Corrective Action Plans

Finding: 2024-067 - Sixty Medicaid and 60 CHIP recipients were randomly selected for eligibility testing. Testing revealed the following errors: Medicaid - 22 of 60 cases lacked eligibility determination issues (note, some case had multiple deficiencies): • One of 60 files was approved by the federally facilitated marketplace in 2015 and has been rolling forward ever since with no review and no documentation to support the case as an ongoing Medicaid eligible case. Electronic review did not have enough information so roll forward was cancelled as of June 30, 2024. In addition: • Ten of 60 cases, one of which was a behavioral health case, lacked documentation to indicate the participant submitted a signed Medicaid application. • Ten of 60 files, one of which was behavioral health, lacked documentation of facts supporting the eligibility determination. • Two of 60 cases were determined to not be part of one of the non-Modified Adjusted Gross Income (MAGI) covered groups and did not fit into one of the MAGI-exempted categories. • One of 60 participants did not meet income eligibility requirements. • Fifteen of 60 cases, five of which are behavioral health, lacked documentation to verify that IEVS was used to verify income eligibility. • Two of 60 cases lacked review by the appropriate staff/supervisor for manual overrides. CHIP - 23 of 60 cases lacked eligibility determination issues (note, some case had multiple deficiencies): • Three of 60 cases lacked adequate support to eligibility determinations redeterminations, one ofwhich was a behavioral health case. • Two of 60 cases were not covered groups, one of which was a behavioral health case. • One of 60 participant files did not contain a social security number. During testing it was noted that the application was denied once reviewed, but it was initially allowed through the federally facilitated marketplace. • Three of 60 participants received benefits after aging out of the program (age 19). One of these was a behavioral health case. • One of sixty behavioral health case files was missing a CHIP-specific application and support for determination. • Eighteen of 60 case files, four of which were behavioral health cases, lacked sufficient documentation to indicate that IEVS participation was verified. Questioned Costs: AL 93.778: $ 5,691 (known questioned costs); $762,897,131 (likely questioned costs); AL 93.767: $ 5,019 (known questioned costs); $ 2,537,251 (likely questioned costs) Assistance Listing Number: 93.767; 93.775, 93.777, 93.778 Assistance Listing Title: CHIP; Medicaid Cluster Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): The department agrees with the finding but does not concur with the questioned costs. CMS has notified the state that financial recoveries based on eligibility errors can only be pursued when identified by programs operating under CMS’ Payment Error Rate Measurement (PERM) program, under section 1903(u) of the Social Security Act and regulations at 42 CFR Part 431, Subpart Q Corrective Action (corrective action planned): Division of Public Assistance continues to leverage automated renewals for Medicaid and expects processing timeliness to continue improving. Staff will be coached on proper case documentation standards and procedures such as including appropriate information in case notes and uploading documentation in ILINX to support eligibility determinations. The Division intends to implement quality control and training efforts using the newly formed Staff Learning & Development team. Completion Date (list anticipated completion date): The department anticipates the finding will be resolved in FY2026. Agency Contact (name of person responsible for corrective action): Pam Halloran, Assistant Commissioner

Finding: 2024-066 - Sixty Medicaid and 60 Children’s Health Insurance Program (CHIP) recipients were randomly selected for eligibility testing. Testing revealed the following errors: Medicaid 24 of 60 cases had timing issues (note, some cases had multiple deficiencies): • Fifteen of the 60 cases, two of which were behavioral health cases, had not gone through a renewal assessment within 12 months of the last determination. • Sixteen of the 60 cases’ eligibility determinations were not done timely (i.e., within 45 days), one of which was a behavioral health case. • One of the 60 cases’ eligibility effective date was earlier than 3 months prior to the month of application. CHIP 40 of 60 cases had timing issues (note, some cases had multiple deficiencies): • Twenty-eight of 60 cases’ eligibility determinations were not done timely (i.e., within 45 days), two of which were behavioral health cases. • Nineteen of 60 cases, four of which were behavioral health cases, had not gone through a renewal assessment within 12 months of the last determination. Questioned Costs: AL 93.778: $ 608 (known questioned costs); $81,540,436 (likely questioned costs); AL 93.767: $ 6,888 (known questioned costs); $ 3,482,307 (likely questioned costs) Assistance Listing Number: 93.767; 93.775, 93.777, 93.778 Assistance Listing Title: CHIP; Medicaid Cluster Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): The department agrees with the finding but does not concur with the questioned costs. CMS has notified the state that financial recoveries based on eligibility errors can only be pursued when identified by programs operating under CMS’ Payment Error Rate Measurement (PERM) program, under section 1903(u) of the Social Security Act and regulations at 42 CFR Part 431, Subpart Q. Corrective Action (corrective action planned): Division of Public Assistance continues to streamline and enhance internal processes and integrate systems to automate processes as much as possible. This includes (a) automated document ingestion into the electronic document repository (ILINX) from the online portal, e-mail, and other sources; (b) integrating the Division’s workload program (Current) with ILINX to improve workload management; and (c) continue using the approved E- 14 waiver authorized under section 1902(e)(14)(A) of the Social Security Act to increase ex parte renewal rates. Completion Date (list anticipated completion date): The department anticipates the finding will be resolved in FY2026. Agency Contact (name of person responsible for corrective action): Pam Halloran, Assistant Commissioner

