Audit 350398

Reporting (Significant Deficiency) and Compliance Federal Agency: U.S. Department of Treasury Program Title: Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) Assistance Listing Number: 21.027 Federal Award Source: Pass-through Funding Pass-Through Entity: City of Tucson Pass-Through Identifying Number: NW9MUKKRP9C5 Criteria – The pass-through entity’s grant agreement with the Organization requires that the Organization submit quarterly summary reports with demographic data no later than 15th of the month following each Fiscal Quarter. Condition – During our audit of the reporting requirements for the CSLFRF program, we requested quarterly summary reports and noted that they were not created nor submitted. Cause – The finding appears to be the result of staffing turnover at the Organization. Effect and Context – Four quarterly summary reports were not submitted. Questioned Costs – None identified. Recommendation – We recommend the Organization implement policies and procedures to ensure timely and accurate reporting of required program reports. View of Responsible Officials: We are in agreement with the finding and are in the process of updating our procedures to mitigate the issues noted in the future. See our Corrective Action Plan for the fiscal year ended June 30, 2024 for additional detail.

Allowable Costs (Significant Deficiency) and Compliance Federal Agency: U.S. Department of Treasury Program Title: Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) Assistance Listing Number: 21.027 Federal Award Source: Pass-through Funding Pass-Through Entity: State of Arizona Pass-Through Identifying Number: GR-ARPA-JP-030122-01 Criteria – Section 200.403 of the Uniform Guidance states that in order to be allowable under a Federal award, costs must conform to any limitations or exclusions of the Uniform Guidance cost principles and the applicable Federal award, and be accorded consistent treatment. Condition – During our audit, the State of Arizona completed a program audit of the Organization’s grant award under the American Rescue Plan Act for the grant period from March 2022 through December 2024, which resulted in disallowed costs of $23,197 and $87,690 pertaining to the Organization’s fiscal years ended June 30, 2024 and 2023, respectively. The Organization’s financial statements for the years ended June 30, 2024 and 2023 were adjusted accordingly. In total, $58,179 of the disallowed costs related to participant costs for which the State of Arizona took a more stringent approach to determine allowability and $52,708 related to payroll costs that were inadvertently charged to the award. Cause – The finding appears to be the result of an unexpected change in the State of Arizona’s criteria for determining allowability of participant costs, a misunderstanding of proper allocability of payroll costs, and a lack of proper internal controls over the review and approval of the use of Federal award funds that had been previously advanced. Effect and Context – The Organization utilized funds that were previously advanced for costs that were subsequently disallowed. Questioned Costs – $110,887, of which $23,197 related to the fiscal year ended June 30, 2024 and $87,690 related to the fiscal year ended June 30, 2023. Recommendation – We recommend the Organization implement policies and procedures to ensure proper review and approval of the use of Federal award funds that are advanced. View of Responsible Officials: We are in agreement with the finding and are in the process of updating our procedures to mitigate the issues noted in the future. See our Corrective Action Plan for the fiscal year ended June 30, 2024 for additional detail.

Reporting (Significant Deficiency) and Compliance Federal Agency: U.S. Department of Treasury Program Title: Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) Assistance Listing Number: 21.027 Federal Award Source: Pass-through Funding Pass-Through Entity: City of Tucson Pass-Through Identifying Number: NW9MUKKRP9C5 Criteria – The pass-through entity’s grant agreement with the Organization requires that the Organization submit quarterly summary reports with demographic data no later than 15th of the month following each Fiscal Quarter. Condition – During our audit of the reporting requirements for the CSLFRF program, we requested quarterly summary reports and noted that they were not created nor submitted. Cause – The finding appears to be the result of staffing turnover at the Organization. Effect and Context – Four quarterly summary reports were not submitted. Questioned Costs – None identified. Recommendation – We recommend the Organization implement policies and procedures to ensure timely and accurate reporting of required program reports. View of Responsible Officials: We are in agreement with the finding and are in the process of updating our procedures to mitigate the issues noted in the future. See our Corrective Action Plan for the fiscal year ended June 30, 2024 for additional detail.

Allowable Costs (Significant Deficiency) and Compliance Federal Agency: U.S. Department of Treasury Program Title: Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) Assistance Listing Number: 21.027 Federal Award Source: Pass-through Funding Pass-Through Entity: State of Arizona Pass-Through Identifying Number: GR-ARPA-JP-030122-01 Criteria – Section 200.403 of the Uniform Guidance states that in order to be allowable under a Federal award, costs must conform to any limitations or exclusions of the Uniform Guidance cost principles and the applicable Federal award, and be accorded consistent treatment. Condition – During our audit, the State of Arizona completed a program audit of the Organization’s grant award under the American Rescue Plan Act for the grant period from March 2022 through December 2024, which resulted in disallowed costs of $23,197 and $87,690 pertaining to the Organization’s fiscal years ended June 30, 2024 and 2023, respectively. The Organization’s financial statements for the years ended June 30, 2024 and 2023 were adjusted accordingly. In total, $58,179 of the disallowed costs related to participant costs for which the State of Arizona took a more stringent approach to determine allowability and $52,708 related to payroll costs that were inadvertently charged to the award. Cause – The finding appears to be the result of an unexpected change in the State of Arizona’s criteria for determining allowability of participant costs, a misunderstanding of proper allocability of payroll costs, and a lack of proper internal controls over the review and approval of the use of Federal award funds that had been previously advanced. Effect and Context – The Organization utilized funds that were previously advanced for costs that were subsequently disallowed. Questioned Costs – $110,887, of which $23,197 related to the fiscal year ended June 30, 2024 and $87,690 related to the fiscal year ended June 30, 2023. Recommendation – We recommend the Organization implement policies and procedures to ensure proper review and approval of the use of Federal award funds that are advanced. View of Responsible Officials: We are in agreement with the finding and are in the process of updating our procedures to mitigate the issues noted in the future. See our Corrective Action Plan for the fiscal year ended June 30, 2024 for additional detail.