Authority4 was able to provide adequate supporting documentation for all of its grants reviewed.
Mental Health Systems, Inc., provided adequate supporting documentation for all but one of its




3
  Mental Health Systems, Inc., is the supportive service provider for the County of San Diego Housing Authority
clients. It was also contacted for documentation on the respective grants.
4
  Additional information provided by the County as part of its response to the report showed that Interfaith
Community Service and the County of San Diego Housing Authority met the match requirement.


                                                         5
grants reviewed. The respective portion of grant funds that did not have its 25 percent match
support totaled $54,473 (appendix D).

Match Funds Are Statutorily Required for the County’s Grant Fund Eligibility
When applying for Continuum of Care grants as part of the notice of funds availability process,
part of the consideration for the grant is past performance. Under past performance
requirements, it states that in evaluating applications for funding, HUD will take into account an
applicant’s past performance in managing funds, including but not limited to receipt of promised
matching or leveraged funds. Before being awarded program funds, grantees are required to list
in their project application all sources of match (cash and in-kind commitments). Therefore, if
HUD had known that the County would not meet the required 25 percent match, it could have
adversely affected the award of the Continuum of Care grants. Also, matching contributions are
statutorily required as part of the Continuum of Care program.

Conclusion
The County did not have adequate records to support the Continuum of Care match funds
requirement for one of its subgrantees. It had not implemented a process to confirm match funds
through its monitoring review and required only a self-certification from subgrantees. As a
result, HUD had no assurance that the County’s subgrantees contributed all of the pledged
matching funds. Not having the required match funds would affect the County’s eligibility for
the grant funds, and the program was not fully maximized as intended. Therefore, the eligibility
of the applicable $54,473 in Continuum of Care grant funds received was questionable.


Recommendations
We recommend that the Director of HUD’s Los Angeles Office of Community Planning and
Development require the County to

       1A.     Support the unsupported amount of match for its subgrantee or repay HUD
               $54,473 from non-Federal funds (appendix D).

       1B.     Implement written procedures to include the confirmation of match funds as part
               of its annual monitoring reviews of each subgrantee.

       1C.     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.




                                                 6
Finding 2: The County Did Not Adequately Support Retroactive
Payroll Expenses
The County did not adequately support its Continuum of Care administrative expenses. This
condition occurred because the County did not have adequate procedures and controls to ensure
that retroactive payroll costs reconciled to the applicable timesheet documentation. As a result,
HUD had no assurance that all retroactive administrative fees charged to the various Continuum
of Care grants belonged to those grants.

The County’s Retroactive Payroll Expenses Did Not Reconcile
The County had experienced various delays in getting its grant agreements approved and signed
by all parties and getting a program code entered into Oracle, the County’s accounting system,
which led to an alternative process for tracking and paying payroll expenses during that period.
An example of such delays is grant CA0689L9D011502 as shown in the chart below. 5

    Grant period            HUD               County             County           Subgrantee          Entered into
                           signed          signed grant           signed            signed            Oracle by the
                                            agreement           subgrant 6         subgrant             County
    February 1,       June 22, 2016        July 8, 2016         February 9,      December 20,            March 1,
      2016, to                                                     2017             2016                  2017
    January 31,
       2017

This grant was not opened in Oracle until after the grant term ended. As a result, one employee
had to charge payroll hours to other grants and projects until the grant could be entered into the
accounting system. The time was initially charged to supplemental funding sources approved by
HUD, such as Safe Housing Coordination, Behavioral Health Services, or Community
Development Building Grant. Once the grants were assigned a project number and added to
Oracle, the County retroactively charged the Continuum of Care grants. However, the
supporting timesheet documentation used by the County for its HUD Line of Credit Control
System (LOCCS 7) draws charged the other projects, instead of the Continuum of Care grants on
which the employee spent her time. The hours charged frequently did not match to the hours
attributed to the supplemental funding sources on the timesheets, and the County did not
maintain adequate reconciliation records. The County did not provide adequate documentation
to show which Continuum of Care grants the employee was working on or how many hours were
spent working on those grants as required by program regulations under 2 CFR 200.430, which
state, “…salaries and wages must be based on records that accurately reflect the work



