Audit 399984

Contractor Debarment and Suspension Verification U.S. Department of Energy – Assistance Listing No. 81.042; Grant Nos. C000082807 and NAT23001-WAPLOCAL; Grant Periods: July 2022 to June 2027, July 2023 to July 2026, and January 2024 to December 2026; Pass-through Pennsylvania Department of Community & Economic Development (DCED), Delaware Natural Resources and Environmental Control (DNREC), and Philadelphia Energy Authority (PEA). Condition: There was no evidence of contractors’ suspension or debarment status in ECA’s procurement files. Criteria: In accordance with Article V section 10, Debarment and Suspension, of ECA’s agreement with DCED: “The Grantee (ECA) may not enter into subcontracts with parties listed on the government-wide exclusions in the System for Award Management (SAM), in accordance with the OMB guidelines at 2 CFR 180…, “Debarment and Suspension”. Additionally, in accordance with Appendix A, Scope of Services, section 22 of ECA’s agreement with DNREC: “It is the Vendor’s (ECA) responsibility to check all subcontractor’s for debarment prior to hire”. Cause: ECA did not retain records to evidence searching for contractors’ suspension or debarment status on sam.gov. ECA provided a report after our inquiry showing the contractors engaged were not suspended or debarred. Effect: ECA is not compliant with the Debarment and Suspension standards required by DCED, DNREC, PEA, and OMB, with respect to the awarded subcontracts. Context: ECA hires contractors to perform work for the weatherization program funded through their contracts with DCED, DNREC, and PEA. These contracts are federally funded, and certain federal debarment and suspension guidelines apply. ECA is required to confirm that contractors are not suspended and debarred for federally funded contracts. Based on our inquiries, management performs verifications to confirm that contractors engaged are not suspended or debarred from federal and/or state contracts. However, evidence of the search results was not retained in the contractors’ files. Questioned Costs: Unknown Repeat Finding: No Recommendation: ECA should ensure the search is performed before engaging contractors and retain evidence of contractors’ suspension or debarment status search results from sam.gov in the procurement files. View of responsible officials and Planned Corrective Actions: ECA Agrees with this finding and has created a new policy specifically outlining the requirements for onboarding new contractors and checking existing contractors to confirm that they are not federally debarred. ECA will review its existing contracts to confirm that no current contractors are debarred and will take further action if necessary.

U.S. Department of Labor – Assistance Listing No. 17.289; Grant No. 24A60CP000153-01-00; Grant Period: November 2023 to October 2026 Condition: ECA submitted a required quarterly ETA-9130 Financial Report five (5) days after the due date. Criteria: ECA, as a recipient of the U.S. Department of Labor funds, is required to submit quarterly ETA-9130 Financial Reports 45 days after the end of each calendar quarter. Cause: ECA has not enforced its written financial closing and reporting policies and procedures to ensure required program report is submitted timely. Effect: The Organization did not comply with submitting an ETA-9130 Financial Report by the due date. Context: We obtained and reviewed two completed quarterly ETA-9130 Financial Report and noted one report was submitted five (5) days after the due date. Questioned Costs: None Repeat Finding: Yes Recommendation: We recommend management create a plan to ensure required program financial reports are completed by or before their due dates, to avoid punitive damages for noncompliance. Management should consider delegating the preparation to someone else other than the CFO and have the CFO instead review and submit. View of responsible officials and planned corrective actions: ECA agrees with this finding and has created calendar reminders for all federal contracts to comply with all financial and programmatic requirements. ECA also hired a Director of Development in March 2026, who will also be partially responsible for maintaining contract compliance.

Internal Control over Preparation of the Schedule of Expenditures of Federal, State, and City Awards (SEFA), Assistance Listing Numbers (ALNs) - All Condition: Management’s SEFA did not include the ALNs for all of its federal awards with expenditures during the fiscal year. Criteria: “A non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single or program-specific audit conducted for that year in accordance with the provisions of the Uniform Guidance Part 2 CFR section 200.50 (a). In order to accomplish this, “The auditee must also prepare a Schedule of Expenditures of Federal Awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with § 200.502” per Part 2 CFR section 200.510 (b) of the Uniform Guidance. This guidance includes the requirement that the SEFA include the ALN for each grant award included in the schedule. Cause: When awards are received during the year, management does not confirm the source of funding or the ALN with the awarding agency. Effect: The SEFA provided by management in advance of the audit was misstated because two (2) federal awards with expenditures totaling $1,695,881 were excluded. This had a direct and material effect on the audit of the major programs. Context: The Chief Financial Officer (CFO) relies on pass-through agencies to provide the funding sources, including the related ALN. Two of the award agreements did not include this information, and it was only identified that the programs were federally funded upon receipt of the audit confirmation responses. As a result, the SEFA initially provided by the CFO did not include these two programs. Recommendation: We recommend management implement policies and procedures in which the funding source of all awards (including ALN) be obtained from funders at the time that all awards are granted. View of responsible officials and Planned Corrective Actions: ECA agrees with this finding and has created a policy for identification and verification of funding sources for all contracts. This will ensure that all contracts are screened for federal funding regardless of what is listed in the contract/award/agreement. ECA will review its existing contracts to confirm all funding sources.