Audit 399300

Federal agency: Department of Housing and Urban Development Federal program title: Continuum of Care Program FALN Number: 14.267 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: December 1, 2024 – November 30, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance and Immaterial Noncompliance Criteria or specific requirement: 2 CFR section 200.320 outlines the acceptable methods of procurement. Purchases below the simplified acquisition threshold, but above the micro-purchase threshold, require that price or rate quotations be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Furthermore, the Organization's procurement policies require the maintaining of records sufficient to detail the history of procurement including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price Condition: The Organization did not follow the procedures outlined within its internal policies related to maintaining documentation associated with purchases made via the simplified acquisition method of procurement. Questioned costs: $31,673. Context: This condition impacted one (1) of one (1) transaction selected for testing. Cause: Oversight. Effect: The Organization could potentially use federal funds in a manner which is not the most efficient or economical. Repeat Finding: No Recommendation: We recommend the organization consistently follow its established policies and procedures related to the maintaining of necessary documentation to support the method of procurement utilized. The Organization may also consider qualifying multiple vendors for particular goods/service and then utilizing an approved vendors list. Views of responsible officials: There is no disagreement with the audit finding.

Federal agency: Department of Housing and Urban Development Federal program title: Continuum of Care Program FALN Number: 14.267 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: December 1, 2024 – November 30, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance and Immaterial Noncompliance Criteria or specific requirement: 2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.209-6 outlines that the non-Federal entity must verify that the agency in which it is entering into a contract is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: The Organization did not verify that a vendor utilized was not suspended, debarred, or otherwise excluded prior to entering into a transaction. Questioned costs: None Context: This condition impacted one (1) of one (1) transaction selected for testing. During the audit, the vendor was checked via SAM.gov and determined to not be included as suspend or debarred. Cause: Oversight. Effect: The Organization could potentially enter into a transaction with an entity that has been suspended or debarred. Repeat Finding: No Recommendation: We recommend that the Organization retain documentation that SAM.gov was used to verify that vendors are not suspended, debarred, or otherwise excluded from participating in the transaction prior to contract. To the extent practicable, the Organization can engage with a third party that will verify any new and existing vendors have not been suspended or debarred on a monthly basis. Views of responsible officials: There is no disagreement with the audit finding.

Federal agency: Department of Housing and Urban Development Federal program title: Continuum of Care Program FALN Number: 14.267 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: September 1, 2023 – August 31, 2024; September 1, 2024- August 31, 2025. Type of Finding: Significant Deficiency in Internal Control over Compliance and Immaterial Noncompliance Criteria or specific requirement: 2 CFR § 200.303 requires recipients and subrecipients to establish, document, and maintain effective internal controls over Federal awards, aligned with the COSO Internal Control–Integrated Framework. Condition: The Organization could not provide documentation that certain rent reasonableness checks were done for selected clients. Questioned costs: None Context: This condition impacted three (3) of nine (9) checklists selected for testing. Cause: Oversight. Effect: The Organization could pay rent on behalf of a client that is 1) unreasonable in relation to rents being charged in the area of comparable unassisted units or 2) in excess of the HUD-determined fair market rate. Repeat Finding: No Recommendation: We recommend program managers verify that rent reasonableness checklists and certifications are fully completed by HUD staff. Views of responsible officials: There is no disagreement with the audit finding.

Federal agency: U.S. Department of Health and Human Services Federal program title: Block Grants for Community Mental Health Services FALN Number: 93.958 Pass-Through Agency: Illinois Department of Human Services Pass-Through Number(s): 45CDB04278 Award Period: July 1, 2024 – June 30, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance and Immaterial Noncompliance Criteria or specific requirement: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award's period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Condition: Costs outside of the period of performance were charged to the grant. Questioned costs: $5,521 Context: Four (4) of the eight (8) transactions selected for testing. Cause: Oversight. Effect: The Organization may allocate unallowable costs to the federal grant. Repeat Finding: The finding is a repeat of a finding in the prior year. Prior year finding number was 2024-002. Recommendation: Management should review and revise its process for allocating costs to federal grants to include additional layers of review and so that costs for which some or all are from outside of the period of performance, may be appropriately excluded from the federal grant. Views of responsible officials: There is no disagreement with the audit finding