5
  While this is an example, it is not an isolated incident and we found similar delays for other grants on behalf of all
parties involved. However, it should be noted that the County went through a realignment within the agency which
contributed to the delays on its behalf.
6
  The grant agreement is first signed by HUD and the County and then the County enters into a subgrant contract
with its subgrantee(s), which is signed by the County and its subgrantee.
7
  LOCCS is HUD’s primary grant disbursement system, handling disbursements for most HUD programs.


                                                            7
performed.” As a result, the County was unable to support $12,109 in payroll expenses charged
to administrative fees for four grants. See the table below.

           Unsupported payroll costs
            Count     Grant number                   Unsupported
                                                        payroll
                                                       amount 8
                 1       CA0689L9D011502                $3,468
                 2       CA0880L9D011501                 2,197
                 3       CA0881L9D011501                 2,531
                 4       CA0945L9D011506                 3,914
                                                        12,109


Conclusion
The County did not adequately support the administrative expenses for retroactive payroll related
to one employee. This condition occurred due to a lack of procedures and controls to ensure that
documentation was maintained to reconcile retroactive grant charges. As a result, HUD had no
assurance that all retroactive payroll charges to the various Continuum of Care grants belonged
to those grants and were spent appropriately. This issue also called into question the retroactive
payroll applicable to the remaining grants with similar administrative charges that we were not
able to test during the course of the audit 9 (appendix E).

Recommendations
We recommend that the Director of HUD’s Los Angeles Office of Community Planning and
Development require the County to

           2A.       Support 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.

           2B.       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.

           2C.       Develop and implement additional procedures and controls to ensure that payroll
                     costs charged to the grant reconcile to actual hours worked on the grants.




8
    The $1 difference in total is due to rounding.



                                                        8
Scope and Methodology
We performed our audit work at the County’s office located at 3989 Ruffin Road, San Diego,
CA, from June through October 2017. Our audit generally covered the period January 2014
through September 2017.

To accomplish our objective, we performed the following:

       •   Reviewed HUD’s grant agreements with the County and information found in LOCCS. 10

       •   Reviewed grant agreements between the County and its various subgrantees.

       •   Reviewed Federal regulations at 2 CFR 200.306 and 200.430 and HUD regulations at 24
           CFR Part 578.

       •   Reviewed County policies and procedures.

       •   Reviewed County accounting records and audited financial statements for fiscal years
           2015 and 2016.

       •   Reviewed County organizational charts.

       •   Reviewed County drawdowns, supporting documentation, and timesheets.

       •   Interviewed appropriate County employees.

       •   Interviewed appropriate subgrantee staff at Mental Health Systems, Inc., Solutions for
           Change, Interfaith Community Services, and the County of San Diego Housing
           Authority.

The County had 33 grants within our audit period; however, we narrowed our scope to eliminate
the 5 Shelter Plus Care grants (see the footnote in the Background and Objective section), 6
grants from subgrantees that were no longer part of the County’s Continuum of Care grant
program, and 1 grant that was declined by the subgrantee. We attempted to review match funds
for the remaining 21 grants in our audit scope. However, due to the difficulty in obtaining
documentation from multiple grantees and audit resource limitations, we were able to review




10
     LOCCS is HUD’s primary grant disbursement system, handling disbursements for most HUD programs.


                                                       9
only 13, including at least 1 grant applicable to each major subgrantee and focusing on the most
recent grants. The sample results could not be projected.

