Audit 403057

Finding 2024-001 – Significant Deficiency in Internal Control Over Compliance – Untimely Submission of Single Audit Reporting Package Federal Program Information Federal Agency: U.S. Department of Housing and Urban Development Assistance Listing Number(s): 14.235, 14.239, 14.241, 14.267 Program Name: Supportive Housing, HOME Investment Partnerships Program, Housing Opportunities for Persons with AIDS, Continuum of Care Program Type of Finding Significant Deficiency in Internal Control Over Compliance Other Matter – Reporting Criteria In accordance with 2 CFR §200.512, the auditee is required to submit the Data Collection Form and reporting package to the Federal Audit Clearinghouse (FAC) within the earlier of 30 calendar days after receipt of the auditor’s reports or nine months after the end of the audit period. Condition The Organization did not submit the required Single Audit reporting package to the Federal Audit Clearinghouse within the required timeframe for the fiscal year ended December 31, 2024. The reporting package was submitted in June 2026. Cause Management did not have adequate procedures in place to ensure timely preparation and submission of financial information required for completion of the audit and Single Audit reporting package. Delays in providing requested financial information to the auditors, along with other unforeseen circumstances encountered during the audit process, contributed to the untimely filing.. Effect Failure to submit the Single Audit reporting package timely constitutes noncompliance with Uniform Guidance reporting requirements and may subject the Organization to increased oversight from federal agencies and pass-through programs. Questioned Costs None noted. Recommendation We recommend management strengthen internal procedures related to the preparation, review, and timely submission of financial information necessary for completion of the audit and Single Audit reporting requirements. Management should establish formal timelines, assign responsibility for monitoring reporting deadlines, and enhance communication with auditors throughout the audit process to help ensure timely filing with the Federal Audit Clearinghouse. Views of Responsible Officials and Planned Corrective Action Management acknowledges the finding and recognizes improvements are needed in the coordination and timing of information provided during the audit process. Management plans to implement enhanced internal timelines and monitoring procedures for future audits and Single Audit submissions. Management will also work more closely with auditors throughout the engagement to help ensure all required information is provided timely and future reporting deadlines are met.

Finding 2024-002 – Noncompliance with Reserve for Replacement Funding Requirements Criteria The Regulatory Agreement and related HUD program requirements require the Organization to make monthly deposits to the Reserve for Replacement account in the amount specified by HUD. These funds are required to be maintained in a separate restricted account to provide for future capital repairs and replacements of the property. Condition During our audit, we noted the Organization did not make all required deposits to the Reserve for Replacement account during the fiscal year ended December 31, 2024. Cause Management indicated the Organization experienced cash flow limitations during the year and did not have adequate monitoring procedures in place to ensure compliance with HUD reserve funding requirements. Effect Failure to maintain the required Reserve for Replacement funding balance constitutes noncompliance with the Regulatory Agreement and HUD requirements. Continued noncompliance may result in increased HUD oversight, restrictions on operations, or other regulatory actions. Questioned Costs None noted. Recommendation We recommend management implement procedures to ensure required Reserve for Replacement deposits are made timely and that reserve balances are regularly monitored for compliance with HUD requirements. Management should also communicate with HUD and the lender, if applicable, regarding a plan to restore the reserve balance to the required level. Views of Responsible Officials and Planned Corrective Action Management acknowledges the finding and plans to improve monitoring of reserve funding requirements and cash flow projections to ensure timely future deposits. Management is also evaluating options to replenish the reserve account balance and will communicate corrective actions to HUD.