Audit 343437

Program: Continuum of Care Federal Financial Assistance Listing No.:14.267 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward Award Year: 2023 Compliance Requirement: Special Tests and Provisions – Reasonable Rental Rates Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208 Type of Finding: Material Weakness in Internal Controls Over Compliance and Material Noncompliance Criteria: Per 24 CFR section 578.49(b)(1), where grants are used to pay for rent for all or a part of a structure, the rent paid must be reasonable in relation to rents being charged in the area for comparable space. In addition, the rent may not exceed rents currently being charged by the same owner for comparable unassisted space. Per 24 CFR sections 578.49(b)(2) and 578.51(g) and (j), where grants are used to pay rent for individual housing units, the rent paid must be reasonable in relation to rents being charged for comparable units taking into account relevant features. In addition, the rents may not exceed rents currently being charged by the same owner for comparable unassisted units, and the portion of rents paid with grant funds may not exceed HUD-determined fair market rents. Grant funds in an amount up to one month’s rent may be used to pay the non-recipient landlord for any damages to leased units by homeless participants. Condition Found: • As a result of our procedures performed, we noted for 8 out of 17 rental participants tested, the organization could not provide documentation to demonstrate the reasonableness of contract rents being paid for individual housing units in relation to rents being charged for comparable units. This should have included an analysis of rents in the immediate area of the participants housing. • For 3 out of 41 rental payments tested, we noted the rent paid exceed the HUD-determined fair market rents for the fiscal year. Cause: The Organization was applying a method of determining reasonable rents that had been allowable under prior awards, prior to migration of the program's funding to the Continuum of Care program under assistance listing number 14.267. Effect: Rent paid to landlords on behalf of participants may have been higher in comparison to other rental properties in a similar area during the period the reasonableness assessment was not completed. Also, rental payments made using grant funds exceeded the HUD-determined fair market rents. Questioned Costs: $330 in questioned costs was identified as a result of our procedures. Context/ Sampling: • A nonstatistical sample of 17 out of 109 participants was selected to test for rent reasonableness documentation. • A nonstatistical sample of 41 out of 1,088 rental payments were selected to test compliance over the HUD-determined fair market rents. Our sample was $59,905 in rental payments and the population of rental payments for the year ended December 31, 2023 totaled $2,491,614.94. Repeat Finding from Prior Years: Yes, Finding 2022-002 Recommendation: This is a repeat finding from 2022. It was noted that the Organization implemented procedures in January 2022 to document rent reasonableness checks on a prospective basis, however this was not corrected for the samples tested as part of our audit. We recommend that the Organization continue to implement policies and procedures to ensure compliance with the program’s Special Tests and Provisions – Reasonable Rental Rates requirement. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.

Program: Continuum of Care Federal Financial Assistance Listing No.:14.267 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward Award Year: 2023 Compliance Requirement: Special Tests and Provisions – Reasonable Rental Rates Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208 Type of Finding: Material Weakness in Internal Controls Over Compliance and Material Noncompliance Criteria: Per 24 CFR section 578.49(b)(1), where grants are used to pay for rent for all or a part of a structure, the rent paid must be reasonable in relation to rents being charged in the area for comparable space. In addition, the rent may not exceed rents currently being charged by the same owner for comparable unassisted space. Per 24 CFR sections 578.49(b)(2) and 578.51(g) and (j), where grants are used to pay rent for individual housing units, the rent paid must be reasonable in relation to rents being charged for comparable units taking into account relevant features. In addition, the rents may not exceed rents currently being charged by the same owner for comparable unassisted units, and the portion of rents paid with grant funds may not exceed HUD-determined fair market rents. Grant funds in an amount up to one month’s rent may be used to pay the non-recipient landlord for any damages to leased units by homeless participants. Condition Found: • As a result of our procedures performed, we noted for 8 out of 17 rental participants tested, the organization could not provide documentation to demonstrate the reasonableness of contract rents being paid for individual housing units in relation to rents being charged for comparable units. This should have included an analysis of rents in the immediate area of the participants housing. • For 3 out of 41 rental payments tested, we noted the rent paid exceed the HUD-determined fair market rents for the fiscal year. Cause: The Organization was applying a method of determining reasonable rents that had been allowable under prior awards, prior to migration of the program's funding to the Continuum of Care program under assistance listing number 14.267. Effect: Rent paid to landlords on behalf of participants may have been higher in comparison to other rental properties in a similar area during the period the reasonableness assessment was not completed. Also, rental payments made using grant funds exceeded the HUD-determined fair market rents. Questioned Costs: $330 in questioned costs was identified as a result of our procedures. Context/ Sampling: • A nonstatistical sample of 17 out of 109 participants was selected to test for rent reasonableness documentation. • A nonstatistical sample of 41 out of 1,088 rental payments were selected to test compliance over the HUD-determined fair market rents. Our sample was $59,905 in rental payments and the population of rental payments for the year ended December 31, 2023 totaled $2,491,614.94. Repeat Finding from Prior Years: Yes, Finding 2022-002 Recommendation: This is a repeat finding from 2022. It was noted that the Organization implemented procedures in January 2022 to document rent reasonableness checks on a prospective basis, however this was not corrected for the samples tested as part of our audit. We recommend that the Organization continue to implement policies and procedures to ensure compliance with the program’s Special Tests and Provisions – Reasonable Rental Rates requirement. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.

Program: Continuum of Care Federal Financial Assistance Listing No.:14.267 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward Award Year: 2023 Compliance Requirement: Special Tests and Provisions – Reasonable Rental Rates Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208 Type of Finding: Material Weakness in Internal Controls Over Compliance and Material Noncompliance Criteria: Per 24 CFR section 578.49(b)(1), where grants are used to pay for rent for all or a part of a structure, the rent paid must be reasonable in relation to rents being charged in the area for comparable space. In addition, the rent may not exceed rents currently being charged by the same owner for comparable unassisted space. Per 24 CFR sections 578.49(b)(2) and 578.51(g) and (j), where grants are used to pay rent for individual housing units, the rent paid must be reasonable in relation to rents being charged for comparable units taking into account relevant features. In addition, the rents may not exceed rents currently being charged by the same owner for comparable unassisted units, and the portion of rents paid with grant funds may not exceed HUD-determined fair market rents. Grant funds in an amount up to one month’s rent may be used to pay the non-recipient landlord for any damages to leased units by homeless participants. Condition Found: • As a result of our procedures performed, we noted for 8 out of 17 rental participants tested, the organization could not provide documentation to demonstrate the reasonableness of contract rents being paid for individual housing units in relation to rents being charged for comparable units. This should have included an analysis of rents in the immediate area of the participants housing. • For 3 out of 41 rental payments tested, we noted the rent paid exceed the HUD-determined fair market rents for the fiscal year. Cause: The Organization was applying a method of determining reasonable rents that had been allowable under prior awards, prior to migration of the program's funding to the Continuum of Care program under assistance listing number 14.267. Effect: Rent paid to landlords on behalf of participants may have been higher in comparison to other rental properties in a similar area during the period the reasonableness assessment was not completed. Also, rental payments made using grant funds exceeded the HUD-determined fair market rents. Questioned Costs: $330 in questioned costs was identified as a result of our procedures. Context/ Sampling: • A nonstatistical sample of 17 out of 109 participants was selected to test for rent reasonableness documentation. • A nonstatistical sample of 41 out of 1,088 rental payments were selected to test compliance over the HUD-determined fair market rents. Our sample was $59,905 in rental payments and the population of rental payments for the year ended December 31, 2023 totaled $2,491,614.94. Repeat Finding from Prior Years: Yes, Finding 2022-002 Recommendation: This is a repeat finding from 2022. It was noted that the Organization implemented procedures in January 2022 to document rent reasonableness checks on a prospective basis, however this was not corrected for the samples tested as part of our audit. We recommend that the Organization continue to implement policies and procedures to ensure compliance with the program’s Special Tests and Provisions – Reasonable Rental Rates requirement. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.

