Audit 393787

Finding 2025-002 Significant deficiency in internal control over compliance with procurement procedures meeting the requirements of 2 CFR Part 200. Identification of the Federal Program Federal Agency: The United States Department of Housing and Urban Development Program Title: Continuum of Care Program Assistance Listing Number: 14.267 Award Numbers: All Award Periods: All Criteria Requirements contained in Title 2 U.S. Code of Federal Regulations Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Subpart D – Post Federal Award Requirements, Sections 200.318 through 200.326, require that a nonfederal entity establish and follow a written procurement policy that conforms to federal standards. The Uniform Guidance further requires that procurement transactions be documented in sufficient detail to provide a complete history of the procurement, including the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price (2 CFR 200.318(i), 200.319, and related sections). The written procurement policy must identify formal and informal procurement actions to be taken based on the size of the procurement, covering both goods and services, and must require documentation to support compliance with those requirements. Condition The Organization did not maintain adequate procurement documentation to support procurement transactions. For four out of nine of the items tested, the Organization could not provide documentation sufficient to evidence the method of procurement and that adequate price quotes were received in accordance with the Organizations documented procurement policy. Cause The Organization’s internal controls were insufficient to ensure that required procurement documentation was prepared, retained, and reviewed in accordance with its written procurement policy and Uniform Guidance requirements. Questioned Costs Not applicable. Effect The Organization did not retain documentation sufficient to comply the procurement standards set out at 2 CFR Part 200 as it related to the selected procurement transactions. Repeat Finding No

Finding 2025-003 Significant deficiency in internal controls over compliance and instance of noncompliance related to matching requirements. Identification of the Federal Program Federal Agency: The United States Department of Housing and Urban Development Program Title: Continuum of Care Program Assistance Listing Number: 14.267 Award Numbers: All Award Periods: All Criteria Internal controls should ensure that the Organization’s population of allowable matching costs only include amounts from allowable sources in accordance with 2 CFR 200.306. Condition During testing of the matching compliance requirement we received an unsubmitted excel workbook identifying the matching costs eligible to be claimed during the period under audit. During testing of the aggregated charges it was identified five out of our 25 matching charges identified were improperly included as eligible in the excel workbook aggregating the matching cost pool as they were from an unallowable source. The error was due to a clerical allocation error within the spreadsheet identifying the matching charges. After correcting for the clerical error the unallowable costs were removed from the cost pool and the Organization determined it still had sufficient allowable and allocable charges to meet the awards matching requirements. Cause The primary cause of this issue is associated with inadequate internal controls relating to the spreadsheet design and review. Effect The effect of ineligible costs were included in the preliminary matching cost pool, there is a risk that reported match amounts could have been inaccurate and that reported cost sharing or matching would not meet the requirements of 2 CFR 200.306. Questioned Costs Not applicable. Recommendation We recommend that the Organization strengthen controls over the preparation and review of the matching cost pool by modifying the Excel workbook or other tools used to identify matching costs to ensure that only specifically designated matching expenses are included, implementing a formal review of the matching cost pool.

Finding 2025-001 Significant deficiency in internal control in internal control over compliance with allowable costs/cost principles requirements. Identification of the Federal Program Federal Agency All Program Title: All Assistance Listing Number: All Award Numbers: All Award Periods: All Criteria In accordance with 2 CFR Part 200, costs charged to a federal award must be necessary, reasonable, allowable under the cost principles, allocable, and adequately documented; entertainment costs are specifically unallowable per 2 CFR 200.438, and costs must be allocated consistently between federal awards and other activities, as inconsistent allocation is not permitted under the Uniform Guidance. Condition During our audit, two expenses totaling $2,917 of 25 tested expenses tested in the indirect allowable cost pool were identified in the indirect cost pool as unallowable costs as they were for meals associated with entertainment for staff morale. Questioned Costs N/A Cause Unallowable costs were charged as the Organization lacked adequate review procedures to ensure charges to the allowable indirect cost pool were in compliance with federal cost principles. Effect The indirect cost pool contained $2,917of known unallowable costs included in the indirect cost population. Repeat Finding No Recommendations We recommend that the Organization strengthen controls over the coding and approval od expenses allowable to the indirect cost pool.