Corrective Action Plans

Finding 519898 (2023-001)

None 2023

MO

Questioned Costs Cash Management HUD Housing Programs

Finding No 2023-001 Name of Responsible Party Fred Gibbs FKGibbs Company, LLC PO Box 410312 Kansas City, MO 64141 Fred@fkgibbs.com M: 913.709.1811 Views of Responsible Official and Corrective Action The Project did not make the required deposit to the residual receipts accounts and ...

Finding No 2023-001 Name of Responsible Party Fred Gibbs FKGibbs Company, LLC PO Box 410312 Kansas City, MO 64141 Fred@fkgibbs.com M: 913.709.1811 Views of Responsible Official and Corrective Action The Project did not make the required deposit to the residual receipts accounts and still is not in compliance for the year ending 06-30-2023. Expected Date of Completion: unknown

View Audit 339228 Questioned Costs: $1

Finding 519850 (2023-001)

Material Weakness 2023

Southeast Arkansas Economic Development District, Inc.

AR

Questioned Costs Subrecipient Monitoring § 200.331 § 200.333

Management concurs with the finding and recommendation. Management will work to ensure proper policies and procedures are established and followed to ensure future reporting under the appropriate guidance by June 30, 2025.

View Audit 339115 Questioned Costs: $1

Finding 519843 (2023-004)

Material Weakness 2023

Productive Alternatives, Inc.

MN

Questioned Costs Allowable Costs / Cost Principles Matching / Level of Effort / Earmarking

Formula Grants for Rural Area and Tribal Transit Program Federal Assistance Listing #20.509 Recommendation: The organization should ensure proper documentation is retained to support the approval of allowable costs by someone knowledgeable of the grant and its guidelines. The Organization should re...

Formula Grants for Rural Area and Tribal Transit Program Federal Assistance Listing #20.509 Recommendation: The organization should ensure proper documentation is retained to support the approval of allowable costs by someone knowledgeable of the grant and its guidelines. The Organization should reconcile the budgeted payroll allocation charged to the grant after-the-fact to actual work performed to ensure the allocation accurately reflected. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The Organization will ensure moving forward that proper support is retained for allowable costs charged to the grant and budgeted amounts are reconciled to after-the fact actual amounts. Name(s) of the contact person(s) responsible for corrective action: Denise DeMartelaere, Co-Director of Finance Planned completion date for corrective action plan: 12/31/2025

View Audit 339087 Questioned Costs: $1

Finding 519518 (2023-001)

None 2023

Living Indepdence for Everyone, Inc. (life)

MS

Questioned Costs Allowable Costs / Cost Principles

Compliance Requirement – Living Independence for Everyone, Inc. (LIFE) is subject to 45 CFR sections 75.403-405 which require all expenses charged to a federal award to be allowable, reasonable and allocable. Recommendation – The Organization should adopt and implement formalized policies to provide...

Compliance Requirement – Living Independence for Everyone, Inc. (LIFE) is subject to 45 CFR sections 75.403-405 which require all expenses charged to a federal award to be allowable, reasonable and allocable. Recommendation – The Organization should adopt and implement formalized policies to provide guidance on assessing staff performance and delivery of bonus payments. Also, the Organization should maintain sufficient documentation of the methodology followed in determining the amount of any bonus payments and the approval of such payments. Corrective Action Plan – The Organization agrees with the finding and is in the process of adopting updated policies and having them approved by ACL. These updated policies will provide clear guidance on the staff performance review process and the methodology for determining any bonus amounts to be paid. Contact Person – Roger Bullock, Executive Director

View Audit 338528 Questioned Costs: $1

Finding 519488 (2023-009)

Significant Deficiency 2023

Kipp Delta, Inc. D/b/a Kipp Delta Public Schools

AR

Questioned Costs Allowable Costs / Cost Principles Internal Control / Segregation of Duties § 200.430

Views of responsible officials and planned corrective actions: Management agrees with this finding and will ensure copies of all employee contracts are maintained. See 2023-004 for management’s detailed action plan, timeline, and the responsible parties for all Education Stabilization Fund findings.