Program: Continuum of Care Federal Financial Assistance Listing No.:14.267 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward Award Year: 2023 Compliance Requirement: Special Tests and Provisions – Reasonable Rental Rates Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208 Type of Finding: Material Weakness in Internal Controls Over Compliance and Material Noncompliance Criteria: Per 24 CFR section 578.49(b)(1), where grants are used to pay for rent for all or a part of a structure, the rent paid must be reasonable in relation to rents being charged in the area for comparable space. In addition, the rent may not exceed rents currently being charged by the same owner for comparable unassisted space. Per 24 CFR sections 578.49(b)(2) and 578.51(g) and (j), where grants are used to pay rent for individual housing units, the rent paid must be reasonable in relation to rents being charged for comparable units taking into account relevant features. In addition, the rents may not exceed rents currently being charged by the same owner for comparable unassisted units, and the portion of rents paid with grant funds may not exceed HUD-determined fair market rents. Grant funds in an amount up to one month’s rent may be used to pay the non-recipient landlord for any damages to leased units by homeless participants. Condition Found: • As a result of our procedures performed, we noted for 8 out of 17 rental participants tested, the organization could not provide documentation to demonstrate the reasonableness of contract rents being paid for individual housing units in relation to rents being charged for comparable units. This should have included an analysis of rents in the immediate area of the participants housing. • For 3 out of 41 rental payments tested, we noted the rent paid exceed the HUD-determined fair market rents for the fiscal year. Cause: The Organization was applying a method of determining reasonable rents that had been allowable under prior awards, prior to migration of the program's funding to the Continuum of Care program under assistance listing number 14.267. Effect: Rent paid to landlords on behalf of participants may have been higher in comparison to other rental properties in a similar area during the period the reasonableness assessment was not completed. Also, rental payments made using grant funds exceeded the HUD-determined fair market rents. Questioned Costs: $330 in questioned costs was identified as a result of our procedures. Context/ Sampling: • A nonstatistical sample of 17 out of 109 participants was selected to test for rent reasonableness documentation. • A nonstatistical sample of 41 out of 1,088 rental payments were selected to test compliance over the HUD-determined fair market rents. Our sample was $59,905 in rental payments and the population of rental payments for the year ended December 31, 2023 totaled $2,491,614.94. Repeat Finding from Prior Years: Yes, Finding 2022-002 Recommendation: This is a repeat finding from 2022. It was noted that the Organization implemented procedures in January 2022 to document rent reasonableness checks on a prospective basis, however this was not corrected for the samples tested as part of our audit. We recommend that the Organization continue to implement policies and procedures to ensure compliance with the program’s Special Tests and Provisions – Reasonable Rental Rates requirement. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.

Program: Continuum of Care Federal Financial Assistance Listing No.:14.267 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward Award Year: 2023 Compliance Requirement: Special Tests and Provisions – Reasonable Rental Rates Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208 Type of Finding: Material Weakness in Internal Controls Over Compliance and Material Noncompliance Criteria: Per 24 CFR section 578.49(b)(1), where grants are used to pay for rent for all or a part of a structure, the rent paid must be reasonable in relation to rents being charged in the area for comparable space. In addition, the rent may not exceed rents currently being charged by the same owner for comparable unassisted space. Per 24 CFR sections 578.49(b)(2) and 578.51(g) and (j), where grants are used to pay rent for individual housing units, the rent paid must be reasonable in relation to rents being charged for comparable units taking into account relevant features. In addition, the rents may not exceed rents currently being charged by the same owner for comparable unassisted units, and the portion of rents paid with grant funds may not exceed HUD-determined fair market rents. Grant funds in an amount up to one month’s rent may be used to pay the non-recipient landlord for any damages to leased units by homeless participants. Condition Found: • As a result of our procedures performed, we noted for 8 out of 17 rental participants tested, the organization could not provide documentation to demonstrate the reasonableness of contract rents being paid for individual housing units in relation to rents being charged for comparable units. This should have included an analysis of rents in the immediate area of the participants housing. • For 3 out of 41 rental payments tested, we noted the rent paid exceed the HUD-determined fair market rents for the fiscal year. Cause: The Organization was applying a method of determining reasonable rents that had been allowable under prior awards, prior to migration of the program's funding to the Continuum of Care program under assistance listing number 14.267. Effect: Rent paid to landlords on behalf of participants may have been higher in comparison to other rental properties in a similar area during the period the reasonableness assessment was not completed. Also, rental payments made using grant funds exceeded the HUD-determined fair market rents. Questioned Costs: $330 in questioned costs was identified as a result of our procedures. Context/ Sampling: • A nonstatistical sample of 17 out of 109 participants was selected to test for rent reasonableness documentation. • A nonstatistical sample of 41 out of 1,088 rental payments were selected to test compliance over the HUD-determined fair market rents. Our sample was $59,905 in rental payments and the population of rental payments for the year ended December 31, 2023 totaled $2,491,614.94. Repeat Finding from Prior Years: Yes, Finding 2022-002 Recommendation: This is a repeat finding from 2022. It was noted that the Organization implemented procedures in January 2022 to document rent reasonableness checks on a prospective basis, however this was not corrected for the samples tested as part of our audit. We recommend that the Organization continue to implement policies and procedures to ensure compliance with the program’s Special Tests and Provisions – Reasonable Rental Rates requirement. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.

