Audit 356132

Activities Allowed or Unallowed/Allowable Costs/Cost Principles Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should follow guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.404 – Reasonable costs – A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. Per 2 CFR section 200.405 – Allocable costs –focuses on how costs are allocable, ensuring they are directly tied to the federal award or its benefits. Per 2 CFR 200.430(i), charges to Federal awards for salaries and wages must be based on records that are supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and that are incorporated into the official records of the non-Federal entity. Condition – The following exceptions were noted during testing of 138 program disbursements, 93 payroll disbursements, and 100 journal entry transactions: • 20 invoices could not be located related to program disbursements • 6 invoices tested did not agree to the approved allocation of Head Start expenses • 1 timecard could not be located • multiple instances where an approved pay rate covering the appropriate time-period could not be obtained • 12 instances where supporting documentation for journal entries to adjust Head Start expenses could not be obtained. Cause – Turnover in staff and the passage of time since the period under audit has caused documentation to be misplaced. Effect – Inadequate or inconsistent documentation of expenses may result in erroneous or fraudulent transactions occurring, loss of funding, or disallowed costs. Questioned Costs – $151,608. Recommendation – Documentation should be prepared, reviewed, and retained to support the expense. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Activities Allowed or Unallowed/Allowable Costs/Cost Principles Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should follow guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.404 – Reasonable costs – A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. Per 2 CFR section 200.405 – Allocable costs –focuses on how costs are allocable, ensuring they are directly tied to the federal award or its benefits. Per 2 CFR 200.430(i), charges to Federal awards for salaries and wages must be based on records that are supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and that are incorporated into the official records of the non-Federal entity. Condition – The following exceptions were noted during testing of 138 program disbursements, 93 payroll disbursements, and 100 journal entry transactions: • 20 invoices could not be located related to program disbursements • 6 invoices tested did not agree to the approved allocation of Head Start expenses • 1 timecard could not be located • multiple instances where an approved pay rate covering the appropriate time-period could not be obtained • 12 instances where supporting documentation for journal entries to adjust Head Start expenses could not be obtained. Cause – Turnover in staff and the passage of time since the period under audit has caused documentation to be misplaced. Effect – Inadequate or inconsistent documentation of expenses may result in erroneous or fraudulent transactions occurring, loss of funding, or disallowed costs. Questioned Costs – $151,608. Recommendation – Documentation should be prepared, reviewed, and retained to support the expense. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Activities Allowed or Unallowed/Allowable Costs/Cost Principles Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should follow guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.404 – Reasonable costs – A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. Per 2 CFR section 200.405 – Allocable costs –focuses on how costs are allocable, ensuring they are directly tied to the federal award or its benefits. Per 2 CFR 200.430(i), charges to Federal awards for salaries and wages must be based on records that are supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and that are incorporated into the official records of the non-Federal entity. Condition – The following exceptions were noted during testing of 138 program disbursements, 93 payroll disbursements, and 100 journal entry transactions: • 20 invoices could not be located related to program disbursements • 6 invoices tested did not agree to the approved allocation of Head Start expenses • 1 timecard could not be located • multiple instances where an approved pay rate covering the appropriate time-period could not be obtained • 12 instances where supporting documentation for journal entries to adjust Head Start expenses could not be obtained. Cause – Turnover in staff and the passage of time since the period under audit has caused documentation to be misplaced. Effect – Inadequate or inconsistent documentation of expenses may result in erroneous or fraudulent transactions occurring, loss of funding, or disallowed costs. Questioned Costs – $151,608. Recommendation – Documentation should be prepared, reviewed, and retained to support the expense. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Activities Allowed or Unallowed/Allowable Costs/Cost Principles Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should follow guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.404 – Reasonable costs – A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. Per 2 CFR section 200.405 – Allocable costs –focuses on how costs are allocable, ensuring they are directly tied to the federal award or its benefits. Per 2 CFR 200.430(i), charges to Federal awards for salaries and wages must be based on records that are supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and that are incorporated into the official records of the non-Federal entity. Condition – The following exceptions were noted during testing of 138 program disbursements, 93 payroll disbursements, and 100 journal entry transactions: • 20 invoices could not be located related to program disbursements • 6 invoices tested did not agree to the approved allocation of Head Start expenses • 1 timecard could not be located • multiple instances where an approved pay rate covering the appropriate time-period could not be obtained • 12 instances where supporting documentation for journal entries to adjust Head Start expenses could not be obtained. Cause – Turnover in staff and the passage of time since the period under audit has caused documentation to be misplaced. Effect – Inadequate or inconsistent documentation of expenses may result in erroneous or fraudulent transactions occurring, loss of funding, or disallowed costs. Questioned Costs – $151,608. Recommendation – Documentation should be prepared, reviewed, and retained to support the expense. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Activities Allowed or Unallowed/Allowable Costs/Cost Principles Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should follow guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.404 – Reasonable costs – A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. Per 2 CFR section 200.405 – Allocable costs –focuses on how costs are allocable, ensuring they are directly tied to the federal award or its benefits. Per 2 CFR 200.430(i), charges to Federal awards for salaries and wages must be based on records that are supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and that are incorporated into the official records of the non-Federal entity. Condition – The following exceptions were noted during testing of 138 program disbursements, 93 payroll disbursements, and 100 journal entry transactions: • 20 invoices could not be located related to program disbursements • 6 invoices tested did not agree to the approved allocation of Head Start expenses • 1 timecard could not be located • multiple instances where an approved pay rate covering the appropriate time-period could not be obtained • 12 instances where supporting documentation for journal entries to adjust Head Start expenses could not be obtained. Cause – Turnover in staff and the passage of time since the period under audit has caused documentation to be misplaced. Effect – Inadequate or inconsistent documentation of expenses may result in erroneous or fraudulent transactions occurring, loss of funding, or disallowed costs. Questioned Costs – $151,608. Recommendation – Documentation should be prepared, reviewed, and retained to support the expense. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Activities Allowed or Unallowed/Allowable Costs/Cost Principles Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should follow guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.404 – Reasonable costs – A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. Per 2 CFR section 200.405 – Allocable costs –focuses on how costs are allocable, ensuring they are directly tied to the federal award or its benefits. Per 2 CFR 200.430(i), charges to Federal awards for salaries and wages must be based on records that are supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and that are incorporated into the official records of the non-Federal entity. Condition – The following exceptions were noted during testing of 138 program disbursements, 93 payroll disbursements, and 100 journal entry transactions: • 20 invoices could not be located related to program disbursements • 6 invoices tested did not agree to the approved allocation of Head Start expenses • 1 timecard could not be located • multiple instances where an approved pay rate covering the appropriate time-period could not be obtained • 12 instances where supporting documentation for journal entries to adjust Head Start expenses could not be obtained. Cause – Turnover in staff and the passage of time since the period under audit has caused documentation to be misplaced. Effect – Inadequate or inconsistent documentation of expenses may result in erroneous or fraudulent transactions occurring, loss of funding, or disallowed costs. Questioned Costs – $151,608. Recommendation – Documentation should be prepared, reviewed, and retained to support the expense. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Equipment/Real Property Management Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR 200.439(d)(1) requires that property records must be maintained for equipment acquired under a federal award that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Condition – During testing it was noted that the Inventory tracking sheet did not contain all assets with federal interest under the Head Start program. It was also noted that there were items not included in the physical inventory observation taken. Cause – The Agency did not properly include all additions in the current year to the fixed asset schedule, which resulted in a lack of proper property records and missing physical inventory observation was made for assets included on properly records. Effect – Failure to include all items and take a full physical inventory observation could result in noncompliance with the grant agreements. Questioned Costs – Not applicable. Recommendation – We recommend the Agency follow its capital asset management policy to ensure all assets are adequately accounted for and properly safeguarded. CRI also recommends that the Agency include all of the information required by the Uniform Guidance in one central tracking spreadsheet or database. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Equipment/Real Property Management Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR 200.439(d)(1) requires that property records must be maintained for equipment acquired under a federal award that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Condition – During testing it was noted that the Inventory tracking sheet did not contain all assets with federal interest under the Head Start program. It was also noted that there were items not included in the physical inventory observation taken. Cause – The Agency did not properly include all additions in the current year to the fixed asset schedule, which resulted in a lack of proper property records and missing physical inventory observation was made for assets included on properly records. Effect – Failure to include all items and take a full physical inventory observation could result in noncompliance with the grant agreements. Questioned Costs – Not applicable. Recommendation – We recommend the Agency follow its capital asset management policy to ensure all assets are adequately accounted for and properly safeguarded. CRI also recommends that the Agency include all of the information required by the Uniform Guidance in one central tracking spreadsheet or database. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Equipment/Real Property Management Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR 200.439(d)(1) requires that property records must be maintained for equipment acquired under a federal award that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Condition – During testing it was noted that the Inventory tracking sheet did not contain all assets with federal interest under the Head Start program. It was also noted that there were items not included in the physical inventory observation taken. Cause – The Agency did not properly include all additions in the current year to the fixed asset schedule, which resulted in a lack of proper property records and missing physical inventory observation was made for assets included on properly records. Effect – Failure to include all items and take a full physical inventory observation could result in noncompliance with the grant agreements. Questioned Costs – Not applicable. Recommendation – We recommend the Agency follow its capital asset management policy to ensure all assets are adequately accounted for and properly safeguarded. CRI also recommends that the Agency include all of the information required by the Uniform Guidance in one central tracking spreadsheet or database. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Equipment/Real Property Management Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR 200.439(d)(1) requires that property records must be maintained for equipment acquired under a federal award that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Condition – During testing it was noted that the Inventory tracking sheet did not contain all assets with federal interest under the Head Start program. It was also noted that there were items not included in the physical inventory observation taken. Cause – The Agency did not properly include all additions in the current year to the fixed asset schedule, which resulted in a lack of proper property records and missing physical inventory observation was made for assets included on properly records. Effect – Failure to include all items and take a full physical inventory observation could result in noncompliance with the grant agreements. Questioned Costs – Not applicable. Recommendation – We recommend the Agency follow its capital asset management policy to ensure all assets are adequately accounted for and properly safeguarded. CRI also recommends that the Agency include all of the information required by the Uniform Guidance in one central tracking spreadsheet or database. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Equipment/Real Property Management Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR 200.439(d)(1) requires that property records must be maintained for equipment acquired under a federal award that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Condition – During testing it was noted that the Inventory tracking sheet did not contain all assets with federal interest under the Head Start program. It was also noted that there were items not included in the physical inventory observation taken. Cause – The Agency did not properly include all additions in the current year to the fixed asset schedule, which resulted in a lack of proper property records and missing physical inventory observation was made for assets included on properly records. Effect – Failure to include all items and take a full physical inventory observation could result in noncompliance with the grant agreements. Questioned Costs – Not applicable. Recommendation – We recommend the Agency follow its capital asset management policy to ensure all assets are adequately accounted for and properly safeguarded. CRI also recommends that the Agency include all of the information required by the Uniform Guidance in one central tracking spreadsheet or database. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Equipment/Real Property Management Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR 200.439(d)(1) requires that property records must be maintained for equipment acquired under a federal award that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Condition – During testing it was noted that the Inventory tracking sheet did not contain all assets with federal interest under the Head Start program. It was also noted that there were items not included in the physical inventory observation taken. Cause – The Agency did not properly include all additions in the current year to the fixed asset schedule, which resulted in a lack of proper property records and missing physical inventory observation was made for assets included on properly records. Effect – Failure to include all items and take a full physical inventory observation could result in noncompliance with the grant agreements. Questioned Costs – Not applicable. Recommendation – We recommend the Agency follow its capital asset management policy to ensure all assets are adequately accounted for and properly safeguarded. CRI also recommends that the Agency include all of the information required by the Uniform Guidance in one central tracking spreadsheet or database. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Financial Reporting Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 2 CFR section 200.302(b))3) requires that nonfederal entities keep records that include info: pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation Condition – The Organization did not maintain proper documentation in support of financial reporting requirements. Cause – Supporting records used to populate the required financial reporting were not retained by the Agency. Effect – The agency could submit incorrect information. Questioned Costs – Not applicable. Recommendation – Documentation should be prepared, reviewed, and retained to support the required reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Financial Reporting Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 2 CFR section 200.302(b))3) requires that nonfederal entities keep records that include info: pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation Condition – The Organization did not maintain proper documentation in support of financial reporting requirements. Cause – Supporting records used to populate the required financial reporting were not retained by the Agency. Effect – The agency could submit incorrect information. Questioned Costs – Not applicable. Recommendation – Documentation should be prepared, reviewed, and retained to support the required reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Financial Reporting Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 2 CFR section 200.302(b))3) requires that nonfederal entities keep records that include info: pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation Condition – The Organization did not maintain proper documentation in support of financial reporting requirements. Cause – Supporting records used to populate the required financial reporting were not retained by the Agency. Effect – The agency could submit incorrect information. Questioned Costs – Not applicable. Recommendation – Documentation should be prepared, reviewed, and retained to support the required reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Financial Reporting Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 2 CFR section 200.302(b))3) requires that nonfederal entities keep records that include info: pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation Condition – The Organization did not maintain proper documentation in support of financial reporting requirements. Cause – Supporting records used to populate the required financial reporting were not retained by the Agency. Effect – The agency could submit incorrect information. Questioned Costs – Not applicable. Recommendation – Documentation should be prepared, reviewed, and retained to support the required reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Financial Reporting Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 2 CFR section 200.302(b))3) requires that nonfederal entities keep records that include info: pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation Condition – The Organization did not maintain proper documentation in support of financial reporting requirements. Cause – Supporting records used to populate the required financial reporting were not retained by the Agency. Effect – The agency could submit incorrect information. Questioned Costs – Not applicable. Recommendation – Documentation should be prepared, reviewed, and retained to support the required reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Financial Reporting Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 2 CFR section 200.302(b))3) requires that nonfederal entities keep records that include info: pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation Condition – The Organization did not maintain proper documentation in support of financial reporting requirements. Cause – Supporting records used to populate the required financial reporting were not retained by the Agency. Effect – The agency could submit incorrect information. Questioned Costs – Not applicable. Recommendation – Documentation should be prepared, reviewed, and retained to support the required reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Special Reporting Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, under compliance requirements for reporting 2 CFR 200.32 states that information must be collected with the frequency required by the terms and conditions of the federal award for effective monitoring of the federal awards. 