Finding: 2024-063 - The State lacked sufficient documentation, as outlined in the federal requirements and the state plan, to clearly document what services one child was receiving and if they were authorized for services during the period under audit. Questioned Costs: None Assistance Listing Number: 93.575, 93.596 Assistance Listing Title: Child Care and Development Fund Cluster (CCDF) Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): The department agrees with the finding. Corrective Action (corrective action planned): Division of Public Assistance (DPA) will provide documentation and case note training to Child Care Assistance grantees. Grantees will provide similar training to their staff and increase internal case file review. DPA will verify grantee staff training occurred and that they’re maintaining compliance. Completion Date (list anticipated completion date): The department anticipates the finding will be resolved in FY2025. Agency Contact (name of person responsible for corrective action): Pam Halloran, Assistant Commissioner

Finding: 2024-061 - Each state shall participate in Income Eligibility and Verification System required by Section 1137 of the Social Security Act as amended. Fifteen of 60 cases tested lacked adequate documentation to indicate if all components of income verification were gathered and processed correctly. Questioned Costs: None Assistance Listing Number: 93.558 Assistance Listing Title: TANF Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): The department agrees with the finding. Corrective Action (corrective action planned): Division of Public Assistance staff will be coached on proper case documentation standards and procedures such as including appropriate information in case notes and uploading documentation in ILINX to support eligibility determinations. Spot checks and case reviews will be performed for case completion and accuracy. Completion Date (list anticipated completion date): The department anticipates the finding will be resolved in FY2025. Agency Contact (name of person responsible for corrective action): Pam Halloran, Assistant Commissioner

Finding: 2024-056 - Three of 60 Temporary Assistance for Needy Families (TANF) recipient case files tested lacked adequate documentation to indicate that the participant met all eligibility criteria. The following errors were noted: • Two cases exceeded the 60-month benefit limit, which resulted in excess benefits. • One case lacked documentation to verify one parent’s relational status to the children. Additionally, seven of 60 cases tested had documentation to support individual’s eligibility but lacked sufficient documentation to verify that the key control over compliance occurred. Questioned Costs: AL 93.558: $ 5,720 (known questioned costs); $173,417 (likely questioned costs) Assistance Listing Number: 93.558 Assistance Listing Title: TANF Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): The department agrees with the finding. Corrective Action (corrective action planned): Division of Public Assistance staff will be coached on proper case documentation standards and procedures such as including appropriate information in case notes and uploading documentation in ILINX to support eligibility determinations. Spot checks and case reviews will be performed for case completion and accuracy. Completion Date (list anticipated completion date): The department anticipates the finding will be resolved in FY2025. Agency Contact (name of person responsible for corrective action): Pam Halloran, Assistant Commissioner

Finding: 2024-054 - Testing of 42 SNAP recipient cases to verify the completeness and accuracy of benefit calculations found 37 (88 percent) were incorrect or unsupported, including 24 (57 percent) in which the recipients’ application or reports of changes were not processed within federally required timeframes. Testing of 42 SNAP recipient cases to verify the adequacy of case information stored in EIS and DOH’s document management system, ILINX, found 18 (43 percent) had inadequate verifications of required information. Questioned Costs: AL 10.551: $59,073 Assistance Listing Number: 10.551, 10.561 Assistance Listing Title: SNAP Cluster Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): The department agrees with the finding. Corrective Action (corrective action planned): The Division of Public Assistance has reinstated SNAP interview requirements and verification procedures in FY2025. It will also review casework via supervisory case reviews to ensure accuracy and documentation standards are met. The division’s Learning & Development Team is creating training modules that will provide continuing education to existing staff. Completion Date (list anticipated completion date): The department anticipates the finding will be resolved in FY2026. Agency Contact (name of person responsible for corrective action): Pam Halloran, Assistant Commissioner