Program: Continuum of Care Federal Financial Assistance Listing No.:14.267 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward Award Year: 2023 Compliance Requirement: Special Tests and Provisions – Reasonable Rental Rates Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208 Type of Finding: Material Weakness in Internal Controls Over Compliance and Material Noncompliance Criteria: Per 24 CFR section 578.49(b)(1), where grants are used to pay for rent for all or a part of a structure, the rent paid must be reasonable in relation to rents being charged in the area for comparable space. In addition, the rent may not exceed rents currently being charged by the same owner for comparable unassisted space. Per 24 CFR sections 578.49(b)(2) and 578.51(g) and (j), where grants are used to pay rent for individual housing units, the rent paid must be reasonable in relation to rents being charged for comparable units taking into account relevant features. In addition, the rents may not exceed rents currently being charged by the same owner for comparable unassisted units, and the portion of rents paid with grant funds may not exceed HUD-determined fair market rents. Grant funds in an amount up to one month’s rent may be used to pay the non-recipient landlord for any damages to leased units by homeless participants. Condition Found: • As a result of our procedures performed, we noted for 8 out of 17 rental participants tested, the organization could not provide documentation to demonstrate the reasonableness of contract rents being paid for individual housing units in relation to rents being charged for comparable units. This should have included an analysis of rents in the immediate area of the participants housing. • For 3 out of 41 rental payments tested, we noted the rent paid exceed the HUD-determined fair market rents for the fiscal year. Cause: The Organization was applying a method of determining reasonable rents that had been allowable under prior awards, prior to migration of the program's funding to the Continuum of Care program under assistance listing number 14.267. Effect: Rent paid to landlords on behalf of participants may have been higher in comparison to other rental properties in a similar area during the period the reasonableness assessment was not completed. Also, rental payments made using grant funds exceeded the HUD-determined fair market rents. Questioned Costs: $330 in questioned costs was identified as a result of our procedures. Context/ Sampling: • A nonstatistical sample of 17 out of 109 participants was selected to test for rent reasonableness documentation. • A nonstatistical sample of 41 out of 1,088 rental payments were selected to test compliance over the HUD-determined fair market rents. Our sample was $59,905 in rental payments and the population of rental payments for the year ended December 31, 2023 totaled $2,491,614.94. Repeat Finding from Prior Years: Yes, Finding 2022-002 Recommendation: This is a repeat finding from 2022. It was noted that the Organization implemented procedures in January 2022 to document rent reasonableness checks on a prospective basis, however this was not corrected for the samples tested as part of our audit. We recommend that the Organization continue to implement policies and procedures to ensure compliance with the program’s Special Tests and Provisions – Reasonable Rental Rates requirement. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.

Program: Continuum of Care, Emergency Solutions Grant Program Federal Financial Assistance Listing No.:14.267, 14.231 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward, Sacramento County Department of Human Assistance Award Year: 2023 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208, DHA-NM-03-23, DHA-NM-03-24 Type of Finding: Material Weakness in Internal Controls Over Compliance Criteria: 2 CFR 200.303(a) of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The nonfederal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are met. As outlined in 2 CFR 180, recipients must not utilize any contractor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition Found: The Organization’s procurement policy did not include all the required elements as outlined in the Uniform Guidance. Additionally, the Organization did not retain documentation to support the procedures performed to ensure compliance with suspension and debarment requirements. Cause: The Organization does not typically receive federal financial assistance that is subject to procurement and suspension and debarment regulations; consequently, certain elements required by the Uniform Guidance were missing. Effect: Lack of complete procurement, suspension, and debarment policies and not retaining documentation to support compliance with suspension and debarment requirements could result in noncompliance with Uniform Guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 9 contractors totaling $1,989,106 under the Continuum of Care Program and three contractors totaling $227,772 under the Emergency Solutions Grant Program. We tested all contractors with total payments exceeding $25,000 during the year. Repeat Finding from Prior Years: Yes, Finding 2022-03. Recommendation: We recommend that management develop a written procurement policy that conforms with Uniform Guidance. In addition, we recommend that management implement procedures and control processes to retain documentation supporting compliance with major federal program compliance requirements regarding suspension and debarment. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.

Program: Continuum of Care, Emergency Solutions Grant Program Federal Financial Assistance Listing No.:14.267, 14.231 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward, Sacramento County Department of Human Assistance Award Year: 2023 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208, DHA-NM-03-23, DHA-NM-03-24 Type of Finding: Material Weakness in Internal Controls Over Compliance Criteria: 2 CFR 200.303(a) of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The nonfederal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are met. As outlined in 2 CFR 180, recipients must not utilize any contractor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition Found: The Organization’s procurement policy did not include all the required elements as outlined in the Uniform Guidance. Additionally, the Organization did not retain documentation to support the procedures performed to ensure compliance with suspension and debarment requirements. Cause: The Organization does not typically receive federal financial assistance that is subject to procurement and suspension and debarment regulations; consequently, certain elements required by the Uniform Guidance were missing. Effect: Lack of complete procurement, suspension, and debarment policies and not retaining documentation to support compliance with suspension and debarment requirements could result in noncompliance with Uniform Guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 9 contractors totaling $1,989,106 under the Continuum of Care Program and three contractors totaling $227,772 under the Emergency Solutions Grant Program. We tested all contractors with total payments exceeding $25,000 during the year. Repeat Finding from Prior Years: Yes, Finding 2022-03. Recommendation: We recommend that management develop a written procurement policy that conforms with Uniform Guidance. In addition, we recommend that management implement procedures and control processes to retain documentation supporting compliance with major federal program compliance requirements regarding suspension and debarment. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.

Program: Continuum of Care, Emergency Solutions Grant Program Federal Financial Assistance Listing No.:14.267, 14.231 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward, Sacramento County Department of Human Assistance Award Year: 2023 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208, DHA-NM-03-23, DHA-NM-03-24 Type of Finding: Material Weakness in Internal Controls Over Compliance Criteria: 2 CFR 200.303(a) of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The nonfederal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are met. As outlined in 2 CFR 180, recipients must not utilize any contractor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition Found: The Organization’s procurement policy did not include all the required elements as outlined in the Uniform Guidance. Additionally, the Organization did not retain documentation to support the procedures performed to ensure compliance with suspension and debarment requirements. Cause: The Organization does not typically receive federal financial assistance that is subject to procurement and suspension and debarment regulations; consequently, certain elements required by the Uniform Guidance were missing. Effect: Lack of complete procurement, suspension, and debarment policies and not retaining documentation to support compliance with suspension and debarment requirements could result in noncompliance with Uniform Guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 9 contractors totaling $1,989,106 under the Continuum of Care Program and three contractors totaling $227,772 under the Emergency Solutions Grant Program. We tested all contractors with total payments exceeding $25,000 during the year. Repeat Finding from Prior Years: Yes, Finding 2022-03. Recommendation: We recommend that management develop a written procurement policy that conforms with Uniform Guidance. In addition, we recommend that management implement procedures and control processes to retain documentation supporting compliance with major federal program compliance requirements regarding suspension and debarment. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.

