Corrective Action Plans

Finding 2022-002 a. Program Information: 14.267 Continuum of Care Program b. Criteria: Housing program tenants are required to pay up to 30% of their income for rent. Eligibility and rent determination evaluations are performed for new tenants before move-in and annually for existing tenants to determine their portion of rent to pay. In accordance with 2 CFR 200.307, program income (in this case, tenant rent) must be correctly determined and properly recorded in the accounting records. c. Condition: For two out of 10 transactions tested, the amount of rent collected by The Center from the tenant was more than the amount determined on the Eligibility and Rent Determination form. Response: a. The Director of Housing and Youth Homeless Services is working with the housing complex property manager to memorialize the practice of either having the tenant reduce a future payment by the overpayment amount or refunding the overpayment amount to the tenant. In addition, they are working together to implement an actively level control whereby the Director of Housing and Youth Homeless Services’ team and the housing complex property manager are performing a more detailed review on a monthly basis to ensure overpayments, in particular, are detected and corrected timely. Contact persons responsible for corrective action: a. Victor Esquivel, Director of Housing and Youth Homeless Services b. Angela Reyes, Chief Financial Officer Anticipated completion date: a. November 1, 2023

Finding Reference Number: MW2021-009 Statement of Concurrence or Nonconcurrence: CUAHSI agrees with the finding and recommendation. CUAHSI Corrective Action: Action by CUAHSI impacting audit year 2021: CUAHSI used a single payment gateway for registration on CUAHSI events and was able to accurately document and produce grant-specific totals for audit year 2021 program income. CUAHSI staff missed the NSF filing deadline for declaring federal fiscal year 2021 program income by one day (submitted November 16th, 2021). Corrective actions to processes and responsibilities impacting subsequent years: CUAHSI continues to use a single payment gateway for events and registration fees which supports segregation of payments per event and per grant. Program income has been reported to NSF accurately and on time beginning in 2023 and appropriate staff and policies are in place to ensure future compliance. Name of Contact Person: 􀁸 Maureen S. Ako, Director of Finance 􀁸 Telephone: (339)221-5400 􀁸 Email: msabino@cuahsi.org Projected Completion Date: NA; is complete

During the audit period through 2022, there was a transition of fiscal and administrative personnel at the City of Williamsport. Due to findings of an internal financial investigation, the City communicated with appropriate parties and a grand jury was convened. The City has been an continues to be under state and federal criminal investigations since February of 2020. Numerous financial records, extending over a 10-year period, have been provided to investigators. In June of 2022, the City hired a consultant to provide fiscal oversight on an ongoing basis and reconcile, to the extent possible prior financial records. Since that time, the City has enhanced internal control and implemented policies to assure accurate financial reporting and compliance. The City anticipates a similar finding for the December 31, 2020, 2021, and 2022 audits, but with the exception of the results of the criminal investigations, expects to resolve this finding for the December 31, 2023 audit.

FINDINGS - FEDERAL AWARDS Finding Number: 2021005 Finding Type: Significant Deficiency Condition: Program income was not used by DCCCMH to meet their matching requirements. DCCCMH reported allowable net program costs in excess of actual net allowable program costs of $15,569 and $3,446 for grants M10071L5F011912 and Ml0439L5F011903, respectively. Management Response: Management acknowledges that program income generated from specific programs is to be used to cover net allowable program costs or to meet matching requirements. DCCCMH will implement measures to track program income for grant programs and will use program income to offset allowable program costs when preparing financial status reports. A final review of the use of program income will be performed by the Finance team before the annual audit commences. These measures will be incorporated into the updates to the financial policies and procedures for grant programs.

The Office of AIDS (OA) agrees with the finding and recommendation. OA developed and implemented additional, internal quality assurance (QA) processes in April of 2022 to ensure that secondary reviews of AIDS Drug Assistance Program (ADAP) applications are consistently enforcing the existing guidelines, including acceptable supporting documentation and accurate eligibility requirements. During this audit period, and through December 2021, ADAP had issued multiple policy memos to respond to the COVID-19 pandemic, which enabled staff and enrollment workers to defer documentation collection, when necessary, to remain flexible and ensure clients impacted by the pandemic, and associated site closures, did not lose eligibility and access to life saving medications and comprehensive healthcare. These flexibilities in our guidelines were implemented based on guidance received from our federal funder, Health Resources and Services Administration (HRSA), which encouraged ADAPs to reassess their organization's eligibility and recertification policies and procedures, and remove any barriers that may impede social distancing, or other public health strategies, necessary to minimize COVID-19 transmission. This documentation deferral was terminated on December 31, 2021, and since January 1, 2022, full documentation and eligibility requirements have been enforced. This, combined with ongoing QA efforts, will help to mitigate future findings in ADAP applications dated January 1, 2022 onward. Estimated Implementation Date: Already implemented as of April 2022 Contact: Sharisse Kemp, Branch Chief AIDS Drug Assistance Program Branch California Department of Public Health

Our financial staff has offered additional training for staff one the proper procedure, discussed the importance of the control of program income and used disciplinary procedures as appropriate to reach better compliance.