View Audit 338456 Questioned Costs: $1

Finding 519487 (2023-008)

Significant Deficiency 2023

Kipp Delta, Inc. D/b/a Kipp Delta Public Schools

AR

Questioned Costs Internal Control / Segregation of Duties § 200.430

Views of responsible officials and planned corrective actions: Management agrees with this finding and will ensure all time certifications are signed by employees and reviewed and approved by the appropriate School personnel. See 2023-004 for management’s detailed action plan, timeline, and the resp...

Views of responsible officials and planned corrective actions: Management agrees with this finding and will ensure all time certifications are signed by employees and reviewed and approved by the appropriate School personnel. See 2023-004 for management’s detailed action plan, timeline, and the responsible parties for all Education Stabilization Fund findings.

View Audit 338456 Questioned Costs: $1

Finding 519486 (2023-007)

Significant Deficiency 2023

Kipp Delta, Inc. D/b/a Kipp Delta Public Schools

AR

Questioned Costs Allowable Costs / Cost Principles Internal Control / Segregation of Duties § 200.430

Views of responsible officials and planned corrective actions: Management agrees with this find and will review time certifications in comparison to salaries and wages recorded to the program. See 2023-004 for management’s detailed action plan, timeline, and the responsible parties for all Education...

Views of responsible officials and planned corrective actions: Management agrees with this find and will review time certifications in comparison to salaries and wages recorded to the program. See 2023-004 for management’s detailed action plan, timeline, and the responsible parties for all Education Stabilization Fund findings.

View Audit 338456 Questioned Costs: $1

Finding 519485 (2023-006)

Significant Deficiency 2023

Kipp Delta, Inc. D/b/a Kipp Delta Public Schools

AR

Questioned Costs Equipment & Real Property Management § 200.313

Views of responsible officials and planned corrective actions: Management agrees with this finding and will put procedures in place to perform a physical inventory of property at least once every two years. See 2023-004 for management’s detailed action plan, timeline, and the responsible parties for...

Views of responsible officials and planned corrective actions: Management agrees with this finding and will put procedures in place to perform a physical inventory of property at least once every two years. See 2023-004 for management’s detailed action plan, timeline, and the responsible parties for all Education Stabilization Fund findings.

View Audit 338456 Questioned Costs: $1

Finding 519484 (2023-005)

Significant Deficiency 2023

Kipp Delta, Inc. D/b/a Kipp Delta Public Schools

AR

Questioned Costs Equipment & Real Property Management Procurement, Suspension & Debarment § 200.313

View of responsible officials and planned corrective actions: Management agrees with this finding and will put procedures in place to maintain adequate property records. See 2023-004 for management’s detailed action plan, timeline, and the responsible parties for all Education Stabilization Fund fin...

View of responsible officials and planned corrective actions: Management agrees with this finding and will put procedures in place to maintain adequate property records. See 2023-004 for management’s detailed action plan, timeline, and the responsible parties for all Education Stabilization Fund findings.

View Audit 338456 Questioned Costs: $1

Finding 519483 (2023-004)

Material Weakness 2023

Kipp Delta, Inc. D/b/a Kipp Delta Public Schools

AR

Questioned Costs Subrecipient Monitoring Allowable Costs / Cost Principles § 200.302

Views of responsible officials and planned corrective actions: Management agrees with this finding and will put procedures in place to maintain adequate supporting documentation for all transactions. Action Plan: Establish clear guidelines and training on allowable costs for federally funded program...

Views of responsible officials and planned corrective actions: Management agrees with this finding and will put procedures in place to maintain adequate supporting documentation for all transactions. Action Plan: Establish clear guidelines and training on allowable costs for federally funded programs. Implement a compliance checklist for all federally funded expenditures to ensure alignment with Education Stabilization Fund requirements. Conduct internal audits every quarter to monitor compliance and document findings. Timeline: Immediate implementation; quarterly compliance reviews. Responsible Parties: Finance Director, APSRC, and Directors.