Finding: 2024-053 - The amount of FY 24 Supplemental Nutrition Assistance Program (SNAP) benefits reported to the United States Department of Agriculture (USDA) as issued by the State’s EBT contractor, FIS, was $2,628,951 more than the amount of authorized benefits reported in data from DPA’s Eligibility Information System (EIS). Furthermore, FIS could not provide a reliable audit trail of issuances. Questioned Costs: AL 10.551: $2,628,951 Assistance Listing Number: 10.551, 10.561 Assistance Listing Title: SNAP Cluster Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): The department agrees with the finding, but not the questioned cost. The Division of Public Assistance performs monthly reconciliations and balancing efforts to ensure accuracy with routine FIS reports, EIS authorization and issuance reports, and federal reporting. However, the division agrees that a new ad hoc report created for this audit by the EBT contractor, FIS, does not match with issuances and reporting. Corrective Action (corrective action planned): The Division of Public Assistance will work with the EBT contractor, FIS, through the contract performance management process to address discrepancies found between a non standard ad hoc report and program issuances and reporting. The division will evaluate further ad hoc reports against previously established documents for accuracy. Completion Date (list anticipated completion date): The department anticipates the finding will be resolved in FY2026. Agency Contact (name of person responsible for corrective action): Pam Halloran, Assistant Commissioner

Finding: 2024-052 - DOH’s Division of Public Assistance (DPA) did not determine or distribute benefits to school children or children in child care in accordance with the process and timeframes in the federally approved state plan. The audit identified the following deficiencies in FY 24: • The children in child care beneficiaries were not identified as required by the school year 2020—2021 state plan. • The per child benefit amount paid to the 15,697 children in child care was understated by $6.21 and 125 children were included in both the student and the child care benefit eligibility lists. • Issuance records provided by DPA’s Electronic Benefits Transfer (EBT) contractor, Fidelity National Information Services (FIS), were $795,659 more than DPA reported issuances. Furthermore, the FIS report included $28,992 in duplicate summer 2021 benefit issuances to school children. • School year 2020—2021 student beneficiaries paid in FY 24 received benefits at least two years late and the children in child care beneficiaries were paid benefits at least 20 months late. Summer of 2021 beneficiaries paid in FY24 received benefits at least 20 months late. Questioned Costs: AL 10.542: Indeterminate Assistance Listing Number: 10.542 Assistance Listing Title: Pandemic Electronic Benefit Transfer Food Benefits (P-EBT) COVID-19 Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): The department partially agrees with the finding. The Division of Public Assistance disagrees with the finding regarding issuance timelines. The division communicated with FNS regarding manual benefit issuance for Alaska expressing timelines would be affected and FNS did not request an updated timeline. Communication with FNS regarding issuance remained consistent, with no indication to alter our issuance plan. Corrective Action (corrective action planned): Shall the department agree to administer this federal program in the future, the Commissioner will allocate the resources necessary to prevent the necessity to manually administer the federal program. Completion Date (list anticipated completion date): Not applicable. This federal program is complete. Agency Contact (name of person responsible for corrective action): Pam Halloran, Assistant Commissioner

Finding: 2024-026 — Department of Education and Early Development’s (DEED) child nutrition services management authorized Summer 2021 Pandemic Electronic Benefit Transfer Food Benefits (P-EBT) benefits for ineligible children. Questioned Costs: AL 10.542: $62,816 Assistance Listing Number: 10.542 Assistance Listing Title: P-EBT COVID- 19 Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): The department agrees with Finding 2024-026. Corrective Action (corrective action planned): As the program is complete no corrective action can be taken for the Summer P-EBT program. If a new Summer EBT program is implemented, the department would work to implement a combination of standard operating procedures and automated electronic data validation processes to prevent erroneous benefit issuance. The department did not have sufficient time or resources to establish such features when implementing Pandemic EBT due to the urgent nature of the program. Completion Date (list anticipated completion date): n/a Agency Contact (name of person responsible for corrective action): Gavin Northey, Child Nutrition Programs Manager

