Audit 7859

Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Choice Voucher Program Federal Assistance Listing Number: 14.871 Pass-Through Agencies: Faribault and Le Sueur County Housing and Redevelopment Authorities Pass-Through Number(s): MN200VO/MN171VO Award Period: 3/1/21-3/31/23 Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Housing Choice Voucher program requires quality control over reasonableness testing on both new leased units, selection from the waiting list, and quality control reinspections. Condition: Management does not have a system in place to track changes in rent charged by landlords from the current year to the prior year to verify the change is reasonable. There is no system in place to track historical admissions of tenants from the waiting list. There is no system in place to identify re-inspections separate from initial inspections. Therefore, a complete population was unable to be obtained in order to perform required testing of special provisions. Questioned Costs: None Context: Management does not maintain listing of contract rent changes, admissions of tenants from the waiting list, or re-inspections performed. Cause: Management did not have a tenant management computer program in place during 2023. Effect: Noncompliance with HUD requirement Repeat Finding: No Recommendation: We recommend that management implements a tenant management software system which will track the contract rents annually, admissions from the waiting list, and re-inspections performed. Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Choice Voucher Program Federal Assistance Listing Number: 14.871 Pass-Through Agencies: Faribault and Le Sueur County Housing and Redevelopment Authorities Pass-Through Number(s): MN200VO/MN171VO Award Period: 3/1/21-3/31/23 Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Housing Choice Voucher program requires rent reasonableness calculations to be performed for each new contract. Condition: Management does not perform rent reasonableness calculations on new tenants. Questioned Costs: None Context: During testing, zero of five tenants selected had documentation of rent reasonableness calculations performed. Cause: Management does not have a process in place to calculate reasonable rent upon admission of new tenants to the program. Effect: Rent to owner could be unreasonable and noncompliant with the Organization’s Administrative Plan and HUD requirements. Repeat Finding: No Recommendation: We recommend that management implements a process to perform rent reasonableness calculation and retain documentation. Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Choice Voucher Program Federal Assistance Listing Number: 14.871 Pass-Through Agencies: Faribault and Le Sueur County Housing and Redevelopment Authorities Pass-Through Number(s): MN200VO/MN171VO Award Period: 3/1/21-3/31/23 Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Housing Choice Voucher program requires inspections and reinspections to be performed within specified timeframes. Condition: Management did not perform unit inspections and re-inspections if repairs were required within required timeframes. Questioned Costs: None Context: During testing, two of six inspections were re-inspections for units requiring repairs and were not completed within the required 30 days. Four of six inspections selected were not completed within two years of previous inspection. Cause: Management does not have a process in place to calculate reasonable rent upon admission of new tenants to the program. Effect: Untimely inspections could result in unresolved repairs as well as noncompliance with the Organization’s Administrative Plan and HUD requirements. Repeat Finding: No Recommendation: We recommend that management implements a process to perform inspections and re-inspections within the timeframes required by the Administrative Plan. Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Choice Voucher Program Federal Assistance Listing Number: 14.871 Pass-Through Agencies: Faribault and Le Sueur County Housing and Redevelopment Authorities Pass-Through Number(s): MN200VO/MN171VO Award Period: 3/1/21-3/31/23 Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Housing Choice Voucher program requires documentation of admission of new tenants from the waiting list and signed Housing Assistance Payment (HAP) contract. Condition: Management did not retain applicable documentation of a new tenant being admitted to the program or retain documentation supporting admission to the program in proper order. Questioned Costs: None Context: During testing, one of five new tenants selected did not have signed HAP contract or other documentation retained. We were unable to verify tenants were admitted to the program in the proper order. Cause: Documentation was misplaced and unable to be located. Effect: Improper admission from the waiting list could result in noncompliance with the Organization’s Administrative Plan and HUD requirements. Repeat Finding: No Recommendation: We recommend that management retains all documentation related to new tenants being admitted to program. Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Choice Voucher Program Federal Assistance Listing Number: 14.871 Pass-Through Agencies: Faribault and Le Sueur County Housing and Redevelopment Authorities Pass-Through Number(s): MN200VO/MN171VO Award Period: 3/1/21-3/31/23 Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Housing Choice Voucher program requires quality control over reasonableness testing on both new leased units, selection from the waiting list, and quality control reinspections. Condition: Management does not have a system in place to track changes in rent charged by landlords from the current year to the prior year to verify the change is reasonable. There is no system in place to track historical admissions of tenants from the waiting list. There is no system in place to identify re-inspections separate from initial inspections. Therefore, a complete population was unable to be obtained in order to perform required testing of special provisions. Questioned Costs: None Context: Management does not maintain listing of contract rent changes, admissions of tenants from the waiting list, or re-inspections performed. Cause: Management did not have a tenant management computer program in place during 2023. Effect: Noncompliance with HUD requirement Repeat Finding: No Recommendation: We recommend that management implements a tenant management software system which will track the contract rents annually, admissions from the waiting list, and re-inspections performed. Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Choice Voucher Program Federal Assistance Listing Number: 14.871 Pass-Through Agencies: Faribault and Le Sueur County Housing and Redevelopment Authorities Pass-Through Number(s): MN200VO/MN171VO Award Period: 3/1/21-3/31/23 Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Housing Choice Voucher program requires rent reasonableness calculations to be performed for each new contract. Condition: Management does not perform rent reasonableness calculations on new tenants. Questioned Costs: None Context: During testing, zero of five tenants selected had documentation of rent reasonableness calculations performed. Cause: Management does not have a process in place to calculate reasonable rent upon admission of new tenants to the program. Effect: Rent to owner could be unreasonable and noncompliant with the Organization’s Administrative Plan and HUD requirements. Repeat Finding: No Recommendation: We recommend that management implements a process to perform rent reasonableness calculation and retain documentation. Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Choice Voucher Program Federal Assistance Listing Number: 14.871 Pass-Through Agencies: Faribault and Le Sueur County Housing and Redevelopment Authorities Pass-Through Number(s): MN200VO/MN171VO Award Period: 3/1/21-3/31/23 Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Housing Choice Voucher program requires inspections and reinspections to be performed within specified timeframes. Condition: Management did not perform unit inspections and re-inspections if repairs were required within required timeframes. Questioned Costs: None Context: During testing, two of six inspections were re-inspections for units requiring repairs and were not completed within the required 30 days. Four of six inspections selected were not completed within two years of previous inspection. Cause: Management does not have a process in place to calculate reasonable rent upon admission of new tenants to the program. Effect: Untimely inspections could result in unresolved repairs as well as noncompliance with the Organization’s Administrative Plan and HUD requirements. Repeat Finding: No Recommendation: We recommend that management implements a process to perform inspections and re-inspections within the timeframes required by the Administrative Plan. Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Choice Voucher Program Federal Assistance Listing Number: 14.871 Pass-Through Agencies: Faribault and Le Sueur County Housing and Redevelopment Authorities Pass-Through Number(s): MN200VO/MN171VO Award Period: 3/1/21-3/31/23 Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Housing Choice Voucher program requires documentation of admission of new tenants from the waiting list and signed Housing Assistance Payment (HAP) contract. Condition: Management did not retain applicable documentation of a new tenant being admitted to the program or retain documentation supporting admission to the program in proper order. Questioned Costs: None Context: During testing, one of five new tenants selected did not have signed HAP contract or other documentation retained. We were unable to verify tenants were admitted to the program in the proper order. Cause: Documentation was misplaced and unable to be located. Effect: Improper admission from the waiting list could result in noncompliance with the Organization’s Administrative Plan and HUD requirements. Repeat Finding: No Recommendation: We recommend that management retains all documentation related to new tenants being admitted to program. Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

