Audit 52830

Finding 2022-001 Auditor scope limitation over applicability and determination of eligibility requirements Federal Agency: Department of Housing and Urban Development Program Title: Moving to Work Demonstration Program Federal Assistance Number: 14.881 Award Number: SC-108463-1 Award Period: July 1, 2021 through June 30, 2022 Federal Agency: Department of Housing and Urban Development Program Title: Moving to Work Demonstration Program Federal Assistance Number: 14.881 Award Number: SC-107790 Award Period: June 1, 2020 through August 31, 2022 Criteria The auditor is required to test compliance requirements that are determined to be direct and material to the Federal major program. Condition/Context for Evaluation We were unable to determine if eligibility was direct and material to the federal major program being tested for the following reasons: ? The grantor and Wellspring are not in agreement as to the responsibilities over the determination of eligibility. ? The contracts lack clarity and are contradictory as to whether Wellspring or other parties are responsible for the determination of eligibility. ? Wellspring asserts and has received an outside legal opinion that Wellspring was not responsible for the determination of eligibility. ? In 2022, Pierce County issued a monitoring report asserting Wellspring was not in compliance with the determination of eligibility. Wellspring has vigorously disputed the findings in the report. Since we cannot obtain sufficient evidence to determine adherence to compliance requirements, we have qualified our opinion on compliance related to eligibility due to a scope limitation. Effect or Potential Effect An opinion on compliance over eligibility requirements was not able to be determined due to a scope limitation. Questioned Costs Not determinable. Cause Wellspring asserts that the contracts between Wellspring and Pierce County (the County) lack any formal guidance from the County. As such, Wellspring implemented internal controls based its interpretation of the compliance requirements. Repeat Finding Repeat of finding 2021-003. Recommendation We recommend that Wellspring implement internal controls to ensure that Wellspring?s responsibilities over compliance with specific grant terms are verified before entering into the award. Views of Responsible Officials of Auditee Management agrees with the finding and has provided the accompanying corrective action plan.

Finding 2022-001 Auditor scope limitation over applicability and determination of eligibility requirements Federal Agency: Department of Housing and Urban Development Program Title: Moving to Work Demonstration Program Federal Assistance Number: 14.881 Award Number: SC-108463-1 Award Period: July 1, 2021 through June 30, 2022 Federal Agency: Department of Housing and Urban Development Program Title: Moving to Work Demonstration Program Federal Assistance Number: 14.881 Award Number: SC-107790 Award Period: June 1, 2020 through August 31, 2022 Criteria The auditor is required to test compliance requirements that are determined to be direct and material to the Federal major program. Condition/Context for Evaluation We were unable to determine if eligibility was direct and material to the federal major program being tested for the following reasons: ? The grantor and Wellspring are not in agreement as to the responsibilities over the determination of eligibility. ? The contracts lack clarity and are contradictory as to whether Wellspring or other parties are responsible for the determination of eligibility. ? Wellspring asserts and has received an outside legal opinion that Wellspring was not responsible for the determination of eligibility. ? In 2022, Pierce County issued a monitoring report asserting Wellspring was not in compliance with the determination of eligibility. Wellspring has vigorously disputed the findings in the report. Since we cannot obtain sufficient evidence to determine adherence to compliance requirements, we have qualified our opinion on compliance related to eligibility due to a scope limitation. Effect or Potential Effect An opinion on compliance over eligibility requirements was not able to be determined due to a scope limitation. Questioned Costs Not determinable. Cause Wellspring asserts that the contracts between Wellspring and Pierce County (the County) lack any formal guidance from the County. As such, Wellspring implemented internal controls based its interpretation of the compliance requirements. Repeat Finding Repeat of finding 2021-003. Recommendation We recommend that Wellspring implement internal controls to ensure that Wellspring?s responsibilities over compliance with specific grant terms are verified before entering into the award. Views of Responsible Officials of Auditee Management agrees with the finding and has provided the accompanying corrective action plan.

