Audit 414437

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Economic Development Initiative, Community Project Funding, and Miscellaneous Grants Assistance Listing Number: 14.251 Pass-Through Agency: N/A Pass-Through Numbers: N/A Award Period: 8/13/2024 – 8/31/2032 Type of Finding: Material Weakness in Internal Control over Compliance. Condition: The Organization did not maintain a written procurement policy that incorporated the procurement standards required by Uniform Guidance during the fiscal year. As a result, procurement activities were not governed by a formally documented policy designed to ensure compliance with federal requirements. Criteria or specific requirement: 2 CFR §200.318 through §200.327 requires non-federal entities expending federal awards to maintain and follow documented procurement policies and procedures that comply with the procurement standards established under Uniform Guidance. Cause: Management had not established or updated procurement policies and procedures to address the specific requirements of Uniform Guidance. Effect: The absence of a compliant procurement policy increases the risk that procurements funded by federal awards may not be conducted in accordance with applicable federal requirements, including competition, documentation, and vendor selection standards. Repeat Finding: No Recommendation: We recommend that management develop, adopt, and implement a written procurement policy that complies with the requirements of 2 CFR §200.318 through §200.327 and ensure personnel involved in procurement activities are trained on the policy and applicable federal requirements. Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Economic Development Initiative, Community Project Funding, and Miscellaneous Grants Assistance Listing Number: 14.251 Pass-Through Agency: N/A Pass-Through Numbers: N/A Award Period: 8/13/2024 – 8/31/2032 Type of Finding: Material Weakness in Internal Control over Compliance Condition: The Organization was unable to provide documentation supporting the amounts included in reimbursement requests submitted under the Federal award. In addition, there was no evidence that reimbursement requests were independently reviewed for accuracy and completeness prior to submission. Criteria: Pursuant to 2 CFR § 200.329, non-Federal entities are responsible for monitoring activities under Federal awards to ensure compliance with applicable Federal requirements and to maintain sufficient oversight of Federal award operations. Such oversight includes maintaining adequate documentation to support reimbursement requests submitted to the grantor and implementing appropriate review controls over those requests. Cause: The Organization has not established or implemented formal policies and procedures governing the preparation, review, approval, and retention of documentation related to Federal reimbursement requests. Effect: Without adequate supporting documentation and evidence of supervisory review, the Organization cannot demonstrate that reimbursement requests were accurate, allowable, and consistent with Federal award requirements. This increases the risk of errors, unsupported costs, and noncompliance with Federal regulations. Repeat Finding: No Recommendation: We recommend that management establish and implement policies to retain proof of amounts requested for reimbursement. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Economic Development Initiative, Community Project Funding, and Miscellaneous Grants Assistance Listing Number: 14.251 Pass-Through Agency: N/A Pass-Through Numbers: N/A Award Period: 8/13/2024 – 8/31/2032 Type of Finding: Material Weakness in Internal Control over Compliance Condition: The Organization did not maintain formal policies and procedures governing Federal grant reporting. Additionally, the Organization was unable to provide evidence that required reports were independently reviewed prior to submission or documentation demonstrating that reports were submitted within required deadlines. Criteria: Pursuant to 2 CFR § 200.329, non-Federal entities are responsible for monitoring activities under Federal awards to ensure compliance with applicable Federal requirements and performance expectations. Effective monitoring includes establishing controls over the preparation, review, submission, and retention of required financial and performance reports. Cause: The Organization has not established or implemented formal policies and procedures for the administration and oversight of Federal award reporting requirements. Effect: Without documented review and submission procedures, the Organization cannot demonstrate compliance with Federal reporting requirements, including the accuracy, completeness, and timely submission of required reports. The lack of supporting documentation also limits the Organization's ability to evidence compliance during monitoring activities or audits. Repeat Finding: No Recommendation: We recommend that management establish and implement formal policies and procedures for Federal award reporting. Such procedures should require: (1) preparation and independent review of all required reports prior to submission, (2) retention of documentation evidencing the review and approval process, and (3) maintenance of proof of submission to demonstrate compliance with reporting deadlines. Implementing these controls will strengthen oversight and provide support for compliance with Federal reporting requirements. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Economic Development Initiative, Community Project Funding, and Miscellaneous Grants Assistance Listing Number: 14.251 Pass-Through Agency: N/A Pass-Through Numbers: N/A Award Period: 8/13/2024 – 8/31/2032 Type of Finding: Material Weakness in Internal Control over Compliance Condition: The Organization did not maintain documentation demonstrating that suspension and debarment verifications were performed for vendors receiving Federal funds. In addition, the Organization was unable to provide evidence of ongoing monitoring or procedures designed to ensure compliance with Federal suspension and debarment requirements. Criteria: Pursuant to 2 CFR § 200.329, non-Federal entities are responsible for monitoring activities under Federal awards to ensure compliance with applicable Federal requirements. This responsibility includes establishing procedures to verify that vendors and contractors receiving Federal funds are not suspended or debarred from participating in federally funded programs. Cause: The Organization has not established or implemented formal policies and procedures for monitoring vendor compliance with suspension and debarment requirements applicable to Federal awards. Effect: Without documented verification and monitoring procedures, the Organization cannot demonstrate compliance with Federal suspension and debarment requirements. As a result, there is an increased risk that Federal funds could be expended with vendors that are ineligible to participate in federally funded programs. Repeat Finding: No Recommendation: We recommend that management establish and implement formal policies and procedures requiring suspension and debarment verification for vendors receiving Federal funds. Such procedures should include documenting initial and periodic verifications, maintaining evidence of the reviews performed, and retaining records sufficient to demonstrate compliance with applicable Federal requirements. Views of responsible officials: There is no disagreement with the audit finding.