2023-001: Activities Allowed or Unallowed Federal Agencies: U.S. Department of Health and Human Services; U.S. Department of Labor Federal Programs: Temporary Assistance for Needy Families; Workforce Innovation and Opportunity Act Pass-Through Agencies: None; South Central Workforce Council Pass-Through Number(s): None; 1073600 Award Period: 1/1/22-12/31/22; 4/1/21-3/31/23 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Approval of general disbursements Condition: There was no documentation of approval of invoices prior to payment. Questioned Costs: None Context: One of 35 disbursements; one of 37 disbursements Cause: Department supervisor approval was not obtained prior to payment of invoices Effect: Without proper of approval, there is a risk of disallowed funds being disbursed Repeat Finding: No Recommendation: We recommend obtaining documentation of approval for all invoices Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

2023-001: Activities Allowed or Unallowed Federal Agencies: U.S. Department of Health and Human Services; U.S. Department of Labor Federal Programs: Temporary Assistance for Needy Families; Workforce Innovation and Opportunity Act Pass-Through Agencies: None; South Central Workforce Council Pass-Through Number(s): None; 1073600 Award Period: 1/1/22-12/31/22; 4/1/21-3/31/23 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Approval of general disbursements Condition: There was no documentation of approval of invoices prior to payment. Questioned Costs: None Context: One of 35 disbursements; one of 37 disbursements Cause: Department supervisor approval was not obtained prior to payment of invoices Effect: Without proper of approval, there is a risk of disallowed funds being disbursed Repeat Finding: No Recommendation: We recommend obtaining documentation of approval for all invoices Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

2023-001: Activities Allowed or Unallowed Federal Agencies: U.S. Department of Health and Human Services; U.S. Department of Labor Federal Programs: Temporary Assistance for Needy Families; Workforce Innovation and Opportunity Act Pass-Through Agencies: None; South Central Workforce Council Pass-Through Number(s): None; 1073600 Award Period: 1/1/22-12/31/22; 4/1/21-3/31/23 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Approval of general disbursements Condition: There was no documentation of approval of invoices prior to payment. Questioned Costs: None Context: One of 35 disbursements; one of 37 disbursements Cause: Department supervisor approval was not obtained prior to payment of invoices Effect: Without proper of approval, there is a risk of disallowed funds being disbursed Repeat Finding: No Recommendation: We recommend obtaining documentation of approval for all invoices Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

2023-001: Activities Allowed or Unallowed Federal Agencies: U.S. Department of Health and Human Services; U.S. Department of Labor Federal Programs: Temporary Assistance for Needy Families; Workforce Innovation and Opportunity Act Pass-Through Agencies: None; South Central Workforce Council Pass-Through Number(s): None; 1073600 Award Period: 1/1/22-12/31/22; 4/1/21-3/31/23 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Approval of general disbursements Condition: There was no documentation of approval of invoices prior to payment. Questioned Costs: None Context: One of 35 disbursements; one of 37 disbursements Cause: Department supervisor approval was not obtained prior to payment of invoices Effect: Without proper of approval, there is a risk of disallowed funds being disbursed Repeat Finding: No Recommendation: We recommend obtaining documentation of approval for all invoices Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

Federal Agency: U.S. Department of Labor Federal Program: Workforce Innovation and Opportunity Act Federal Assistance Listing Number: 17.258 Pass-Through Agency: MN Department of Employment and Economic Development/South Central Workforce Council Pass-Through Number(s): 1075301 Award Period: 12/23/21-3/31/23 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Indirect Costs Condition: No documentation of approval of indirect cost allocation journal entries. Questioned Costs: None Context: During testing of indirect cost allocations, three of seven allocations tested related to the allocation of payroll for the Workforce Council Executive Director. It was noted the Workforce Council Executive Director’s timesheet used in the allocation as well as the allocation journal entry was not approved. Cause: No journal entry review process for Workforce Council Executive Director payroll allocation. Effect: Incorrect indirect cost allocation could occur causing noncompliance with program requirements. Repeat Finding: No Recommendation: We recommend that management implements journal entry review process for Workforce Council Executive Director indirect cost allocations. Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

Federal Agency: U.S. Department of Labor Federal Program: Workforce Innovation and Opportunity Act Federal Assistance Listing Number: 17.258 Pass-Through Agency: MN Department of Employment and Economic Development/South Central Workforce Council Pass-Through Number(s): 1075301 Award Period: 12/23/21-3/31/23 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Indirect Costs Condition: No documentation of approval of indirect cost allocation journal entries. Questioned Costs: None Context: During testing of indirect cost allocations, three of seven allocations tested related to the allocation of payroll for the Workforce Council Executive Director. It was noted the Workforce Council Executive Director’s timesheet used in the allocation as well as the allocation journal entry was not approved. Cause: No journal entry review process for Workforce Council Executive Director payroll allocation. Effect: Incorrect indirect cost allocation could occur causing noncompliance with program requirements. Repeat Finding: No Recommendation: We recommend that management implements journal entry review process for Workforce Council Executive Director indirect cost allocations. Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