Finding 2022-001 Auditor scope limitation over applicability and determination of eligibility requirements Federal Agency: Department of Housing and Urban Development Program Title: Moving to Work Demonstration Program Federal Assistance Number: 14.881 Award Number: SC-108463-1 Award Period: July 1, 2021 through June 30, 2022 Federal Agency: Department of Housing and Urban Development Program Title: Moving to Work Demonstration Program Federal Assistance Number: 14.881 Award Number: SC-107790 Award Period: June 1, 2020 through August 31, 2022 Criteria The auditor is required to test compliance requirements that are determined to be direct and material to the Federal major program. Condition/Context for Evaluation We were unable to determine if eligibility was direct and material to the federal major program being tested for the following reasons: ? The grantor and Wellspring are not in agreement as to the responsibilities over the determination of eligibility. ? The contracts lack clarity and are contradictory as to whether Wellspring or other parties are responsible for the determination of eligibility. ? Wellspring asserts and has received an outside legal opinion that Wellspring was not responsible for the determination of eligibility. ? In 2022, Pierce County issued a monitoring report asserting Wellspring was not in compliance with the determination of eligibility. Wellspring has vigorously disputed the findings in the report. Since we cannot obtain sufficient evidence to determine adherence to compliance requirements, we have qualified our opinion on compliance related to eligibility due to a scope limitation. Effect or Potential Effect An opinion on compliance over eligibility requirements was not able to be determined due to a scope limitation. Questioned Costs Not determinable. Cause Wellspring asserts that the contracts between Wellspring and Pierce County (the County) lack any formal guidance from the County. As such, Wellspring implemented internal controls based its interpretation of the compliance requirements. Repeat Finding Repeat of finding 2021-003. Recommendation We recommend that Wellspring implement internal controls to ensure that Wellspring?s responsibilities over compliance with specific grant terms are verified before entering into the award. Views of Responsible Officials of Auditee Management agrees with the finding and has provided the accompanying corrective action plan.

Finding 2022-001 Auditor scope limitation over applicability and determination of eligibility requirements Federal Agency: Department of Housing and Urban Development Program Title: Moving to Work Demonstration Program Federal Assistance Number: 14.881 Award Number: SC-108463-1 Award Period: July 1, 2021 through June 30, 2022 Federal Agency: Department of Housing and Urban Development Program Title: Moving to Work Demonstration Program Federal Assistance Number: 14.881 Award Number: SC-107790 Award Period: June 1, 2020 through August 31, 2022 Criteria The auditor is required to test compliance requirements that are determined to be direct and material to the Federal major program. Condition/Context for Evaluation We were unable to determine if eligibility was direct and material to the federal major program being tested for the following reasons: ? The grantor and Wellspring are not in agreement as to the responsibilities over the determination of eligibility. ? The contracts lack clarity and are contradictory as to whether Wellspring or other parties are responsible for the determination of eligibility. ? Wellspring asserts and has received an outside legal opinion that Wellspring was not responsible for the determination of eligibility. ? In 2022, Pierce County issued a monitoring report asserting Wellspring was not in compliance with the determination of eligibility. Wellspring has vigorously disputed the findings in the report. Since we cannot obtain sufficient evidence to determine adherence to compliance requirements, we have qualified our opinion on compliance related to eligibility due to a scope limitation. Effect or Potential Effect An opinion on compliance over eligibility requirements was not able to be determined due to a scope limitation. Questioned Costs Not determinable. Cause Wellspring asserts that the contracts between Wellspring and Pierce County (the County) lack any formal guidance from the County. As such, Wellspring implemented internal controls based its interpretation of the compliance requirements. Repeat Finding Repeat of finding 2021-003. Recommendation We recommend that Wellspring implement internal controls to ensure that Wellspring?s responsibilities over compliance with specific grant terms are verified before entering into the award. Views of Responsible Officials of Auditee Management agrees with the finding and has provided the accompanying corrective action plan.