Audit 383307

Finding 2025-003 (Material Weakness) Program: Housing Opportunities for Persons with AIDS Federal Agency: United States Department of Housing and Urban Development (HUD) AL #: 14.241 Federal Award Identification Number and Year: Various – See SEFA Pass-through Entity: N/A Type of Compliance Finding: M) Subrecipient Monitoring Criteria Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). Condition The City did not provide evidence supporting compliance with this requirement. Cause The City failed to 1) evaluate the results of subrecipient’s previous audits including whether or not the subrecipient received a single audit in accordance with 2 CFR Part 200, Subpart F, and the extent to which the same or similar subaward was audited as a major program; and 2) have the Subrecipient address the identified findings in the contract monitoring report according to the response timeframe outlined in the report; to ensure quality programming that benefits the clients. Effect The City may not be compliant with HUD, which could result in the City not receiving federal assistance or repayment of grant funds. Questioned Costs None Context N/A Is the finding a repeat finding No Recommendations We recommend the City ensure Subrecipients respond to all corrective action plans by the required timeframes outlined and ensure all subrecipients are monitored as stated in the Federal regulations and City’s policy. Views of Responsible Officials / Planned Corrective Actions Management agrees with the finding. See Corrective Action Plan on Organization’s letterhead.

. Finding 2025-004 (Material Weakness) Program: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: United States Department of Treasury AL #: 21.027 Federal Award Identification Number and Year: Various – See SEFA Pass-through Entity: N/A Type of Compliance Finding: A) Activities Allowed or Unallowed and B) Allowable Costs/Cost Principles Criteria Recipients may use SLFRF payments for any eligible expenses subject to the restrictions set forth in sections 602 / 603 of the Social Security Act as added by section 9901 of the American Rescue Plan Act of 2021, codified at 42 USC sections 802 and 803, and as amended by the 2023 CAA. Per 2 CFR 200.430(g)(1) Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must (i) be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and (vi) support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one federal award. Condition Management did not provide sufficient evidence to support the charges for salaries and wages for five of the seven employee samples who work solely on one cost objective or multiple cost objectives. Cause Management does not have controls and processes in place to ensure that required documentation is maintained to support federal award charges for salaries and wages. Effect Unallowable salary expenses were charged to the federal award, which could result in the City not receiving federal assistance or repayment of grant funds. Questioned Costs $11,480 Context The total salaries and wages were $1,036,364 and likely questioned costs are $252,797. Is the finding a repeat finding No Recommendations We recommend management establish a process to ensure required documentation is maintained to support federal award salaries and wages. Views of Responsible Officials/ Planned Corrective Actions Management agrees with the finding. See Corrective Action Plan on Organization’s letterhead.