Audit 414816

2024-002 – Untimely Submission of Single Audit Reporting Package Type of Finding: Federal Award Finding – Noncompliance Federal Agency: U.S. Department of Housing and Urban Development Federal Programs: All Federal programs subject to the Single Audit Major Program: CDBG – Entitlement/Special Purpose Grants Cluster Assistance Listing Number: 14.218 – Community Development Block Grants/Entitlement Grants Pass-Through Entity: N/A Federal Award Identification Number: N/A Compliance Requirement: Uniform Guidance – Single Audit Reporting Requirements Questioned Costs: None Repeat Finding: No Criteria: Title 2 U.S. Code of Federal Regulations §200.508(a) requires an auditee subject to the Single Audit requirements to arrange for the audit to be performed and submitted in accordance with §200.512. Title 2 U.S. Code of Federal Regulations §200.512(a)(1) requires the audit, data collection form, and reporting package to be submitted to the Federal Audit Clearinghouse within 30 calendar days after the auditee receives the auditor's reports or nine months after the end of the audit period, whichever is earlier, unless an authorized extension has been granted. For the Alliance's fiscal year ended June 30, 2024, the nine-month submission deadline was March 31, 2025. Condition: The Organization was required to submit its Single Audit reporting package for the fiscal year ended June 30, 2024 to the Federal Audit Clearinghouse no later than March 31, 2025. The financial statement audit and Single Audit were not completed by March 31, 2025. Consequently, the Organization did not submit its audit, data collection form, and reporting package to the Federal Audit Clearinghouse within the timeframe required by 2 CFR §200.512(a)(1). Context and Perspective: The condition relates to the Organization's entity-wide responsibility for timely completion and submission of its Single Audit rather than to an individual Federal expenditure or transaction. The Organization's major Federal program for the year ended June 30, 2024 was the CDBG – Entitlement/Special Purpose Grants Cluster. Questioned Costs: None. Cause: As discussed in Finding 2024-001, the Organization experienced changes in management personnel that affected continuity in the financial reporting and audit preparation process. The management transition, including efforts to obtain historical audit information and coordinate communications with the prior auditor, contributed to delays in completing the financial close and providing the information necessary to complete the audit. These circumstances, combined with the absence of a sufficiently formalized year-end closing and audit completion timetable, resulted in the financial statement audit and Single Audit not being completed by the required Federal Audit Clearinghouse filing deadline. Effect: The Organization did not comply with the Single Audit reporting requirements of 2 CFR §200.512(a)(1). The untimely submission also may affect the Organization's ability to qualify as a low-risk auditee under the Uniform Guidance and delays the availability of required audit information to Federal awarding agencies and pass-through entities responsible for oversight of the Organization's federal awards. Recommendation: We recommend that the Organization establish procedures specifically designed to ensure that future Single Audit reporting packages are completed and submitted within the required timeframe. Such procedures should include: • maintaining a compliance calendar that identifies the Federal Audit Clearinghouse filing deadline; • establishing internal financial close and audit completion dates sufficiently in advance of the Federal filing deadline; • assigning responsibility for monitoring the status of the financial statement audit and Single Audit; • preparing the Schedule of Expenditures of Federal Awards concurrently with the annual financial close; • establishing interim deadlines for providing audit schedules and supporting documentation; • promptly communicating significant delays to executive management and those charged with governance; • establishing transition procedures when changes occur in management or financial personnel; and • maintaining appropriate communication with the external auditor throughout the audit process to identify and resolve matters that could delay completion of the audit. Views of Responsible Officials: Management agrees with the finding. See the Organization's separately prepared Corrective Action Plan.