Audit 403688

2025-001: Lack of Documentation of Suspension/Debarment Testing at Time of Procurement Federal Department: Department of Housing and Urban Development Assistance Listing #: 14.251 Internal Controls Significant Deficiency & Noncompliance Category of Finding – Procurement, Suspension, and Debarment Criteria - In accordance with 2 CFR 200.214 and 2 CFR part 180, recipients of federal funds must not enter into covered transactions with parties that are suspended or debarred. The Uniform Guidance requires that entities verify the exclusion status of vendors or subrecipients by checking the System for Award Management (SAM) Exclusions list (https://sam.gov) prior to entering into a covered transaction and keeping documentation of checking SAM before entering into those contracts. Condition - The Organization has a written policy requiring verification that vendors involved in covered procurement transactions under this program are not suspended or debarred. For the period under audit, program management represented that suspension and debarment checks were performed prior to entering into agreements with vendors subject to this requirement; however, the Organization did not retain documentation evidence that these checks were performed. Context: During the audit, we performed SAM Exclusions checks over all vendors over $25,000 paid under this grant, and no vendors were identified as suspended, debarred, or otherwise excluded. However, documents of the testing performed by the Organization were not properly kept. Cause - Management indicated that while the required checks were performed by the program manager, there was not a formal process to ensure that documentation of the completed SAM checks (such as dated screenshots, printouts, or other electronic evidence) was retained in the procurement or grant files. Effect - Because documentation of the suspension and debarment checks was not retained, the Organization is unable to demonstrate, based solely on its records, that it consistently complied with the suspension and debarment requirements for covered transactions during the period under audit. This represents a weakness in internal control over compliance and results in noncompliance with the documentation expectations for this compliance requirement. Recommendation - We recommend that the Organization strengthen its internal controls over documentation procurement and suspension and debarment for federal programs by: Implementing a monitoring or review control (such as periodic file reviews) to verify that required documentation is consistently maintained. CLARE HOUSING SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended December 31, 2025 Auditee’s comments and response – Clare Housing will continue to conduct verifications which are consistent with the organization’s financial policies by validating the potential vendors’ status in the System for Award Management (www.SAM.gov) portal and document the verification with a screenshot of the validation before any payment to a vendor is completed. Clare Housing will also establish a centralized electronic filing system that houses the documentation for suspension/debarment verification, and will track and report any findings to management, including corrective actions for any recurring deficiencies. Responsible party for corrective action: Zach Petroski, Director of Finance Repeat Finding: No

2025-002: Reporting Submissions Not Performed Timely Federal Department: Department of Housing and Urban Development Assistance Listing #: 14.251 Internal Controls Significant Deficiency & Noncompliance Category of Finding – Reporting Criteria - The entity is required to submit semi-annual performance reports in the Disaster Recovery Grant Reporting (DRGR) system within 30 days after the end of each reporting period (i.e., by July 30, 2025, and January 30, 2026) per the grant agreement. Condition - Based on our testing and discussions with management, the entity prepared the required reports for both reporting periods; however, the reports had not been submitted in DRGR as of the date we performed fieldwork. Cause - According to management, the reports were prepared but not submitted in DRGR by the required deadlines due to inadequate internal controls over the submission process. Specifically, the entity did not have a formal review and reminder process to ensure that semiannual DRGR reports were submitted within the required timeframe. The entity relied on manual tracking by a single staff member, and there was no secondary review to verify that submission in DRGR had occurred by the due date. Context: The DRGR reporting is a new requirement for the Organization and this program is mostly run by a single staff member rather than a team like most of their other programs, so the normal controls in place to ensure reports are file timely did not function for these reports. Effect - Failure to submit required performance reports in DRGR by the established due dates results in noncompliance with the reporting requirements of the grant agreement. Untimely reporting may impair the Federal awarding agency’s ability to monitor the entity’s progress, assess achievement of program objectives, and identify potential issues in a timely manner. Continued noncompliance with reporting requirements could place the entity at risk for additional oversight, conditions on future awards, or other administrative actions by the Federal awarding agency. Recommendation - We recommend that the entity strengthen its internal controls over reporting to ensure timely submission of required reports. At a minimum, the entity should establish written procedures specifying the responsible personnel, reporting calendar, and required timelines for preparing and submitting reports, and implement a control (such as a supervisor review or checklist) to verify and document that each required report has been submitted by the applicable due date. Auditee’s comments and response - Clare Housing will ensure reporting requirements are met by establishing calendar reminders for all reporting requirements. Calendar reminders will include relevant staff, including but not limited to, the Director of Finance and the Director of Supportive Services. The Director of Supportive Services and Director of Finance will ensure submission of any prepared reports in the DRGR (or other relevant reporting) system by the appropriate due date. Responsible party for corrective action: Leah Cameron, Director of Supportive Services Repeat Finding: No