Audit 412694

Condition 2025-01 The Organization was required to submit its Single Audit reporting package and data collection form for the fiscal year ended December 31, 2022, to the Federal Audit Clearinghouse (FAC). The reporting package was not submitted within the required timeframe. The reporting package was subsequently submitted in April 2026. Criteria 2 CFR Section 200.512(a)(1) requires the audit, data collection form, and reporting package to be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s) or nine months after the end of the audit period, unless an extension is authorized by the cognizant agency for audit or oversight agency for audit. In accordance with 2 CFR Section 200.512(d), the auditee is responsible for electronically submitting the data collection form and reporting package to the Federal Audit Clearinghouse. Cause The Organization did not have adequate procedures or controls in place to monitor and ensure timely completion and submission of its Single Audit reporting package to the Federal Audit Clearinghouse. Effect The Organization did not comply with Federal requirements for timely submission of its Single Audit reporting package. The delayed submission reduced the timeliness of information available to Federal agencies and pass-through entities for oversight of Federal awards and delayed public availability of the audit results. Recommendation We recommend that the Organization establish procedures to monitor Single Audit requirements and ensure that future audit reporting packages and data collection forms are submitted to the Federal Audit Clearinghouse within the timeframe prescribed by 2 CFR Section 200.512. The Organization should assign responsibility for monitoring the audit submission deadline and establish a process for ensuring that any required extension is obtained before the applicable deadline. Views of Responsible Officials In 2026, procedures were implemented to strengthen oversight of Single Audit reporting requirements and ensure timely submission of future reporting packages. Responsibility for monitoring applicable filing deadlines has been assigned to designated finance personnel, with deadlines incorporated into the Organization’s annual audit calendar. Finance personnel will also coordinate with the independent auditors throughout the audit process to monitor completion and submission requirements and will address any potential delays or required extensions prior to the applicable deadline.

Condition 2025-02 The Organization did not have written procedures for determining the allowability of costs charged to Federal awards. In addition, the Organization did not have documented procurement policies and procedures governing procurement transactions under Federal awards. Criteria 2 CFR Section 200.302(b)(7) requires a recipient or subrecipient's financial management system to provide for written procedures for determining the allowability of costs in accordance with Subpart E of 2 CFR Part 200 and the terms and conditions of the Federal award. 2 CFR Section 200.318(a) requires a recipient or subrecipient to maintain and use documented procedures for procurement transactions under a Federal award. The procedures must conform to applicable Federal, State, and local laws and regulations and the standards identified in 2 CFR Sections 200.317 through 200.327. Cause The Organization had not established and implemented formal written policies and procedures to govern Federal award expenditures and procurement activities. Effect The absence of written allowable cost and procurement procedures increases the risk that Federal funds may be used for costs that are not allowable under the terms and conditions of the Federal award or that procurement transactions may not comply with applicable Federal requirements. Recommendation We recommend that the Organization establish, document, and implement written procedures for determining the allowability of costs charged to Federal awards. We also recommend that the Organization establish and implement documented procurement procedures addressing, at a minimum, procurement methods, competition requirements, contractor selection and evaluation, cost and price analysis, contractor responsibility, conflicts of interest, suspension and debarment, applicable contract provisions, procurement records, and other requirements applicable to Federal awards. Views of Responsible Officials In 2026, written procedures governing the allowability of costs charged to Federal awards and procurement activities involving Federal funds were developed, documented, and implemented. Responsibility for implementing and maintaining these procedures has been assigned to the Finance Department. The procedures address applicable Federal requirements for determining allowable costs and procurement activities and will be reviewed periodically and updated as necessary to maintain compliance with applicable Federal requirements.

Condition 2025-03 The Organization did not comply with applicable Federal procurement requirements when selecting the general contractor for construction of its new branch building. The Organization did not publicly solicit the construction contract. Instead, the Organization developed a list of potential construction companies using information obtained from Organization team members, professional consultants, members of the board of directors, volunteers, and community partners. The Organization then directly solicited proposals from five construction companies that it determined were qualified based on their experience and ability to perform a construction project of this nature. No other construction companies were given an opportunity to submit proposals because the Organization did not provide public notice of the procurement. Context The Organization entered into the construction contract prior to 2025 and the construction project was underway before the Organization received Coronavirus State and Local Fiscal Recovery Funds (SLFRF). In 2025, the Organization received approximately $1 million of SLFRF funds through a pass-through entity. Treasury's SLFRF Frequently Asked Questions (FAQ 13.7) indicates that recipients may leverage existing contracts for SLFRF activities if the existing contracts conform to the procurement standards in 2 CFR Part 200. Accordingly, the Organization's existing construction contract was required to conform to the applicable Federal procurement standards. Criteria 2 CFR Section 200.319(a) requires procurement transactions under a Federal award to be conducted in a manner providing full and open competition. For procurements exceeding the applicable simplified acquisition threshold, 2 CFR Section 200.320(b) requires the use of formal procurement methods. Under Section 200.320(b)(2), when the competitive proposal method is used, the request for proposals must be through public notice, and proposals must be solicited from multiple qualified entities. The recipient or subrecipient must also have a written method for conducting technical evaluations and making selections. Cause The Organization did not have adequate procurement policies and procedures to ensure that an existing construction contract used for SLFRF-funded activities was procured in accordance with applicable Federal procurement requirements. The Organization's procurement process relied on a limited group of construction firms identified through internal and community sources rather than providing an opportunity for other qualified firms to compete through a publicly noticed solicitation. Effect The Organization's procurement process limited competition by restricting the opportunity to compete for the construction contract to five firms identified by the Organization. The Organization did not demonstrate that the procurement provided full and open competition as required by Federal procurement requirements. Because the existing construction contract was subsequently leveraged for SLFRF-funded activities, the noncompliant procurement affected the Federal award. The Organization charged approximately $1 million of construction expenditures under the contract to the SLFRF award. Recommendation We recommend that the Organization establish and implement procedures to ensure that procurements used for Federal award activities comply with applicable Federal procurement requirements. The Organization should ensure that applicable formal procurements are publicly solicited, provide full and open competition. The Organization should also maintain documentation sufficient to demonstrate compliance with appropriate 2 CFR Sections when using existing contracts for Federal award activities. Views of Responsible Officials In 2026, procedures to ensure that future procurements associated with Federal awards comply with applicable Federal procurement requirements were developed, documented, and implemented. These procedures include requirements for public solicitation and full and open competition when applicable, as well as review of existing contracts before they are used for Federal award activities. The Organization will maintain appropriate documentation demonstrating compliance with applicable Federal procurement requirements.