We initially tested the County’s program expenses for its 11 Continuum of Care grants for the
2016-2017 grant term because those grants were the most recent in our audit scope. We obtained
a list of draws (vouchers) made for each grant from LOCCS and determined that the total
universe of draws was 71. We used Excel to randomly select one paid voucher for each of the 11
grants, 11 except grant CA0690L9D011502 had only 2 paid vouchers so we reviewed both. We
performed further testing of payroll draw amounts based on issues identified in the initial
sample. Of the 11 grants from our initial sample, 10 had retroactive administrative fee payroll
vouchers for testing; however, due to resource limitations, we were able to review only 4 of the
10 grants. We used a table containing all the Continuum of Care grants for 2016-2017, in which
the County listed the date on which each of the grants was opened in Oracle, to work our way
through the retroactive payroll. The consistent issues with all retroactive payroll vouchers tested
called into question the untested amounts for the remaining six grants.

We found that data contained in source documentation provided by the County agreed with data
contained in the LOCCS. We also found that information regarding matching funds received
from the County matched data received from its subgrantees. We, therefore, assessed the data
from the County to be sufficiently reliable for our use during the audit.

We conducted the audit in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain sufficient, appropriate
evidence to provide a reasonable basis for our findings and conclusions based on our audit
objective(s). We believe that the evidence obtained provides a reasonable basis for our findings
and conclusions based on our audit objective.




11
     Grant CA0689L9D011502 had only one paid voucher.


                                                        10
Internal Controls
Internal control is a process adopted by those charged with governance and management,
designed to provide reasonable assurance about the achievement of the organization’s mission,
goals, and objectives with regard to

•   effectiveness and efficiency of operations,
•   reliability of financial reporting, and
•   compliance with applicable laws and regulations.

Internal controls comprise the plans, policies, methods, and procedures used to meet the
organization’s mission, goals, and objectives. Internal controls include the processes and
procedures for planning, organizing, directing, and controlling program operations as well as the
systems for measuring, reporting, and monitoring program performance.

Relevant Internal Controls
We determined that the following internal controls were relevant to our audit objective:

    •   Effectiveness and efficiency of program operations – Implementation of policies and
        procedures to ensure that program funds are used for eligible purposes.

    •   Reliability of financial information – Implementation of policies and procedures to
        reasonably ensure that relevant and reliable information is obtained to adequately support
        program expenditures.

    •   Compliance with applicable laws and regulations – Implementation of policies and
        procedures to ensure compliance with applicable HUD rules and requirements.

We assessed the relevant controls identified above.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, the
reasonable opportunity to prevent, detect, or correct (1) impairments to effectiveness or
efficiency of operations, (2) misstatements in financial or performance information, or (3)
violations of laws and regulations on a timely basis.




                                                  11
Significant Deficiencies
Based on our review, we believe that the following items are significant deficiencies:

   •   The County did not have adequate policies and procedures to ensure that matching funds
       were fully contributed under grant agreements and Federal regulations (finding 1).

   •   The County did not have controls to ensure that payroll-related administrative fees were
       used in accordance with Federal regulations (finding 2).




                                                 12
Appendixes

Appendix A


                             Schedule of Questioned Costs
                            Recommendation Unsupported
                                number              1/
                                    1A             $54,473
                                    2A              12,109
                                  Totals
                                                    66,582


1/   Unsupported costs are those costs charged to a HUD-financed or HUD-insured program
     or activity when we cannot determine eligibility at the time of the audit. Unsupported
     costs require a decision by HUD program officials. This decision, in addition to
     obtaining supporting documentation, might involve legal interpretation or clarification of
     departmental policies and procedures.




                                              13
Appendix B
                        Auditee Comments and OIG’s Evaluation


Ref to OIG Evaluation
                         Auditee Comments




Comment 1


Comment 2


Comment 3

Comment 4

Comment 5


Comment 3




                          * Exhibits available upon request.