Finding reference number: SA 2021-002 Accurate Financial Reporting in the Annual PR26 Report Assistance Listing Number: 14.218 Assistance Listing Title: COVID-19 - Community Development Block Grants/Entitlement Grants (CDBG) Name of Federal Agency: Department of Housing and Urban Development Federal Award Identification Number: B-14-MC-06-0037, B-18-MC-06-0037, B-19-MC-06-0037, B-20-MC-06-0037, B-20-MW-06-0037 • Fiscal Year of Initial Finding: 2021 • Name(s) of the contact person: Jennifer Block, Management Analyst • Corrective Action Plan: Since FY 2021, the City has reviewed its organizational structure and processes for management of the CDBG grant program. At the end of FY 2023, the City brought the program back in-house to the newly-created Department of Social Services and Housing (SSH). In FY 2024, staff developed a process to ensure timely and consistent draws, with reconciliation to the general ledger at the point of each draw. SSH staff have developed a timeline of required actions for the program to ensure compliance with deadlines. • Anticipated Completion Date: June 30, 2024

Finding 2021-012 Program Income Individual(s) Responsible: Grace Ross, Tribal Treasurer, Accounting Director, Program Directors Action: Ensure that documentation is available for every item purchased or run through payroll. Anticipated Completion Date: September 2023

In response to finding number 2021-SA5, management agrees with the finding and will design, implement, and maintain policies and procedures that ensure program income is tracked and expended appropriately.

In response to finding number 2021-SA2, management agrees with the finding and will design, implement, and maintain internal controls over all direct and material compliance areas (other than eligibility). Additionally, management will ensure that the Organization’s internal controls comply with the Comptroller General of the United States’s “Standards for Internal Control in the Federal Government” or COSO’s “Internal Control Integrated Framework”.

Finding Reference Number: MW2020-009 Statement of Concurrence or Nonconcurrence: CUAHSI agrees with the finding and recommendation. CUAHSI Corrective Action: Action by CUAHSI impacting audit year 2020: CUAHSI uses a single payment gateway for registration on CUAHSI events and was able to accurately document and produce grant-specific totals for audit year 2020 program income. Corrective actions to processes and responsibilities impacting subsequent years: CUAHSI uses a single payment gateway to segregate payments appropriately per event and per grant. Program income for subsequent years has been reported to NSF annually and appropriate staff and policies are in place to ensure future compliance. Name of Contact Person: 􀁸 Maureen S. Ako, Director of Finance 􀁸 Telephone: (339)221-5400 􀁸 Email: msabino@cuahsi.org Projected Completion Date: NA; is complete

Statement of Concurrence or Nonconcurrence: CUAHSI agrees with the finding and recommendation. CUAHSI Corrective Action: Action by CUAHSI impacting audit year 2020: CUAHSI uses a single payment gateway for registration on CUAHSI events and was able to accurately document and produce grant-specific totals for audit year 2020 program income. Corrective actions to processes and responsibilities impacting subsequent years: CUAHSI uses a single payment gateway to segregate payments appropriately per event and per grant. Program income for subsequent years has been reported to NSF annually and appropriate staff and policies are in place to ensure future compliance. Name of Contact Person: 􀁸 Maureen S. Ako, Director of Finance 􀁸 Telephone: (339)221-5400 􀁸 Email: msabino@cuahsi.org Projected Completion Date: NA; is complete

During the audit period through 2022, there was a transition of fiscal and administrative personnel at the City of Williamsport. Due to findings of an internal financial investigation, the City communicated with appropriate parties and a grand jury was convened. The City has been an continues to be under state and federal criminal investigations since February of 2020. Numerous financial records, extending over a 10-year period, have been provided to investigators. In June of 2022, the City hired a consultant to provide fiscal oversight on an ongoing basis and reconcile, to the extent possible prior financial records. Since that time, the City has enhanced internal control and implemented policies to assure accurate financial reporting and compliance. The City anticipates a similar finding for the December 31, 2021, and 2022 audits, but with the exception of the results of the criminal investigations, expects to resolve this finding for the December 31, 2023 audit.