2024-003 – ALN 14.871 – Housing Voucher Cluster – Eligibility Management acknowledged the finding and will follow the Auditor's recommendations as listed in the Schedule of Findings and Questioned Costs. Person Responsible for Correction of Finding: Mr. J. Daniels, Chief Executive Officer Projected Completion Date: September 30, 2025

Program: Section 8 Housing Choice Voucher Finding: 2024-006 Contact Person: Michelle Mel-Duch Housing Administrative and Financial Services Officer Health & Human Services Department Phone: (562) 570-5344 Email: Michelle.Mel-Duch@longbeach.gov Planned Actions: 1. Automated Data Validation and Error Detection: o HACLB utilizes the MRI housing management software, which syncs to the HUD’s PIC (Public and Indian Housing Information Center)requirements, ensuring data consistency and validation. o The MRI system incorporates HUD’s mandated validation standards and automatically identifies errors in participant data before submission to the PIC system. o Validation errors flagged by MRI are reviewed and corrected prior to submission to HUD, ensuring data accuracy and compliance. 2. Compliance with HUD Standards and Reporting: o Each recertification is submitted to the HUD PIC system, which further validates the data and alerts HACLB to any errors through the PIC Error Dashboard. o HACLB promptly addresses and corrects errors identified by PIC to maintain program integrity and compliance with HUD reporting standards. 3. Quality Control and Training: o HACLB conducts annual SEMAP (Section Eight Management Assessment Program) evaluations, which include quality control indicators to assess the accuracy of calculations and program administration. o Errors identified through SEMAP and system validations are used proactively as training opportunities for staff. o New Housing Specialists’ work is closely reviewed during their training period to ensure accuracy and compliance. 4. Systematic Tracking and Monitoring: o The MRI system facilitates ongoing quality control tracking, enabling Housing staff to monitor and correct errors effectively. o HACLB’s process includes regular oversight and review of participant files and related transactions to ensure timely and accurate housing assistance payments and reporting. Expected Completion Date: December 31, 2025

Program: Section 8 Housing Choice Voucher Finding: 2024-005 Contact Person: Michelle Mel-Duch Housing Administrative and Financial Services Officer Health & Human Services Department Phone: (562) 570-5344 Email: Michelle.Mel-Duch@longbeach.gov Planned Actions: 1. Process Improvement for Reinspection Scheduling: o Beginning December 2024, HACLB implemented an enhanced scheduling process to ensure all reinspections are conducted prior to the expiration of the required 30-day remediation period. o The agency has configured its housing software platform (MRI) to automatically schedule reinspections in advance of the 30-day deadline following the identification of deficiencies. This automated process minimizes the risk of delay or oversight. 2. Extension Tracking and Compliance Monitoring: o The MRI system is also configured to flag cases where an extension has been requested or approved, allowing for documented exceptions while maintaining compliance oversight. o Staff monitor reinspection dates regularly through system-generated reports to ensure adherence to HUD standards and to follow up on any outstanding cases. Expected Completion Date: December 31. 2025

Program: Section 8 Housing Choice Voucher Finding: 2024-003 Contact Person: Michelle Mel-Duch Housing Administrative and Financial Services Officer Health & Human Services Department Phone: (562) 570-5344 Email: Michelle.Mel-Duch@longbeach.gov Planned Actions: 1. Staff Augmentation and Training: o In January 2025, HACLB submitted requisitions to the Human Resources Department to recruit additional Housing Specialists to improve the management of high volume HCV program participants, documentations, processes, and to meet various requirement deadlines. o As of May 3, 2025, four new Housing Specialists have been hired and are currently undergoing training. Four additional Housing Specialists are in the onboarding process with Human Resources Department. o Several supervisory positions remain unfilled due to the need to renew the hiring list. HACLB has submitted a request to initiate the renewal process in order to recruit from a new list. o In addition, HACLB has hired a Housing Administrative and Financial Services Officer and a Housing Operations Program Officer. These roles are critical in providing oversight of operational workflows, evaluating staff productivity, and developing strategies to optimize staffing levels and resource allocation. 2. Contracted Support Services: o To address a backlog of overdue reexaminations, HACLB renewed its contract with an external agency to provide dedicated assistance in processing pending cases. This contract became effective in May 2025 and has already begun to support the reexamination workload. 3. Technology Upgrade: o HACLB has transitioned to a new housing software platform tailored to improve the tracking and processing of annual recertifications. This system upgrade enhances productivity monitoring, facilitates efficient workflow management, and supports compliance with HUD timeliness standards. Expected Completion Date: September 30, 2026