                                            14
             Auditee Comments and OIG’s Evaluation




Ref to OIG    Auditee Comments
Evaluation




Comment 3




Comment 4




                               15
             Auditee Comments and OIG’s Evaluation




Ref to OIG    Auditee Comments
Evaluation




Comment 5




                               16
                         OIG Evaluation of Auditee Comments


Comment 1   We appreciate the County’s acknowledgement of the need for improvements to
            programmatic procedures for oversight and monitoring of its sub-grantees as well
            as HCDS internal controls for payroll reconciliations.
Comment 2   We agree with the County’s position that the required match should be based on
            the actual grant disbursements and have adjusted the report to reflect these
            amounts. We adjusted appendix D, column C to reflect grant amount disbursed
            instead of the total grant amount. Grants that met the match based on the revised
            calculations were removed from the spreadsheet and questioned costs. Based on
            this change and the additional match support provided with the response, we have
            eliminated the recommendation for HUD to require the County to provide match
            support for its remaining grants.

Comment 3   We agree grant CA0693L9D011508 and CA0694L9D011407 met the match
            requirements. The report was changed to reflect this amount.

Comment 4   We agree the actual amount expended and drawn for grant CA0693L9D011407
            was lower than the original grant amount shown on the contract between HUD
            and the County and also between the County and its subgrantee. We also
            reviewed the additional supportive services documentation provided with the
            County’s response and found it sufficient to cover the remaining required match
            amount. As a result, we agree grant CA0693L9D011407 met the match
            requirement and the report was changed to reflect this adjustment.

Comment 5   We agree the grant funds expended for the MHS grant CA0880L9D011501 was
            $67,251. In addition, we reviewed the additional $900 of match support provided
            with the County’s response and updated the total match funds provided. We
            appreciate the County’s commitment to working with HUD during the audit
            resolution process to update and verify the potential match fund shortfall.




                                             17
Appendix C
                                             Criteria

2 CFR Part 200, Uniform administrative requirements, cost principles, and audit requirements
for Federal awards

2 CFR 200.306, Cost sharing or matching
(a) Under Federal research proposals, voluntary committed cost sharing is not expected. It
cannot be used as a factor during the merit review of applications or proposals, but may be
considered if it is both in accordance with Federal awarding agency regulations and specified in
a notice of funding opportunity. Criteria for considering voluntary committed cost sharing and
any other program policy factors that may be used to determine who may receive a Federal
award must be explicitly described in the notice of funding opportunity. See also §§ 200.414
Indirect (F&A) costs, 200.203 Notices of funding opportunities, and Appendix I to Part 200—
Full Text of Notice of Funding Opportunity.

(b) For all Federal awards, any shared costs or matching funds and all contributions, including
cash and third party in-kind contributions, must be accepted as part of the non-Federal entity's
cost sharing or matching when such contributions meet all of the following criteria:

(1) Are verifiable from the non-Federal entity's records;


2 CFR 200.430, Compensation—personal services.
(i) Standards for Documentation of Personnel Expenses
        (1) Charges to Federal awards for salaries and wages must be based on records that
        accurately reflect the work performed. These records must:
        (i) Be supported by a system of internal control which provides reasonable assurance that
        the charges are accurate, allowable, and properly allocated;
        (ii) Be incorporated into the official records of the non-Federal entity;
        (iii) Reasonably reflect the total activity for which the employee is compensated by the
        non-Federal entity, not exceeding 100% of compensated activities (for IHE [institutions
        of higher education], this per the IHE’s definition of IBS [institutional base salary]);
        (iv) Encompass both federally assisted and all other activities compensated by the non-
        Federal entity on an integrated basis, but may include the use of subsidiary records as
        defined in the non-Federal entity’s written policy;
        (v) Comply with the established accounting policies and practices of the non-Federal
        entity (See paragraph (h) (1) (ii) above for treatment of incidental work for IHEs.); and
        (vi) [Reserved]
        (vii) Support the distribution of the employee’s salary or wages among specific activities
        or cost objectives if the employee works on more than one Federal award; a Federal
        award and non-Federal award; an indirect cost activity and a direct cost activity; two or
        more indirect activities which are allocated using different allocation bases; or an
        unallowable activity and a direct or indirect cost activity.


                                                 18
24 CFR Part 578, Continuum of Care Program

24 CFR 578.73, Matching requirements
(a) In general. The recipient or subrecipient must match all grant funds, except for leasing
funds, with no less than 25 percent of funds or in-kind contributions from other sources. For
Continuum of Care geographic areas in which there is more than one grant agreement, the 25
percent match must be provided on a grant-by-grant basis.

