Audit 393506

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Home Partnership Investment Program Assistance Listing Number: 14.239 Pass-Through Agency: State Department of Housing and Urban Development Pass-Through Number(s): N/A Award Period: July 1, 2024 to June 30, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matter Criteria: In accordance with 2 CFR § 200.334, recipients and subrecipients of federal awards are required to retain all records pertinent to a federal award for a period of three years from the date of submission of the final expenditure or financial report. These records include, but are not limited to, financial records, supporting documentation, statistical records, and all other records pertinent to the federal award. The County is expected to retain copies of all grant agreements to ensure it can identify and comply with all applicable terms, conditions, and regulatory requirements associated with the funding. Condition: CLA observed that the County did not retain copies of the grant agreements for the Home Partnership Investment Program. Questioned costs: None noted. Context: CLA was unable to obtain the grant agreements for the Home Partnership Investment Program, as the County was unable to provide copies upon request. Cause: The management was unable to retain copies of the grant agreements due to the considerable passage of time since their issuance. Effect: Due to the absence of the original grant agreements, the County may not be fully aware of, or in compliance with, all applicable grant requirements. Repeat Finding: 2024-008 Recommendation: We recommend that management establish and maintain a formal process for the retention and organization of all grant-related documentation. This process should ensure that key documents are securely stored, easily accessible, and periodically reviewed to support ongoing compliance with grant requirements. Additionally, the County should work with granting agencies to obtain copies of any missing agreements and perform a comprehensive review to identify and address any outstanding compliance requirements. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Community Development Block Grant Assistance Listing Number: 14.228 Pass-Through Agency: State Department of Housing and Urban Development Pass-Through Number(s): N/A Award Period: July 1, 2024 to June 30, 2025 Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria: Grant compliance requires the County to submit to the State various reports throughout the term of the agreement. Based on terms of the agreement in Exhibit D item 22, the County must submit quarterly financial, activity and program income reports, semi-annual labor and compliance reports and annual performance reports. Condition: During our test of the reporting requirements, we determined that the County did not submit the required reports under Reporting of the Compliance Supplement. Questioned costs: None Context: The County’s agreement with the State requires that various reports are submitted at various times during the year. Based on the agreement, the County should submit a total of 15 reports during the year, however, none of the reports were submitted during the year. Cause: Due to an empty employment position at the time of monitoring, the County was unaware of the reporting requirements and therefore was unable to complete them. Effect: Not following through on the reporting requirements may cause the State to require increased monitoring or result in increased challenges in obtaining funding due to continued noncompliance. Repeat Finding: 2024-012 Recommendation: CLA recommends the County develop procedures, such as reporting checklist to ensure that reporting requirements are tracked and met. Additionally, CLA recommends that the County perform cross training with employees to ensure that knowledge is shared among the team members. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Home Partnership Investment Program Assistance Listing Number: 14.239 Pass-Through Agency: State Department of Housing and Urban Development Pass-Through Number(s): N/A Award Period: July 1, 2024 to June 30, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matter Criteria: Grant compliance requires that Home Investment Partnership Program loans be monitored for compliance with the loan provisions on a regular basis. Such loan requirements are required to ensure HOME loan funds are used in accordance with all program requirements. The requirements are noted in the OMB 24 CFR Part 92.500 and 92.201(b). This requirement states the participating jurisdiction “has committed and expended HOME funds, as required, and has met HOME program requirements particularly as they relate to eligible activities, income targeting, affordability, and matching contribution requirement. Condition: The County has procedures in place used for monitoring loan compliance. This involves sending an email to each HOME beneficiary asking for documents proving they are still a resident (utility bills, insurance documents, etc.) and mailing a physical Certificate of Occupancy for the resident to sign. However, there were two residents which have failed to return any of these documents or a response as of February 27, 2026. The initial inquiry occurred on January 29, 2025 and January 28, 2025 for both residents. Due to an empty employment position at the time of monitoring, the County has failed to perform a physical inspection despite being a procedure in the case of a non-response scenario with a resident. Questioned costs: Known questioned costs of $171,748, the value of two loans Context: HOME loans must be monitored annually to ensure recipients are still living in the residence covered by the loan. CLA haphazardly selected six loans from a population of eighteen HOME Program loans to test continuing compliance and found that two of those loans did not have adequate documentation to show continued monitoring occurred. Cause: Due to an empty employment position at the time of monitoring, the County was unable to perform physical inspections of two residents who failed to respond to the County's inquiry. Effect: Not following through on continual monitoring requirements could result in noncompliance with program requirements and could potentially cause an overstatement of program loan receivables reported by the County. Repeat Finding: 2024-006 Recommendation: CLA recommends the County hires the staff necessary to ensure that all monitoring procedures are performed. Views of responsible officials: There is no disagreement with the audit finding.