Federal Agency: U.S. Department of Labor Federal Program: Workforce Innovation and Opportunity Act Federal Assistance Listing Number: 17.258 Pass-Through Agency: MN Department of Employment and Economic Development/South Central Workforce Council Pass-Through Number(s): 1075301 Award Period: 12/23/21-3/31/23 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Indirect Costs Condition: No documentation of approval of indirect cost allocation journal entries. Questioned Costs: None Context: During testing of indirect cost allocations, three of seven allocations tested related to the allocation of payroll for the Workforce Council Executive Director. It was noted the Workforce Council Executive Director’s timesheet used in the allocation as well as the allocation journal entry was not approved. Cause: No journal entry review process for Workforce Council Executive Director payroll allocation. Effect: Incorrect indirect cost allocation could occur causing noncompliance with program requirements. Repeat Finding: No Recommendation: We recommend that management implements journal entry review process for Workforce Council Executive Director indirect cost allocations. Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

Federal Agency: U.S. Department of Labor Federal Program: Workforce Innovation and Opportunity Act Federal Assistance Listing Number: 17.258 Pass-Through Agency: MN Department of Employment and Economic Development/South Central Workforce Council Pass-Through Number(s): 1075301 Award Period: 12/23/21-3/31/23 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Indirect Costs Condition: No documentation of approval of indirect cost allocation journal entries. Questioned Costs: None Context: During testing of indirect cost allocations, three of seven allocations tested related to the allocation of payroll for the Workforce Council Executive Director. It was noted the Workforce Council Executive Director’s timesheet used in the allocation as well as the allocation journal entry was not approved. Cause: No journal entry review process for Workforce Council Executive Director payroll allocation. Effect: Incorrect indirect cost allocation could occur causing noncompliance with program requirements. Repeat Finding: No Recommendation: We recommend that management implements journal entry review process for Workforce Council Executive Director indirect cost allocations. Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

2023-001: Activities Allowed or Unallowed Federal Agencies: U.S. Department of Health and Human Services; U.S. Department of Labor Federal Programs: Temporary Assistance for Needy Families; Workforce Innovation and Opportunity Act Pass-Through Agencies: None; South Central Workforce Council Pass-Through Number(s): None; 1073600 Award Period: 1/1/22-12/31/22; 4/1/21-3/31/23 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Approval of general disbursements Condition: There was no documentation of approval of invoices prior to payment. Questioned Costs: None Context: One of 35 disbursements; one of 37 disbursements Cause: Department supervisor approval was not obtained prior to payment of invoices Effect: Without proper of approval, there is a risk of disallowed funds being disbursed Repeat Finding: No Recommendation: We recommend obtaining documentation of approval for all invoices Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

2023-001: Activities Allowed or Unallowed Federal Agencies: U.S. Department of Health and Human Services; U.S. Department of Labor Federal Programs: Temporary Assistance for Needy Families; Workforce Innovation and Opportunity Act Pass-Through Agencies: None; South Central Workforce Council Pass-Through Number(s): None; 1073600 Award Period: 1/1/22-12/31/22; 4/1/21-3/31/23 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Approval of general disbursements Condition: There was no documentation of approval of invoices prior to payment. Questioned Costs: None Context: One of 35 disbursements; one of 37 disbursements Cause: Department supervisor approval was not obtained prior to payment of invoices Effect: Without proper of approval, there is a risk of disallowed funds being disbursed Repeat Finding: No Recommendation: We recommend obtaining documentation of approval for all invoices Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