Program: Continuum of Care, Emergency Solutions Grant Program Federal Financial Assistance Listing No.:14.267, 14.231 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward, Sacramento County Department of Human Assistance Award Year: 2023 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208, DHA-NM-03-23, DHA-NM-03-24 Type of Finding: Material Weakness in Internal Controls Over Compliance Criteria: 2 CFR 200.303(a) of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The nonfederal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are met. As outlined in 2 CFR 180, recipients must not utilize any contractor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition Found: The Organization’s procurement policy did not include all the required elements as outlined in the Uniform Guidance. Additionally, the Organization did not retain documentation to support the procedures performed to ensure compliance with suspension and debarment requirements. Cause: The Organization does not typically receive federal financial assistance that is subject to procurement and suspension and debarment regulations; consequently, certain elements required by the Uniform Guidance were missing. Effect: Lack of complete procurement, suspension, and debarment policies and not retaining documentation to support compliance with suspension and debarment requirements could result in noncompliance with Uniform Guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 9 contractors totaling $1,989,106 under the Continuum of Care Program and three contractors totaling $227,772 under the Emergency Solutions Grant Program. We tested all contractors with total payments exceeding $25,000 during the year. Repeat Finding from Prior Years: Yes, Finding 2022-03. Recommendation: We recommend that management develop a written procurement policy that conforms with Uniform Guidance. In addition, we recommend that management implement procedures and control processes to retain documentation supporting compliance with major federal program compliance requirements regarding suspension and debarment. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.

Program: Continuum of Care, Emergency Solutions Grant Program Federal Financial Assistance Listing No.:14.267, 14.231 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward, Sacramento County Department of Human Assistance Award Year: 2023 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208, DHA-NM-03-23, DHA-NM-03-24 Type of Finding: Material Weakness in Internal Controls Over Compliance Criteria: 2 CFR 200.303(a) of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The nonfederal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are met. As outlined in 2 CFR 180, recipients must not utilize any contractor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition Found: The Organization’s procurement policy did not include all the required elements as outlined in the Uniform Guidance. Additionally, the Organization did not retain documentation to support the procedures performed to ensure compliance with suspension and debarment requirements. Cause: The Organization does not typically receive federal financial assistance that is subject to procurement and suspension and debarment regulations; consequently, certain elements required by the Uniform Guidance were missing. Effect: Lack of complete procurement, suspension, and debarment policies and not retaining documentation to support compliance with suspension and debarment requirements could result in noncompliance with Uniform Guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 9 contractors totaling $1,989,106 under the Continuum of Care Program and three contractors totaling $227,772 under the Emergency Solutions Grant Program. We tested all contractors with total payments exceeding $25,000 during the year. Repeat Finding from Prior Years: Yes, Finding 2022-03. Recommendation: We recommend that management develop a written procurement policy that conforms with Uniform Guidance. In addition, we recommend that management implement procedures and control processes to retain documentation supporting compliance with major federal program compliance requirements regarding suspension and debarment. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.

Program: Continuum of Care, Emergency Solutions Grant Program Federal Financial Assistance Listing No.:14.267, 14.231 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward, Sacramento County Department of Human Assistance Award Year: 2023 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208, DHA-NM-03-23, DHA-NM-03-24 Type of Finding: Material Weakness in Internal Controls Over Compliance Criteria: 2 CFR 200.303(a) of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The nonfederal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are met. As outlined in 2 CFR 180, recipients must not utilize any contractor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition Found: The Organization’s procurement policy did not include all the required elements as outlined in the Uniform Guidance. Additionally, the Organization did not retain documentation to support the procedures performed to ensure compliance with suspension and debarment requirements. Cause: The Organization does not typically receive federal financial assistance that is subject to procurement and suspension and debarment regulations; consequently, certain elements required by the Uniform Guidance were missing. Effect: Lack of complete procurement, suspension, and debarment policies and not retaining documentation to support compliance with suspension and debarment requirements could result in noncompliance with Uniform Guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 9 contractors totaling $1,989,106 under the Continuum of Care Program and three contractors totaling $227,772 under the Emergency Solutions Grant Program. We tested all contractors with total payments exceeding $25,000 during the year. Repeat Finding from Prior Years: Yes, Finding 2022-03. Recommendation: We recommend that management develop a written procurement policy that conforms with Uniform Guidance. In addition, we recommend that management implement procedures and control processes to retain documentation supporting compliance with major federal program compliance requirements regarding suspension and debarment. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.

Program: Continuum of Care, Emergency Solutions Grant Program Federal Financial Assistance Listing No.:14.267, 14.231 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward, Sacramento County Department of Human Assistance Award Year: 2023 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208, DHA-NM-03-23, DHA-NM-03-24 Type of Finding: Material Weakness in Internal Controls Over Compliance Criteria: 2 CFR 200.303(a) of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The nonfederal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are met. As outlined in 2 CFR 180, recipients must not utilize any contractor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition Found: The Organization’s procurement policy did not include all the required elements as outlined in the Uniform Guidance. Additionally, the Organization did not retain documentation to support the procedures performed to ensure compliance with suspension and debarment requirements. Cause: The Organization does not typically receive federal financial assistance that is subject to procurement and suspension and debarment regulations; consequently, certain elements required by the Uniform Guidance were missing. Effect: Lack of complete procurement, suspension, and debarment policies and not retaining documentation to support compliance with suspension and debarment requirements could result in noncompliance with Uniform Guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 9 contractors totaling $1,989,106 under the Continuum of Care Program and three contractors totaling $227,772 under the Emergency Solutions Grant Program. We tested all contractors with total payments exceeding $25,000 during the year. Repeat Finding from Prior Years: Yes, Finding 2022-03. Recommendation: We recommend that management develop a written procurement policy that conforms with Uniform Guidance. In addition, we recommend that management implement procedures and control processes to retain documentation supporting compliance with major federal program compliance requirements regarding suspension and debarment. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.

Program: Continuum of Care, Emergency Solutions Grant Program Federal Financial Assistance Listing No.:14.267, 14.231 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward, Sacramento County Department of Human Assistance Award Year: 2023 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208, DHA-NM-03-23, DHA-NM-03-24 Type of Finding: Material Weakness in Internal Controls Over Compliance Criteria: 2 CFR 200.303(a) of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The nonfederal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are met. As outlined in 2 CFR 180, recipients must not utilize any contractor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition Found: The Organization’s procurement policy did not include all the required elements as outlined in the Uniform Guidance. Additionally, the Organization did not retain documentation to support the procedures performed to ensure compliance with suspension and debarment requirements. Cause: The Organization does not typically receive federal financial assistance that is subject to procurement and suspension and debarment regulations; consequently, certain elements required by the Uniform Guidance were missing. Effect: Lack of complete procurement, suspension, and debarment policies and not retaining documentation to support compliance with suspension and debarment requirements could result in noncompliance with Uniform Guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 9 contractors totaling $1,989,106 under the Continuum of Care Program and three contractors totaling $227,772 under the Emergency Solutions Grant Program. We tested all contractors with total payments exceeding $25,000 during the year. Repeat Finding from Prior Years: Yes, Finding 2022-03. Recommendation: We recommend that management develop a written procurement policy that conforms with Uniform Guidance. In addition, we recommend that management implement procedures and control processes to retain documentation supporting compliance with major federal program compliance requirements regarding suspension and debarment. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.