CUAHSI uses a single payment gateway for registration on CUAHSI events, which is the organization’s only source of program income during the audit year (2019) up to present day (February 2024). The CVENT platform segregates events and CUAHSI program staff align these event codes to the grants supporting the events. Though identifiable through the CVENT system, our external contract accounting team failed to record and classify the program income to the correct grant in the accounting books and incorrectly included some grant expense reimbursement revenue in the program income transactions and totals provided to the auditors. Reporting program income to NSF through the annual program income report was not affected and was reported accurately. CUAHSI has addressed this issue by building its financial team and hiring accounting employees (as of September, 2023) with the skills, knowledge, and experience to appropriately manage the finances of federal awards. The new accounting team has applied proper identification of the events and have corrected the misclassification done by the former contractors.

Program income of $293,591 was entered into Sage and submitted to the auditor along with all other General Ledger details. Separately, CUAHSI reported program incomes of different (smaller) amounts to NSF that are likely reflective of actual incomes generated by the active awards. Potential mischaracterization in General Ledger detail may have resulted in overstating program income. The organization is working to implement processes that are 2 CFR Part 200.307 compliant and will be work with their cognizant agency to reconcile accurate program income relative to award draws.

During the audit period through 2022, there was a transition of fiscal and administrative personnel at the City of Williamsport. Due to findings of an internal financial investigation, the City communicated with appropriate parties and a grand jury was convened. The City has been an continues to be under state and federal criminal investigations since February of 2020. Numerous financial records, extending over a 10-year period, have been provided to investigators. In June of 2022, the City hired a consultant to provide fiscal oversight on an ongoing basis and reconcile, to the extent possible prior financial records. Since that time, the City has enhanced internal control and implemented policies to assure accurate financial reporting and compliance. The City anticipates a similar finding for the December 31, 2020, 2021, and 2022 audits, but with the exception of the results of the criminal investigations, expects to resolve this finding for the December 31, 2023 audit.

Recommendation: We recommend the City maintain a complete listing of outstanding loans and prepare and regularly use a master CDBG-related loan repayment schedule detailing all loans issued to monitor and capture loan repayments that would prompt the recording of program income as repayments are received. In addition, loans receivable should be reconciled to the general ledger on a regular periodic basis. This addresses COSO's Control Activities, Principle 10: selects & develops control activities and Principle 12: deploys control activities through policies and procedures Management Response and Corrective Action Plan City's Response: The City concurs with the recommendation Corrective Action Plan: The Controller's office will work with the Grants Division to implement tracking procedures, recording procedures and processes, creation of a centralized database that clearly identifies program income including loan repayments and provide training to staff on how to track, record and report program income. This system will be communicated to all staff members within Grants Division, City Controller's Office and Treasury Department to ensure all parties have access to the database, policies and procedures so they are able to properly code each payment in order to monitor the payment type and record the payment in the correct fiscal year. The Grants Division will create a CDBG procedures manual that documents policies and procedures designed to serve as the system of internal controls required by OMB's Uniform Guidance (2 CFR 200). In the meantime, the Grants and City Controller's departments will take steps to address the specific finding noted above. Planned Implementation Date: June 30, 2021 Responsible Person: Aubrey Relf, Grants Manager and Rafaela King, Controller

Recommendation: We recommend the City strengthen their procedures in relation to identifying, determining, assessing, and recording program income. The City should have procedures in place to accurately identify program income when are received and to ensure that program income is appropriately recorded in the CDBG fund as such and into IDIS. This addresses COSO's Control Activities, Principle 10: selects & develops control activities and Information & Communication, Principle 15: communicates externally. Management Response and Corrective Action Plan Corrective Action Plan: The Controller's office will work with the Grants Division to implement tracking procedures, recording procedures and processes, creation of a centralized database that clearly identifies program income including loan repayments and provide training to staff on how to track, record and report program income. This system will be communicated to all staff members within Grants Division, City Controller's Office and Treasury Department to ensure all parties have access to the database, policies and procedures so they are able to properly code each payment in order to monitor the payment type and record the payment in the correct fiscal year. The City will create a procedures manual that documents policies and procedures designed to serve as the system of internal controls required by OMB's Uniform Guidance (2 CFR 200). In the meantime, the Grants and City Controller's departments will take steps to address the specific finding noted above. Planned Implementation Date: June 30, 2021 Responsible Person: Aubrey Relf, Grants Manager and Rafaela King, Controller