2023-001: Activities Allowed or Unallowed Federal Agencies: U.S. Department of Health and Human Services; U.S. Department of Labor Federal Programs: Temporary Assistance for Needy Families; Workforce Innovation and Opportunity Act Pass-Through Agencies: None; South Central Workforce Council Pass-Through Number(s): None; 1073600 Award Period: 1/1/22-12/31/22; 4/1/21-3/31/23 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Approval of general disbursements Condition: There was no documentation of approval of invoices prior to payment. Questioned Costs: None Context: One of 35 disbursements; one of 37 disbursements Cause: Department supervisor approval was not obtained prior to payment of invoices Effect: Without proper of approval, there is a risk of disallowed funds being disbursed Repeat Finding: No Recommendation: We recommend obtaining documentation of approval for all invoices Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Choice Voucher Program Federal Assistance Listing Number: 14.871 Pass-Through Agencies: Faribault and Le Sueur County Housing and Redevelopment Authorities Pass-Through Number(s): MN200VO/MN171VO Award Period: 3/1/21-3/31/23 Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Housing Choice Voucher program requires quality control over reasonableness testing on both new leased units, selection from the waiting list, and quality control reinspections. Condition: Management does not have a system in place to track changes in rent charged by landlords from the current year to the prior year to verify the change is reasonable. There is no system in place to track historical admissions of tenants from the waiting list. There is no system in place to identify re-inspections separate from initial inspections. Therefore, a complete population was unable to be obtained in order to perform required testing of special provisions. Questioned Costs: None Context: Management does not maintain listing of contract rent changes, admissions of tenants from the waiting list, or re-inspections performed. Cause: Management did not have a tenant management computer program in place during 2023. Effect: Noncompliance with HUD requirement Repeat Finding: No Recommendation: We recommend that management implements a tenant management software system which will track the contract rents annually, admissions from the waiting list, and re-inspections performed. Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Choice Voucher Program Federal Assistance Listing Number: 14.871 Pass-Through Agencies: Faribault and Le Sueur County Housing and Redevelopment Authorities Pass-Through Number(s): MN200VO/MN171VO Award Period: 3/1/21-3/31/23 Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Housing Choice Voucher program requires rent reasonableness calculations to be performed for each new contract. Condition: Management does not perform rent reasonableness calculations on new tenants. Questioned Costs: None Context: During testing, zero of five tenants selected had documentation of rent reasonableness calculations performed. Cause: Management does not have a process in place to calculate reasonable rent upon admission of new tenants to the program. Effect: Rent to owner could be unreasonable and noncompliant with the Organization’s Administrative Plan and HUD requirements. Repeat Finding: No Recommendation: We recommend that management implements a process to perform rent reasonableness calculation and retain documentation. Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Choice Voucher Program Federal Assistance Listing Number: 14.871 Pass-Through Agencies: Faribault and Le Sueur County Housing and Redevelopment Authorities Pass-Through Number(s): MN200VO/MN171VO Award Period: 3/1/21-3/31/23 Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Housing Choice Voucher program requires inspections and reinspections to be performed within specified timeframes. Condition: Management did not perform unit inspections and re-inspections if repairs were required within required timeframes. Questioned Costs: None Context: During testing, two of six inspections were re-inspections for units requiring repairs and were not completed within the required 30 days. Four of six inspections selected were not completed within two years of previous inspection. Cause: Management does not have a process in place to calculate reasonable rent upon admission of new tenants to the program. Effect: Untimely inspections could result in unresolved repairs as well as noncompliance with the Organization’s Administrative Plan and HUD requirements. Repeat Finding: No Recommendation: We recommend that management implements a process to perform inspections and re-inspections within the timeframes required by the Administrative Plan. Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Choice Voucher Program Federal Assistance Listing Number: 14.871 Pass-Through Agencies: Faribault and Le Sueur County Housing and Redevelopment Authorities Pass-Through Number(s): MN200VO/MN171VO Award Period: 3/1/21-3/31/23 Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Housing Choice Voucher program requires documentation of admission of new tenants from the waiting list and signed Housing Assistance Payment (HAP) contract. Condition: Management did not retain applicable documentation of a new tenant being admitted to the program or retain documentation supporting admission to the program in proper order. Questioned Costs: None Context: During testing, one of five new tenants selected did not have signed HAP contract or other documentation retained. We were unable to verify tenants were admitted to the program in the proper order. Cause: Documentation was misplaced and unable to be located. Effect: Improper admission from the waiting list could result in noncompliance with the Organization’s Administrative Plan and HUD requirements. Repeat Finding: No Recommendation: We recommend that management retains all documentation related to new tenants being admitted to program. Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Choice Voucher Program Federal Assistance Listing Number: 14.871 Pass-Through Agencies: Faribault and Le Sueur County Housing and Redevelopment Authorities Pass-Through Number(s): MN200VO/MN171VO Award Period: 3/1/21-3/31/23 Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Housing Choice Voucher program requires quality control over reasonableness testing on both new leased units, selection from the waiting list, and quality control reinspections. Condition: Management does not have a system in place to track changes in rent charged by landlords from the current year to the prior year to verify the change is reasonable. There is no system in place to track historical admissions of tenants from the waiting list. There is no system in place to identify re-inspections separate from initial inspections. Therefore, a complete population was unable to be obtained in order to perform required testing of special provisions. Questioned Costs: None Context: Management does not maintain listing of contract rent changes, admissions of tenants from the waiting list, or re-inspections performed. Cause: Management did not have a tenant management computer program in place during 2023. Effect: Noncompliance with HUD requirement Repeat Finding: No Recommendation: We recommend that management implements a tenant management software system which will track the contract rents annually, admissions from the waiting list, and re-inspections performed. Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Choice Voucher Program Federal Assistance Listing Number: 14.871 Pass-Through Agencies: Faribault and Le Sueur County Housing and Redevelopment Authorities Pass-Through Number(s): MN200VO/MN171VO Award Period: 3/1/21-3/31/23 Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Housing Choice Voucher program requires rent reasonableness calculations to be performed for each new contract. Condition: Management does not perform rent reasonableness calculations on new tenants. Questioned Costs: None Context: During testing, zero of five tenants selected had documentation of rent reasonableness calculations performed. Cause: Management does not have a process in place to calculate reasonable rent upon admission of new tenants to the program. Effect: Rent to owner could be unreasonable and noncompliant with the Organization’s Administrative Plan and HUD requirements. Repeat Finding: No Recommendation: We recommend that management implements a process to perform rent reasonableness calculation and retain documentation. Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Choice Voucher Program Federal Assistance Listing Number: 14.871 Pass-Through Agencies: Faribault and Le Sueur County Housing and Redevelopment Authorities Pass-Through Number(s): MN200VO/MN171VO Award Period: 3/1/21-3/31/23 Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Housing Choice Voucher program requires inspections and reinspections to be performed within specified timeframes. Condition: Management did not perform unit inspections and re-inspections if repairs were required within required timeframes. Questioned Costs: None Context: During testing, two of six inspections were re-inspections for units requiring repairs and were not completed within the required 30 days. Four of six inspections selected were not completed within two years of previous inspection. Cause: Management does not have a process in place to calculate reasonable rent upon admission of new tenants to the program. Effect: Untimely inspections could result in unresolved repairs as well as noncompliance with the Organization’s Administrative Plan and HUD requirements. Repeat Finding: No Recommendation: We recommend that management implements a process to perform inspections and re-inspections within the timeframes required by the Administrative Plan. Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Choice Voucher Program Federal Assistance Listing Number: 14.871 Pass-Through Agencies: Faribault and Le Sueur County Housing and Redevelopment Authorities Pass-Through Number(s): MN200VO/MN171VO Award Period: 3/1/21-3/31/23 Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Housing Choice Voucher program requires documentation of admission of new tenants from the waiting list and signed Housing Assistance Payment (HAP) contract. Condition: Management did not retain applicable documentation of a new tenant being admitted to the program or retain documentation supporting admission to the program in proper order. Questioned Costs: None Context: During testing, one of five new tenants selected did not have signed HAP contract or other documentation retained. We were unable to verify tenants were admitted to the program in the proper order. Cause: Documentation was misplaced and unable to be located. Effect: Improper admission from the waiting list could result in noncompliance with the Organization’s Administrative Plan and HUD requirements. Repeat Finding: No Recommendation: We recommend that management retains all documentation related to new tenants being admitted to program. Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