View Audit 338456 Questioned Costs: $1

Finding 519481 (2023-001)

Material Weakness 2023

Mental Health Resource of Texas, Inc.

TX

Questioned Costs Internal Control / Segregation of Duties Allowable Costs / Cost Principles

I. VIA HOPE 2023 MANAGEMENT CORRECTIVE ACTION PLAN: ► BACKGROUND: CONTINUATION, ADDRESS MULTI-YEAR FRAUD: STRENGTHEN INTERNAL CONTROLS: Management and staff continue to work with the insurance carrier and local law enforcement agencies to restore funds and strengthen its internal controls. ► Update:...

I. VIA HOPE 2023 MANAGEMENT CORRECTIVE ACTION PLAN: ► BACKGROUND: CONTINUATION, ADDRESS MULTI-YEAR FRAUD: STRENGTHEN INTERNAL CONTROLS: Management and staff continue to work with the insurance carrier and local law enforcement agencies to restore funds and strengthen its internal controls. ► Update: History and Board Actions: In FY 2021, Via Hope experienced a significant loss of revenue due to the ending of contracts from its two primary funding streams – the Health and Human Services Commission and the Hogg Foundation for Mental Health. This loss of revenue resulted in the Board recommending and approving the reduction of staff and the departure of the CEO. In FY 2022, the Board recommended and approved the termination of its Accounts Manager and the former Board Chairman stepped in to voluntarily manage the finances until the organization could make other arrangements. The former chairman stepped down from his role and an election of officers was held to install a new Chair. By January 2022, with new revenue coming into the organization, the Board selected a new CEO and in December 2022, a new accounts manager was hired. Once the new accounts manager began reconciling the accounts, a pattern of questionable expenditures became evident with PayPal and other accounts. The CEO and staff informed the Board of what appeared to have happened and recognizing its fiduciary responsibility, the Board approved the engagement of a forensic audit by an external audit firm, The Wesley Peachtree Group (WPG) of Atlanta, Georgia. The forensic audit resulted in findings that fraudulent activity in the amount of $233,000 was likely to have occurred. As a result, the CEO was instructed to file an insurance claim with Frost Insurance. To process the claim, Frost required the involvement of law enforcement which was approved by the Board. Formal investigations were launched and remain ongoing with the Austin Police Department and the Travis County District Attorney's office. Recently, law enforcement met with the Board and provided an update on the investigation. Subsequently, the CEO was requested to follow up with the insurance carrier and state regulatory agencies to ensure the prompt receipt of its insurance claim from PayPal and other potential sources. II. FINDINGS AND RECOMMENDATIONS: Finding 2023-001 - Internal Control Deficiencies (Material Weakness) a) Time and Effort, Payroll and Human Resource Forms and Contracts - In response to the finding, Management will require monthly Time and Effort reports for each employee, develop new human resource forms, and update staff contracts at the beginning of the fiscal year. b) Drawdowns and Written Approvals - With the addition of the new Finance staff member in January 2025, management will initiate a written approval process. All payroll adjustments, drawdowns, credit card purchases, and payments will require invoices, receipts, and written approvals before payment is made. The Accounting Manager will also work with the CEO to ensure that staff provide receipts promptly and that journal entries are recorded on a monthly basis. c) Receipts, Written Approvals, PP&E Schedule - Receipts and written approvals were addressed in Response (C). While the organization maintains an equipment log, we will establish a formal Property, Plant, and Equipment Schedule (PP&E), particularly noting equipment purchased with federal funds. d) Paypal, Frost, Forte - Management continues to work with law enforcement to obtain misappropriated funds from PayPal, and other potential accounts. As indicated, investigators met with the CEO, staff, Frost Bank, and the Board to obtain information regarding these accounts. It is our understanding that they may meet with prior Via Hope executives as well. We will update the auditors when more information is provided. e) Segregation of Duties - Management has begun the process of interviewing qualified staff to segregate duties in the Finance office. This will ensure that one individual will no longer be responsible for handling funds, payments, reconciliations, and General Ledger (GL) postings. The individual will be in place by January 2025.