Program: Continuum of Care Federal Financial Assistance Listing No.:14.267 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward Award Year: 2023 Compliance Requirement: Special Tests and Provisions – Reasonable Rental Rates Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208 Type of Finding: Material Weakness in Internal Controls Over Compliance and Material Noncompliance Criteria: Per 24 CFR section 578.49(b)(1), where grants are used to pay for rent for all or a part of a structure, the rent paid must be reasonable in relation to rents being charged in the area for comparable space. In addition, the rent may not exceed rents currently being charged by the same owner for comparable unassisted space. Per 24 CFR sections 578.49(b)(2) and 578.51(g) and (j), where grants are used to pay rent for individual housing units, the rent paid must be reasonable in relation to rents being charged for comparable units taking into account relevant features. In addition, the rents may not exceed rents currently being charged by the same owner for comparable unassisted units, and the portion of rents paid with grant funds may not exceed HUD-determined fair market rents. Grant funds in an amount up to one month’s rent may be used to pay the non-recipient landlord for any damages to leased units by homeless participants. Condition Found: • As a result of our procedures performed, we noted for 8 out of 17 rental participants tested, the organization could not provide documentation to demonstrate the reasonableness of contract rents being paid for individual housing units in relation to rents being charged for comparable units. This should have included an analysis of rents in the immediate area of the participants housing. • For 3 out of 41 rental payments tested, we noted the rent paid exceed the HUD-determined fair market rents for the fiscal year. Cause: The Organization was applying a method of determining reasonable rents that had been allowable under prior awards, prior to migration of the program's funding to the Continuum of Care program under assistance listing number 14.267. Effect: Rent paid to landlords on behalf of participants may have been higher in comparison to other rental properties in a similar area during the period the reasonableness assessment was not completed. Also, rental payments made using grant funds exceeded the HUD-determined fair market rents. Questioned Costs: $330 in questioned costs was identified as a result of our procedures. Context/ Sampling: • A nonstatistical sample of 17 out of 109 participants was selected to test for rent reasonableness documentation. • A nonstatistical sample of 41 out of 1,088 rental payments were selected to test compliance over the HUD-determined fair market rents. Our sample was $59,905 in rental payments and the population of rental payments for the year ended December 31, 2023 totaled $2,491,614.94. Repeat Finding from Prior Years: Yes, Finding 2022-002 Recommendation: This is a repeat finding from 2022. It was noted that the Organization implemented procedures in January 2022 to document rent reasonableness checks on a prospective basis, however this was not corrected for the samples tested as part of our audit. We recommend that the Organization continue to implement policies and procedures to ensure compliance with the program’s Special Tests and Provisions – Reasonable Rental Rates requirement. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.

Program: Continuum of Care Federal Financial Assistance Listing No.:14.267 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward Award Year: 2023 Compliance Requirement: Special Tests and Provisions – Reasonable Rental Rates Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208 Type of Finding: Material Weakness in Internal Controls Over Compliance and Material Noncompliance Criteria: Per 24 CFR section 578.49(b)(1), where grants are used to pay for rent for all or a part of a structure, the rent paid must be reasonable in relation to rents being charged in the area for comparable space. In addition, the rent may not exceed rents currently being charged by the same owner for comparable unassisted space. Per 24 CFR sections 578.49(b)(2) and 578.51(g) and (j), where grants are used to pay rent for individual housing units, the rent paid must be reasonable in relation to rents being charged for comparable units taking into account relevant features. In addition, the rents may not exceed rents currently being charged by the same owner for comparable unassisted units, and the portion of rents paid with grant funds may not exceed HUD-determined fair market rents. Grant funds in an amount up to one month’s rent may be used to pay the non-recipient landlord for any damages to leased units by homeless participants. Condition Found: • As a result of our procedures performed, we noted for 8 out of 17 rental participants tested, the organization could not provide documentation to demonstrate the reasonableness of contract rents being paid for individual housing units in relation to rents being charged for comparable units. This should have included an analysis of rents in the immediate area of the participants housing. • For 3 out of 41 rental payments tested, we noted the rent paid exceed the HUD-determined fair market rents for the fiscal year. Cause: The Organization was applying a method of determining reasonable rents that had been allowable under prior awards, prior to migration of the program's funding to the Continuum of Care program under assistance listing number 14.267. Effect: Rent paid to landlords on behalf of participants may have been higher in comparison to other rental properties in a similar area during the period the reasonableness assessment was not completed. Also, rental payments made using grant funds exceeded the HUD-determined fair market rents. Questioned Costs: $330 in questioned costs was identified as a result of our procedures. Context/ Sampling: • A nonstatistical sample of 17 out of 109 participants was selected to test for rent reasonableness documentation. • A nonstatistical sample of 41 out of 1,088 rental payments were selected to test compliance over the HUD-determined fair market rents. Our sample was $59,905 in rental payments and the population of rental payments for the year ended December 31, 2023 totaled $2,491,614.94. Repeat Finding from Prior Years: Yes, Finding 2022-002 Recommendation: This is a repeat finding from 2022. It was noted that the Organization implemented procedures in January 2022 to document rent reasonableness checks on a prospective basis, however this was not corrected for the samples tested as part of our audit. We recommend that the Organization continue to implement policies and procedures to ensure compliance with the program’s Special Tests and Provisions – Reasonable Rental Rates requirement. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.

Program: Continuum of Care Federal Financial Assistance Listing No.:14.267 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward Award Year: 2023 Compliance Requirement: Special Tests and Provisions – Reasonable Rental Rates Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208 Type of Finding: Material Weakness in Internal Controls Over Compliance and Material Noncompliance Criteria: Per 24 CFR section 578.49(b)(1), where grants are used to pay for rent for all or a part of a structure, the rent paid must be reasonable in relation to rents being charged in the area for comparable space. In addition, the rent may not exceed rents currently being charged by the same owner for comparable unassisted space. Per 24 CFR sections 578.49(b)(2) and 578.51(g) and (j), where grants are used to pay rent for individual housing units, the rent paid must be reasonable in relation to rents being charged for comparable units taking into account relevant features. In addition, the rents may not exceed rents currently being charged by the same owner for comparable unassisted units, and the portion of rents paid with grant funds may not exceed HUD-determined fair market rents. Grant funds in an amount up to one month’s rent may be used to pay the non-recipient landlord for any damages to leased units by homeless participants. Condition Found: • As a result of our procedures performed, we noted for 8 out of 17 rental participants tested, the organization could not provide documentation to demonstrate the reasonableness of contract rents being paid for individual housing units in relation to rents being charged for comparable units. This should have included an analysis of rents in the immediate area of the participants housing. • For 3 out of 41 rental payments tested, we noted the rent paid exceed the HUD-determined fair market rents for the fiscal year. Cause: The Organization was applying a method of determining reasonable rents that had been allowable under prior awards, prior to migration of the program's funding to the Continuum of Care program under assistance listing number 14.267. Effect: Rent paid to landlords on behalf of participants may have been higher in comparison to other rental properties in a similar area during the period the reasonableness assessment was not completed. Also, rental payments made using grant funds exceeded the HUD-determined fair market rents. Questioned Costs: $330 in questioned costs was identified as a result of our procedures. Context/ Sampling: • A nonstatistical sample of 17 out of 109 participants was selected to test for rent reasonableness documentation. • A nonstatistical sample of 41 out of 1,088 rental payments were selected to test compliance over the HUD-determined fair market rents. Our sample was $59,905 in rental payments and the population of rental payments for the year ended December 31, 2023 totaled $2,491,614.94. Repeat Finding from Prior Years: Yes, Finding 2022-002 Recommendation: This is a repeat finding from 2022. It was noted that the Organization implemented procedures in January 2022 to document rent reasonableness checks on a prospective basis, however this was not corrected for the samples tested as part of our audit. We recommend that the Organization continue to implement policies and procedures to ensure compliance with the program’s Special Tests and Provisions – Reasonable Rental Rates requirement. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.

