Audit 405186

Finding 2025-001 - Untimely Submission of Financial Status and Expenditure Reports, All Major Programs (Repeat) Programs: Ryan White HIV/AIDS (ALN 93.917, $3,137,317); HOPWA (ALN 14.241, $1,851,237); HIV State Services (HHS001317000004, $2,889,482); LIHEAP/CEAP (ALN 93.568, $485,959; contracts 58240004035 and 58940004183); Regional Solid Waste, TCEQ ($214,792) Compliance Requirement: L - Reporting Classification: Significant Deficiency in internal control over compliance; Noncompliance Criteria: Grant contracts require financial status reports and expenditure reports to be submitted within 30 days after each reporting period end (monthly for Ryan White, HOPWA, State Services, and CEAP; quarterly for TCEQ). Condition: Late submissions occurred across all five major programs: Ryan White, 11 of 12 monthly B-13 reports late (average 37.8 days; worst April 2025 at 62 days); HOPWA, 11 of 12 late (average 37.8 days; worst August 2025 at 52 days); State Services, 10 of 12 monthly reports late (average 8.5 days; worst August 2025 at 22 days); CEAP contract 58240004035, 10 of 10 late (average 67 days; worst April 2025 at 103 days); CEAP IIJA contract 58940004183, 10 of 10 late (average 59 days; worst January 2025 at 101 days); TCEQ, 3 of 4 quarterly reports late (fourth quarter at 77 days). Cause: The Finance Director prepares all financial status reports for all programs. The FSR submission calendar implemented as the prior-year corrective action was not operating effectively, and resource constraints exist in a single-person finance preparation function. Effect: Grantor agencies received required financial reports late, impairing their ability to monitor award status, and creating risk of payment delays, award withholding, and high-risk designation consequences. Questioned Costs: None. Late reporting does not affect the allowability of the underlying expenditures. Repeat Finding: Yes. Repeat of Findings 2024-001 (Ryan White) and 2024-003 (State Services); the condition has expanded to all major programs. Recommendation: Implement a hard financial-report close calendar with preparation deadlines 10 days after each period end; cross-train a second preparer; require Executive Director review of the calendar monthly; and track submission dates against deadlines on a dashboard reviewed at each board finance committee meeting. Views of Responsible Officials and Planned Corrective Action: Management's response is presented in the accompanying Corrective Action Plan.

Finding 2025-002 - Untimely Submission of the Single Audit Reporting Package to the Federal Audit Clearinghouse (Repeat) Programs: Entity-wide, all federal awards Compliance Requirement: Audit submission, 2 CFR 200.512 (nine months after fiscal year end) Classification: Noncompliance Criteria: 2 CFR 200.512(a) requires submission of the single audit reporting package to the Federal Audit Clearinghouse within nine months after fiscal year end (June 30, 2026 for the fiscal year ended September 30, 2025). Condition: The fiscal year 2025 single audit is the fourth consecutive audit completed near or after the regulatory deadline. The fiscal year 2022, 2023, and 2024 packages were each submitted late; the fiscal year 2024 package was submitted in March 2026, approximately nine months late. Cause: Delays in audit readiness, including accounting system recovery issues in prior years, delayed availability of client records and monitoring documentation, and compressed engagement timelines. Effect: High-risk auditee designation; the Texas Department of Housing and Community Affairs withheld CEAP award funding as a direct consequence; and potential for additional grantor sanctions and enhanced monitoring. Questioned Costs: None Repeat Finding: Yes. Repeat of Finding 2024-004; fourth consecutive year. Recommendation: Adopt a board-approved audit readiness calendar with records closed and reconciled within 90 days of fiscal year end; engage the auditor by December; deliver complete supporting documentation by February; and target Federal Audit Clearinghouse submission by April each year. Views of Responsible Officials and Planned Corrective Action: Management's response is presented in the accompanying Corrective Action Plan.