View Audit 338449 Questioned Costs: $1

Finding 519404 (2023-002)

Significant Deficiency 2023

Crawford County Board of Education

GA

Questioned Costs Allowable Costs / Cost Principles Subrecipient Monitoring § 200.303 § 200.403 § 200.415

FA 2023-002 Strengthen Budgetary Controls over Expenditures Internal Control Impact: Significant Deficiency Compliance Impact: Activities Allowed or Unallowed Allowable Costs/Cost Principle Prior Year Finding: None Description: A review of expenditures charged to the Elementary and Secondary ...

FA 2023-002 Strengthen Budgetary Controls over Expenditures Internal Control Impact: Significant Deficiency Compliance Impact: Activities Allowed or Unallowed Allowable Costs/Cost Principle Prior Year Finding: None Description: A review of expenditures charged to the Elementary and Secondary School Emergency Relief Fund program revealed instances in which expenditures has not been properly approved by the pass- through entity. Corrective Action Plans: the School District will work with all entities to confirm that all existing controls are adhered to by developing and implementing an improved monitoring process. This process will ensure that all expenditures comply with all applicable policies and regulations. Estimated Completion Date: June 30, 2024 Contact Person: Daisy M. Prather, Finance Director Telephone: (478) 836-3131 extension 106 Email: daisy.prather@crawfordschools.org

View Audit 338350 Questioned Costs: $1

Finding 519400 (2023-007)

Material Weakness 2023

Town of Seabrook

NH

Questioned Costs Allowable Costs / Cost Principles Internal Control / Segregation of Duties § 200.303 § 200.430

Audit Finding Reference: 2023-007 Management’s Response and Planned Corrective Action: Implement a record keeping process for all rates and weighted rates for payroll. Name of Contact Person and Completion Date: Name: William Manzi

View Audit 338332 Questioned Costs: $1

Finding 519360 (2023-005)

Material Weakness 2023

Housing Authority of the County of Marin

CA

Questioned Costs HUD Housing Programs Internal Control / Segregation of Duties

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 – Public Housing Waiting List Non Compliance Material to the Financial Statements: Yes...

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 – Public Housing Waiting List Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Special Tests and Provisions Finding 2023-005 (continued): 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 any certainty that certain new move-ins to the Public and Indian Housing Program were selected from the wait list in an order that is in accordance with the Authority’s Admissions and Continued Occupancy Policy. Context: Of a sample size of nine (9) new move-ins, nine (9) could not be determined to be housed in proper order from the Authority's waiting list. Our sample size is statistically valid. Known Questioned Costs: $89,397 Cause: There is a material weakness in internal controls over the compliance for the special tests and provisions type of compliance related to the public housing 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 Program is in material non-compliance with the special tests and provisions type of compliance related to selection of applicants from the waiting list. Recommendation: We recommend the Authority design and implement internal control procedures that will assure compliance with the Uniform Guidance and the compliance supplement. Views of responsible officials and planned corrective action: The Authority accepts the recommendation of the auditor. The Authority will increase oversight on the maintenance of the waiting list and process of housing applicants to better monitor adequacy with compliance requirements. Kim Dolan, Chief Financial officer, will be responsible to implement this corrective action by December 31, 2024.

View Audit 338241 Questioned Costs: $1

Finding 519359 (2023-004)

Material Weakness 2023

Housing Authority of the County of Marin

CA

Questioned Costs HUD Housing Programs Eligibility

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Public and Indian Housing Assistance Listing Numbers: 14.850 Noncompliance – E. Eligibility – Tenant Files Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Comp...