2023-001: Activities Allowed or Unallowed Federal Agencies: U.S. Department of Health and Human Services; U.S. Department of Labor Federal Programs: Temporary Assistance for Needy Families; Workforce Innovation and Opportunity Act Pass-Through Agencies: None; South Central Workforce Council Pass-Through Number(s): None; 1073600 Award Period: 1/1/22-12/31/22; 4/1/21-3/31/23 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Approval of general disbursements Condition: There was no documentation of approval of invoices prior to payment. Questioned Costs: None Context: One of 35 disbursements; one of 37 disbursements Cause: Department supervisor approval was not obtained prior to payment of invoices Effect: Without proper of approval, there is a risk of disallowed funds being disbursed Repeat Finding: No Recommendation: We recommend obtaining documentation of approval for all invoices Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

2023-001: Activities Allowed or Unallowed Federal Agencies: U.S. Department of Health and Human Services; U.S. Department of Labor Federal Programs: Temporary Assistance for Needy Families; Workforce Innovation and Opportunity Act Pass-Through Agencies: None; South Central Workforce Council Pass-Through Number(s): None; 1073600 Award Period: 1/1/22-12/31/22; 4/1/21-3/31/23 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Approval of general disbursements Condition: There was no documentation of approval of invoices prior to payment. Questioned Costs: None Context: One of 35 disbursements; one of 37 disbursements Cause: Department supervisor approval was not obtained prior to payment of invoices Effect: Without proper of approval, there is a risk of disallowed funds being disbursed Repeat Finding: No Recommendation: We recommend obtaining documentation of approval for all invoices Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

2023-001: Activities Allowed or Unallowed Federal Agencies: U.S. Department of Health and Human Services; U.S. Department of Labor Federal Programs: Temporary Assistance for Needy Families; Workforce Innovation and Opportunity Act Pass-Through Agencies: None; South Central Workforce Council Pass-Through Number(s): None; 1073600 Award Period: 1/1/22-12/31/22; 4/1/21-3/31/23 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Approval of general disbursements Condition: There was no documentation of approval of invoices prior to payment. Questioned Costs: None Context: One of 35 disbursements; one of 37 disbursements Cause: Department supervisor approval was not obtained prior to payment of invoices Effect: Without proper of approval, there is a risk of disallowed funds being disbursed Repeat Finding: No Recommendation: We recommend obtaining documentation of approval for all invoices Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

2023-001: Activities Allowed or Unallowed Federal Agencies: U.S. Department of Health and Human Services; U.S. Department of Labor Federal Programs: Temporary Assistance for Needy Families; Workforce Innovation and Opportunity Act Pass-Through Agencies: None; South Central Workforce Council Pass-Through Number(s): None; 1073600 Award Period: 1/1/22-12/31/22; 4/1/21-3/31/23 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Approval of general disbursements Condition: There was no documentation of approval of invoices prior to payment. Questioned Costs: None Context: One of 35 disbursements; one of 37 disbursements Cause: Department supervisor approval was not obtained prior to payment of invoices Effect: Without proper of approval, there is a risk of disallowed funds being disbursed Repeat Finding: No Recommendation: We recommend obtaining documentation of approval for all invoices Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

Federal Agency: U.S. Department of Labor Federal Program: Workforce Innovation and Opportunity Act Federal Assistance Listing Number: 17.258 Pass-Through Agency: MN Department of Employment and Economic Development/South Central Workforce Council Pass-Through Number(s): 1075301 Award Period: 12/23/21-3/31/23 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Indirect Costs Condition: No documentation of approval of indirect cost allocation journal entries. Questioned Costs: None Context: During testing of indirect cost allocations, three of seven allocations tested related to the allocation of payroll for the Workforce Council Executive Director. It was noted the Workforce Council Executive Director’s timesheet used in the allocation as well as the allocation journal entry was not approved. Cause: No journal entry review process for Workforce Council Executive Director payroll allocation. Effect: Incorrect indirect cost allocation could occur causing noncompliance with program requirements. Repeat Finding: No Recommendation: We recommend that management implements journal entry review process for Workforce Council Executive Director indirect cost allocations. Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

Federal Agency: U.S. Department of Labor Federal Program: Workforce Innovation and Opportunity Act Federal Assistance Listing Number: 17.258 Pass-Through Agency: MN Department of Employment and Economic Development/South Central Workforce Council Pass-Through Number(s): 1075301 Award Period: 12/23/21-3/31/23 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Indirect Costs Condition: No documentation of approval of indirect cost allocation journal entries. Questioned Costs: None Context: During testing of indirect cost allocations, three of seven allocations tested related to the allocation of payroll for the Workforce Council Executive Director. It was noted the Workforce Council Executive Director’s timesheet used in the allocation as well as the allocation journal entry was not approved. Cause: No journal entry review process for Workforce Council Executive Director payroll allocation. Effect: Incorrect indirect cost allocation could occur causing noncompliance with program requirements. Repeat Finding: No Recommendation: We recommend that management implements journal entry review process for Workforce Council Executive Director indirect cost allocations. Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

