Audit 414293

Program Title: All federal programs Federal Financial Assistance Listing Number: N/A Federal Award Year: 2022, 2023, 2024, and 2025 Federal Agency: All federal agencies Type of Finding: Material Weakness in Internal Control over Compliance Criteria: As required under the Uniform Guidance, the single audit and data collection reporting package must be submitted to the Federal Audit Clearinghouse within 9 months after the end of the audit period. Condition: For the years ended September 30, 2022, 2023, 2024, and 2025, the financial statement audit and single audit were not scheduled or completed in a timely manner. As a result, the single audit and data collection reporting package for these years were not completed or submitted to the Federal Audit Clearinghouse within the required timeframe. Cause: The FY2023 audit was not completed and issued until October 2025, which delayed commencement of the FY2024 audit until August 2026. Effect: The financial statements and single audit for FY2024 were not completed in a timely manner, and AIRS remains out of compliance with the required submission timing under the Uniform Guidance. Questioned Costs: None reported Repeat Finding from Prior Year: Yes (Finding 2023-004, repeat of 2022-004) Recommendation: AIRS should continue working with the audit firm on a schedule that brings future audits and single audits current and ensures the data collection reporting package is submitted to the Federal Audit Clearinghouse by the due date for FY2025 and future years. Views of Responsible Officials: Management concurs with this audit finding Corrective Action Plan: See corrective action plan

Program Title: All federal programs Federal Financial Assistance Listing Number: N/A Federal Award Year: 2024 Federal Agency: All federal agencies Type of Finding: Material Weakness in Internal Control over Compliance Criteria: A non-federal entity is required to have written procurement policies and procedures in compliance with the Uniform Guidance (2 CFR 200.318 through 200.327), and, if it has a parent, affiliate, or subsidiary organization, written standards of conduct covering organizational conflicts of interest. Condition: AIRS has not completed written purchasing/procurement policies and procedures as required by 2 CFR 200.318(a) as of September 30, 2024. As an affiliate of the Ethiopian Community Development Council (ECDC), AIRS continues to meet the “affiliate” definition under 2 CFR 200.318(c)(2). Cause: Management has not yet fully created certain written policies and procedures as required under 2 CFR 200.318. Effect: AIRS is not in compliance with the written policies and procedures requirements of 2 CFR 200.318. Questioned Costs: None reported Repeat Finding from Prior Year: Yes (Finding 2023-005, repeat of 2022-005) Recommendation: AIRS should complete its written procurement policies and procedures and standards of conduct covering organizational conflicts of interest as soon as possible, ideally prior to the start of the FY2025 audit. Views of Responsible Officials: Management concurs with this audit finding Corrective Action Plan: See corrective action plan

Program Title: Refugee and Entrant Assistance State Administered Programs — Afghan Supplemental Services (Contract No. CTR061924) Federal Financial Assistance Listing Number: 93.566 Federal Award Year: 2024 Federal Agency: U.S. Department of Health and Human Services, passed through the Arizona Department of Economic Security Type of Finding: Material Weakness in Internal Control over Compliance / Scope Limitation resulting in Disclaimer of Opinion Criteria: Compliance requirements identified as direct and material to Contract No. CTR061924 under ALN 93.566 include Activities Allowed or Unallowed (A), Allowable Costs/Cost Principles (B), Cash Management (C), Eligibility (E), Period of Performance (H), and Reporting (L), per the 2025 OMB Compliance Supplement, Part 4, ALN 93.566. Condition: Of these six requirements, only the administrative-claim component of Allowable Costs (B) was substantively tested, using AIRS’s own accounting records. The remaining five requirements could not be tested because the evidence needed — ARRPODS-based unit/task activity records and client A-number eligibility data — was inaccessible. The Arizona Department of Economic Security (ADES) confirmed in writing (correspondence dated September 10, 2026) that this data is currently unavailable due to a stateside data conversion, a condition compounded by the inactive status of Contract No. CTR061924 for FY2024 and FY2025. Cause: This is an inherent scope limitation arising from circumstances beyond the control of both AIRS and the engagement team, rather than a restriction imposed by management, consistent with AU-C §705.13. AIRS does not maintain source documentation independent of ADES’s ARRPODS system sufficient to support billed units under CTR061924 in the event ARRPODS is unavailable. Effect: The engagement team was unable to obtain sufficient appropriate audit evidence regarding compliance with five of six direct-and-material requirements for a contract representing approximately 79% of the dollar volume and 64% of the invoices tested within ALN 93.566. Because AIRS invoices ADES across all four ALN 93.566 contracts on a combined, purpose-code basis, this evidence gap could not be isolated to a separable population of transactions and is pervasive to the program as a whole, resulting in a disclaimer of opinion on compliance for ALN 93.566. Because CTR061924 revenue is recognized on the same unit-earned basis for financial reporting purposes, the same evidence gap also contributed to the qualified opinion on the basic financial statements taken as a whole (see the Independent Auditor’s Report).Questioned Costs: Undeterminable due to the scope limitation. An estimated $600,000–$650,000 of ALN 93.566 revenue and the related receivable could not be substantiated (applying the approximate 79% sample proportion to total program revenue of approximately $800,000 on a pre-adjustment, cash basis). Following the GAAP accrual-basis correction described in Finding 2024-002, total ALN 93.566 program revenue increased to $1,122,212, as reflected in the Schedule of Expenditures of Federal Awards; the $600,000–$650,000 estimate reflects the pre-adjustment base and was not recalculated on the adjusted amount. This amount is not characterized as a questioned cost in the 2 CFR 200.516 sense because it reflects an inability to test, rather than an identified instance of noncompliance or unallowable cost. Repeat Finding from Prior Year: No — new condition for FY2024. (ALN 93.566 received an unmodified compliance opinion in FY2023; the qualified opinion issued for FY2023 pertained to the separate ALN 93.567 program’s matching requirement, Finding 2023-006.) Recommendation: AIRS should coordinate with ADES on restoring ARRPODS access and evaluate whether independently maintained case-management task logs or client files could substitute for ARRPODS extracts in future periods, so that a similar scope limitation does not recur for FY2025. Views of Responsible Officials: Management concurs with this audit finding Corrective Action Plan: See corrective action plan