2 CFR 200.330, Reporting on Real Property: The Federal awarding agency or pass-through entity must require a non-Federal entity to submit reports at least annually on the status of real property in which the Federal Government retains an interest. As described in ACF-IM-HS-17-01 Facilities Guidance, all grantees, including those with no covered real property, are instructed to use and submit standard form (SF) Real Property Status Report 429. Condition – The SF-429 required to be filed for Head Start was submitted after the deadline. Cause – The Agency did not apply appropriate controls to ensure that all reporting required under the terms of the grant were filed timely. Effect – Late reporting to the grantor can result in sanctions or loss of future funding. Questioned Costs – Not applicable. Recommendation – Management should implement the necessary controls to ensure all reporting required under the grant is filed accurately and timely. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Special Reporting Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, under compliance requirements for reporting 2 CFR 200.32 states that information must be collected with the frequency required by the terms and conditions of the federal award for effective monitoring of the federal awards. 2 CFR 200.330, Reporting on Real Property: The Federal awarding agency or pass-through entity must require a non-Federal entity to submit reports at least annually on the status of real property in which the Federal Government retains an interest. As described in ACF-IM-HS-17-01 Facilities Guidance, all grantees, including those with no covered real property, are instructed to use and submit standard form (SF) Real Property Status Report 429. Condition – The SF-429 required to be filed for Head Start was submitted after the deadline. Cause – The Agency did not apply appropriate controls to ensure that all reporting required under the terms of the grant were filed timely. Effect – Late reporting to the grantor can result in sanctions or loss of future funding. Questioned Costs – Not applicable. Recommendation – Management should implement the necessary controls to ensure all reporting required under the grant is filed accurately and timely. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Special Reporting Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, under compliance requirements for reporting 2 CFR 200.32 states that information must be collected with the frequency required by the terms and conditions of the federal award for effective monitoring of the federal awards. 2 CFR 200.330, Reporting on Real Property: The Federal awarding agency or pass-through entity must require a non-Federal entity to submit reports at least annually on the status of real property in which the Federal Government retains an interest. As described in ACF-IM-HS-17-01 Facilities Guidance, all grantees, including those with no covered real property, are instructed to use and submit standard form (SF) Real Property Status Report 429. Condition – The SF-429 required to be filed for Head Start was submitted after the deadline. Cause – The Agency did not apply appropriate controls to ensure that all reporting required under the terms of the grant were filed timely. Effect – Late reporting to the grantor can result in sanctions or loss of future funding. Questioned Costs – Not applicable. Recommendation – Management should implement the necessary controls to ensure all reporting required under the grant is filed accurately and timely. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Special Reporting Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, under compliance requirements for reporting 2 CFR 200.32 states that information must be collected with the frequency required by the terms and conditions of the federal award for effective monitoring of the federal awards. 2 CFR 200.330, Reporting on Real Property: The Federal awarding agency or pass-through entity must require a non-Federal entity to submit reports at least annually on the status of real property in which the Federal Government retains an interest. As described in ACF-IM-HS-17-01 Facilities Guidance, all grantees, including those with no covered real property, are instructed to use and submit standard form (SF) Real Property Status Report 429. Condition – The SF-429 required to be filed for Head Start was submitted after the deadline. Cause – The Agency did not apply appropriate controls to ensure that all reporting required under the terms of the grant were filed timely. Effect – Late reporting to the grantor can result in sanctions or loss of future funding. Questioned Costs – Not applicable. Recommendation – Management should implement the necessary controls to ensure all reporting required under the grant is filed accurately and timely. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Special Reporting Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, under compliance requirements for reporting 2 CFR 200.32 states that information must be collected with the frequency required by the terms and conditions of the federal award for effective monitoring of the federal awards. 2 CFR 200.330, Reporting on Real Property: The Federal awarding agency or pass-through entity must require a non-Federal entity to submit reports at least annually on the status of real property in which the Federal Government retains an interest. As described in ACF-IM-HS-17-01 Facilities Guidance, all grantees, including those with no covered real property, are instructed to use and submit standard form (SF) Real Property Status Report 429. Condition – The SF-429 required to be filed for Head Start was submitted after the deadline. Cause – The Agency did not apply appropriate controls to ensure that all reporting required under the terms of the grant were filed timely. Effect – Late reporting to the grantor can result in sanctions or loss of future funding. Questioned Costs – Not applicable. Recommendation – Management should implement the necessary controls to ensure all reporting required under the grant is filed accurately and timely. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Special Reporting Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, under compliance requirements for reporting 2 CFR 200.32 states that information must be collected with the frequency required by the terms and conditions of the federal award for effective monitoring of the federal awards. 2 CFR 200.330, Reporting on Real Property: The Federal awarding agency or pass-through entity must require a non-Federal entity to submit reports at least annually on the status of real property in which the Federal Government retains an interest. As described in ACF-IM-HS-17-01 Facilities Guidance, all grantees, including those with no covered real property, are instructed to use and submit standard form (SF) Real Property Status Report 429. Condition – The SF-429 required to be filed for Head Start was submitted after the deadline. Cause – The Agency did not apply appropriate controls to ensure that all reporting required under the terms of the grant were filed timely. Effect – Late reporting to the grantor can result in sanctions or loss of future funding. Questioned Costs – Not applicable. Recommendation – Management should implement the necessary controls to ensure all reporting required under the grant is filed accurately and timely. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Activities Allowed/Allowable Costs/Costs Principles, Eligibility, Period of Performance Emergency Rental Assistance ALN# 21.023 US Department of the Treasury Passed through Oregon Housing and Community Services Federal Grant/Contract Number: ERA000 Grant period – 2022 Criteria – 2 CFR 200.303 requires non-Federal entities to establish and maintain effective internal controls over Federal awards, including the requirements for allowable costs, activities allowed, beneficiary eligibility, and period of performance. For the Emergency Rental Assistance Program, specific requirements are laid out in Section 501 of Division N of the Consolidated Appropriations Act, 2021, 2 CFR Part 200, Subpart E, federal awarding agency regulations, and the terms and conditions of the award. Condition – In our sample of 100 items, we noted the following exceptions: • 2 instances where client applications nor check requests could be produced • 2 instances where client applications could not be produced • 1 instance where the risk of housing status was not properly documented. Cause – Supporting applications and/or required documentation was not retained by the Agency to substantiate eligibility, allowable costs, activities allowed, and period of performance for benefit services rendered. Effect – Failure to properly document eligibility determinations and benefit amounts could result in improper payments and disallowed costs. Questioned Costs – $ 137,567. Recommendation – Documentation should be prepared, reviewed, and retained to support the allowable costs, activities allowed, eligibility, and period of performance for benefits paid to individuals for services. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Activities Allowed/Allowable Costs/Costs Principles, Period of Performance Emergency Rental Assistance ALN# 21.023 US Department of the Treasury Passed through Oregon Housing and Community Services Federal Grant/Contract Number: ERA000 Grant period – 2022 Criteria – Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition – In our sample of 100 items, we noted the following exceptions: • 13 instances where the check request used to identify approval of the disbursement could not be located • 1 instance where the request was not signed by the supervisor Cause – Supporting check request documentation relevant to verify that proper approval controls had been performed could not be obtained. Effect – Expenses not relevant to the fund or client benefits could be paid without approval. Expenses could be in excess of costs that client was eligible for or could be outside of the period of performance. Questioned Costs – Not applicable. Recommendation – Documentation should be prepared, reviewed, and retained to support the allowable costs, activities allowed, eligibility, and period of performance for benefits paid to individuals for services. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Period of Performance and Earmarking Low-Income Home Energy Assistance ALN# 93.568 US Department of Health and Human Services Passed through Oregon Housing and Community Services Federal Grant/Contract Number: 2021ORLIEA, 2022ORLIEA, 2102ORE5C, 2101ORLWC5, 2102ORLWC6 Grant period – 2021 & 2022 Criteria – Per the 2021-2023 Master Grant Agreement. Subgrantee shall, and shall cause and shall require its subrecipients by contract to administer the program in a manner satisfactory to OHCS and in compliance with all program requirements, including but not limited to the following terms and conditions: (1) Assure that program funds are used only for program services consistent with program requirements. (3) Ensure that program funds are expended within the time limitations set by OHCS. Program funds not expended within the time period may be recaptured by OHCS. (8) Be responsible for maintaining an internal controls framework, satisfactory to OHCS, which assures compliance with program requirements. (10) Maintain accurate financial records satisfactory to the department, which document, among other things, the receipt and disbursement of all funds provided through the program by the department; and have an accounting system in place satisfactory to the department, which meets, among other things, generally accepted accounting principles. Condition – Our testing noted the following exceptions: • 22 instances where check request and invoice could not be produced from a sample of 62 • 4 instances where the journal entry and corresponding back up could not be produced from a sample of 23. Moreover, $809,022 of costs associated with benefit services provided were not captured by the Agency. These amounts were noted during the review of Eligibility. However, these costs were noted by batches uploaded to the pass-through entity of the client. A detail of the expenses as it relates to payment of the disbursements to vendors could not be obtained and therefore not tested. These amounts represented benefit payments to individuals. A detail of the expenses was not available, as records supporting the batches under which reimbursement was requested were not retained. As a result, the auditors were unable to test these payments. We were unable to obtain sufficient, appropriate audit evidence related to these amounts. Cause – Supporting invoices or required documentation were not retained by the Agency to substantiate period of performance and earmarking costs. The Agency was not properly accounting for expenses incurred during the correct period. Effect – Expenditures could be made outside of the period of performance or costs could be captured incorrectly resulting in noncompliance with earmarking. Not properly recording the expenditures could result in expenditures being booked in the wrong grant period. Questioned Costs – $ 258,313, based on the populations sampled. An additional $809,022 was not recorded properly and was not able to be tested. Recommendation – Documentation should be prepared, reviewed, and retained to support the period of performance and earmarking. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. The Agency should review applications for when benefit was incurred to ensure that expenses are recorded in the proper period as opposed to when paid. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Period of Performance and Earmarking Low-Income Home Energy Assistance ALN# 93.568 US Department of Health and Human Services Passed through Oregon Housing and Community Services Federal Grant/Contract Number: 2021ORLIEA, 2022ORLIEA, 2102ORE5C, 2101ORLWC5, 2102ORLWC6 Grant period – 2021 & 2022 Criteria – Per the 2021-2023 Master Grant Agreement. Subgrantee shall, and shall cause and shall require its subrecipients by contract to administer the program in a manner satisfactory to OHCS and in compliance with all program requirements, including but not limited to the following terms and conditions: (1) Assure that program funds are used only for program services consistent with program requirements. (3) Ensure that program funds are expended within the time limitations set by OHCS. Program funds not expended within the time period may be recaptured by OHCS. (8) Be responsible for maintaining an internal controls framework, satisfactory to OHCS, which assures compliance with program requirements. (10) Maintain accurate financial records satisfactory to the department, which document, among other things, the receipt and disbursement of all funds provided through the program by the department; and have an accounting system in place satisfactory to the department, which meets, among other things, generally accepted accounting principles. Condition – Our testing noted the following exceptions: • 22 instances where check request and invoice could not be produced from a sample of 62 • 4 instances where the journal entry and corresponding back up could not be produced from a sample of 23. Moreover, $809,022 of costs associated with benefit services provided were not captured by the Agency. These amounts were noted during the review of Eligibility. However, these costs were noted by batches uploaded to the pass-through entity of the client. A detail of the expenses as it relates to payment of the disbursements to vendors could not be obtained and therefore not tested. These amounts represented benefit payments to individuals. A detail of the expenses was not available, as records supporting the batches under which reimbursement was requested were not retained. As a result, the auditors were unable to test these payments. We were unable to obtain sufficient, appropriate audit evidence related to these amounts. Cause – Supporting invoices or required documentation were not retained by the Agency to substantiate period of performance and earmarking costs. The Agency was not properly accounting for expenses incurred during the correct period. Effect – Expenditures could be made outside of the period of performance or costs could be captured incorrectly resulting in noncompliance with earmarking. Not properly recording the expenditures could result in expenditures being booked in the wrong grant period. Questioned Costs – $ 258,313, based on the populations sampled. An additional $809,022 was not recorded properly and was not able to be tested. Recommendation – Documentation should be prepared, reviewed, and retained to support the period of performance and earmarking. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. The Agency should review applications for when benefit was incurred to ensure that expenses are recorded in the proper period as opposed to when paid. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Period of Performance and Earmarking Low-Income Home Energy Assistance ALN# 93.568 US Department of Health and Human Services Passed through Oregon Housing and Community Services Federal Grant/Contract Number: 2021ORLIEA, 2022ORLIEA, 2102ORE5C, 2101ORLWC5, 2102ORLWC6 Grant period – 2021 & 2022 Criteria – Per the 2021-2023 Master Grant Agreement. Subgrantee shall, and shall cause and shall require its subrecipients by contract to administer the program in a manner satisfactory to OHCS and in compliance with all program requirements, including but not limited to the following terms and conditions: (1) Assure that program funds are used only for program services consistent with program requirements. (3) Ensure that program funds are expended within the time limitations set by OHCS. Program funds not expended within the time period may be recaptured by OHCS. (8) Be responsible for maintaining an internal controls framework, satisfactory to OHCS, which assures compliance with program requirements. (10) Maintain accurate financial records satisfactory to the department, which document, among other things, the receipt and disbursement of all funds provided through the program by the department; and have an accounting system in place satisfactory to the department, which meets, among other things, generally accepted accounting principles. Condition – Our testing noted the following exceptions: • 22 instances where check request and invoice could not be produced from a sample of 62 • 4 instances where the journal entry and corresponding back up could not be produced from a sample of 23. Moreover, $809,022 of costs associated with benefit services provided were not captured by the Agency. These amounts were noted during the review of Eligibility. However, these costs were noted by batches uploaded to the pass-through entity of the client. A detail of the expenses as it relates to payment of the disbursements to vendors could not be obtained and therefore not tested. These amounts represented benefit payments to individuals. A detail of the expenses was not available, as records supporting the batches under which reimbursement was requested were not retained. As a result, the auditors were unable to test these payments. We were unable to obtain sufficient, appropriate audit evidence related to these amounts. Cause – Supporting invoices or required documentation were not retained by the Agency to substantiate period of performance and earmarking costs. The Agency was not properly accounting for expenses incurred during the correct period. Effect – Expenditures could be made outside of the period of performance or costs could be captured incorrectly resulting in noncompliance with earmarking. Not properly recording the expenditures could result in expenditures being booked in the wrong grant period. Questioned Costs – $ 258,313, based on the populations sampled. An additional $809,022 was not recorded properly and was not able to be tested. Recommendation – Documentation should be prepared, reviewed, and retained to support the period of performance and earmarking. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. The Agency should review applications for when benefit was incurred to ensure that expenses are recorded in the proper period as opposed to when paid. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Period of Performance and Earmarking Low-Income Home Energy Assistance ALN# 93.568 US Department of Health and Human Services Passed through Oregon Housing and Community Services Federal Grant/Contract Number: 2021ORLIEA, 2022ORLIEA, 2102ORE5C, 2101ORLWC5, 2102ORLWC6 Grant period – 2021 & 2022 Criteria – Per the 2021-2023 Master Grant Agreement. Subgrantee shall, and shall cause and shall require its subrecipients by contract to administer the program in a manner satisfactory to OHCS and in compliance with all program requirements, including but not limited to the following terms and conditions: (1) Assure that program funds are used only for program services consistent with program requirements. (3) Ensure that program funds are expended within the time limitations set by OHCS. Program funds not expended within the time period may be recaptured by OHCS. (8) Be responsible for maintaining an internal controls framework, satisfactory to OHCS, which assures compliance with program requirements. (10) Maintain accurate financial records satisfactory to the department, which document, among other things, the receipt and disbursement of all funds provided through the program by the department; and have an accounting system in place satisfactory to the department, which meets, among other things, generally accepted accounting principles. Condition – Our testing noted the following exceptions: • 22 instances where check request and invoice could not be produced from a sample of 62 • 4 instances where the journal entry and corresponding back up could not be produced from a sample of 23. Moreover, $809,022 of costs associated with benefit services provided were not captured by the Agency. These amounts were noted during the review of Eligibility. However, these costs were noted by batches uploaded to the pass-through entity of the client. A detail of the expenses as it relates to payment of the disbursements to vendors could not be obtained and therefore not tested. These amounts represented benefit payments to individuals. A detail of the expenses was not available, as records supporting the batches under which reimbursement was requested were not retained. As a result, the auditors were unable to test these payments. We were unable to obtain sufficient, appropriate audit evidence related to these amounts. Cause – Supporting invoices or required documentation were not retained by the Agency to substantiate period of performance and earmarking costs. The Agency was not properly accounting for expenses incurred during the correct period. Effect – Expenditures could be made outside of the period of performance or costs could be captured incorrectly resulting in noncompliance with earmarking. Not properly recording the expenditures could result in expenditures being booked in the wrong grant period. Questioned Costs – $ 258,313, based on the populations sampled. An additional $809,022 was not recorded properly and was not able to be tested. Recommendation – Documentation should be prepared, reviewed, and retained to support the period of performance and earmarking. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. The Agency should review applications for when benefit was incurred to ensure that expenses are recorded in the proper period as opposed to when paid. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Period of Performance and Earmarking Low-Income Home Energy Assistance ALN# 93.568 US Department of Health and Human Services Passed through Oregon Housing and Community Services Federal Grant/Contract Number: 2021ORLIEA, 2022ORLIEA, 2102ORE5C, 2101ORLWC5, 2102ORLWC6 Grant period – 2021 & 2022 Criteria – Per the 2021-2023 Master Grant Agreement. Subgrantee shall, and shall cause and shall require its subrecipients by contract to administer the program in a manner satisfactory to OHCS and in compliance with all program requirements, including but not limited to the following terms and conditions: (1) Assure that program funds are used only for program services consistent with program requirements. (3) Ensure that program funds are expended within the time limitations set by OHCS. Program funds not expended within the time period may be recaptured by OHCS. (8) Be responsible for maintaining an internal controls framework, satisfactory to OHCS, which assures compliance with program requirements. (10) Maintain accurate financial records satisfactory to the department, which document, among other things, the receipt and disbursement of all funds provided through the program by the department; and have an accounting system in place satisfactory to the department, which meets, among other things, generally accepted accounting principles. Condition – Our testing noted the following exceptions: • 22 instances where check request and invoice could not be produced from a sample of 62 • 4 instances where the journal entry and corresponding back up could not be produced from a sample of 23. Moreover, $809,022 of costs associated with benefit services provided were not captured by the Agency. These amounts were noted during the review of Eligibility. However, these costs were noted by batches uploaded to the pass-through entity of the client. A detail of the expenses as it relates to payment of the disbursements to vendors could not be obtained and therefore not tested. These amounts represented benefit payments to individuals. A detail of the expenses was not available, as records supporting the batches under which reimbursement was requested were not retained. As a result, the auditors were unable to test these payments. We were unable to obtain sufficient, appropriate audit evidence related to these amounts. Cause – Supporting invoices or required documentation were not retained by the Agency to substantiate period of performance and earmarking costs. The Agency was not properly accounting for expenses incurred during the correct period. Effect – Expenditures could be made outside of the period of performance or costs could be captured incorrectly resulting in noncompliance with earmarking. Not properly recording the expenditures could result in expenditures being booked in the wrong grant period. Questioned Costs – $ 258,313, based on the populations sampled. An additional $809,022 was not recorded properly and was not able to be tested. Recommendation – Documentation should be prepared, reviewed, and retained to support the period of performance and earmarking. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. The Agency should review applications for when benefit was incurred to ensure that expenses are recorded in the proper period as opposed to when paid. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Eligibility Low-Income Home Energy Assistance ALN# 93.568 US Department of Health and Human Services Passed through Oregon Housing and Community Services Federal Grant/Contract Number: 2021ORLIEA, 2022ORLIEA, 2102ORE5C, 2101ORLWC5, 2102ORLWC6 Grant period – 2021 & 2022 Criteria – Per the 2021-2023 Master Grant Agreement. Subgrantee shall, and shall cause and shall require its subrecipients by contract to administer the program in a manner satisfactory to OHCS and in compliance with all program requirements, including but not limited to the following terms and conditions: (4) Serve only households whose eligibility has been determined in compliance with program requirements. (8) Be responsible for maintaining an internal controls framework, satisfactory to OHCS, which assures compliance with program requirements. (11) Maintain other program records satisfactory to the department, which document, among other things, client eligibility requirements, receipt of allowable program services, termination of services and the basis for same, housing and income status of clients, administrative actions, contracts with subcontractors, review of subcontractor performance, action taken with respect to deficiency notices, and any administrative review proceedings. Such records shall be in substance and format satisfactory to the department. Condition – In our sample of 60 items, we noted the following exceptions: • 3 instances where client applications could not be produced • 1 instance where client application did not contain evidence of a bill • 6 instances where the combo payment amount covering overages of another program could not be substantiated in terms of amount paid • 1 instance where crisis payment didn’t contain all elements of documentation required for amount paid • 4 instances where bulk fuel payments didn’t contain all elements of documentation required for information taken via quote or vendor The Agency was not able to provide a listing of payments made on behalf of clients corresponding to the fiscal year, and we were unable to reconcile the awards paid out to the cash received from the passthrough entity and the listing of applications approved during the year. Cause – Supporting applications and required documentation were not retained by the Agency to substantiate eligibility and services provided. Effect – Applicants could receive improper benefit amounts based on eligibility criteria, excessive disbursements could be made, and a return of funds could be required to grantor. Questioned Costs – $190,142, based on the populations sampled. Recommendation – Documentation should be prepared, reviewed, and retained to support the period of performance and earmarking. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Eligibility Low-Income Home Energy Assistance ALN# 93.568 US Department of Health and Human Services Passed through Oregon Housing and Community Services Federal Grant/Contract Number: 2021ORLIEA, 2022ORLIEA, 2102ORE5C, 2101ORLWC5, 2102ORLWC6 Grant period – 2021 & 2022 Criteria – Per the 2021-2023 Master Grant Agreement. Subgrantee shall, and shall cause and shall require its subrecipients by contract to administer the program in a manner satisfactory to OHCS and in compliance with all program requirements, including but not limited to the following terms and conditions: (4) Serve only households whose eligibility has been determined in compliance with program requirements. (8) Be responsible for maintaining an internal controls framework, satisfactory to OHCS, which assures compliance with program requirements. (11) Maintain other program records satisfactory to the department, which document, among other things, client eligibility requirements, receipt of allowable program services, termination of services and the basis for same, housing and income status of clients, administrative actions, contracts with subcontractors, review of subcontractor performance, action taken with respect to deficiency notices, and any administrative review proceedings. Such records shall be in substance and format satisfactory to the department. Condition – In our sample of 60 items, we noted the following exceptions: • 3 instances where client applications could not be produced • 1 instance where client application did not contain evidence of a bill • 6 instances where the combo payment amount covering overages of another program could not be substantiated in terms of amount paid • 1 instance where crisis payment didn’t contain all elements of documentation required for amount paid • 4 instances where bulk fuel payments didn’t contain all elements of documentation required for information taken via quote or vendor The Agency was not able to provide a listing of payments made on behalf of clients corresponding to the fiscal year, and we were unable to reconcile the awards paid out to the cash received from the passthrough entity and the listing of applications approved during the year. Cause – Supporting applications and required documentation were not retained by the Agency to substantiate eligibility and services provided. Effect – Applicants could receive improper benefit amounts based on eligibility criteria, excessive disbursements could be made, and a return of funds could be required to grantor. Questioned Costs – $190,142, based on the populations sampled. Recommendation – Documentation should be prepared, reviewed, and retained to support the period of performance and earmarking. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Eligibility Low-Income Home Energy Assistance ALN# 93.568 US Department of Health and Human Services Passed through Oregon Housing and Community Services Federal Grant/Contract Number: 2021ORLIEA, 2022ORLIEA, 2102ORE5C, 2101ORLWC5, 2102ORLWC6 Grant period – 2021 & 2022 Criteria – Per the 2021-2023 Master Grant Agreement. Subgrantee shall, and shall cause and shall require its subrecipients by contract to administer the program in a manner satisfactory to OHCS and in compliance with all program requirements, including but not limited to the following terms and conditions: (4) Serve only households whose eligibility has been determined in compliance with program requirements. (8) Be responsible for maintaining an internal controls framework, satisfactory to OHCS, which assures compliance with program requirements. (11) Maintain other program records satisfactory to the department, which document, among other things, client eligibility requirements, receipt of allowable program services, termination of services and the basis for same, housing and income status of clients, administrative actions, contracts with subcontractors, review of subcontractor performance, action taken with respect to deficiency notices, and any administrative review proceedings. Such records shall be in substance and format satisfactory to the department. Condition – In our sample of 60 items, we noted the following exceptions: • 3 instances where client applications could not be produced • 1 instance where client application did not contain evidence of a bill • 6 instances where the combo payment amount covering overages of another program could not be substantiated in terms of amount paid • 1 instance where crisis payment didn’t contain all elements of documentation required for amount paid • 4 instances where bulk fuel payments didn’t contain all elements of documentation required for information taken via quote or vendor The Agency was not able to provide a listing of payments made on behalf of clients corresponding to the fiscal year, and we were unable to reconcile the awards paid out to the cash received from the passthrough entity and the listing of applications approved during the year. Cause – Supporting applications and required documentation were not retained by the Agency to substantiate eligibility and services provided. Effect – Applicants could receive improper benefit amounts based on eligibility criteria, excessive disbursements could be made, and a return of funds could be required to grantor. Questioned Costs – $190,142, based on the populations sampled. Recommendation – Documentation should be prepared, reviewed, and retained to support the period of performance and earmarking. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Eligibility Low-Income Home Energy Assistance ALN# 93.568 US Department of Health and Human Services Passed through Oregon Housing and Community Services Federal Grant/Contract Number: 2021ORLIEA, 2022ORLIEA, 2102ORE5C, 2101ORLWC5, 2102ORLWC6 Grant period – 2021 & 2022 Criteria – Per the 2021-2023 Master Grant Agreement. Subgrantee shall, and shall cause and shall require its subrecipients by contract to administer the program in a manner satisfactory to OHCS and in compliance with all program requirements, including but not limited to the following terms and conditions: (4) Serve only households whose eligibility has been determined in compliance with program requirements. (8) Be responsible for maintaining an internal controls framework, satisfactory to OHCS, which assures compliance with program requirements. (11) Maintain other program records satisfactory to the department, which document, among other things, client eligibility requirements, receipt of allowable program services, termination of services and the basis for same, housing and income status of clients, administrative actions, contracts with subcontractors, review of subcontractor performance, action taken with respect to deficiency notices, and any administrative review proceedings. Such records shall be in substance and format satisfactory to the department. Condition – In our sample of 60 items, we noted the following exceptions: • 3 instances where client applications could not be produced • 1 instance where client application did not contain evidence of a bill • 6 instances where the combo payment amount covering overages of another program could not be substantiated in terms of amount paid • 1 instance where crisis payment didn’t contain all elements of documentation required for amount paid • 4 instances where bulk fuel payments didn’t contain all elements of documentation required for information taken via quote or vendor The Agency was not able to provide a listing of payments made on behalf of clients corresponding to the fiscal year, and we were unable to reconcile the awards paid out to the cash received from the passthrough entity and the listing of applications approved during the year. Cause – Supporting applications and required documentation were not retained by the Agency to substantiate eligibility and services provided. Effect – Applicants could receive improper benefit amounts based on eligibility criteria, excessive disbursements could be made, and a return of funds could be required to grantor. Questioned Costs – $190,142, based on the populations sampled. Recommendation – Documentation should be prepared, reviewed, and retained to support the period of performance and earmarking. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Eligibility Low-Income Home Energy Assistance ALN# 93.568 US Department of Health and Human Services Passed through Oregon Housing and Community Services Federal Grant/Contract Number: 2021ORLIEA, 2022ORLIEA, 2102ORE5C, 2101ORLWC5, 2102ORLWC6 Grant period – 2021 & 2022 Criteria – Per the 2021-2023 Master Grant Agreement. Subgrantee shall, and shall cause and shall require its subrecipients by contract to administer the program in a manner satisfactory to OHCS and in compliance with all program requirements, including but not limited to the following terms and conditions: (4) Serve only households whose eligibility has been determined in compliance with program requirements. (8) Be responsible for maintaining an internal controls framework, satisfactory to OHCS, which assures compliance with program requirements. (11) Maintain other program records satisfactory to the department, which document, among other things, client eligibility requirements, receipt of allowable program services, termination of services and the basis for same, housing and income status of clients, administrative actions, contracts with subcontractors, review of subcontractor performance, action taken with respect to deficiency notices, and any administrative review proceedings. Such records shall be in substance and format satisfactory to the department. Condition – In our sample of 60 items, we noted the following exceptions: • 3 instances where client applications could not be produced • 1 instance where client application did not contain evidence of a bill • 6 instances where the combo payment amount covering overages of another program could not be substantiated in terms of amount paid • 1 instance where crisis payment didn’t contain all elements of documentation required for amount paid • 4 instances where bulk fuel payments didn’t contain all elements of documentation required for information taken via quote or vendor The Agency was not able to provide a listing of payments made on behalf of clients corresponding to the fiscal year, and we were unable to reconcile the awards paid out to the cash received from the passthrough entity and the listing of applications approved during the year. Cause – Supporting applications and required documentation were not retained by the Agency to substantiate eligibility and services provided. Effect – Applicants could receive improper benefit amounts based on eligibility criteria, excessive disbursements could be made, and a return of funds could be required to grantor. Questioned Costs – $190,142, based on the populations sampled. Recommendation – Documentation should be prepared, reviewed, and retained to support the period of performance and earmarking. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Cash Management and Reporting Low-Income Home Energy Assistance ALN# 93.568 US Department of Health and Human Services Passed through Oregon Housing and Community Services Federal Grant/Contract Number: 2021ORLIEA, 2022ORLIEA, 2102ORE5C, 2101ORLWC5, 2102ORLWC6 Grant period – 2021 & 2022 Criteria – Per the 2021-2023 Master Grant Agreement. Subgrantee shall, and shall cause and shall require its subrecipients by contract to administer the program in a manner satisfactory to OHCS and in compliance with all program requirements, including but not limited to the following terms and conditions: (8) Be responsible for maintaining an internal controls framework, satisfactory to OHCS, which assures compliance with program requirements. (10) Maintain accurate financial records satisfactory to the department, which document, among other things, the receipt and disbursement of all funds provided through the program by the department; and have an accounting system in place satisfactory to the department, which meets, among other things, generally accepted accounting principles. (12) Provide the department with reports, data, and financial statements, in form and substance satisfactory to the department, as may be required or requested from time to time by the department, which shall be in a format prescribed by the department. (14) Assure that data collection and reporting, including data entry for program funded activities, be conducted through the use of an OHCS approved data collection system (such as ServicePoint and OPUS), where applicable by program requirements. (15) Ensure that data collection, entry and reporting occur in an accurate and timely manner as satisfactory to OHCS. Condition – The Agency did not maintain proper documentation in support of annual reporting requirements. Quarterly reports as required by the grant document were not filed. Cash request could not be substantiated nor could documentation to support amounts reimbursed be tied to supporting records. As a result of the lack of documentation, sufficient appropriate audit evidence could not be obtained in order to test reporting and cash management . Cause – Supporting records used to populate the required annual financial reporting were not retained by the Agency. The Agency stated quarterly reports were not required by grantor and therefore not filed, however the Agency was unable to provide documentation to support this inconsistency with the terms and conditions of the grant agreement for the first 3 quarters of the fiscal year. Reimbursement was provided as information was uploaded into the state pass-through system, however, as noted during our testing of eligibility; batches were uploaded months behind amounts being pledged to vendors on behalf of clients and no records were kept for amounts input for expenses outside of client assistance. Effect – The Agency could submit incorrect information. Non-reporting to the grantor can result in sanctions or loss of future funding. The Agency could request funds that may not have adequate supporting documentation which could lead to errors and loss of funding under this program. Questioned Costs – Not applicable. Recommendation – Documentation should be prepared, reviewed, and retained to support the reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Grant agreements should be read in detail and information relevant to report requirements be provided to the appropriate personnel to prevent not filing required reports. Documentation should be provided that directly links the amount requested to the related expenditures to clearly document those funds are being used in a timely manner, that more was not requested than was expended, specifically what expenditures are being considered expended through these funds, and that funds requested applied to the correct period. Update policies and procedures as needed to reflect changes, if applicable. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Cash Management and Reporting Low-Income Home Energy Assistance ALN# 93.568 US Department of Health and Human Services Passed through Oregon Housing and Community Services Federal Grant/Contract Number: 2021ORLIEA, 2022ORLIEA, 2102ORE5C, 2101ORLWC5, 2102ORLWC6 Grant period – 2021 & 2022 Criteria – Per the 2021-2023 Master Grant Agreement. Subgrantee shall, and shall cause and shall require its subrecipients by contract to administer the program in a manner satisfactory to OHCS and in compliance with all program requirements, including but not limited to the following terms and conditions: (8) Be responsible for maintaining an internal controls framework, satisfactory to OHCS, which assures compliance with program requirements. (10) Maintain accurate financial records satisfactory to the department, which document, among other things, the receipt and disbursement of all funds provided through the program by the department; and have an accounting system in place satisfactory to the department, which meets, among other things, generally accepted accounting principles. (12) Provide the department with reports, data, and financial statements, in form and substance satisfactory to the department, as may be required or requested from time to time by the department, which shall be in a format prescribed by the department. (14) Assure that data collection and reporting, including data entry for program funded activities, be conducted through the use of an OHCS approved data collection system (such as ServicePoint and OPUS), where applicable by program requirements. (15) Ensure that data collection, entry and reporting occur in an accurate and timely manner as satisfactory to OHCS. Condition – The Agency did not maintain proper documentation in support of annual reporting requirements. Quarterly reports as required by the grant document were not filed. Cash request could not be substantiated nor could documentation to support amounts reimbursed be tied to supporting records. As a result of the lack of documentation, sufficient appropriate audit evidence could not be obtained in order to test reporting and cash management . Cause – Supporting records used to populate the required annual financial reporting were not retained by the Agency. The Agency stated quarterly reports were not required by grantor and therefore not filed, however the Agency was unable to provide documentation to support this inconsistency with the terms and conditions of the grant agreement for the first 3 quarters of the fiscal year. Reimbursement was provided as information was uploaded into the state pass-through system, however, as noted during our testing of eligibility; batches were uploaded months behind amounts being pledged to vendors on behalf of clients and no records were kept for amounts input for expenses outside of client assistance. Effect – The Agency could submit incorrect information. Non-reporting to the grantor can result in sanctions or loss of future funding. The Agency could request funds that may not have adequate supporting documentation which could lead to errors and loss of funding under this program. Questioned Costs – Not applicable. Recommendation – Documentation should be prepared, reviewed, and retained to support the reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Grant agreements should be read in detail and information relevant to report requirements be provided to the appropriate personnel to prevent not filing required reports. Documentation should be provided that directly links the amount requested to the related expenditures to clearly document those funds are being used in a timely manner, that more was not requested than was expended, specifically what expenditures are being considered expended through these funds, and that funds requested applied to the correct period. Update policies and procedures as needed to reflect changes, if applicable. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Cash Management and Reporting Low-Income Home Energy Assistance ALN# 93.568 US Department of Health and Human Services Passed through Oregon Housing and Community Services Federal Grant/Contract Number: 2021ORLIEA, 2022ORLIEA, 2102ORE5C, 2101ORLWC5, 2102ORLWC6 Grant period – 2021 & 2022 Criteria – Per the 2021-2023 Master Grant Agreement. Subgrantee shall, and shall cause and shall require its subrecipients by contract to administer the program in a manner satisfactory to OHCS and in compliance with all program requirements, including but not limited to the following terms and conditions: (8) Be responsible for maintaining an internal controls framework, satisfactory to OHCS, which assures compliance with program requirements. (10) Maintain accurate financial records satisfactory to the department, which document, among other things, the receipt and disbursement of all funds provided through the program by the department; and have an accounting system in place satisfactory to the department, which meets, among other things, generally accepted accounting principles. (12) Provide the department with reports, data, and financial statements, in form and substance satisfactory to the department, as may be required or requested from time to time by the department, which shall be in a format prescribed by the department. (14) Assure that data collection and reporting, including data entry for program funded activities, be conducted through the use of an OHCS approved data collection system (such as ServicePoint and OPUS), where applicable by program requirements. (15) Ensure that data collection, entry and reporting occur in an accurate and timely manner as satisfactory to OHCS. Condition – The Agency did not maintain proper documentation in support of annual reporting requirements. Quarterly reports as required by the grant document were not filed. Cash request could not be substantiated nor could documentation to support amounts reimbursed be tied to supporting records. As a result of the lack of documentation, sufficient appropriate audit evidence could not be obtained in order to test reporting and cash management . Cause – Supporting records used to populate the required annual financial reporting were not retained by the Agency. The Agency stated quarterly reports were not required by grantor and therefore not filed, however the Agency was unable to provide documentation to support this inconsistency with the terms and conditions of the grant agreement for the first 3 quarters of the fiscal year. Reimbursement was provided as information was uploaded into the state pass-through system, however, as noted during our testing of eligibility; batches were uploaded months behind amounts being pledged to vendors on behalf of clients and no records were kept for amounts input for expenses outside of client assistance. Effect – The Agency could submit incorrect information. Non-reporting to the grantor can result in sanctions or loss of future funding. The Agency could request funds that may not have adequate supporting documentation which could lead to errors and loss of funding under this program. Questioned Costs – Not applicable. Recommendation – Documentation should be prepared, reviewed, and retained to support the reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Grant agreements should be read in detail and information relevant to report requirements be provided to the appropriate personnel to prevent not filing required reports. Documentation should be provided that directly links the amount requested to the related expenditures to clearly document those funds are being used in a timely manner, that more was not requested than was expended, specifically what expenditures are being considered expended through these funds, and that funds requested applied to the correct period. Update policies and procedures as needed to reflect changes, if applicable. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Cash Management and Reporting Low-Income Home Energy Assistance ALN# 93.568 US Department of Health and Human Services Passed through Oregon Housing and Community Services Federal Grant/Contract Number: 2021ORLIEA, 2022ORLIEA, 2102ORE5C, 2101ORLWC5, 2102ORLWC6 Grant period – 2021 & 2022 Criteria – Per the 2021-2023 Master Grant Agreement. Subgrantee shall, and shall cause and shall require its subrecipients by contract to administer the program in a manner satisfactory to OHCS and in compliance with all program requirements, including but not limited to the following terms and conditions: (8) Be responsible for maintaining an internal controls framework, satisfactory to OHCS, which assures compliance with program requirements. (10) Maintain accurate financial records satisfactory to the department, which document, among other things, the receipt and disbursement of all funds provided through the program by the department; and have an accounting system in place satisfactory to the department, which meets, among other things, generally accepted accounting principles. (12) Provide the department with reports, data, and financial statements, in form and substance satisfactory to the department, as may be required or requested from time to time by the department, which shall be in a format prescribed by the department. (14) Assure that data collection and reporting, including data entry for program funded activities, be conducted through the use of an OHCS approved data collection system (such as ServicePoint and OPUS), where applicable by program requirements. (15) Ensure that data collection, entry and reporting occur in an accurate and timely manner as satisfactory to OHCS. Condition – The Agency did not maintain proper documentation in support of annual reporting requirements. Quarterly reports as required by the grant document were not filed. Cash request could not be substantiated nor could documentation to support amounts reimbursed be tied to supporting records. As a result of the lack of documentation, sufficient appropriate audit evidence could not be obtained in order to test reporting and cash management . Cause – Supporting records used to populate the required annual financial reporting were not retained by the Agency. The Agency stated quarterly reports were not required by grantor and therefore not filed, however the Agency was unable to provide documentation to support this inconsistency with the terms and conditions of the grant agreement for the first 3 quarters of the fiscal year. Reimbursement was provided as information was uploaded into the state pass-through system, however, as noted during our testing of eligibility; batches were uploaded months behind amounts being pledged to vendors on behalf of clients and no records were kept for amounts input for expenses outside of client assistance. Effect – The Agency could submit incorrect information. Non-reporting to the grantor can result in sanctions or loss of future funding. The Agency could request funds that may not have adequate supporting documentation which could lead to errors and loss of funding under this program. Questioned Costs – Not applicable. Recommendation – Documentation should be prepared, reviewed, and retained to support the reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Grant agreements should be read in detail and information relevant to report requirements be provided to the appropriate personnel to prevent not filing required reports. Documentation should be provided that directly links the amount requested to the related expenditures to clearly document those funds are being used in a timely manner, that more was not requested than was expended, specifically what expenditures are being considered expended through these funds, and that funds requested applied to the correct period. Update policies and procedures as needed to reflect changes, if applicable. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Cash Management and Reporting Low-Income Home Energy Assistance ALN# 93.568 US Department of Health and Human Services Passed through Oregon Housing and Community Services Federal Grant/Contract Number: 2021ORLIEA, 2022ORLIEA, 2102ORE5C, 2101ORLWC5, 2102ORLWC6 Grant period – 2021 & 2022 Criteria – Per the 2021-2023 Master Grant Agreement. Subgrantee shall, and shall cause and shall require its subrecipients by contract to administer the program in a manner satisfactory to OHCS and in compliance with all program requirements, including but not limited to the following terms and conditions: (8) Be responsible for maintaining an internal controls framework, satisfactory to OHCS, which assures compliance with program requirements. (10) Maintain accurate financial records satisfactory to the department, which document, among other things, the receipt and disbursement of all funds provided through the program by the department; and have an accounting system in place satisfactory to the department, which meets, among other things, generally accepted accounting principles. (12) Provide the department with reports, data, and financial statements, in form and substance satisfactory to the department, as may be required or requested from time to time by the department, which shall be in a format prescribed by the department. (14) Assure that data collection and reporting, including data entry for program funded activities, be conducted through the use of an OHCS approved data collection system (such as ServicePoint and OPUS), where applicable by program requirements. (15) Ensure that data collection, entry and reporting occur in an accurate and timely manner as satisfactory to OHCS. Condition – The Agency did not maintain proper documentation in support of annual reporting requirements. Quarterly reports as required by the grant document were not filed. Cash request could not be substantiated nor could documentation to support amounts reimbursed be tied to supporting records. As a result of the lack of documentation, sufficient appropriate audit evidence could not be obtained in order to test reporting and cash management . Cause – Supporting records used to populate the required annual financial reporting were not retained by the Agency. The Agency stated quarterly reports were not required by grantor and therefore not filed, however the Agency was unable to provide documentation to support this inconsistency with the terms and conditions of the grant agreement for the first 3 quarters of the fiscal year. Reimbursement was provided as information was uploaded into the state pass-through system, however, as noted during our testing of eligibility; batches were uploaded months behind amounts being pledged to vendors on behalf of clients and no records were kept for amounts input for expenses outside of client assistance. Effect – The Agency could submit incorrect information. Non-reporting to the grantor can result in sanctions or loss of future funding. The Agency could request funds that may not have adequate supporting documentation which could lead to errors and loss of funding under this program. Questioned Costs – Not applicable. Recommendation – Documentation should be prepared, reviewed, and retained to support the reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Grant agreements should be read in detail and information relevant to report requirements be provided to the appropriate personnel to prevent not filing required reports. Documentation should be provided that directly links the amount requested to the related expenditures to clearly document those funds are being used in a timely manner, that more was not requested than was expended, specifically what expenditures are being considered expended through these funds, and that funds requested applied to the correct period. Update policies and procedures as needed to reflect changes, if applicable. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Activities Allowed or Unallowed/Allowable Costs/Cost Principles Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should follow guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.404 – Reasonable costs – A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. Per 2 CFR section 200.405 – Allocable costs –focuses on how costs are allocable, ensuring they are directly tied to the federal award or its benefits. Per 2 CFR 200.430(i), charges to Federal awards for salaries and wages must be based on records that are supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and that are incorporated into the official records of the non-Federal entity. Condition – The following exceptions were noted during testing of 138 program disbursements, 93 payroll disbursements, and 100 journal entry transactions: • 20 invoices could not be located related to program disbursements • 6 invoices tested did not agree to the approved allocation of Head Start expenses • 1 timecard could not be located • multiple instances where an approved pay rate covering the appropriate time-period could not be obtained • 12 instances where supporting documentation for journal entries to adjust Head Start expenses could not be obtained. Cause – Turnover in staff and the passage of time since the period under audit has caused documentation to be misplaced. Effect – Inadequate or inconsistent documentation of expenses may result in erroneous or fraudulent transactions occurring, loss of funding, or disallowed costs. Questioned Costs – $151,608. Recommendation – Documentation should be prepared, reviewed, and retained to support the expense. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Activities Allowed or Unallowed/Allowable Costs/Cost Principles Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should follow guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.404 – Reasonable costs – A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. Per 2 CFR section 200.405 – Allocable costs –focuses on how costs are allocable, ensuring they are directly tied to the federal award or its benefits. Per 2 CFR 200.430(i), charges to Federal awards for salaries and wages must be based on records that are supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and that are incorporated into the official records of the non-Federal entity. Condition – The following exceptions were noted during testing of 138 program disbursements, 93 payroll disbursements, and 100 journal entry transactions: • 20 invoices could not be located related to program disbursements • 6 invoices tested did not agree to the approved allocation of Head Start expenses • 1 timecard could not be located • multiple instances where an approved pay rate covering the appropriate time-period could not be obtained • 12 instances where supporting documentation for journal entries to adjust Head Start expenses could not be obtained. Cause – Turnover in staff and the passage of time since the period under audit has caused documentation to be misplaced. Effect – Inadequate or inconsistent documentation of expenses may result in erroneous or fraudulent transactions occurring, loss of funding, or disallowed costs. Questioned Costs – $151,608. Recommendation – Documentation should be prepared, reviewed, and retained to support the expense. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Activities Allowed or Unallowed/Allowable Costs/Cost Principles Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should follow guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.404 – Reasonable costs – A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. Per 2 CFR section 200.405 – Allocable costs –focuses on how costs are allocable, ensuring they are directly tied to the federal award or its benefits. Per 2 CFR 200.430(i), charges to Federal awards for salaries and wages must be based on records that are supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and that are incorporated into the official records of the non-Federal entity. Condition – The following exceptions were noted during testing of 138 program disbursements, 93 payroll disbursements, and 100 journal entry transactions: • 20 invoices could not be located related to program disbursements • 6 invoices tested did not agree to the approved allocation of Head Start expenses • 1 timecard could not be located • multiple instances where an approved pay rate covering the appropriate time-period could not be obtained • 12 instances where supporting documentation for journal entries to adjust Head Start expenses could not be obtained. Cause – Turnover in staff and the passage of time since the period under audit has caused documentation to be misplaced. Effect – Inadequate or inconsistent documentation of expenses may result in erroneous or fraudulent transactions occurring, loss of funding, or disallowed costs. Questioned Costs – $151,608. Recommendation – Documentation should be prepared, reviewed, and retained to support the expense. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Activities Allowed or Unallowed/Allowable Costs/Cost Principles Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should follow guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.404 – Reasonable costs – A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. Per 2 CFR section 200.405 – Allocable costs –focuses on how costs are allocable, ensuring they are directly tied to the federal award or its benefits. Per 2 CFR 200.430(i), charges to Federal awards for salaries and wages must be based on records that are supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and that are incorporated into the official records of the non-Federal entity. Condition – The following exceptions were noted during testing of 138 program disbursements, 93 payroll disbursements, and 100 journal entry transactions: • 20 invoices could not be located related to program disbursements • 6 invoices tested did not agree to the approved allocation of Head Start expenses • 1 timecard could not be located • multiple instances where an approved pay rate covering the appropriate time-period could not be obtained • 12 instances where supporting documentation for journal entries to adjust Head Start expenses could not be obtained. Cause – Turnover in staff and the passage of time since the period under audit has caused documentation to be misplaced. Effect – Inadequate or inconsistent documentation of expenses may result in erroneous or fraudulent transactions occurring, loss of funding, or disallowed costs. Questioned Costs – $151,608. Recommendation – Documentation should be prepared, reviewed, and retained to support the expense. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Activities Allowed or Unallowed/Allowable Costs/Cost Principles Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should follow guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.404 – Reasonable costs – A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. Per 2 CFR section 200.405 – Allocable costs –focuses on how costs are allocable, ensuring they are directly tied to the federal award or its benefits. Per 2 CFR 200.430(i), charges to Federal awards for salaries and wages must be based on records that are supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and that are incorporated into the official records of the non-Federal entity. Condition – The following exceptions were noted during testing of 138 program disbursements, 93 payroll disbursements, and 100 journal entry transactions: • 20 invoices could not be located related to program disbursements • 6 invoices tested did not agree to the approved allocation of Head Start expenses • 1 timecard could not be located • multiple instances where an approved pay rate covering the appropriate time-period could not be obtained • 12 instances where supporting documentation for journal entries to adjust Head Start expenses could not be obtained. Cause – Turnover in staff and the passage of time since the period under audit has caused documentation to be misplaced. Effect – Inadequate or inconsistent documentation of expenses may result in erroneous or fraudulent transactions occurring, loss of funding, or disallowed costs. Questioned Costs – $151,608. Recommendation – Documentation should be prepared, reviewed, and retained to support the expense. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Activities Allowed or Unallowed/Allowable Costs/Cost Principles Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should follow guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.404 – Reasonable costs – A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. Per 2 CFR section 200.405 – Allocable costs –focuses on how costs are allocable, ensuring they are directly tied to the federal award or its benefits. Per 2 CFR 200.430(i), charges to Federal awards for salaries and wages must be based on records that are supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and that are incorporated into the official records of the non-Federal entity. Condition – The following exceptions were noted during testing of 138 program disbursements, 93 payroll disbursements, and 100 journal entry transactions: • 20 invoices could not be located related to program disbursements • 6 invoices tested did not agree to the approved allocation of Head Start expenses • 1 timecard could not be located • multiple instances where an approved pay rate covering the appropriate time-period could not be obtained • 12 instances where supporting documentation for journal entries to adjust Head Start expenses could not be obtained. Cause – Turnover in staff and the passage of time since the period under audit has caused documentation to be misplaced. Effect – Inadequate or inconsistent documentation of expenses may result in erroneous or fraudulent transactions occurring, loss of funding, or disallowed costs. Questioned Costs – $151,608. Recommendation – Documentation should be prepared, reviewed, and retained to support the expense. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Equipment/Real Property Management Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR 200.439(d)(1) requires that property records must be maintained for equipment acquired under a federal award that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Condition – During testing it was noted that the Inventory tracking sheet did not contain all assets with federal interest under the Head Start program. It was also noted that there were items not included in the physical inventory observation taken. Cause – The Agency did not properly include all additions in the current year to the fixed asset schedule, which resulted in a lack of proper property records and missing physical inventory observation was made for assets included on properly records. Effect – Failure to include all items and take a full physical inventory observation could result in noncompliance with the grant agreements. Questioned Costs – Not applicable. Recommendation – We recommend the Agency follow its capital asset management policy to ensure all assets are adequately accounted for and properly safeguarded. CRI also recommends that the Agency include all of the information required by the Uniform Guidance in one central tracking spreadsheet or database. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Equipment/Real Property Management Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR 200.439(d)(1) requires that property records must be maintained for equipment acquired under a federal award that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Condition – During testing it was noted that the Inventory tracking sheet did not contain all assets with federal interest under the Head Start program. It was also noted that there were items not included in the physical inventory observation taken. Cause – The Agency did not properly include all additions in the current year to the fixed asset schedule, which resulted in a lack of proper property records and missing physical inventory observation was made for assets included on properly records. Effect – Failure to include all items and take a full physical inventory observation could result in noncompliance with the grant agreements. Questioned Costs – Not applicable. Recommendation – We recommend the Agency follow its capital asset management policy to ensure all assets are adequately accounted for and properly safeguarded. CRI also recommends that the Agency include all of the information required by the Uniform Guidance in one central tracking spreadsheet or database. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Equipment/Real Property Management Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR 200.439(d)(1) requires that property records must be maintained for equipment acquired under a federal award that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Condition – During testing it was noted that the Inventory tracking sheet did not contain all assets with federal interest under the Head Start program. It was also noted that there were items not included in the physical inventory observation taken. Cause – The Agency did not properly include all additions in the current year to the fixed asset schedule, which resulted in a lack of proper property records and missing physical inventory observation was made for assets included on properly records. Effect – Failure to include all items and take a full physical inventory observation could result in noncompliance with the grant agreements. Questioned Costs – Not applicable. Recommendation – We recommend the Agency follow its capital asset management policy to ensure all assets are adequately accounted for and properly safeguarded. CRI also recommends that the Agency include all of the information required by the Uniform Guidance in one central tracking spreadsheet or database. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Equipment/Real Property Management Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR 200.439(d)(1) requires that property records must be maintained for equipment acquired under a federal award that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Condition – During testing it was noted that the Inventory tracking sheet did not contain all assets with federal interest under the Head Start program. It was also noted that there were items not included in the physical inventory observation taken. Cause – The Agency did not properly include all additions in the current year to the fixed asset schedule, which resulted in a lack of proper property records and missing physical inventory observation was made for assets included on properly records. Effect – Failure to include all items and take a full physical inventory observation could result in noncompliance with the grant agreements. Questioned Costs – Not applicable. Recommendation – We recommend the Agency follow its capital asset management policy to ensure all assets are adequately accounted for and properly safeguarded. CRI also recommends that the Agency include all of the information required by the Uniform Guidance in one central tracking spreadsheet or database. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Equipment/Real Property Management Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR 200.439(d)(1) requires that property records must be maintained for equipment acquired under a federal award that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Condition – During testing it was noted that the Inventory tracking sheet did not contain all assets with federal interest under the Head Start program. It was also noted that there were items not included in the physical inventory observation taken. Cause – The Agency did not properly include all additions in the current year to the fixed asset schedule, which resulted in a lack of proper property records and missing physical inventory observation was made for assets included on properly records. Effect – Failure to include all items and take a full physical inventory observation could result in noncompliance with the grant agreements. Questioned Costs – Not applicable. Recommendation – We recommend the Agency follow its capital asset management policy to ensure all assets are adequately accounted for and properly safeguarded. CRI also recommends that the Agency include all of the information required by the Uniform Guidance in one central tracking spreadsheet or database. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Equipment/Real Property Management Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR 200.439(d)(1) requires that property records must be maintained for equipment acquired under a federal award that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Condition – During testing it was noted that the Inventory tracking sheet did not contain all assets with federal interest under the Head Start program. It was also noted that there were items not included in the physical inventory observation taken. Cause – The Agency did not properly include all additions in the current year to the fixed asset schedule, which resulted in a lack of proper property records and missing physical inventory observation was made for assets included on properly records. Effect – Failure to include all items and take a full physical inventory observation could result in noncompliance with the grant agreements. Questioned Costs – Not applicable. Recommendation – We recommend the Agency follow its capital asset management policy to ensure all assets are adequately accounted for and properly safeguarded. CRI also recommends that the Agency include all of the information required by the Uniform Guidance in one central tracking spreadsheet or database. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Financial Reporting Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 2 CFR section 200.302(b))3) requires that nonfederal entities keep records that include info: pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation Condition – The Organization did not maintain proper documentation in support of financial reporting requirements. Cause – Supporting records used to populate the required financial reporting were not retained by the Agency. Effect – The agency could submit incorrect information. Questioned Costs – Not applicable. Recommendation – Documentation should be prepared, reviewed, and retained to support the required reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Financial Reporting Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 2 CFR section 200.302(b))3) requires that nonfederal entities keep records that include info: pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation Condition – The Organization did not maintain proper documentation in support of financial reporting requirements. Cause – Supporting records used to populate the required financial reporting were not retained by the Agency. Effect – The agency could submit incorrect information. Questioned Costs – Not applicable. Recommendation – Documentation should be prepared, reviewed, and retained to support the required reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Financial Reporting Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 2 CFR section 200.302(b))3) requires that nonfederal entities keep records that include info: pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation Condition – The Organization did not maintain proper documentation in support of financial reporting requirements. Cause – Supporting records used to populate the required financial reporting were not retained by the Agency. Effect – The agency could submit incorrect information. Questioned Costs – Not applicable. Recommendation – Documentation should be prepared, reviewed, and retained to support the required reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Financial Reporting Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 2 CFR section 200.302(b))3) requires that nonfederal entities keep records that include info: pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation Condition – The Organization did not maintain proper documentation in support of financial reporting requirements. Cause – Supporting records used to populate the required financial reporting were not retained by the Agency. Effect – The agency could submit incorrect information. Questioned Costs – Not applicable. Recommendation – Documentation should be prepared, reviewed, and retained to support the required reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Financial Reporting Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 2 CFR section 200.302(b))3) requires that nonfederal entities keep records that include info: pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation Condition – The Organization did not maintain proper documentation in support of financial reporting requirements. Cause – Supporting records used to populate the required financial reporting were not retained by the Agency. Effect – The agency could submit incorrect information. Questioned Costs – Not applicable. Recommendation – Documentation should be prepared, reviewed, and retained to support the required reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Financial Reporting Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 2 CFR section 200.302(b))3) requires that nonfederal entities keep records that include info: pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation Condition – The Organization did not maintain proper documentation in support of financial reporting requirements. Cause – Supporting records used to populate the required financial reporting were not retained by the Agency. Effect – The agency could submit incorrect information. Questioned Costs – Not applicable. Recommendation – Documentation should be prepared, reviewed, and retained to support the required reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Special Reporting Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, under compliance requirements for reporting 2 CFR 200.32 states that information must be collected with the frequency required by the terms and conditions of the federal award for effective monitoring of the federal awards. 