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Public and Indian Housing Assistance Listing Numbers: 14.850 Noncompliance – E. Eligibility – Tenant Files Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Eligibility Criteria: Tenant Files. The PHA must do the following: As a condition of admission or continued occupancy, require the tenant and other family member to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). These files are required to be maintained and available for examination at the time of audit. Condition: Based upon inspection of the Authority’s files and on discussion with management, there were documents that were unavailable for examination at the time of audit. Finding 2023-004 (continued): Context: There are approximately 460 units. Of a sample size of seventeen (17) tenant files, the following was noted: • HUD 50058 annual recertification was not filed timely in 2 files • Original Application was missing in 1 file • Verification of income was missing in 3 files • Verification of assets was missing in 2 files Our sample size is statistically valid. Known Questioned Costs: $28,961 Cause: There is a material weakness in internal controls over the compliance for the eligibility type of compliance related to the maintenance of tenant files. 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 eligibility type of compliance related to the maintenance of tenant files. Recommendation: We recommend the Authority design and implement internal control procedures that will 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 that will ensure compliance with federal regulations. Elizabeth Campbell, Interim Deputy Director, will be responsible to implement this corrective action by December 31, 2024.

View Audit 338241 Questioned Costs: $1

Finding 519358 (2023-006)

Material Weakness 2023

Housing Authority of the County of Marin

CA

Questioned Costs HUD Housing Programs Eligibility

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers Program Federal Assistance Listing Numbers: 14.871 Noncompliance - N. Special Tests and Provisions - Selection from the Waiting List Non Compliance Material to the Financial Sta...

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers Program Federal Assistance Listing Numbers: 14.871 Noncompliance - N. Special Tests and Provisions - Selection 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 Section 8 Administrative Plan 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 any certainty that certain new move-ins to the Section 8 Housing Choice Vouchers Program were selected from the wait list in an order that is in accordance with the Authority’s Section 8 Administrative Plan. Context: Of a sample size of thirteen (13) new move-ins, seven (7) could not be determined to be housed in proper order from the Authority's waiting list. Our sample size is statistically valid. Known Questioned Costs: $181,533 Cause: There is a material weakness in internal controls over the compliance for the special tests and provisions type of compliance related to selection from the waiting list. The Authority has not properly housed applicants in compliance with program requirements. Effect: The Section 8 Housing Choice Vouchers Program is in material non-compliance with the eligibility type of compliance related to selection from the waiting list. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement. Finding 2023-006 (continued): Views of responsible officials and planned corrective action: The Authority accepts the recommendation of the auditor. The Authority will increase oversight in the Section 8 Housing Choice Voucher Program to ensure that established internal control policies are being followed on a timely basis. Kim Dolan, Chief Financial officer, will be responsible to implement this corrective action by December 31, 2024.

View Audit 338241 Questioned Costs: $1

Finding 519357 (2023-003)

Significant Deficiency 2023

Housing Authority of the County of Marin

CA

Questioned Costs HUD Housing Programs Significant Deficiency

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Housing Voucher Cluster - Section 8 Housing Choice Vouchers - Mainstream Vouchers - Emergency Housing Vouchers Assistance Listing Numbers: 14.871, 14.879, and 14.EHV Noncompliance – N. Special Tests and ...

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Housing Voucher Cluster - Section 8 Housing Choice Vouchers - Mainstream Vouchers - Emergency Housing Vouchers Assistance Listing Numbers: 14.871, 14.879, and 14.EHV Noncompliance – N. Special Tests and Provisions – Housing Quality Standards Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Special Tests and Provisions Criteria: Housing Quality Standards Inspections. The PHA must inspect the unit leased to a family at least biennially to determine if the unit meets the Housing Quality Standards (HQS) and the PHA must conduct quality control re-inspections. The PHA must prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)). For units that fail inspection the PHA must correct all life threatening HQS deficiencies within 24 hours and all other deficiencies within 30 days. Condition: Based upon inspection of the Authority’s files and on discussions with management, the Authority did not properly abate five (5) out of thirty-six (36) annual failed inspections selected for testing. Context: The Authority did not properly abate five (5) out of thirty-six (36) failed inspections selected for testing. As a result, the Authority was not in compliance with the HQS as required by 24 CFR sections 982.158(d) and 982.405(b). Finding 2023-003 (continued): Known Questioned Costs: • 14.871 - Section 8 Housing Choice Vouchers - $11,067 • 14.879 - Mainstream Vouchers - $160 • 14.EHV - Emergency Housing Vouchers - $341 Cause: There is a significant deficiency in internal controls over compliance for the special tests and provisions type of compliance related to HQS inspections. 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 Section 8 Housing Choice Vouchers, Mainstream Vouchers, and Emergency Housing Vouchers programs are in non-compliance with the special tests and provisions type of compliance related to HQS inspections. Recommendation: We recommend the Authority design and implement internal control procedures that will assure compliance with the Uniform Guidance and the compliance supplement. Views of responsible officials and planned corrective action: The Authority has recognized the significant deficiency in the Section 8 Housing Choice Vouchers, Mainstream Vouchers, and Emergency Housing Vouchers programs and will implement internal control procedures that will ensure compliance with federal regulations. Kathleen Wyatt, Director of Housing Operations, will be responsible to implement this corrective action by December 31, 2024.