Program: Continuum of Care Federal Financial Assistance Listing No.:14.267 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward Award Year: 2023 Compliance Requirement: Special Tests and Provisions – Reasonable Rental Rates Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208 Type of Finding: Material Weakness in Internal Controls Over Compliance and Material Noncompliance Criteria: Per 24 CFR section 578.49(b)(1), where grants are used to pay for rent for all or a part of a structure, the rent paid must be reasonable in relation to rents being charged in the area for comparable space. In addition, the rent may not exceed rents currently being charged by the same owner for comparable unassisted space. Per 24 CFR sections 578.49(b)(2) and 578.51(g) and (j), where grants are used to pay rent for individual housing units, the rent paid must be reasonable in relation to rents being charged for comparable units taking into account relevant features. In addition, the rents may not exceed rents currently being charged by the same owner for comparable unassisted units, and the portion of rents paid with grant funds may not exceed HUD-determined fair market rents. Grant funds in an amount up to one month’s rent may be used to pay the non-recipient landlord for any damages to leased units by homeless participants. Condition Found: • As a result of our procedures performed, we noted for 8 out of 17 rental participants tested, the organization could not provide documentation to demonstrate the reasonableness of contract rents being paid for individual housing units in relation to rents being charged for comparable units. This should have included an analysis of rents in the immediate area of the participants housing. • For 3 out of 41 rental payments tested, we noted the rent paid exceed the HUD-determined fair market rents for the fiscal year. Cause: The Organization was applying a method of determining reasonable rents that had been allowable under prior awards, prior to migration of the program's funding to the Continuum of Care program under assistance listing number 14.267. Effect: Rent paid to landlords on behalf of participants may have been higher in comparison to other rental properties in a similar area during the period the reasonableness assessment was not completed. Also, rental payments made using grant funds exceeded the HUD-determined fair market rents. Questioned Costs: $330 in questioned costs was identified as a result of our procedures. Context/ Sampling: • A nonstatistical sample of 17 out of 109 participants was selected to test for rent reasonableness documentation. • A nonstatistical sample of 41 out of 1,088 rental payments were selected to test compliance over the HUD-determined fair market rents. Our sample was $59,905 in rental payments and the population of rental payments for the year ended December 31, 2023 totaled $2,491,614.94. Repeat Finding from Prior Years: Yes, Finding 2022-002 Recommendation: This is a repeat finding from 2022. It was noted that the Organization implemented procedures in January 2022 to document rent reasonableness checks on a prospective basis, however this was not corrected for the samples tested as part of our audit. We recommend that the Organization continue to implement policies and procedures to ensure compliance with the program’s Special Tests and Provisions – Reasonable Rental Rates requirement. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.

Program: Continuum of Care Federal Financial Assistance Listing No.:14.267 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward Award Year: 2023 Compliance Requirement: Special Tests and Provisions – Reasonable Rental Rates Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208 Type of Finding: Material Weakness in Internal Controls Over Compliance and Material Noncompliance Criteria: Per 24 CFR section 578.49(b)(1), where grants are used to pay for rent for all or a part of a structure, the rent paid must be reasonable in relation to rents being charged in the area for comparable space. In addition, the rent may not exceed rents currently being charged by the same owner for comparable unassisted space. Per 24 CFR sections 578.49(b)(2) and 578.51(g) and (j), where grants are used to pay rent for individual housing units, the rent paid must be reasonable in relation to rents being charged for comparable units taking into account relevant features. In addition, the rents may not exceed rents currently being charged by the same owner for comparable unassisted units, and the portion of rents paid with grant funds may not exceed HUD-determined fair market rents. Grant funds in an amount up to one month’s rent may be used to pay the non-recipient landlord for any damages to leased units by homeless participants. Condition Found: • As a result of our procedures performed, we noted for 8 out of 17 rental participants tested, the organization could not provide documentation to demonstrate the reasonableness of contract rents being paid for individual housing units in relation to rents being charged for comparable units. This should have included an analysis of rents in the immediate area of the participants housing. • For 3 out of 41 rental payments tested, we noted the rent paid exceed the HUD-determined fair market rents for the fiscal year. Cause: The Organization was applying a method of determining reasonable rents that had been allowable under prior awards, prior to migration of the program's funding to the Continuum of Care program under assistance listing number 14.267. Effect: Rent paid to landlords on behalf of participants may have been higher in comparison to other rental properties in a similar area during the period the reasonableness assessment was not completed. Also, rental payments made using grant funds exceeded the HUD-determined fair market rents. Questioned Costs: $330 in questioned costs was identified as a result of our procedures. Context/ Sampling: • A nonstatistical sample of 17 out of 109 participants was selected to test for rent reasonableness documentation. • A nonstatistical sample of 41 out of 1,088 rental payments were selected to test compliance over the HUD-determined fair market rents. Our sample was $59,905 in rental payments and the population of rental payments for the year ended December 31, 2023 totaled $2,491,614.94. Repeat Finding from Prior Years: Yes, Finding 2022-002 Recommendation: This is a repeat finding from 2022. It was noted that the Organization implemented procedures in January 2022 to document rent reasonableness checks on a prospective basis, however this was not corrected for the samples tested as part of our audit. We recommend that the Organization continue to implement policies and procedures to ensure compliance with the program’s Special Tests and Provisions – Reasonable Rental Rates requirement. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.

