Audit 412152

Federal program information: Funding agency: All Programs Title: All Programs Federal Assistance Listing Number: All Programs Compliance Requirement Reporting Award Period: July 1, 2024 to June 30, 2025 Condition: The Organization’s fiscal year ended June 30, 2025, single audit reporting package was not submitted to the Federal Audit Clearinghouse within nine months after the end of the audit period as required by 2 CFR Section 200.50(c). Criteria: The Uniform Guidance requires that the Single Audit reporting package be submitted within nine months after the end of the audit period. Effect: The Organization is not in compliance with reporting requirements of the Uniform Guidance. Questioned Costs: None Cause: The Organization experienced significant turnover during this fiscal year, and it resulted in both operations and closing of the previous fiscal year to be delayed which made everything late. Auditors’ Recommendation: We recommend that the Organization should work to catch up the closing process in order to ensure that the next year’s audit is performed timely in order for the next year’s audit reporting package to be submitted by the federal clearing house due date. Management’s Response: Management acknowledges the finding that for FY ended June 30th, 2025, that the single audit reporting package was not submitted to the Federal Audit Clearinghouse within nine months, as required by 2 CFR §200.50(c). Management will improve timeliness by re-establishing a single-audit close timeline with deadlines starting earlier in the audit period. Management has assigned responsibility for preparation and submission of the reporting package to ensure no single handoff delays completion by implementing a review and quality-check process to confirm the package is complete prior to submission therefore ensuring that the organization can submit by the required Federal Audit Clearinghouse due date each year. Management plans to be prepared to submit the next Single Audit reporting package by the required due date, with the updated process effective for the FY ending June 30th, 2026, audit cycle.

2025‐006 — Compliance over Rent Reasonableness – (Significant Deficiency) Federal Program Information: Funding Agency: Housing and Urban Development Title: Continuum of Care Assistance Listing Number: 14.267 Compliance Requirement: Special Tests and Provisions Award Year: July 1, 2024 to June 30, 2025 Condition: During our audit, we noted that Hopeworks was not following its policy for rent reasonableness. Five of the eight tenants tested had at least one comparable unit being built over 10 years different from the unit the tenant was living in. Criteria: Hopeworks has policies that when determining rent reasonableness, Hopeworks must review 3 comparable units documented to determine rent reasonableness and those comparable units must have been built within 10 years of the year the unit that tenant is living in was built. Effect: Hopeworks did not follow the required test for the rent reasonableness requirement. Questioned Costs: None Cause: There was turnover in the staff performing these tests during the fiscal year under audit and when the tests were being done they were done by employees who didn’t receive the proper training to understand what all was required for these procedures. Auditors’ Recommendation: We recommend that Hopeworks establish a system of internal controls to ensure that these requirements are documented and easily attainable so that if there is turnover the new staff know what they need to do. Management’s Response: Management concurs that program staff did not consistently follow the organization's written Rent Reasonableness Policy, which included a provision limiting eligible units to those less than 10 years old. Upon review of the applicable HUD Continuum of Care regulations and guidance, management determined that HUD rent reasonableness requirements focus on comparability of rent based on factors such as location, size, type, quality, amenities, facilities, and management services. HUD does not establish a prohibition based solely on the age of a unit. The units identified in the audit were determined to be rent reasonable based on market comparisons and otherwise met applicable program requirements. However, management acknowledges that the organization's written policy had not been updated to align with current HUD requirements and therefore was not followed as written. Corrective action has been taken to revise the Rent Reasonableness Policy to remove the age-based restriction and align the policy with HUD requirements. Staff have been retrained on the revised policy, and management review controls have been implemented to ensure future rent reasonableness determinations are documented and performed consistently with HUD regulations