View Audit 338241 Questioned Costs: $1

Finding 519356 (2023-002)

Material Weakness 2023

Housing Authority of the County of Marin

CA

Questioned Costs HUD Housing Programs Material Weakness

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: - Section 8 Housing Choice Vouchers - Emergency Housing Vouchers Assistance Listing Numbers: 14.871, 14.EHV Noncompliance – N. Special Tests and Provisions - Housing Quality Standards Non Compliance Materia...

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: - Section 8 Housing Choice Vouchers - Emergency Housing Vouchers Assistance Listing Numbers: 14.871, 14.EHV Noncompliance – N. Special Tests and Provisions - Housing Quality Standards Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Special Tests and Provisions Criteria: HQS Inspections. Per the Authority's HCV Admin Plan, the PHA must inspect the unit leased to a family biennially in order to determine if the unit meets HQS standards, and the PHA must conduct quality control re-inspections. The PHA must prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)). These inspection reports are required to be maintained and available for examination at the time of audit. Condition: Based upon inspection of the Authority’s files and on discussion with management there were inspection reports that were unavailable for examination at the time of audit. Context: Of a sample size of forty-four (44) units, twelve (12) units did not have biennial HQS inspections performed timely. Our sample size is statistically valid. Known Questioned Costs: • 14.871 - Section 8 Housing Choice Vouchers - $246,504 • 14.EHV - Emergency Housing Vouchers - $30,252 Cause: There is a material weakness in internal controls over the compliance for the special tests and provisions type of compliance related to HQS inspections. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that assures the program is in compliance. Finding 2023-002 (continued): Effect: The Section 8 Housing Choice Vouchers and Emergency Housing Vouchers programs are in material non-compliance with the with the special tests and provisions type of compliance related to HQS inspections. Recommendation: We recommend the Authority design and implement internal control procedures 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 Section 8 Housing Choice Vouchers and Emergency Housing Vouchers programs and will implement internal control procedures that will ensure compliance with federal regulations. Kathleen Wyatt, Director of Housing Operations, will be responsible to implement this corrective action by December 31, 2024.

View Audit 338241 Questioned Costs: $1

Finding 519355 (2023-001)

Material Weakness 2023

Housing Authority of the County of Marin

CA

Questioned Costs HUD Housing Programs Eligibility

Finding 2023-001: Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Housing Voucher Cluster - Section 8 Housing Choice Vouchers - Mainstream Vouchers - Emergency Housing Vouchers Assistance Listing Numbers: 14.871, 14.879, 14.EHV Noncompliance – E. Eli...