County’s Subgrantee Contract

5.1 Record Keeping. Subrecipient must establish and maintain sufficient records to enable HUD
to determine whether Subrecipient is meeting the requirements of the CoC [Continuum of Care]
Program regulations at 24 CFR 578. Subrecipient must maintain records of the following:
    a) Homelessness status;
    b) At risk homelessness status (if applicable);
    c) Records of reasonable belief of imminent threat of harm (where applicable);
    d) Annual income (for programs where the participant pays rent or an occupancy charge);
    e) Program participant records, including records regarding services and assistance provided
        and, if applicable, compliance with termination of assistance requirements;
    f) Housing quality standard inspections (for programs that provide permanent housing)
    g) Documentation verifying compliance with match requirements (including, for in-kind
        match, records documenting service hours provided);
    h) Compliance with conflict of interest requirements;
    i) Compliance with homeless participation requirements;
    j) Compliance with faith-based activities requirements; and
    k) Records related to any procurement.




                                                19
Appendix D
                                          Match Questioned Costs


      Sub-         Grant number             Grant         Required      Supported Amount Per- Questioned
     grantee                               amount          match          match    short centage  costs 12
                                          disbursed(        fund         amount          short on
                                              C)          amount                          match
      (A)                (B)                                 (D)           (E)      (F)    (G)     (H)

     MHS*       CA0880L9D011501             $67,251        $16,813        $3,182       $13,631      81%        $54,473
     Total                                                                                                     $54,473
* Mental Health Systems, Inc.

Table explanations
• Column D – This is 25 percent of the grant amount in column C.
• Column E – This is the amount the subgrantee was able to support with in-kind match.
• Column F – This is the difference between the required match fund amount and supported
   match fund amount (D – E).
• Column G – This is supported match amount (F) divided by required match amount in (D).
• Column H – This is the result of column (C) multiplied by column (G).




12
  Typically, if a grantee failed to provide the required matching fund requirement, it would be required to repay 100
percent of the grant. In this case, the grantee did not provide 100 percent of the match fund, so we questioned a
percentage of the grant amount.


                                                          20
Appendix E
                  Grants Reviewed for Match and Retroactive Payroll


                                                                                         Retroactive
                                                       Grant       Grant       Match
Count        Subgrantee           Grant number                                             payroll
                                                       term       amount      reviewed
                                                                                          reviewed
                                                      2/1/2016
        Mental Health Systems,
  1                              CA0689L9D011502          to      $122,045      yes         yes*
                 Inc.
                                                      1/31/2017
                                                      2/1/2016
  2      Solutions for Change    CA0690L9D011502          to      105,907       yes          no
                                                      1/31/2017
        Interfaith Community
  3                                                               216,618       yes         no **
               Services                               7/1/2016
        Mental Health Systems,   CA0693L9D011508          to
  4                                                                85,508       yes         no **
                  Inc.                                6/30/2017
  5      Solutions for Change                                     164,733       no          no **
                                                       7/1/2016
        Mental Health Systems,
  6                              CA0880L9D011501          to       69,996       yes*        yes*
                 Inc.
                                                      6/30/2017
                                                       7/1/2016
        Mental Health Systems,
  7                              CA0881L9D011501          to      114,249       yes         yes*
                 Inc.
                                                      6/30/2017
                                                       7/1/2016
         County of San Diego
  8                              CA1162L9D011504          to      160,289       no          no **
          Housing Authority
                                                      6/30/2017
                                                      10/1/2016
         County of San Diego
  9                              CA0694L9D011508          to      670,259       no          no **
          Housing Authority
                                                      9/30/2017
                                                      10/1/2016
        Kurdish Human Rights
 10                              CA0945L9D011506          to      195,440       no          yes*
          and Crisis House
                                                      4/30/2017
                                                      11/8/2016
 11      Solutions for Change    CA1024L9D011501          to       48,608       no          no **
                                                      11/7/2017
          2016-17 Continuum of Care grants subtotal               1,953,652
                                                      2/1/2015
        Mental Health Systems,
 12                              CA0689L9D011401          to      109,322       yes          no
                 Inc.
                                                      1/31/2016
                                                      2/1/2015
 13      Solutions for Change    CA0690L9D011401          to       95,247       no           no
                                                      1/31/2016
                                                      3/1/2015
         County of San Diego
 14                              CA1247L9D011300          to      192,902       no           no
          Housing Authority
                                                      2/28/2016