FINDINGS - MAJOR FEDERAL AWARD PROGRAM AUDIT Department of Housing and Urban Development Finding, 2024-006: Major Programs: Capital Advance Program, Federal Assistance Listing Number 14.U01 and Section 8 New Construction and Substantial Rehabilitation, Federal Assistance Listing Number 14.182 RECOMMENDATION The auditor recommends the Project and management review and attend training on the HUD Handbook 4350.3 Revision 1 requirements for tenant files including eligibility and income calculations. In addition, the auditor recommends the Project obtain necessary recertification signatures timely. ACTION TAKEN Carrasquillo Management LLC acknowledges the findings and is taking the following corrective actions to ensure compliance with HUD Handbook 4350.3 requirements: 1. Enterprise Income Verification (EIV) Reports Management has implemented an internal checklist to ensure that the initial EIV reports are generated within the required 90 days for all move-ins. Staff has been retrained on EIV protocols and timelines to ensure timely compliance going forward. 2. Timely Tenant Signatures on Recertifications A new recertification specialist has been hired, who is fully trained and qualified in HUD income certifications. Carrasquillo Management LLC has implemented a new tracking system and notification schedule to ensure that all recertification documents are signed by tenants on or before the effective date. Management is also increasing tenant engagement through reminder letters and calls. 3. Bank Account Balance Calculations Staff has received additional training on income and asset calculations per HUD guidance. A verification template has been implemented to ensure all checking account balances are calculated using the six-month average, as required. 4. Security Deposit Charges The error identified regarding the incorrect security deposit has been corrected. Going forward, all move-ins will include a verification step to ensure that the correct deposit is charged in accordance with lease and program guidelines. 5. Date and Time-Stamped Applications Management has implemented a new policy requiring staff to date-and time-stamp all tenant applications upon receipt. Staff has been trained accordingly and periodic file reviews will be conducted to ensure compliance. 6. Missing Lease and Application Documents Management has begun a full file audit to identify and correct any remaining deficiencies. Procedures have been updated to ensure original leases and completed applications are filed immediately upon move-in and scanned into the electronic system as a backup. 7. Move -Inspections A revised move-in protocol has been established that includes a checklist confirming inspection completion and file documentation. A copy of the move-in inspection form is now required to be signed by both tenant and management and scanned into the file on the same day of move-in. 8. Training and Oversight Carrasquillo Management LLC will continue to provide regular staff training and compliance reviews to ensure that all HUD file requirements are met. In addition, quarterly internal audits will be conducted to verify proper documentation and adherence to timelines. We are committed to maintaining full compliance with HUD regulations and ensuring tenant file accuracy moving forward.

FINDINGS - MAJOR FEDERAL AWARD PROGRAM AUDIT Department of Housing and Urban Development Finding, 2024-005: Major Programs: Capital Advance Program, Federal Assistance Listing Number 14.U01 and Section 8 New Construction and Substantial Rehabilitation, Federal Assistance Listing Number 14.182 RECOMMENDATION The auditor recommends ensuring all tenant’s paperwork is thoroughly reviewed and accurately used in the calculation of the tenant’s required monthly rent and HUD’s tenant assistance payments. ACTION TAKEN Carrasquillo Management LLC acknowledges the audit finding related to rent miscalculations for five tenant files during the fiscal year ended September 30, 2024. These errors resulted in both minor tenant overcharges and undercharges, as well as corresponding discrepancies in HUD’s rental assistance payments. 1. Financial Corrections ○ The Project will reimburse the two affected tenants a total of $14 to correct the overcharges. ○ The Project will submit a request to HUD to repay the $14 in overpaid rental assistance associated with these tenants. ○ For the three tenants who were undercharged a total of $826, the Project will bill the tenants for the rent differential in accordance with HUD regulations and provide HUD with reimbursement of the $826 in excess rental assistance paid. 2. File Review and Quality Control Measures Management has implemented a secondary file review process for all certifications and recertifications to ensure that income is correctly verified, entered, and calculated in accordance with HUD Handbook 4350.3 requirements. All tenant income documentation will be double-checked by the compliance team prior to finalizing certifications. 3. Staff Training All staff involved in income verification and rent calculation have been retrained on HUD rent calculation guidelines, including handling of paystubs, Social Security statements, and other income documentation. Training includes real-case scenarios and common error prevention techniques. 4. Compliance Oversight Moving forward, Carrasquillo Management LLC will conduct quarterly internal audits of a random sample of tenant files to verify the accuracy of income calculations and ensure compliance with HUD regulations. Carrasquillo Management LLC remains committed to ensuring the accuracy of tenant rent determinations and maintaining compliance with HUD’s income calculation requirements. All necessary reimbursements and corrective actions will be completed promptly and documented for HUD’s records.

