Material weakness in internal controls over compliance and instances of noncompliance related to eligibility. Federal Agency: US Department of Housing and Urban Development Program Title: HOME Investment Partnerships Program Assistance Listing Number: 14.239 Award Numbers: HOME Aspenwood Rehabilitation, HOME 1993#3, HOME 1995-3, HOME 2002#11, HCS-15-42-1213-198(1), 200511041001.006 Project Period: October 5, 1995 - September 30, 2055 Criteria 2 U.S. Code of Federal Regulations (CFR) 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Subpart D requires a recipient to ensure that Federal funding is expended and associated programs are implemented in full accordance with the U.S. Constitution, applicable Federal statutes and regulations, including eligibility requirements required by the program. Condition/Context for Evaluation The Agency was required by the grant to annually recertify individuals that resided in the low-income housing properties. During the audit for the year ending June 30, 2025, it was determined that the Agency had failed to complete recertifications for 10% of their HOME unit properties. Cause The Agency faced challenges with their property management company resulting in a delay in certain operations being performed. Effect or Potential Effect The Agency did not apply their stated controls over eligibility consistently. Questioned Costs Not applicable for eligibility. Repeat Finding Not applicable. Recommendation We recommend that the Agency strengthen monitoring over recertification processes to ensure they are being completed as required. Views of Responsible Officials and Corrective Action Plan Management concurs with the finding and has provided the accompanying management corrective action.
Material weakness in internal controls over compliance and instances of noncompliance related to subrecipient monitoring. Federal Agency: Department of Treasury Program Title: Coronavirus State and Local Fiscal Recovery Fund Assistance Listing Number: 21.027 Award Numbers: HCS-23-AR-2110-048, SLFRP0194 Project Period: November 1, 2021 - March 31, 2025 Criteria 2 U.S. Code of Federal Regulations (CFR) 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Subpart D requires a recipient to adopt compliance policies to ensure sub-recipients comply with requirements under the award, and evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of such agreements for the purposes of determining appropriate subrecipient monitoring. Condition/Context for Evaluation During the audit for the year ending June 30, 2025, the Agency did not have a subrecipient monitoring policy and did not conduct monitoring over subrecipients awarded under the program. Cause The Agency did not have a subrecipient monitoring policy that included all the required provisions outlined in 2 CFR 200.332. Effect or Potential Effect The Agency did not fully comply with the requirements regarding subrecipient monitoring. Questioned Costs Not applicable as finding relates to a policy not being in place. Repeat Finding Yes, see finding 2024-002. Recommendation We recommend that the Agency develop a subrecipient monitoring policy that meets the required provisions outlined in 2 CFR 200.332 and ensure a risk assessment is performed over all subrecipients. Views of Responsible Officials of Auditee Management concurs with the finding and has provided the accompanying management corrective action.
Significant deficiency in internal controls over compliance related to allowable costs. Federal Agencies: Department of Treasury Program Titles: Coronavirus State and Local Fiscal Recovery Fund Assistance Listing Numbers: 21.027 Award Numbers: HCS-23-AR-2110-048, EL-23-AR-47-048, EL-23-AR-49-353, and SLFRP0194. Project Period: November 1, 2021 - June 30, 2025 Criteria Under 2 CFR § 200.303, a nonfederal entity is required to establish, document, and maintain effective internal control over federal awards that provides reasonable assurance that the entity is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition/Context for Evaluation During the audit for the year ending June 30, 2025, it was noted that the Agency did not consistently have manager review and approval for employee timesheets during a period of six months. The employees were signing the timesheets, but the control for the manager review and approval was not followed. Cause The Agency had switched payroll systems during that time and there was an expectation that there would be a change in the review process. The updated control was determined not to be effective and the Agency switched back to manual review and approval of timesheets. However, due to employee turnover in the finance department, this switch back to the original control did not occur timely, leading to a lapse in control activities. Effect or Potential Effect The Agency did not apply their stated controls over allowable costs during a six-month period. Questioned Costs Not applicable. Repeat Finding Yes, see finding 2024-003. Recommendation We recommend that the Agency strengthen monitoring over its allowable costs to ensure manager review and approval of employee timesheets is performed consistently and timely throughout the year. Views of Responsible Officials of Auditee Management concurs with the finding and has provided the accompanying management corrective action.
Material weakness in internal controls over compliance and instances of noncompliance related to procurement. Federal Agency: U.S. Department of Treasury Program Titles: Coronavirus State and Local Fiscal Recovery Fund Assistance Listing Number: 21.027 Award Number: EL-23-AR-47-048; HCS-24-AR-2107-048 Project Period: July 1, 2023 - June 30, 2026 Criteria Under 2 CFR § 200.318, a recipient must maintain and use documented procedures for procurement transactions under a federal award or subaward that are consistent with the standards identified under Uniform Guidance. In addition, recipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Condition/Context for Evaluation During the audit for the year ending June 30, 2025, it was noted that the Agency's procurement policy was not in compliance with Uniform Guidance. In addition, there were two selections out of four selections when the Agency was not following its own procurement policy. This is not considered a statistical sample. Cause Housing Hope's procurement policy did not include all the requirements outlined in 2 CFR 200.317 through 200.327. Effect or Potential Effect The Agency did not fully comply with the requirements regarding procurement. Questioned Costs Not applicable as finding relates to a policy not being in compliant. Repeat Finding Not applicable Recommendation We recommend that the Agency update their procurement policy to ensure procurement requirements are in line with Uniform Guidance and that proper documentation is retained for all procurements. Views of Responsible Officials of Auditee Management concurs with the finding and has provided the accompanying management corrective action.
Significant deficiency in internal controls over compliance related to allowable costs. Federal Agency: U.S. Department of Treasury Program Titles: Coronavirus State and Local Fiscal Recovery Fund Assistance Listing Number: 21.027 Award Numbers: EL-23-AR-47-048, EL-23-AR-49-353, and SLFRP0194. Project Period: November 1, 2021 - June 30, 2025 Criteria Under 2 CFR § 200.303, a non-federal entity is required to establish, document, and maintain effective internal control over federal awards that provides reasonable assurance that the entity is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition/Context for Evaluation During the audit for year ended June 30, 2025, it was noted that the allocations related to fringe benefits and other payroll expenses were not reviewed for accuracy, resulting in eight out of 60 payroll costs sampled not being adequately supported by approved allocations. This is not considered a statistical sample. Cause During the year ended June 30, 2025, the Agency was developing the allocation process that was not fully formalized at the beginning of the year. However, due to employee turnover in the finance department, this finalization of controls did not occur timely, leading to a lapse in control activities. Effect or Potential Effect The Agency did not apply their stated controls over allowable costs during the period. Questioned Costs $730.96 Repeat Finding Not applicable Recommendation We recommend that the Agency strengthen review of monthly allocations to ensure calculations are performed accurately. Views of Responsible Officials of Auditee Management concurs with the finding and has provided the accompanying management corrective action.