Audit 415601

Criteria: In accordance with the Uniform Guidance, the Single Audit report must be submitted to the designated Federal Audit Clearinghouse (FAC) within 30 days of receipt or 9 months after the end of the audit period, whichever is earlier Condition: The Single Audit report was not completed within 9 months after the end of the audit period. Cause: Personnel turnover within the Organization in addition to a delay in the prior year's audit being completed. Effect: Failing to file a Single Audit report on time can result in several consequences, including federal funding restrictions, penalties, and potential legal actions. These consequences can impact an Organization's ability to receive and utilize federal funds. Repeat Finding: Prior year finding 2023-005. Recommendation: The Organization should close out the year end on a timely basis so that there is adequate time to complete the Single Audit and corresponding report within the required timeframe. Response: Management has engaged a public accounting firm to provide CFO and accounting support and strengthen the year-end closing and audit process. Management is implementing structured account reconciliations, documented review procedures, improved retention of supporting documentation, and internal timelines designed to facilitate timely completion of year-end financial reporting and the Single Audit.

Criteria: When grants are used to pay for rent for all or a part of a structure, the rent paid must be reasonable in relation to rents being charged in the area for comparable space. As part of their internal control policies, the Organization requires that the following documents are included within the tenant file: signed sublease agreement between the Organization and member/tenant and signed master lease agreement between the tenant and landlord. Condition: We were unable to obtain both the signed sublease agreement and master lease agreement for 7 of the 21 tenant files selected for testing. Of those 7 files, there was 1 file where we were unable to obtain either the signed sublease agreement or master lease agreement. The Compliance Supplement does not specify that lease agreements must be examined to verify the rent paid is reasonable in relation to rents being charged in the area for comparable space. In addition, allowable costs/cost principles and activities allowed or unallowed is not applicable to the Continuum of Care Program. Therefore, no instances of noncompliance were identified. Cause: There was a change in personnel within the housing department. Also, the department relocated to a new building during a prior fiscal year and was still getting organized. Effect: While we were able to validate for our selections the rent paid was reasonable in relation to rents being charged in the area for a comparable space for the population tested, there is the potential that the amount being paid on behalf of the tenant is not in line with the agreed upon rate if lease agreements are not retained. Repeat Finding: Prior year finding 2023-006. Recommendation: The Organization should implement procedures to ensure that tenant files include all of the required documentation to support that the rent paid is reasonable in relation to rents being charged in the area for comparable space. Response: Beginning in FY25, the Organization implemented standardized housing compliance procedures, including the use of checklists during lease execution and annual recertification to ensure required master leases, subleases, and supporting documentation are obtained and maintained. Management has also strengthened document retention practices and periodic file reviews to promote complete and accessible tenant files.

Criteria: Rents being charged to the program must be comparable to similar units, in addition to being below fair market rents. The Organization completes a rent reasonableness form for each unit, that evaluates the unit with other comparable units as well as determines if the rent being charged is not greater than the fair market rent. Condition: During our testing for rent reasonableness, we noted the Organization was retroactively completing the rent reasonableness form for a majority of the units, making the determination as to whether or not comparable rent was being paid. Cause: The housing department experienced personnel turnover, alongside strained capacity in the accounting division. Effect: Rent being charged to the program could be in excess of rents for comparable units or greater than the fair market rent. Repeat Finding: Prior year finding 2023-007. Recommendation: The Organization should implement procedures to ensure that rent reasonableness forms are being prepared timely, and that all rents being charged are comparable to similar units and below fair market rent. Response: Management has implemented procedures for rent-reasonableness determinations and supporting comparisons to be completed and documented before lease execution or renewal. Required documentation will be maintained in a centralized electronic repository. Housing staff will receive training on the revised procedures, and management will perform periodic reviews to verify timely completion and retention of required documentation.

Criteria: Patients that participate in the Sliding Fee program fill out an annual income determination form, which includes the patient's sliding fee discount determination. This determination is based on annual income and family size. The annual income determination form is reviewed and approved by supervisors or management. Additionally, each patient claim is reviewed and approved to confirm the proper application of the patient's sliding fee discount. Condition: During our testing of patients participating in the Sliding Fee program, we noted two instances where the sliding fee discount was incorrectly applied. Cause: This was an oversight by management and supervisors of the Sliding Fee program because of turnover within the Organization. Effect: Patients participating in the Sliding Fee program could be charged an incorrect fee based on the wrong sliding fee discount. Repeat Finding: N/A Recommendation: The Organization should implement procedures to ensure that each patient participating in the Sliding Fee program is being charged the correct sliding fee discount based on their annual income and family size. Response: Management will strengthen procedures over the Sliding Fee Discount Program to ensure each patient's discount is accurately determined based on documented annual income and family size and correctly applied to patient charges. Procedures will include documented supervisory review of income determinations and verification that the approved sliding-fee discount is accurately reflected in the patient billing process. Management will also provide appropriate staff training and incorporate periodic monitoring to identify and correct discrepancies timely.