Program: Continuum of Care Federal Financial Assistance Listing No.:14.267 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward Award Year: 2023 Compliance Requirement: Special Tests and Provisions – Reasonable Rental Rates Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208 Type of Finding: Material Weakness in Internal Controls Over Compliance and Material Noncompliance Criteria: Per 24 CFR section 578.49(b)(1), where grants are used to pay for rent for all or a part of a structure, the rent paid must be reasonable in relation to rents being charged in the area for comparable space. In addition, the rent may not exceed rents currently being charged by the same owner for comparable unassisted space. Per 24 CFR sections 578.49(b)(2) and 578.51(g) and (j), where grants are used to pay rent for individual housing units, the rent paid must be reasonable in relation to rents being charged for comparable units taking into account relevant features. In addition, the rents may not exceed rents currently being charged by the same owner for comparable unassisted units, and the portion of rents paid with grant funds may not exceed HUD-determined fair market rents. Grant funds in an amount up to one month’s rent may be used to pay the non-recipient landlord for any damages to leased units by homeless participants. Condition Found: • As a result of our procedures performed, we noted for 8 out of 17 rental participants tested, the organization could not provide documentation to demonstrate the reasonableness of contract rents being paid for individual housing units in relation to rents being charged for comparable units. This should have included an analysis of rents in the immediate area of the participants housing. • For 3 out of 41 rental payments tested, we noted the rent paid exceed the HUD-determined fair market rents for the fiscal year. Cause: The Organization was applying a method of determining reasonable rents that had been allowable under prior awards, prior to migration of the program's funding to the Continuum of Care program under assistance listing number 14.267. Effect: Rent paid to landlords on behalf of participants may have been higher in comparison to other rental properties in a similar area during the period the reasonableness assessment was not completed. Also, rental payments made using grant funds exceeded the HUD-determined fair market rents. Questioned Costs: $330 in questioned costs was identified as a result of our procedures. Context/ Sampling: • A nonstatistical sample of 17 out of 109 participants was selected to test for rent reasonableness documentation. • A nonstatistical sample of 41 out of 1,088 rental payments were selected to test compliance over the HUD-determined fair market rents. Our sample was $59,905 in rental payments and the population of rental payments for the year ended December 31, 2023 totaled $2,491,614.94. Repeat Finding from Prior Years: Yes, Finding 2022-002 Recommendation: This is a repeat finding from 2022. It was noted that the Organization implemented procedures in January 2022 to document rent reasonableness checks on a prospective basis, however this was not corrected for the samples tested as part of our audit. We recommend that the Organization continue to implement policies and procedures to ensure compliance with the program’s Special Tests and Provisions – Reasonable Rental Rates requirement. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.

Program: Continuum of Care, Emergency Solutions Grant Program Federal Financial Assistance Listing No.:14.267, 14.231 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward, Sacramento County Department of Human Assistance Award Year: 2023 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208, DHA-NM-03-23, DHA-NM-03-24 Type of Finding: Material Weakness in Internal Controls Over Compliance Criteria: 2 CFR 200.303(a) of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The nonfederal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are met. As outlined in 2 CFR 180, recipients must not utilize any contractor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition Found: The Organization’s procurement policy did not include all the required elements as outlined in the Uniform Guidance. Additionally, the Organization did not retain documentation to support the procedures performed to ensure compliance with suspension and debarment requirements. Cause: The Organization does not typically receive federal financial assistance that is subject to procurement and suspension and debarment regulations; consequently, certain elements required by the Uniform Guidance were missing. Effect: Lack of complete procurement, suspension, and debarment policies and not retaining documentation to support compliance with suspension and debarment requirements could result in noncompliance with Uniform Guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 9 contractors totaling $1,989,106 under the Continuum of Care Program and three contractors totaling $227,772 under the Emergency Solutions Grant Program. We tested all contractors with total payments exceeding $25,000 during the year. Repeat Finding from Prior Years: Yes, Finding 2022-03. Recommendation: We recommend that management develop a written procurement policy that conforms with Uniform Guidance. In addition, we recommend that management implement procedures and control processes to retain documentation supporting compliance with major federal program compliance requirements regarding suspension and debarment. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.

Program: Continuum of Care, Emergency Solutions Grant Program Federal Financial Assistance Listing No.:14.267, 14.231 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward, Sacramento County Department of Human Assistance Award Year: 2023 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208, DHA-NM-03-23, DHA-NM-03-24 Type of Finding: Material Weakness in Internal Controls Over Compliance Criteria: 2 CFR 200.303(a) of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The nonfederal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are met. As outlined in 2 CFR 180, recipients must not utilize any contractor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition Found: The Organization’s procurement policy did not include all the required elements as outlined in the Uniform Guidance. Additionally, the Organization did not retain documentation to support the procedures performed to ensure compliance with suspension and debarment requirements. Cause: The Organization does not typically receive federal financial assistance that is subject to procurement and suspension and debarment regulations; consequently, certain elements required by the Uniform Guidance were missing. Effect: Lack of complete procurement, suspension, and debarment policies and not retaining documentation to support compliance with suspension and debarment requirements could result in noncompliance with Uniform Guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 9 contractors totaling $1,989,106 under the Continuum of Care Program and three contractors totaling $227,772 under the Emergency Solutions Grant Program. We tested all contractors with total payments exceeding $25,000 during the year. Repeat Finding from Prior Years: Yes, Finding 2022-03. Recommendation: We recommend that management develop a written procurement policy that conforms with Uniform Guidance. In addition, we recommend that management implement procedures and control processes to retain documentation supporting compliance with major federal program compliance requirements regarding suspension and debarment. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.

Program: Continuum of Care, Emergency Solutions Grant Program Federal Financial Assistance Listing No.:14.267, 14.231 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward, Sacramento County Department of Human Assistance Award Year: 2023 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208, DHA-NM-03-23, DHA-NM-03-24 Type of Finding: Material Weakness in Internal Controls Over Compliance Criteria: 2 CFR 200.303(a) of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The nonfederal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are met. As outlined in 2 CFR 180, recipients must not utilize any contractor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition Found: The Organization’s procurement policy did not include all the required elements as outlined in the Uniform Guidance. Additionally, the Organization did not retain documentation to support the procedures performed to ensure compliance with suspension and debarment requirements. Cause: The Organization does not typically receive federal financial assistance that is subject to procurement and suspension and debarment regulations; consequently, certain elements required by the Uniform Guidance were missing. Effect: Lack of complete procurement, suspension, and debarment policies and not retaining documentation to support compliance with suspension and debarment requirements could result in noncompliance with Uniform Guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 9 contractors totaling $1,989,106 under the Continuum of Care Program and three contractors totaling $227,772 under the Emergency Solutions Grant Program. We tested all contractors with total payments exceeding $25,000 during the year. Repeat Finding from Prior Years: Yes, Finding 2022-03. Recommendation: We recommend that management develop a written procurement policy that conforms with Uniform Guidance. In addition, we recommend that management implement procedures and control processes to retain documentation supporting compliance with major federal program compliance requirements regarding suspension and debarment. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.