2024-004 U.S. Department of Housing and Urban Development Housing Voucher Cluster - 14.871 Section 8 Housing Choice Vouchers and 14.879 Mainstream Vouchers - Material Weakness Condition and Criteria: An assistance payment was calculated incorrectly due to errors in data entry. Eligibility for the program requires payment based on substantiated income and expense of the applicants. Cause: Human error in the calculation of income allowance which affected the assistance payment. Effect: The cost of the assistance may be disallowed. Context: A sample of grants totaling $33,038 was selected for audit from a population of $6,470,217. The test found questioned costs totaling $36. Our sample was a statistically valid sample. CORRECTIVE ACTION PLAN RESPONSE: Housing counselors are instructed to document their math on the proof of income they are figuring, and double check their figures. A spreadsheet has also been created so that they can choose how often a client is paid and enter the amounts of pay and it figures the totals for them. If they use the spreadsheet, they are asked to print it out and scan it in with the transaction documents. Anticipated completion date: 9/30/25 Responsible party: Michelle Worthington, Section 8 Housing Director Please contact Vicky Pritchett, Finance Director at 573-213-4811 extension #10102 with questions regarding this plan.

We have implemented a plan for proper training to make sure everyone is aware of HUD rules regarding family eligibility. We will complete a quarterly audit of randomly selected files to ensure we are adhering to HUD rules. We will ensure staff monitors eligibility for each resident within the required time frame.

Views of responsible officials and planned corrective actions: The documentation supporting program check requests is maintained by the program staff in the client files. When requesting a disbursement for a client, the case manager prepares a check request after following the process prescribed by the program and contract for determining an allowable disbursement. The check request is then reviewed and approved by a supervisor who also checks for eligibility and allowability of the disbursement. Only the approved check request is provided to the finance office to create the disbursement to avoid duplication of records. The client files and these records have been reviewed during site visits and previous audits without exception and with no delay in providing requested information. To further improve this process, however, the program has added a new form to be completed for each new client’s rental costs clearly identifying the costs to be paid and the source information for those costs. The supervisor reviewing disbursement requests will also affirmatively indicate on the check request that they have verified this documentation in the client file. Responsible Official: Molly Archer, Chief Operating Officer and Valorie Crout, Chief Program Officer Anticipated Completion Date: 6/1/2025

Finding 2024-022 U.S. Department of Housing and Urban Development (HUD) AL No. 14.871/14.879 Housing Voucher Cluster Material Weakness in Internal Control over Compliance for Eligibility Repeat Finding: Yes; 2023-003 Auditee’s Corrective Action Plan: DCHA has increased their quality control department to ensure that file reviews are completed and stored electronically in the Yardi system. In addition, DCHA has engaged with several consulting groups to assist in the backlog of recertifications while the current staff works on the current recertifications so they do not become past due like in the past. Third party vendors have been brought onboard to assist with processing all past due biennial recertifications. Contact Person: Anton Shaw, Director, Housing Choice Voucher Program Completion Date: September 30, 2026

Finding 2024-021 U.S. Department of Housing and Urban Development (HUD) AL No. 14.881 Moving to Work Demonstration Material Weakness in Internal Control over Compliance for Eligibility Repeat Finding: Yes; 2023-002 Auditee’s Corrective Action Plan: DCHA has increased their quality control department to ensure that file reviews are completed and stored electronically in the Yardi system. In addition, DCHA has engaged with several consulting groups to assist in the backlog of recertifications while the current staff works on the current recertifications so they do not become past due like in the past. Contact Person: Anton Shaw, Director, Housing Choice Voucher Program Completion Date: September 30, 2026

Management is currently conducting a comprehensive review of the process to ensure alignment with compliance requirements and identify areas for improvement.