2 CFR 200.330, Reporting on Real Property: The Federal awarding agency or pass-through entity must require a non-Federal entity to submit reports at least annually on the status of real property in which the Federal Government retains an interest. As described in ACF-IM-HS-17-01 Facilities Guidance, all grantees, including those with no covered real property, are instructed to use and submit standard form (SF) Real Property Status Report 429. Condition – The SF-429 required to be filed for Head Start was submitted after the deadline. Cause – The Agency did not apply appropriate controls to ensure that all reporting required under the terms of the grant were filed timely. Effect – Late reporting to the grantor can result in sanctions or loss of future funding. Questioned Costs – Not applicable. Recommendation – Management should implement the necessary controls to ensure all reporting required under the grant is filed accurately and timely. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Special Reporting Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, under compliance requirements for reporting 2 CFR 200.32 states that information must be collected with the frequency required by the terms and conditions of the federal award for effective monitoring of the federal awards. 2 CFR 200.330, Reporting on Real Property: The Federal awarding agency or pass-through entity must require a non-Federal entity to submit reports at least annually on the status of real property in which the Federal Government retains an interest. As described in ACF-IM-HS-17-01 Facilities Guidance, all grantees, including those with no covered real property, are instructed to use and submit standard form (SF) Real Property Status Report 429. Condition – The SF-429 required to be filed for Head Start was submitted after the deadline. Cause – The Agency did not apply appropriate controls to ensure that all reporting required under the terms of the grant were filed timely. Effect – Late reporting to the grantor can result in sanctions or loss of future funding. Questioned Costs – Not applicable. Recommendation – Management should implement the necessary controls to ensure all reporting required under the grant is filed accurately and timely. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Special Reporting Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, under compliance requirements for reporting 2 CFR 200.32 states that information must be collected with the frequency required by the terms and conditions of the federal award for effective monitoring of the federal awards. 2 CFR 200.330, Reporting on Real Property: The Federal awarding agency or pass-through entity must require a non-Federal entity to submit reports at least annually on the status of real property in which the Federal Government retains an interest. As described in ACF-IM-HS-17-01 Facilities Guidance, all grantees, including those with no covered real property, are instructed to use and submit standard form (SF) Real Property Status Report 429. Condition – The SF-429 required to be filed for Head Start was submitted after the deadline. Cause – The Agency did not apply appropriate controls to ensure that all reporting required under the terms of the grant were filed timely. Effect – Late reporting to the grantor can result in sanctions or loss of future funding. Questioned Costs – Not applicable. Recommendation – Management should implement the necessary controls to ensure all reporting required under the grant is filed accurately and timely. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Special Reporting Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, under compliance requirements for reporting 2 CFR 200.32 states that information must be collected with the frequency required by the terms and conditions of the federal award for effective monitoring of the federal awards. 2 CFR 200.330, Reporting on Real Property: The Federal awarding agency or pass-through entity must require a non-Federal entity to submit reports at least annually on the status of real property in which the Federal Government retains an interest. As described in ACF-IM-HS-17-01 Facilities Guidance, all grantees, including those with no covered real property, are instructed to use and submit standard form (SF) Real Property Status Report 429. Condition – The SF-429 required to be filed for Head Start was submitted after the deadline. Cause – The Agency did not apply appropriate controls to ensure that all reporting required under the terms of the grant were filed timely. Effect – Late reporting to the grantor can result in sanctions or loss of future funding. Questioned Costs – Not applicable. Recommendation – Management should implement the necessary controls to ensure all reporting required under the grant is filed accurately and timely. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Special Reporting Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, under compliance requirements for reporting 2 CFR 200.32 states that information must be collected with the frequency required by the terms and conditions of the federal award for effective monitoring of the federal awards. 2 CFR 200.330, Reporting on Real Property: The Federal awarding agency or pass-through entity must require a non-Federal entity to submit reports at least annually on the status of real property in which the Federal Government retains an interest. As described in ACF-IM-HS-17-01 Facilities Guidance, all grantees, including those with no covered real property, are instructed to use and submit standard form (SF) Real Property Status Report 429. Condition – The SF-429 required to be filed for Head Start was submitted after the deadline. Cause – The Agency did not apply appropriate controls to ensure that all reporting required under the terms of the grant were filed timely. Effect – Late reporting to the grantor can result in sanctions or loss of future funding. Questioned Costs – Not applicable. Recommendation – Management should implement the necessary controls to ensure all reporting required under the grant is filed accurately and timely. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Special Reporting Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, under compliance requirements for reporting 2 CFR 200.32 states that information must be collected with the frequency required by the terms and conditions of the federal award for effective monitoring of the federal awards. 2 CFR 200.330, Reporting on Real Property: The Federal awarding agency or pass-through entity must require a non-Federal entity to submit reports at least annually on the status of real property in which the Federal Government retains an interest. As described in ACF-IM-HS-17-01 Facilities Guidance, all grantees, including those with no covered real property, are instructed to use and submit standard form (SF) Real Property Status Report 429. Condition – The SF-429 required to be filed for Head Start was submitted after the deadline. Cause – The Agency did not apply appropriate controls to ensure that all reporting required under the terms of the grant were filed timely. Effect – Late reporting to the grantor can result in sanctions or loss of future funding. Questioned Costs – Not applicable. Recommendation – Management should implement the necessary controls to ensure all reporting required under the grant is filed accurately and timely. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Activities Allowed/Allowable Costs/Costs Principles, Eligibility, Period of Performance Emergency Rental Assistance ALN# 21.023 US Department of the Treasury Passed through Oregon Housing and Community Services Federal Grant/Contract Number: ERA000 Grant period – 2022 Criteria – 2 CFR 200.303 requires non-Federal entities to establish and maintain effective internal controls over Federal awards, including the requirements for allowable costs, activities allowed, beneficiary eligibility, and period of performance. For the Emergency Rental Assistance Program, specific requirements are laid out in Section 501 of Division N of the Consolidated Appropriations Act, 2021, 2 CFR Part 200, Subpart E, federal awarding agency regulations, and the terms and conditions of the award. Condition – In our sample of 100 items, we noted the following exceptions: • 2 instances where client applications nor check requests could be produced • 2 instances where client applications could not be produced • 1 instance where the risk of housing status was not properly documented. Cause – Supporting applications and/or required documentation was not retained by the Agency to substantiate eligibility, allowable costs, activities allowed, and period of performance for benefit services rendered. Effect – Failure to properly document eligibility determinations and benefit amounts could result in improper payments and disallowed costs. Questioned Costs – $ 137,567. Recommendation – Documentation should be prepared, reviewed, and retained to support the allowable costs, activities allowed, eligibility, and period of performance for benefits paid to individuals for services. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Activities Allowed/Allowable Costs/Costs Principles, Period of Performance Emergency Rental Assistance ALN# 21.023 US Department of the Treasury Passed through Oregon Housing and Community Services Federal Grant/Contract Number: ERA000 Grant period – 2022 Criteria – Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition – In our sample of 100 items, we noted the following exceptions: • 13 instances where the check request used to identify approval of the disbursement could not be located • 1 instance where the request was not signed by the supervisor Cause – Supporting check request documentation relevant to verify that proper approval controls had been performed could not be obtained. Effect – Expenses not relevant to the fund or client benefits could be paid without approval. Expenses could be in excess of costs that client was eligible for or could be outside of the period of performance. Questioned Costs – Not applicable. Recommendation – Documentation should be prepared, reviewed, and retained to support the allowable costs, activities allowed, eligibility, and period of performance for benefits paid to individuals for services. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Period of Performance and Earmarking Low-Income Home Energy Assistance ALN# 93.568 US Department of Health and Human Services Passed through Oregon Housing and Community Services Federal Grant/Contract Number: 2021ORLIEA, 2022ORLIEA, 2102ORE5C, 2101ORLWC5, 2102ORLWC6 Grant period – 2021 & 2022 Criteria – Per the 2021-2023 Master Grant Agreement. Subgrantee shall, and shall cause and shall require its subrecipients by contract to administer the program in a manner satisfactory to OHCS and in compliance with all program requirements, including but not limited to the following terms and conditions: (1) Assure that program funds are used only for program services consistent with program requirements. (3) Ensure that program funds are expended within the time limitations set by OHCS. Program funds not expended within the time period may be recaptured by OHCS. (8) Be responsible for maintaining an internal controls framework, satisfactory to OHCS, which assures compliance with program requirements. (10) Maintain accurate financial records satisfactory to the department, which document, among other things, the receipt and disbursement of all funds provided through the program by the department; and have an accounting system in place satisfactory to the department, which meets, among other things, generally accepted accounting principles. Condition – Our testing noted the following exceptions: • 22 instances where check request and invoice could not be produced from a sample of 62 • 4 instances where the journal entry and corresponding back up could not be produced from a sample of 23. Moreover, $809,022 of costs associated with benefit services provided were not captured by the Agency. These amounts were noted during the review of Eligibility. However, these costs were noted by batches uploaded to the pass-through entity of the client. A detail of the expenses as it relates to payment of the disbursements to vendors could not be obtained and therefore not tested. These amounts represented benefit payments to individuals. A detail of the expenses was not available, as records supporting the batches under which reimbursement was requested were not retained. As a result, the auditors were unable to test these payments. We were unable to obtain sufficient, appropriate audit evidence related to these amounts. Cause – Supporting invoices or required documentation were not retained by the Agency to substantiate period of performance and earmarking costs. The Agency was not properly accounting for expenses incurred during the correct period. Effect – Expenditures could be made outside of the period of performance or costs could be captured incorrectly resulting in noncompliance with earmarking. Not properly recording the expenditures could result in expenditures being booked in the wrong grant period. Questioned Costs – $ 258,313, based on the populations sampled. An additional $809,022 was not recorded properly and was not able to be tested. Recommendation – Documentation should be prepared, reviewed, and retained to support the period of performance and earmarking. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. The Agency should review applications for when benefit was incurred to ensure that expenses are recorded in the proper period as opposed to when paid. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Period of Performance and Earmarking Low-Income Home Energy Assistance ALN# 93.568 US Department of Health and Human Services Passed through Oregon Housing and Community Services Federal Grant/Contract Number: 2021ORLIEA, 2022ORLIEA, 2102ORE5C, 2101ORLWC5, 2102ORLWC6 Grant period – 2021 & 2022 Criteria – Per the 2021-2023 Master Grant Agreement. Subgrantee shall, and shall cause and shall require its subrecipients by contract to administer the program in a manner satisfactory to OHCS and in compliance with all program requirements, including but not limited to the following terms and conditions: (1) Assure that program funds are used only for program services consistent with program requirements. (3) Ensure that program funds are expended within the time limitations set by OHCS. Program funds not expended within the time period may be recaptured by OHCS. (8) Be responsible for maintaining an internal controls framework, satisfactory to OHCS, which assures compliance with program requirements. (10) Maintain accurate financial records satisfactory to the department, which document, among other things, the receipt and disbursement of all funds provided through the program by the department; and have an accounting system in place satisfactory to the department, which meets, among other things, generally accepted accounting principles. Condition – Our testing noted the following exceptions: • 22 instances where check request and invoice could not be produced from a sample of 62 • 4 instances where the journal entry and corresponding back up could not be produced from a sample of 23. Moreover, $809,022 of costs associated with benefit services provided were not captured by the Agency. These amounts were noted during the review of Eligibility. However, these costs were noted by batches uploaded to the pass-through entity of the client. A detail of the expenses as it relates to payment of the disbursements to vendors could not be obtained and therefore not tested. These amounts represented benefit payments to individuals. A detail of the expenses was not available, as records supporting the batches under which reimbursement was requested were not retained. As a result, the auditors were unable to test these payments. We were unable to obtain sufficient, appropriate audit evidence related to these amounts. Cause – Supporting invoices or required documentation were not retained by the Agency to substantiate period of performance and earmarking costs. The Agency was not properly accounting for expenses incurred during the correct period. Effect – Expenditures could be made outside of the period of performance or costs could be captured incorrectly resulting in noncompliance with earmarking. Not properly recording the expenditures could result in expenditures being booked in the wrong grant period. Questioned Costs – $ 258,313, based on the populations sampled. An additional $809,022 was not recorded properly and was not able to be tested. Recommendation – Documentation should be prepared, reviewed, and retained to support the period of performance and earmarking. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. The Agency should review applications for when benefit was incurred to ensure that expenses are recorded in the proper period as opposed to when paid. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Period of Performance and Earmarking Low-Income Home Energy Assistance ALN# 93.568 US Department of Health and Human Services Passed through Oregon Housing and Community Services Federal Grant/Contract Number: 2021ORLIEA, 2022ORLIEA, 2102ORE5C, 2101ORLWC5, 2102ORLWC6 Grant period – 2021 & 2022 Criteria – Per the 2021-2023 Master Grant Agreement. Subgrantee shall, and shall cause and shall require its subrecipients by contract to administer the program in a manner satisfactory to OHCS and in compliance with all program requirements, including but not limited to the following terms and conditions: (1) Assure that program funds are used only for program services consistent with program requirements. (3) Ensure that program funds are expended within the time limitations set by OHCS. Program funds not expended within the time period may be recaptured by OHCS. (8) Be responsible for maintaining an internal controls framework, satisfactory to OHCS, which assures compliance with program requirements. (10) Maintain accurate financial records satisfactory to the department, which document, among other things, the receipt and disbursement of all funds provided through the program by the department; and have an accounting system in place satisfactory to the department, which meets, among other things, generally accepted accounting principles. Condition – Our testing noted the following exceptions: • 22 instances where check request and invoice could not be produced from a sample of 62 • 4 instances where the journal entry and corresponding back up could not be produced from a sample of 23. Moreover, $809,022 of costs associated with benefit services provided were not captured by the Agency. These amounts were noted during the review of Eligibility. However, these costs were noted by batches uploaded to the pass-through entity of the client. A detail of the expenses as it relates to payment of the disbursements to vendors could not be obtained and therefore not tested. These amounts represented benefit payments to individuals. A detail of the expenses was not available, as records supporting the batches under which reimbursement was requested were not retained. As a result, the auditors were unable to test these payments. We were unable to obtain sufficient, appropriate audit evidence related to these amounts. Cause – Supporting invoices or required documentation were not retained by the Agency to substantiate period of performance and earmarking costs. The Agency was not properly accounting for expenses incurred during the correct period. Effect – Expenditures could be made outside of the period of performance or costs could be captured incorrectly resulting in noncompliance with earmarking. Not properly recording the expenditures could result in expenditures being booked in the wrong grant period. Questioned Costs – $ 258,313, based on the populations sampled. An additional $809,022 was not recorded properly and was not able to be tested. Recommendation – Documentation should be prepared, reviewed, and retained to support the period of performance and earmarking. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. The Agency should review applications for when benefit was incurred to ensure that expenses are recorded in the proper period as opposed to when paid. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Period of Performance and Earmarking Low-Income Home Energy Assistance ALN# 93.568 US Department of Health and Human Services Passed through Oregon Housing and Community Services Federal Grant/Contract Number: 2021ORLIEA, 2022ORLIEA, 2102ORE5C, 2101ORLWC5, 2102ORLWC6 Grant period – 2021 & 2022 Criteria – Per the 2021-2023 Master Grant Agreement. Subgrantee shall, and shall cause and shall require its subrecipients by contract to administer the program in a manner satisfactory to OHCS and in compliance with all program requirements, including but not limited to the following terms and conditions: (1) Assure that program funds are used only for program services consistent with program requirements. (3) Ensure that program funds are expended within the time limitations set by OHCS. Program funds not expended within the time period may be recaptured by OHCS. (8) Be responsible for maintaining an internal controls framework, satisfactory to OHCS, which assures compliance with program requirements. (10) Maintain accurate financial records satisfactory to the department, which document, among other things, the receipt and disbursement of all funds provided through the program by the department; and have an accounting system in place satisfactory to the department, which meets, among other things, generally accepted accounting principles. Condition – Our testing noted the following exceptions: • 22 instances where check request and invoice could not be produced from a sample of 62 • 4 instances where the journal entry and corresponding back up could not be produced from a sample of 23. Moreover, $809,022 of costs associated with benefit services provided were not captured by the Agency. These amounts were noted during the review of Eligibility. However, these costs were noted by batches uploaded to the pass-through entity of the client. A detail of the expenses as it relates to payment of the disbursements to vendors could not be obtained and therefore not tested. These amounts represented benefit payments to individuals. A detail of the expenses was not available, as records supporting the batches under which reimbursement was requested were not retained. As a result, the auditors were unable to test these payments. We were unable to obtain sufficient, appropriate audit evidence related to these amounts. Cause – Supporting invoices or required documentation were not retained by the Agency to substantiate period of performance and earmarking costs. The Agency was not properly accounting for expenses incurred during the correct period. Effect – Expenditures could be made outside of the period of performance or costs could be captured incorrectly resulting in noncompliance with earmarking. Not properly recording the expenditures could result in expenditures being booked in the wrong grant period. Questioned Costs – $ 258,313, based on the populations sampled. An additional $809,022 was not recorded properly and was not able to be tested. Recommendation – Documentation should be prepared, reviewed, and retained to support the period of performance and earmarking. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. The Agency should review applications for when benefit was incurred to ensure that expenses are recorded in the proper period as opposed to when paid. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Period of Performance and Earmarking Low-Income Home Energy Assistance ALN# 93.568 US Department of Health and Human Services Passed through Oregon Housing and Community Services Federal Grant/Contract Number: 2021ORLIEA, 2022ORLIEA, 2102ORE5C, 2101ORLWC5, 2102ORLWC6 Grant period – 2021 & 2022 Criteria – Per the 2021-2023 Master Grant Agreement. Subgrantee shall, and shall cause and shall require its subrecipients by contract to administer the program in a manner satisfactory to OHCS and in compliance with all program requirements, including but not limited to the following terms and conditions: (1) Assure that program funds are used only for program services consistent with program requirements. (3) Ensure that program funds are expended within the time limitations set by OHCS. Program funds not expended within the time period may be recaptured by OHCS. (8) Be responsible for maintaining an internal controls framework, satisfactory to OHCS, which assures compliance with program requirements. (10) Maintain accurate financial records satisfactory to the department, which document, among other things, the receipt and disbursement of all funds provided through the program by the department; and have an accounting system in place satisfactory to the department, which meets, among other things, generally accepted accounting principles. Condition – Our testing noted the following exceptions: • 22 instances where check request and invoice could not be produced from a sample of 62 • 4 instances where the journal entry and corresponding back up could not be produced from a sample of 23. Moreover, $809,022 of costs associated with benefit services provided were not captured by the Agency. These amounts were noted during the review of Eligibility. However, these costs were noted by batches uploaded to the pass-through entity of the client. A detail of the expenses as it relates to payment of the disbursements to vendors could not be obtained and therefore not tested. These amounts represented benefit payments to individuals. A detail of the expenses was not available, as records supporting the batches under which reimbursement was requested were not retained. As a result, the auditors were unable to test these payments. We were unable to obtain sufficient, appropriate audit evidence related to these amounts. Cause – Supporting invoices or required documentation were not retained by the Agency to substantiate period of performance and earmarking costs. The Agency was not properly accounting for expenses incurred during the correct period. Effect – Expenditures could be made outside of the period of performance or costs could be captured incorrectly resulting in noncompliance with earmarking. Not properly recording the expenditures could result in expenditures being booked in the wrong grant period. Questioned Costs – $ 258,313, based on the populations sampled. An additional $809,022 was not recorded properly and was not able to be tested. Recommendation – Documentation should be prepared, reviewed, and retained to support the period of performance and earmarking. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. The Agency should review applications for when benefit was incurred to ensure that expenses are recorded in the proper period as opposed to when paid. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Eligibility Low-Income Home Energy Assistance ALN# 93.568 US Department of Health and Human Services Passed through Oregon Housing and Community Services Federal Grant/Contract Number: 2021ORLIEA, 2022ORLIEA, 2102ORE5C, 2101ORLWC5, 2102ORLWC6 Grant period – 2021 & 2022 Criteria – Per the 2021-2023 Master Grant Agreement. Subgrantee shall, and shall cause and shall require its subrecipients by contract to administer the program in a manner satisfactory to OHCS and in compliance with all program requirements, including but not limited to the following terms and conditions: (4) Serve only households whose eligibility has been determined in compliance with program requirements. (8) Be responsible for maintaining an internal controls framework, satisfactory to OHCS, which assures compliance with program requirements. (11) Maintain other program records satisfactory to the department, which document, among other things, client eligibility requirements, receipt of allowable program services, termination of services and the basis for same, housing and income status of clients, administrative actions, contracts with subcontractors, review of subcontractor performance, action taken with respect to deficiency notices, and any administrative review proceedings. Such records shall be in substance and format satisfactory to the department. Condition – In our sample of 60 items, we noted the following exceptions: • 3 instances where client applications could not be produced • 1 instance where client application did not contain evidence of a bill • 6 instances where the combo payment amount covering overages of another program could not be substantiated in terms of amount paid • 1 instance where crisis payment didn’t contain all elements of documentation required for amount paid • 4 instances where bulk fuel payments didn’t contain all elements of documentation required for information taken via quote or vendor The Agency was not able to provide a listing of payments made on behalf of clients corresponding to the fiscal year, and we were unable to reconcile the awards paid out to the cash received from the passthrough entity and the listing of applications approved during the year. Cause – Supporting applications and required documentation were not retained by the Agency to substantiate eligibility and services provided. Effect – Applicants could receive improper benefit amounts based on eligibility criteria, excessive disbursements could be made, and a return of funds could be required to grantor. Questioned Costs – $190,142, based on the populations sampled. Recommendation – Documentation should be prepared, reviewed, and retained to support the period of performance and earmarking. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Eligibility Low-Income Home Energy Assistance ALN# 93.568 US Department of Health and Human Services Passed through Oregon Housing and Community Services Federal Grant/Contract Number: 2021ORLIEA, 2022ORLIEA, 2102ORE5C, 2101ORLWC5, 2102ORLWC6 Grant period – 2021 & 2022 Criteria – Per the 2021-2023 Master Grant Agreement. Subgrantee shall, and shall cause and shall require its subrecipients by contract to administer the program in a manner satisfactory to OHCS and in compliance with all program requirements, including but not limited to the following terms and conditions: (4) Serve only households whose eligibility has been determined in compliance with program requirements. (8) Be responsible for maintaining an internal controls framework, satisfactory to OHCS, which assures compliance with program requirements. (11) Maintain other program records satisfactory to the department, which document, among other things, client eligibility requirements, receipt of allowable program services, termination of services and the basis for same, housing and income status of clients, administrative actions, contracts with subcontractors, review of subcontractor performance, action taken with respect to deficiency notices, and any administrative review proceedings. Such records shall be in substance and format satisfactory to the department. Condition – In our sample of 60 items, we noted the following exceptions: • 3 instances where client applications could not be produced • 1 instance where client application did not contain evidence of a bill • 6 instances where the combo payment amount covering overages of another program could not be substantiated in terms of amount paid • 1 instance where crisis payment didn’t contain all elements of documentation required for amount paid • 4 instances where bulk fuel payments didn’t contain all elements of documentation required for information taken via quote or vendor The Agency was not able to provide a listing of payments made on behalf of clients corresponding to the fiscal year, and we were unable to reconcile the awards paid out to the cash received from the passthrough entity and the listing of applications approved during the year. Cause – Supporting applications and required documentation were not retained by the Agency to substantiate eligibility and services provided. Effect – Applicants could receive improper benefit amounts based on eligibility criteria, excessive disbursements could be made, and a return of funds could be required to grantor. Questioned Costs – $190,142, based on the populations sampled. Recommendation – Documentation should be prepared, reviewed, and retained to support the period of performance and earmarking. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Eligibility Low-Income Home Energy Assistance ALN# 93.568 US Department of Health and Human Services Passed through Oregon Housing and Community Services Federal Grant/Contract Number: 2021ORLIEA, 2022ORLIEA, 2102ORE5C, 2101ORLWC5, 2102ORLWC6 Grant period – 2021 & 2022 Criteria – Per the 2021-2023 Master Grant Agreement. Subgrantee shall, and shall cause and shall require its subrecipients by contract to administer the program in a manner satisfactory to OHCS and in compliance with all program requirements, including but not limited to the following terms and conditions: (4) Serve only households whose eligibility has been determined in compliance with program requirements. (8) Be responsible for maintaining an internal controls framework, satisfactory to OHCS, which assures compliance with program requirements. (11) Maintain other program records satisfactory to the department, which document, among other things, client eligibility requirements, receipt of allowable program services, termination of services and the basis for same, housing and income status of clients, administrative actions, contracts with subcontractors, review of subcontractor performance, action taken with respect to deficiency notices, and any administrative review proceedings. Such records shall be in substance and format satisfactory to the department. Condition – In our sample of 60 items, we noted the following exceptions: • 3 instances where client applications could not be produced • 1 instance where client application did not contain evidence of a bill • 6 instances where the combo payment amount covering overages of another program could not be substantiated in terms of amount paid • 1 instance where crisis payment didn’t contain all elements of documentation required for amount paid • 4 instances where bulk fuel payments didn’t contain all elements of documentation required for information taken via quote or vendor The Agency was not able to provide a listing of payments made on behalf of clients corresponding to the fiscal year, and we were unable to reconcile the awards paid out to the cash received from the passthrough entity and the listing of applications approved during the year. Cause – Supporting applications and required documentation were not retained by the Agency to substantiate eligibility and services provided. Effect – Applicants could receive improper benefit amounts based on eligibility criteria, excessive disbursements could be made, and a return of funds could be required to grantor. Questioned Costs – $190,142, based on the populations sampled. Recommendation – Documentation should be prepared, reviewed, and retained to support the period of performance and earmarking. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Eligibility Low-Income Home Energy Assistance ALN# 93.568 US Department of Health and Human Services Passed through Oregon Housing and Community Services Federal Grant/Contract Number: 2021ORLIEA, 2022ORLIEA, 2102ORE5C, 2101ORLWC5, 2102ORLWC6 Grant period – 2021 & 2022 Criteria – Per the 2021-2023 Master Grant Agreement. Subgrantee shall, and shall cause and shall require its subrecipients by contract to administer the program in a manner satisfactory to OHCS and in compliance with all program requirements, including but not limited to the following terms and conditions: (4) Serve only households whose eligibility has been determined in compliance with program requirements. (8) Be responsible for maintaining an internal controls framework, satisfactory to OHCS, which assures compliance with program requirements. (11) Maintain other program records satisfactory to the department, which document, among other things, client eligibility requirements, receipt of allowable program services, termination of services and the basis for same, housing and income status of clients, administrative actions, contracts with subcontractors, review of subcontractor performance, action taken with respect to deficiency notices, and any administrative review proceedings. Such records shall be in substance and format satisfactory to the department. Condition – In our sample of 60 items, we noted the following exceptions: • 3 instances where client applications could not be produced • 1 instance where client application did not contain evidence of a bill • 6 instances where the combo payment amount covering overages of another program could not be substantiated in terms of amount paid • 1 instance where crisis payment didn’t contain all elements of documentation required for amount paid • 4 instances where bulk fuel payments didn’t contain all elements of documentation required for information taken via quote or vendor The Agency was not able to provide a listing of payments made on behalf of clients corresponding to the fiscal year, and we were unable to reconcile the awards paid out to the cash received from the passthrough entity and the listing of applications approved during the year. Cause – Supporting applications and required documentation were not retained by the Agency to substantiate eligibility and services provided. Effect – Applicants could receive improper benefit amounts based on eligibility criteria, excessive disbursements could be made, and a return of funds could be required to grantor. Questioned Costs – $190,142, based on the populations sampled. Recommendation – Documentation should be prepared, reviewed, and retained to support the period of performance and earmarking. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Eligibility Low-Income Home Energy Assistance ALN# 93.568 US Department of Health and Human Services Passed through Oregon Housing and Community Services Federal Grant/Contract Number: 2021ORLIEA, 2022ORLIEA, 2102ORE5C, 2101ORLWC5, 2102ORLWC6 Grant period – 2021 & 2022 Criteria – Per the 2021-2023 Master Grant Agreement. Subgrantee shall, and shall cause and shall require its subrecipients by contract to administer the program in a manner satisfactory to OHCS and in compliance with all program requirements, including but not limited to the following terms and conditions: (4) Serve only households whose eligibility has been determined in compliance with program requirements. (8) Be responsible for maintaining an internal controls framework, satisfactory to OHCS, which assures compliance with program requirements. (11) Maintain other program records satisfactory to the department, which document, among other things, client eligibility requirements, receipt of allowable program services, termination of services and the basis for same, housing and income status of clients, administrative actions, contracts with subcontractors, review of subcontractor performance, action taken with respect to deficiency notices, and any administrative review proceedings. Such records shall be in substance and format satisfactory to the department. Condition – In our sample of 60 items, we noted the following exceptions: • 3 instances where client applications could not be produced • 1 instance where client application did not contain evidence of a bill • 6 instances where the combo payment amount covering overages of another program could not be substantiated in terms of amount paid • 1 instance where crisis payment didn’t contain all elements of documentation required for amount paid • 4 instances where bulk fuel payments didn’t contain all elements of documentation required for information taken via quote or vendor The Agency was not able to provide a listing of payments made on behalf of clients corresponding to the fiscal year, and we were unable to reconcile the awards paid out to the cash received from the passthrough entity and the listing of applications approved during the year. Cause – Supporting applications and required documentation were not retained by the Agency to substantiate eligibility and services provided. Effect – Applicants could receive improper benefit amounts based on eligibility criteria, excessive disbursements could be made, and a return of funds could be required to grantor. Questioned Costs – $190,142, based on the populations sampled. Recommendation – Documentation should be prepared, reviewed, and retained to support the period of performance and earmarking. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Cash Management and Reporting Low-Income Home Energy Assistance ALN# 93.568 US Department of Health and Human Services Passed through Oregon Housing and Community Services Federal Grant/Contract Number: 2021ORLIEA, 2022ORLIEA, 2102ORE5C, 2101ORLWC5, 2102ORLWC6 Grant period – 2021 & 2022 Criteria – Per the 2021-2023 Master Grant Agreement. Subgrantee shall, and shall cause and shall require its subrecipients by contract to administer the program in a manner satisfactory to OHCS and in compliance with all program requirements, including but not limited to the following terms and conditions: (8) Be responsible for maintaining an internal controls framework, satisfactory to OHCS, which assures compliance with program requirements. (10) Maintain accurate financial records satisfactory to the department, which document, among other things, the receipt and disbursement of all funds provided through the program by the department; and have an accounting system in place satisfactory to the department, which meets, among other things, generally accepted accounting principles. (12) Provide the department with reports, data, and financial statements, in form and substance satisfactory to the department, as may be required or requested from time to time by the department, which shall be in a format prescribed by the department. (14) Assure that data collection and reporting, including data entry for program funded activities, be conducted through the use of an OHCS approved data collection system (such as ServicePoint and OPUS), where applicable by program requirements. (15) Ensure that data collection, entry and reporting occur in an accurate and timely manner as satisfactory to OHCS. Condition – The Agency did not maintain proper documentation in support of annual reporting requirements. Quarterly reports as required by the grant document were not filed. Cash request could not be substantiated nor could documentation to support amounts reimbursed be tied to supporting records. As a result of the lack of documentation, sufficient appropriate audit evidence could not be obtained in order to test reporting and cash management . Cause – Supporting records used to populate the required annual financial reporting were not retained by the Agency. The Agency stated quarterly reports were not required by grantor and therefore not filed, however the Agency was unable to provide documentation to support this inconsistency with the terms and conditions of the grant agreement for the first 3 quarters of the fiscal year. Reimbursement was provided as information was uploaded into the state pass-through system, however, as noted during our testing of eligibility; batches were uploaded months behind amounts being pledged to vendors on behalf of clients and no records were kept for amounts input for expenses outside of client assistance. Effect – The Agency could submit incorrect information. Non-reporting to the grantor can result in sanctions or loss of future funding. The Agency could request funds that may not have adequate supporting documentation which could lead to errors and loss of funding under this program. Questioned Costs – Not applicable. Recommendation – Documentation should be prepared, reviewed, and retained to support the reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Grant agreements should be read in detail and information relevant to report requirements be provided to the appropriate personnel to prevent not filing required reports. Documentation should be provided that directly links the amount requested to the related expenditures to clearly document those funds are being used in a timely manner, that more was not requested than was expended, specifically what expenditures are being considered expended through these funds, and that funds requested applied to the correct period. Update policies and procedures as needed to reflect changes, if applicable. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Cash Management and Reporting Low-Income Home Energy Assistance ALN# 93.568 US Department of Health and Human Services Passed through Oregon Housing and Community Services Federal Grant/Contract Number: 2021ORLIEA, 2022ORLIEA, 2102ORE5C, 2101ORLWC5, 2102ORLWC6 Grant period – 2021 & 2022 Criteria – Per the 2021-2023 Master Grant Agreement. Subgrantee shall, and shall cause and shall require its subrecipients by contract to administer the program in a manner satisfactory to OHCS and in compliance with all program requirements, including but not limited to the following terms and conditions: (8) Be responsible for maintaining an internal controls framework, satisfactory to OHCS, which assures compliance with program requirements. (10) Maintain accurate financial records satisfactory to the department, which document, among other things, the receipt and disbursement of all funds provided through the program by the department; and have an accounting system in place satisfactory to the department, which meets, among other things, generally accepted accounting principles. (12) Provide the department with reports, data, and financial statements, in form and substance satisfactory to the department, as may be required or requested from time to time by the department, which shall be in a format prescribed by the department. (14) Assure that data collection and reporting, including data entry for program funded activities, be conducted through the use of an OHCS approved data collection system (such as ServicePoint and OPUS), where applicable by program requirements. (15) Ensure that data collection, entry and reporting occur in an accurate and timely manner as satisfactory to OHCS. Condition – The Agency did not maintain proper documentation in support of annual reporting requirements. Quarterly reports as required by the grant document were not filed. Cash request could not be substantiated nor could documentation to support amounts reimbursed be tied to supporting records. As a result of the lack of documentation, sufficient appropriate audit evidence could not be obtained in order to test reporting and cash management . Cause – Supporting records used to populate the required annual financial reporting were not retained by the Agency. The Agency stated quarterly reports were not required by grantor and therefore not filed, however the Agency was unable to provide documentation to support this inconsistency with the terms and conditions of the grant agreement for the first 3 quarters of the fiscal year. Reimbursement was provided as information was uploaded into the state pass-through system, however, as noted during our testing of eligibility; batches were uploaded months behind amounts being pledged to vendors on behalf of clients and no records were kept for amounts input for expenses outside of client assistance. Effect – The Agency could submit incorrect information. Non-reporting to the grantor can result in sanctions or loss of future funding. The Agency could request funds that may not have adequate supporting documentation which could lead to errors and loss of funding under this program. Questioned Costs – Not applicable. Recommendation – Documentation should be prepared, reviewed, and retained to support the reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Grant agreements should be read in detail and information relevant to report requirements be provided to the appropriate personnel to prevent not filing required reports. Documentation should be provided that directly links the amount requested to the related expenditures to clearly document those funds are being used in a timely manner, that more was not requested than was expended, specifically what expenditures are being considered expended through these funds, and that funds requested applied to the correct period. Update policies and procedures as needed to reflect changes, if applicable. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Cash Management and Reporting Low-Income Home Energy Assistance ALN# 93.568 US Department of Health and Human Services Passed through Oregon Housing and Community Services Federal Grant/Contract Number: 2021ORLIEA, 2022ORLIEA, 2102ORE5C, 2101ORLWC5, 2102ORLWC6 Grant period – 2021 & 2022 Criteria – Per the 2021-2023 Master Grant Agreement. Subgrantee shall, and shall cause and shall require its subrecipients by contract to administer the program in a manner satisfactory to OHCS and in compliance with all program requirements, including but not limited to the following terms and conditions: (8) Be responsible for maintaining an internal controls framework, satisfactory to OHCS, which assures compliance with program requirements. (10) Maintain accurate financial records satisfactory to the department, which document, among other things, the receipt and disbursement of all funds provided through the program by the department; and have an accounting system in place satisfactory to the department, which meets, among other things, generally accepted accounting principles. (12) Provide the department with reports, data, and financial statements, in form and substance satisfactory to the department, as may be required or requested from time to time by the department, which shall be in a format prescribed by the department. (14) Assure that data collection and reporting, including data entry for program funded activities, be conducted through the use of an OHCS approved data collection system (such as ServicePoint and OPUS), where applicable by program requirements. (15) Ensure that data collection, entry and reporting occur in an accurate and timely manner as satisfactory to OHCS. Condition – The Agency did not maintain proper documentation in support of annual reporting requirements. Quarterly reports as required by the grant document were not filed. Cash request could not be substantiated nor could documentation to support amounts reimbursed be tied to supporting records. As a result of the lack of documentation, sufficient appropriate audit evidence could not be obtained in order to test reporting and cash management . Cause – Supporting records used to populate the required annual financial reporting were not retained by the Agency. The Agency stated quarterly reports were not required by grantor and therefore not filed, however the Agency was unable to provide documentation to support this inconsistency with the terms and conditions of the grant agreement for the first 3 quarters of the fiscal year. Reimbursement was provided as information was uploaded into the state pass-through system, however, as noted during our testing of eligibility; batches were uploaded months behind amounts being pledged to vendors on behalf of clients and no records were kept for amounts input for expenses outside of client assistance. Effect – The Agency could submit incorrect information. Non-reporting to the grantor can result in sanctions or loss of future funding. The Agency could request funds that may not have adequate supporting documentation which could lead to errors and loss of funding under this program. Questioned Costs – Not applicable. Recommendation – Documentation should be prepared, reviewed, and retained to support the reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Grant agreements should be read in detail and information relevant to report requirements be provided to the appropriate personnel to prevent not filing required reports. Documentation should be provided that directly links the amount requested to the related expenditures to clearly document those funds are being used in a timely manner, that more was not requested than was expended, specifically what expenditures are being considered expended through these funds, and that funds requested applied to the correct period. Update policies and procedures as needed to reflect changes, if applicable. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Cash Management and Reporting Low-Income Home Energy Assistance ALN# 93.568 US Department of Health and Human Services Passed through Oregon Housing and Community Services Federal Grant/Contract Number: 2021ORLIEA, 2022ORLIEA, 2102ORE5C, 2101ORLWC5, 2102ORLWC6 Grant period – 2021 & 2022 Criteria – Per the 2021-2023 Master Grant Agreement. Subgrantee shall, and shall cause and shall require its subrecipients by contract to administer the program in a manner satisfactory to OHCS and in compliance with all program requirements, including but not limited to the following terms and conditions: (8) Be responsible for maintaining an internal controls framework, satisfactory to OHCS, which assures compliance with program requirements. (10) Maintain accurate financial records satisfactory to the department, which document, among other things, the receipt and disbursement of all funds provided through the program by the department; and have an accounting system in place satisfactory to the department, which meets, among other things, generally accepted accounting principles. (12) Provide the department with reports, data, and financial statements, in form and substance satisfactory to the department, as may be required or requested from time to time by the department, which shall be in a format prescribed by the department. (14) Assure that data collection and reporting, including data entry for program funded activities, be conducted through the use of an OHCS approved data collection system (such as ServicePoint and OPUS), where applicable by program requirements. (15) Ensure that data collection, entry and reporting occur in an accurate and timely manner as satisfactory to OHCS. Condition – The Agency did not maintain proper documentation in support of annual reporting requirements. Quarterly reports as required by the grant document were not filed. Cash request could not be substantiated nor could documentation to support amounts reimbursed be tied to supporting records. As a result of the lack of documentation, sufficient appropriate audit evidence could not be obtained in order to test reporting and cash management . Cause – Supporting records used to populate the required annual financial reporting were not retained by the Agency. The Agency stated quarterly reports were not required by grantor and therefore not filed, however the Agency was unable to provide documentation to support this inconsistency with the terms and conditions of the grant agreement for the first 3 quarters of the fiscal year. Reimbursement was provided as information was uploaded into the state pass-through system, however, as noted during our testing of eligibility; batches were uploaded months behind amounts being pledged to vendors on behalf of clients and no records were kept for amounts input for expenses outside of client assistance. Effect – The Agency could submit incorrect information. Non-reporting to the grantor can result in sanctions or loss of future funding. The Agency could request funds that may not have adequate supporting documentation which could lead to errors and loss of funding under this program. Questioned Costs – Not applicable. Recommendation – Documentation should be prepared, reviewed, and retained to support the reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Grant agreements should be read in detail and information relevant to report requirements be provided to the appropriate personnel to prevent not filing required reports. Documentation should be provided that directly links the amount requested to the related expenditures to clearly document those funds are being used in a timely manner, that more was not requested than was expended, specifically what expenditures are being considered expended through these funds, and that funds requested applied to the correct period. Update policies and procedures as needed to reflect changes, if applicable. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Cash Management and Reporting Low-Income Home Energy Assistance ALN# 93.568 US Department of Health and Human Services Passed through Oregon Housing and Community Services Federal Grant/Contract Number: 2021ORLIEA, 2022ORLIEA, 2102ORE5C, 2101ORLWC5, 2102ORLWC6 Grant period – 2021 & 2022 Criteria – Per the 2021-2023 Master Grant Agreement. Subgrantee shall, and shall cause and shall require its subrecipients by contract to administer the program in a manner satisfactory to OHCS and in compliance with all program requirements, including but not limited to the following terms and conditions: (8) Be responsible for maintaining an internal controls framework, satisfactory to OHCS, which assures compliance with program requirements. (10) Maintain accurate financial records satisfactory to the department, which document, among other things, the receipt and disbursement of all funds provided through the program by the department; and have an accounting system in place satisfactory to the department, which meets, among other things, generally accepted accounting principles. (12) Provide the department with reports, data, and financial statements, in form and substance satisfactory to the department, as may be required or requested from time to time by the department, which shall be in a format prescribed by the department. (14) Assure that data collection and reporting, including data entry for program funded activities, be conducted through the use of an OHCS approved data collection system (such as ServicePoint and OPUS), where applicable by program requirements. (15) Ensure that data collection, entry and reporting occur in an accurate and timely manner as satisfactory to OHCS. Condition – The Agency did not maintain proper documentation in support of annual reporting requirements. Quarterly reports as required by the grant document were not filed. Cash request could not be substantiated nor could documentation to support amounts reimbursed be tied to supporting records. As a result of the lack of documentation, sufficient appropriate audit evidence could not be obtained in order to test reporting and cash management . Cause – Supporting records used to populate the required annual financial reporting were not retained by the Agency. The Agency stated quarterly reports were not required by grantor and therefore not filed, however the Agency was unable to provide documentation to support this inconsistency with the terms and conditions of the grant agreement for the first 3 quarters of the fiscal year. Reimbursement was provided as information was uploaded into the state pass-through system, however, as noted during our testing of eligibility; batches were uploaded months behind amounts being pledged to vendors on behalf of clients and no records were kept for amounts input for expenses outside of client assistance. Effect – The Agency could submit incorrect information. Non-reporting to the grantor can result in sanctions or loss of future funding. The Agency could request funds that may not have adequate supporting documentation which could lead to errors and loss of funding under this program. Questioned Costs – Not applicable. Recommendation – Documentation should be prepared, reviewed, and retained to support the reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Grant agreements should be read in detail and information relevant to report requirements be provided to the appropriate personnel to prevent not filing required reports. Documentation should be provided that directly links the amount requested to the related expenditures to clearly document those funds are being used in a timely manner, that more was not requested than was expended, specifically what expenditures are being considered expended through these funds, and that funds requested applied to the correct period. Update policies and procedures as needed to reflect changes, if applicable. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.