Audit 403810

The organization did not maintain adequate controls over federal grant compliance monitoring, grant financial management, and SEFA reporting. Specifically: • Management did not maintain a formal mechanism to track and document required versus actual matching contributions for the HUD CoC program, and no grant-level calculation was available to demonstrate compliance with the required 25% match requirement. • Written policies and procedures do not address monitoring of the HUD CoC administrative cost limitation. • The accounting system permitted expenditures to be posted outside the applicable grant performance periods, and no formal grant cutoff policy or review control had been established. • Management did not perform documented reviews of transactions recorded near grant period start and end dates to ensure expenditures were recorded in the proper reporting period. • The initial SEFA provided for audit was inaccurate and unsupported by adequate underlying schedules or reconciliations. • Management had not implemented a formal documented review process to evaluate whether grants and expenditures were appropriately included on the SEFA, including evaluation of a significant State-funded capital grant received during the year.

The organization primarily utilizes micro-purchases; however: • Procurement policies are outdated and do not reflect current Uniform Guidance requirements, including micro-purchase standards • No formal process exists to document price reasonableness for micro-purchases • No documented process exists to verify vendors are not suspended or debarred (e.g., SAM.gov) • No evidence of vendor distribution practices (e.g., rotation or comparison) was maintained

During testing of SLFRF expenditures, we noted that certain shared costs (e.g., grocery purchases) were allocated across multiple grants. The allocation methodology was determined by the Executive Director based on which grants required more rapid spend-down. There was no documented allocation policy, formula, or contemporaneous support demonstrating that costs were distributed based on proportional benefit to each funding source.