Management is currently conducting a comprehensive review of the process to ensure alignment with compliance requirements and identify areas for improvement.

Finding 2024-003 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Public and Indian Housing Program Federal Assistance Listing Numbers: 14.850 Noncompliance – N. Special Tests and Provisions – Selections from the Waiting List Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Special Tests and Provisions Criteria: Selections from the Waiting List. The PHA must have written policies in its Admissions and Continued Occupancy Policy for selecting applicants from the waiting list and PHA documentation must show that the PHA follows these policies when selecting applicants from the waiting list. Except for as provided in 24 CFR section 982.203(Special admission (non-waiting list)), all families admitted to the program must be selected from the waiting list. “Selection” from the waiting list generally occurs when the PHA notifies a family whose name reaches the top of the waiting list to come in to verify eligibility for admission (24CFR sections 5.410, 982.54(d), and 982.201 through 982.207). Condition: Based upon inspection of the waiting list provided to us during the time of audit, the new move-in list and discussions with management, it could not be determined with certainty that new move-ins were selected from the wait list in an order that is in accordance with the Authority’s policy. Context: Two (2) names were selected from the new move-in list and those names were to be traced to the waiting list to verify new move-ins were chosen in an order that was in accordance with the Authority’s policy. It was determined that two (2) out of two (2) new move-ins selected could not be traced with certainty back to the Authority's waiting list Known Questioned Costs: $8,691 Findings – Federal Award Program Audit (continued) Finding 2024-003 (continued) Cause: There is a material weakness in internal controls over the compliance for the special tests and provisions type of compliance related to selections from the waiting list. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that assures the program is in compliance. Effect: The Public and Indian Housing Program is in material non-compliance with the special tests and provisions type of compliance related to selections from the waiting list. Recommendation: We recommend the Authority design and implement internal control procedures related to selections from the waiting list that will reasonably assure compliance with the Uniform Guidance and the compliance supplement. Views of responsible officials and planned corrective action: The Authority has recognized the material weakness in the Public and Indian Housing Program and will implement internal control procedures related to selections from the waiting list that will ensure compliance with federal regulations. Ivy Melendez, Executive Director, will be responsible to implement this corrective action by September 30, 2025.

El Proyecto del Barrio, Inc. acknowledges the finding related to the incorrect administration of sliding fee discounts. We are committed to strengthening the administration of the sliding fee program to ensure full compliance with grant requirements. To address these issues and prevent recurrence, the following corrective actions are being implemented: 1. Revised Application and Documentation Requirements: o The Sliding Fee Program application forms are being updated to include structured sections for staff to record income from supporting documentation (e.g., pay stubs, tax returns), rather than relying on the patient to write their income on the application, which will greatly reduce incorrect income stated on support. Staff will be responsible for calculating annual gross income based on supporting documentation and have a checklist to ensure documentation is complete and retained/uploaded in the system. 2. Two-Step Review Process: o A staff member (the “Preparer) will calculate the annual gross income, determine the household size, and determine the eligible sliding fee discount, and a second staff member (the “Reviewer”) will independently review and verify the Preparer’s calculations and determinations based on the supporting documentation. Both parties will document their review of the application to establish accountability. 3. Staff Training and Ongoing Competency Checks: o Comprehensive refresher training will be provided to all staff involved in the sliding fee program process, including the use of the poverty guidelines, income calculation methods, the new forms, entering income and household size into the system, and uploading support to the system. 4. Formal Review: o The Billing Department will conduct regular audits of completed sliding fee applications and eligibility determination forms to ensure compliance with policies. Errors will be tracked and addressed through corrective action and coaching. El Proyecto del Barrio, Inc. remains committed to accurate, compliant, and equitable implementation of the Sliding Fee Program. Person Responsible: Ricardo Ornelas Position of Responsible Party: Chief Financial Officer Completion Date: August 31, 2025

Action: Checklists for eligibility functions were implemented 07.31.24 with the FY23 Audit Findings. The deficiencies for the FY24 Audit occurred prior to the implementation of the checklists. 01.26.24 for use of the incorrect UA and 01.18.23 for incorrect calculation of income. Due Date: July 31, 2024 Responsible Person: Program Manager, Christi Champ Action: Overdue Inspections Completed. The full portfolio of required HQS inspections were vetted following the FY23 audit, and any overdue inspections were completed. Due Date: March 31, 2025 Responsible Person: Program Manager, Nat Dybens