Federal Agency: U.S. Department of Labor Federal Program: Workforce Innovation and Opportunity Act Federal Assistance Listing Number: 17.258 Pass-Through Agency: MN Department of Employment and Economic Development/South Central Workforce Council Pass-Through Number(s): 1075301 Award Period: 12/23/21-3/31/23 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Indirect Costs Condition: No documentation of approval of indirect cost allocation journal entries. Questioned Costs: None Context: During testing of indirect cost allocations, three of seven allocations tested related to the allocation of payroll for the Workforce Council Executive Director. It was noted the Workforce Council Executive Director’s timesheet used in the allocation as well as the allocation journal entry was not approved. Cause: No journal entry review process for Workforce Council Executive Director payroll allocation. Effect: Incorrect indirect cost allocation could occur causing noncompliance with program requirements. Repeat Finding: No Recommendation: We recommend that management implements journal entry review process for Workforce Council Executive Director indirect cost allocations. Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

Federal Agency: U.S. Department of Labor Federal Program: Workforce Innovation and Opportunity Act Federal Assistance Listing Number: 17.258 Pass-Through Agency: MN Department of Employment and Economic Development/South Central Workforce Council Pass-Through Number(s): 1075301 Award Period: 12/23/21-3/31/23 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Indirect Costs Condition: No documentation of approval of indirect cost allocation journal entries. Questioned Costs: None Context: During testing of indirect cost allocations, three of seven allocations tested related to the allocation of payroll for the Workforce Council Executive Director. It was noted the Workforce Council Executive Director’s timesheet used in the allocation as well as the allocation journal entry was not approved. Cause: No journal entry review process for Workforce Council Executive Director payroll allocation. Effect: Incorrect indirect cost allocation could occur causing noncompliance with program requirements. Repeat Finding: No Recommendation: We recommend that management implements journal entry review process for Workforce Council Executive Director indirect cost allocations. Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

2023-001: Activities Allowed or Unallowed Federal Agencies: U.S. Department of Health and Human Services; U.S. Department of Labor Federal Programs: Temporary Assistance for Needy Families; Workforce Innovation and Opportunity Act Pass-Through Agencies: None; South Central Workforce Council Pass-Through Number(s): None; 1073600 Award Period: 1/1/22-12/31/22; 4/1/21-3/31/23 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Approval of general disbursements Condition: There was no documentation of approval of invoices prior to payment. Questioned Costs: None Context: One of 35 disbursements; one of 37 disbursements Cause: Department supervisor approval was not obtained prior to payment of invoices Effect: Without proper of approval, there is a risk of disallowed funds being disbursed Repeat Finding: No Recommendation: We recommend obtaining documentation of approval for all invoices Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

2023-001: Activities Allowed or Unallowed Federal Agencies: U.S. Department of Health and Human Services; U.S. Department of Labor Federal Programs: Temporary Assistance for Needy Families; Workforce Innovation and Opportunity Act Pass-Through Agencies: None; South Central Workforce Council Pass-Through Number(s): None; 1073600 Award Period: 1/1/22-12/31/22; 4/1/21-3/31/23 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Approval of general disbursements Condition: There was no documentation of approval of invoices prior to payment. Questioned Costs: None Context: One of 35 disbursements; one of 37 disbursements Cause: Department supervisor approval was not obtained prior to payment of invoices Effect: Without proper of approval, there is a risk of disallowed funds being disbursed Repeat Finding: No Recommendation: We recommend obtaining documentation of approval for all invoices Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

2023-001: Activities Allowed or Unallowed Federal Agencies: U.S. Department of Health and Human Services; U.S. Department of Labor Federal Programs: Temporary Assistance for Needy Families; Workforce Innovation and Opportunity Act Pass-Through Agencies: None; South Central Workforce Council Pass-Through Number(s): None; 1073600 Award Period: 1/1/22-12/31/22; 4/1/21-3/31/23 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Approval of general disbursements Condition: There was no documentation of approval of invoices prior to payment. Questioned Costs: None Context: One of 35 disbursements; one of 37 disbursements Cause: Department supervisor approval was not obtained prior to payment of invoices Effect: Without proper of approval, there is a risk of disallowed funds being disbursed Repeat Finding: No Recommendation: We recommend obtaining documentation of approval for all invoices Views of responsible officials and planned corrective actions: Management is in agreement with the finding.