Audit 411579

Allowable Activities Federal Agency: Department of Agriculture Federal Program: Technical Assistance and Training Grant Assistance Listing Number: 10.761 Award Period: March 1, 2023 – September 30, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matter Criteria or specific requirement: 2 CFR 200.403 requires a cost be necessary and reasonable for performance of the award. Condition: One (1) of fifteen (15) disbursement transactions tested revealed a duplicate employee reimbursement charged to the federal award. The same supporting invoice was submitted and reimbursed through two separate expense reports in different months, resulting in duplicate reimbursement of $527.95. Questioned costs: None. Context: During testing of 15 disbursement transactions charged to the major program, we identified one instance in which an employee reimbursement was processed twice. The same invoice was included with two separately approved expense reports submitted in different months. Cause: The Organization's reimbursement review controls did not detect that the same expense had previously been submitted and reimbursed. Both expense reports were approved in accordance with established procedures, and the duplicate charge was not identified during the review process. Effect: As a result, expenditures charged to the federal award were overstated due to a duplicate reimbursement. Repeat finding: No. Recommendation: We recommend management evaluate the circumstances surrounding the duplicate reimbursement and assess whether enhancements to existing reimbursement review procedures are necessary to identify and prevent duplicate reimbursement requests from being processed and charged to federal awards. View of responsible officials: There is no disagreement with the audit finding.

Procurement Federal Agency: Department of Housing and Urban Development Federal Program: Economic Development Initiative, Community Project Funding, and Miscellaneous Grants Assistance Listing Number: 14.251 Award Period: February 5, 2024 – August 31, 2031 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matter Criteria or specific requirement: 2 CFR §§200.318–200.326 require entities to maintain records supporting the procurement method, vendor selection, and basis for price. Condition: Of four procurement transactions tested, one lacked sufficient documentation to demonstrate compliance with Uniform Guidance procurement requirements. Questioned costs: None. Context: We tested four procurement transactions within the major program; one transaction did not include sufficient supporting documentation to demonstrate compliance. Cause: Controls over procurement documentation and review were not consistently applied. Effect: Noncompliance occurred for the transaction tested, increasing the risk of undetected noncompliance and questioned costs. Repeat finding: No. Recommendation: We recommend the Organization strengthen controls to ensure procurement documentation is consistently obtained, retained, and reviewed for compliance. View of responsible officials: There is no disagreement with the audit finding.

Suspension and Debarment Federal Agency: Department of Housing and Urban Development Federal Program: Economic Development Initiative, Community Project Funding, and Miscellaneous Grants Assistance Listing Number: 14.251 Award Period: February 5, 2024 – August 31, 2031 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matter Criteria or specific requirement: Per 2 CFR 200.214 and 2 CFR 180, nonfederal entities must not contract with or make awards to parties that are suspended or debarred and must verify the status of covered parties (e.g., through SAM.gov) and maintain documentation of that verification. Condition: Of four procurement transactions tested, four lacked documentation evidencing suspension and debarment verification. Questioned costs: None. Context: We tested 4 vendor transactions within the major program; none included documentation evidencing suspension and debarment verification. Cause: The deficiency appears to be due to the absence of a formal process and/or review control to document suspension and debarment verification for vendors prior to contract execution or payment. Effect: Failure to document suspension and debarment checks increases the risk of contracting with ineligible vendors and may result in noncompliance and questioned costs. Repeat finding: No. Recommendation: We recommend the Organization implement a formal procedure to verify and document suspension and debarment status (e.g., SAM.gov checks) for all covered transactions, including retaining evidence of the verification and incorporating a review control prior to payment or contract approval. View of responsible officials: There is no disagreement with the audit finding.

Reporting Federal Agency: Department of Housing and Urban Development Federal Program: Economic Development Initiative, Community Project Funding, and Miscellaneous Grants Assistance Listing Number: 14.251 Award Period: February 5, 2024 – August 31, 2031 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matter Criteria or specific requirement: Per 2 CFR 200.327–200.329 and applicable award terms, nonfederal entities are required to submit accurate and timely financial and performance reports as specified by the federal awarding agency. Condition: Four (4) of four (4) reports tested were not submitted by the required deadlines. Questioned costs: None. Context: We tested 4 required reports for the major program; none (0 of 4) were submitted in accordance with required deadlines. Cause: The deficiency appears to be due to inadequate monitoring of reporting deadlines and the absence of a formal review or tracking process to ensure timely submission. Effect: Failure to submit reports timely may result in noncompliance with grant requirements, potential delays in funding, and increased risk of additional oversight by the awarding agency. Repeat finding: No. Recommendation: We recommend the Organization implement a formal reporting calendar and review control process to track due dates, ensure timely submission, and retain documentation of report filings in accordance with federal requirements. View of responsible officials: There is no disagreement with the audit finding.