Examining source documentation for expenses is a key component of monitoring. Proper back-up documentation is critical for a sponsor
to demonstrate to the grantee and for the grantee to demonstrate to HUD that HOPWA funds were actually used
for eligible clients and eligible activities. As part of remote monitoring, a grantee may request full, partial, or spot documentation of all costs
within the project sponsor’s invoices. The supporting documentation should be reviewed to determine that costs were eligible;
were in compliance with OMB regulations, the grant agreement, and the sponsor’s contract and budget; and were allocated to the appropriate categories.
During on-site monitoring, a grantee should select sample invoices and request the full documentation to support the costs,
following the audit trail backwards to primary documentation sources, including client files, maintenance records, and so on.
It is important to note that if complete documentation of costs is regularly provided and reviewed as part of the regular invoicing process,
the need to monitor source documentation on-site will largely be avoided. In addition to basic documentation requirements
for participant eligibility shown on this slide,
the next slide shows particular items necessary for adequate documentation of costs associated with specific HOPWA activities.