Audit 322661

Finding 2023-001 Significant Deficiency: Reporting Compliance and Control Finding ALN 14.537 - Eviction Protection Grant Program Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entities: N/A Criteria Or Specific Requirement: 2 CFR Part 170 requires direct recipients of grants to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS) no later than the last day of the month following the month in which the agreement was made. Additionally, proper controls must be in place surrounding review and approval of the report prior to submission to FSRS. Condition: Audit procedures revealed that the FFATA reports were not properly or timely submitted. Cause: Management was not aware FFATA reports were an applicable requirement of the federal program. Additionally, controls over compliance were not designed effectively to ensure compliance with such grant requirements. Effect: Instances of noncompliance were not detected by management. Questioned Costs: Not applicable. Context: Reports for subrecipients who were awarded over $30,000 in federal funding were not compiled, reviewed or submitted by last day of the month following the month in which the agreement was made. Identification As A Repeat Finding: Not applicable. Recommendation: We recommend that management compile and submit FFATA report timely for all subrecipient agreements for greater than $30,000 in federal funding with proper review and approval prior to submission. Views Of Responsible Officials: All necessary FFATA will be filed within 30 days. Legal Services of Eastern Missouri (LSEM) will develop policies and procedures within 60 days to ensure that all FFATA reports are submitted in a timely manner. LSEM will provide training regarding all grant compliance for all staff involved in grant management and compliance within 90 days.

Finding 2023-002 Significant Deficiency: Procurement, Suspension And Debarment – Compliance and Control Finding ALN 14.537 – Eviction Protection Grant Program Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entities: N/A Criteria: According to Uniform Guidance, 2 CFR Section 180.300, non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity. Condition: The Corporation did not maintain documentation to support whether or not a suspension or debarment verification was performed prior to entering into covered transaction with entities. Cause: The Corporation’s internal control over compliance did not operate effectively related to suspension and debarment. Effect: The Corporation could have entered into covered transaction with an entity that is suspended or debarred resulting in non-compliance with the compliance requirement. Questioned Costs: Not applicable. Context: An exception was noted in the one covered transaction sampled out of the population of three. The vendor tested in the transactions sampled was not suspended or debarred. Statistical sampling was not used to test this compliance requirement. Identification As A Repeat Finding: Not applicable. Recommendation: We recommend that the Corporation maintain support that a SAM or other verification is performed prior to entering into contracts or covered transactions. Views Of Responsible Officials: LSEM will immediately begin time stamping all checks against the System for Awards Management (SAM). LSEM will develop and implement a written policy, within 60 days, that outlines the procedures for verifying suspension and debarment status, including: • Regular checks against SAM. • Requirements for obtaining certifications from vendors. • Inclusion of debarment clauses in contracts. LSEM will conduct training sessions for procurement staff on the new policy, emphasizing the importance of verifying vendor eligibility and maintaining documentation within 90 days. LSEM will implement, within 90 days, a regular monitoring process to ensure compliance with suspension and debarment requirements, including: • Periodic audits of procurement transactions to verify adherence to the policy. • Review of the documentation repository for completeness and accuracy.

Finding 2023-001 Significant Deficiency: Reporting Compliance and Control Finding ALN 14.537 - Eviction Protection Grant Program Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entities: N/A Criteria Or Specific Requirement: 2 CFR Part 170 requires direct recipients of grants to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS) no later than the last day of the month following the month in which the agreement was made. Additionally, proper controls must be in place surrounding review and approval of the report prior to submission to FSRS. Condition: Audit procedures revealed that the FFATA reports were not properly or timely submitted. Cause: Management was not aware FFATA reports were an applicable requirement of the federal program. Additionally, controls over compliance were not designed effectively to ensure compliance with such grant requirements. Effect: Instances of noncompliance were not detected by management. Questioned Costs: Not applicable. Context: Reports for subrecipients who were awarded over $30,000 in federal funding were not compiled, reviewed or submitted by last day of the month following the month in which the agreement was made. Identification As A Repeat Finding: Not applicable. Recommendation: We recommend that management compile and submit FFATA report timely for all subrecipient agreements for greater than $30,000 in federal funding with proper review and approval prior to submission. Views Of Responsible Officials: All necessary FFATA will be filed within 30 days. Legal Services of Eastern Missouri (LSEM) will develop policies and procedures within 60 days to ensure that all FFATA reports are submitted in a timely manner. LSEM will provide training regarding all grant compliance for all staff involved in grant management and compliance within 90 days.

Finding 2023-002 Significant Deficiency: Procurement, Suspension And Debarment – Compliance and Control Finding ALN 14.537 – Eviction Protection Grant Program Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entities: N/A Criteria: According to Uniform Guidance, 2 CFR Section 180.300, non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity. Condition: The Corporation did not maintain documentation to support whether or not a suspension or debarment verification was performed prior to entering into covered transaction with entities. Cause: The Corporation’s internal control over compliance did not operate effectively related to suspension and debarment. Effect: The Corporation could have entered into covered transaction with an entity that is suspended or debarred resulting in non-compliance with the compliance requirement. Questioned Costs: Not applicable. Context: An exception was noted in the one covered transaction sampled out of the population of three. The vendor tested in the transactions sampled was not suspended or debarred. Statistical sampling was not used to test this compliance requirement. Identification As A Repeat Finding: Not applicable. Recommendation: We recommend that the Corporation maintain support that a SAM or other verification is performed prior to entering into contracts or covered transactions. Views Of Responsible Officials: LSEM will immediately begin time stamping all checks against the System for Awards Management (SAM). LSEM will develop and implement a written policy, within 60 days, that outlines the procedures for verifying suspension and debarment status, including: • Regular checks against SAM. • Requirements for obtaining certifications from vendors. • Inclusion of debarment clauses in contracts. LSEM will conduct training sessions for procurement staff on the new policy, emphasizing the importance of verifying vendor eligibility and maintaining documentation within 90 days. LSEM will implement, within 90 days, a regular monitoring process to ensure compliance with suspension and debarment requirements, including: • Periodic audits of procurement transactions to verify adherence to the policy. • Review of the documentation repository for completeness and accuracy.