                                            21
                                                                                         Retroactive
                                                       Grant       Grant       Match
Count        Subgrantee           Grant number                                             payroll
                                                       term       amount      reviewed
                                                                                          reviewed
                                                      9/1/2015
         Alpha Project and
 15                              CA1162L9D011403          to       94,731       no           no
        Volunteers of America
                                                      6/30/2016
        Interfaith Community
 16                                                               199,750       yes          no
               Services                               7/1/2015
        Mental Health Systems,   CA0693L9D011407          to
 17                                                                78,459       yes          no
                  Inc.                                6/30/2016
 18      Solutions for Change                                     153,635       no           no
                                                      10/1/2015
         County of San Diego
 19                              CA0694L9D011407          to      626,099       yes          no
          Housing Authority
                                                      9/30/2016
                                                      10/1/2015
 20     Kurdish Human Rights     CA0945L9D011405          to      183,903       no           no
                                                      9/30/2016
          2015-16 Continuum of Care grants subtotal               1,734,048
                                                      3/18/2014
         County of San Diego
 21                              CA1211L9D011200          to      196,340       no           no
          Housing Authority
                                                      3/17/2015
                                                       4/1/2014
 22     Volunteers of America    CA1162L9D011302          to      143,921       no           no
                                                      3/31/2015
        Interfaith Community
 23                                                               193,632       no           no
               Services                               7/1/2014
        Mental Health Systems,   CA0693L9D011306          to
 24                                                                76,896       yes          no
                  Inc.                                6/30/2015
 25      Solutions for Change                                     149,794       yes          no
                                                      10/1/2014
         County of San Diego
 26                              CA0694L9D011306          to      610,787       no           no
          Housing Authority
                                                      9/30/2015
                                                      10/1/2014
 27     Kurdish Human Rights     CA0945L9D011304          to      179,439       no           no
                                                      9/30/2015
          2014-15 Continuum of Care grants subtotal               1,550,809
                                                      10/1/2013
         County of San Diego
 28                              CA0694L9D011205          to      623,331       no           no
          Housing Authority
                                                      9/30/2014
          2013-14 Continuum of Care grants subtotal               623,331
                                                      7/1/2011
        Mental Health Systems,
 29                              CA0881C9D100900          to      498,586       no           no
                 Inc.
                                                      6/30/2016
                                                      7/1/2011
        Mental Health Systems,
 30                              CA0880C9D100900          to      263,232       no           no
                 Inc.
                                                      6/30/2016




                                            22
                                                                                             Retroactive
                                                             Grant     Grant       Match
 Count         Subgrantee            Grant number                                              payroll
                                                             term     amount      reviewed
                                                                                              reviewed
                                                        11/8/2011
   31      Solutions for Change    CA1024C9D101000          to        213,351       no           no
                                                        11/7/2016
               2011 Shelter Plus Care grants subtotal                 975,169
                                                         2/3/2010
   32     Volunteers of America    CA0690C9D100800          to        461,261       no           no
                                                         2/2/2015
                                                         2/5/2010
          Mental Health Systems,
   33                              CA0689C9D100800          to        552,614       no           no
                   Inc.
                                                         2/4/2015
                 2010 Shelter Plus Care grants subtotal              1,103,875
                           Grants grand total                        7,850, 884     12           4
* Includes costs questioned under recommendation 1A and 2A
** Subgrants to be reviewed according to recommendation 2B




                                                23