Program: Continuum of Care, Emergency Solutions Grant Program Federal Financial Assistance Listing No.:14.267, 14.231 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward, Sacramento County Department of Human Assistance Award Year: 2023 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208, DHA-NM-03-23, DHA-NM-03-24 Type of Finding: Material Weakness in Internal Controls Over Compliance Criteria: 2 CFR 200.303(a) of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The nonfederal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are met. As outlined in 2 CFR 180, recipients must not utilize any contractor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition Found: The Organization’s procurement policy did not include all the required elements as outlined in the Uniform Guidance. Additionally, the Organization did not retain documentation to support the procedures performed to ensure compliance with suspension and debarment requirements. Cause: The Organization does not typically receive federal financial assistance that is subject to procurement and suspension and debarment regulations; consequently, certain elements required by the Uniform Guidance were missing. Effect: Lack of complete procurement, suspension, and debarment policies and not retaining documentation to support compliance with suspension and debarment requirements could result in noncompliance with Uniform Guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 9 contractors totaling $1,989,106 under the Continuum of Care Program and three contractors totaling $227,772 under the Emergency Solutions Grant Program. We tested all contractors with total payments exceeding $25,000 during the year. Repeat Finding from Prior Years: Yes, Finding 2022-03. Recommendation: We recommend that management develop a written procurement policy that conforms with Uniform Guidance. In addition, we recommend that management implement procedures and control processes to retain documentation supporting compliance with major federal program compliance requirements regarding suspension and debarment. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.

Program: Continuum of Care, Emergency Solutions Grant Program Federal Financial Assistance Listing No.:14.267, 14.231 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward, Sacramento County Department of Human Assistance Award Year: 2023 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208, DHA-NM-03-23, DHA-NM-03-24 Type of Finding: Material Weakness in Internal Controls Over Compliance Criteria: 2 CFR 200.303(a) of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The nonfederal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are met. As outlined in 2 CFR 180, recipients must not utilize any contractor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition Found: The Organization’s procurement policy did not include all the required elements as outlined in the Uniform Guidance. Additionally, the Organization did not retain documentation to support the procedures performed to ensure compliance with suspension and debarment requirements. Cause: The Organization does not typically receive federal financial assistance that is subject to procurement and suspension and debarment regulations; consequently, certain elements required by the Uniform Guidance were missing. Effect: Lack of complete procurement, suspension, and debarment policies and not retaining documentation to support compliance with suspension and debarment requirements could result in noncompliance with Uniform Guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 9 contractors totaling $1,989,106 under the Continuum of Care Program and three contractors totaling $227,772 under the Emergency Solutions Grant Program. We tested all contractors with total payments exceeding $25,000 during the year. Repeat Finding from Prior Years: Yes, Finding 2022-03. Recommendation: We recommend that management develop a written procurement policy that conforms with Uniform Guidance. In addition, we recommend that management implement procedures and control processes to retain documentation supporting compliance with major federal program compliance requirements regarding suspension and debarment. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.

Program: Continuum of Care, Emergency Solutions Grant Program Federal Financial Assistance Listing No.:14.267, 14.231 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward, Sacramento County Department of Human Assistance Award Year: 2023 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208, DHA-NM-03-23, DHA-NM-03-24 Type of Finding: Material Weakness in Internal Controls Over Compliance Criteria: 2 CFR 200.303(a) of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The nonfederal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are met. As outlined in 2 CFR 180, recipients must not utilize any contractor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition Found: The Organization’s procurement policy did not include all the required elements as outlined in the Uniform Guidance. Additionally, the Organization did not retain documentation to support the procedures performed to ensure compliance with suspension and debarment requirements. Cause: The Organization does not typically receive federal financial assistance that is subject to procurement and suspension and debarment regulations; consequently, certain elements required by the Uniform Guidance were missing. Effect: Lack of complete procurement, suspension, and debarment policies and not retaining documentation to support compliance with suspension and debarment requirements could result in noncompliance with Uniform Guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 9 contractors totaling $1,989,106 under the Continuum of Care Program and three contractors totaling $227,772 under the Emergency Solutions Grant Program. We tested all contractors with total payments exceeding $25,000 during the year. Repeat Finding from Prior Years: Yes, Finding 2022-03. Recommendation: We recommend that management develop a written procurement policy that conforms with Uniform Guidance. In addition, we recommend that management implement procedures and control processes to retain documentation supporting compliance with major federal program compliance requirements regarding suspension and debarment. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.

Program: Continuum of Care, Emergency Solutions Grant Program Federal Financial Assistance Listing No.:14.267, 14.231 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward, Sacramento County Department of Human Assistance Award Year: 2023 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208, DHA-NM-03-23, DHA-NM-03-24 Type of Finding: Material Weakness in Internal Controls Over Compliance Criteria: 2 CFR 200.303(a) of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The nonfederal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are met. As outlined in 2 CFR 180, recipients must not utilize any contractor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition Found: The Organization’s procurement policy did not include all the required elements as outlined in the Uniform Guidance. Additionally, the Organization did not retain documentation to support the procedures performed to ensure compliance with suspension and debarment requirements. Cause: The Organization does not typically receive federal financial assistance that is subject to procurement and suspension and debarment regulations; consequently, certain elements required by the Uniform Guidance were missing. Effect: Lack of complete procurement, suspension, and debarment policies and not retaining documentation to support compliance with suspension and debarment requirements could result in noncompliance with Uniform Guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 9 contractors totaling $1,989,106 under the Continuum of Care Program and three contractors totaling $227,772 under the Emergency Solutions Grant Program. We tested all contractors with total payments exceeding $25,000 during the year. Repeat Finding from Prior Years: Yes, Finding 2022-03. Recommendation: We recommend that management develop a written procurement policy that conforms with Uniform Guidance. In addition, we recommend that management implement procedures and control processes to retain documentation supporting compliance with major federal program compliance requirements regarding suspension and debarment. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.

Program: Continuum of Care, Emergency Solutions Grant Program Federal Financial Assistance Listing No.:14.267, 14.231 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward, Sacramento County Department of Human Assistance Award Year: 2023 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208, DHA-NM-03-23, DHA-NM-03-24 Type of Finding: Material Weakness in Internal Controls Over Compliance Criteria: 2 CFR 200.303(a) of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The nonfederal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are met. As outlined in 2 CFR 180, recipients must not utilize any contractor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition Found: The Organization’s procurement policy did not include all the required elements as outlined in the Uniform Guidance. Additionally, the Organization did not retain documentation to support the procedures performed to ensure compliance with suspension and debarment requirements. Cause: The Organization does not typically receive federal financial assistance that is subject to procurement and suspension and debarment regulations; consequently, certain elements required by the Uniform Guidance were missing. Effect: Lack of complete procurement, suspension, and debarment policies and not retaining documentation to support compliance with suspension and debarment requirements could result in noncompliance with Uniform Guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/ Sampling: Suspension and debarment was applicable to 9 contractors totaling $1,989,106 under the Continuum of Care Program and three contractors totaling $227,772 under the Emergency Solutions Grant Program. We tested all contractors with total payments exceeding $25,000 during the year. Repeat Finding from Prior Years: Yes, Finding 2022-03. Recommendation: We recommend that management develop a written procurement policy that conforms with Uniform Guidance. In addition, we recommend that management implement procedures and control processes to retain documentation supporting compliance with major federal program compliance requirements regarding suspension and debarment. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.