Finding 2023-001: Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Housing Voucher Cluster - Section 8 Housing Choice Vouchers - Mainstream Vouchers - Emergency Housing Vouchers Assistance Listing Numbers: 14.871, 14.879, 14.EHV Noncompliance – E. Eligibility – Tenant Files Non Compliance Material to the Financial Statements: Housing Voucher Cluster - Section 8 Housing Choice Vouchers - Yes - Mainstream Vouchers - Yes - Emergency Housing Vouchers - No Finding 2023-001 (continued): Material Weakness and Significant Deficiency in Internal Control over Compliance for Eligibility Criteria: Tenant Files. The PHA must do the following: As a condition of admission or continued occupancy, require the tenant and other family member to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). These files are required to be maintained and available for examination at the time of audit. Condition: Based upon inspection of the Authority’s files and on discussion with management, there were documents that were unavailable for examination at the time of audit. Context: There are approximately 2,434 units. Of a sample size of fifty-six (56) tenant files, the following was noted: • HUD form 9886 was unable to be provided in 4 files • Verification of income was unable to be provided in 5 files • Verification of assets was unable to be provided in 4 files • HUD 50058 annual recertification was not filed timely in 8 files • Original Application was unable to be provided in 12 files • Citizen Declaration Section 214 form was unable to be provided in 2 files • Lead based paint form was unable to be provided in 16 files • Signed lease was unable to be provided in 6 files • Our sample size is statistically valid. Known Questioned Costs: • 14.871 - Section 8 Housing Choice Vouchers - $65,025 • 14.879 - Mainstream Vouchers - $31,974 • 14.EHV - Emergency Housing Vouchers - $14,095 Cause: There is a material weakness in the Section 8 Housing Choice Vouchers and Mainstream Vouchers programs and a significant deficiency in the Emergency Housing Vouchers program in internal controls over the compliance for the eligibility type of compliance related to the maintenance of tenant files. 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 Section 8 Housing Choice Vouchers and Mainstream Vouchers programs are in material non-compliance, and the Emergency Housing Vouchers program is in non-compliance with the eligibility type of compliance related to the maintenance of tenant files. Recommendation: We recommend the Authority design and implement internal control procedures that will assure compliance with the Uniform Guidance and the compliance supplement. Views of responsible officials and planned corrective action: The Authority accepts the recommendation of the auditor. The Authority will increase oversight in the Housing Voucher Cluster to ensure that established internal control policies are being followed on a timely basis. Kathleen Wyatt, Director of Housing Operations, will be responsible to implement this corrective action by December 31, 2024.

View Audit 338241 Questioned Costs: $1

Finding 519349 (2023-005)

None 2023

Thornton Township High School District 205

IL

Questioned Costs Reporting Procurement, Suspension & Debarment

Condition: The District did not claim expenditures in conformity with the approved detail budget. Plan: Management will review its policies and procedures and implement changes to strengthen internal control over federal reporting. Anticipated Date of Completion: June 30, 2024. Name of Contact Perso...

Condition: The District did not claim expenditures in conformity with the approved detail budget. Plan: Management will review its policies and procedures and implement changes to strengthen internal control over federal reporting. Anticipated Date of Completion: June 30, 2024. Name of Contact Person: Dr. Albert Holmes. Management Response: The District will continue to monitor and review all expenditures to ensure that internal controls are applied as allowable costs and reporting required by federal and state guidelines.

View Audit 338190 Questioned Costs: $1

Finding 518999 (2023-001)

Significant Deficiency 2023

Friendly Temple Apartments Ii, INC

MO

Questioned Costs HUD Housing Programs Significant Deficiency

Management agrees with this finding and the overpayment was corrected in March 2024. Management will review internal controls and implement a review process to only pay expenses already incurred to avoid future overpayments.

View Audit 337486 Questioned Costs: $1

Finding 518925 (2023-003)

Material Weakness 2023

Eclectic Soul Voices Corporation

IN

Questioned Costs Procurement, Suspension & Debarment Allowable Costs / Cost Principles § 200.302

Finding 2023-03 Lack of Documentation to Support Expenditures Condition: The Organization failed to maintain financial records that properly substantiated expenditures which limited the ability to test several compliance requirements as part of audit procedures. These issues were most prevalent in ...

Finding 2023-03 Lack of Documentation to Support Expenditures Condition: The Organization failed to maintain financial records that properly substantiated expenditures which limited the ability to test several compliance requirements as part of audit procedures. These issues were most prevalent in testing direct disbursements. As part of audit procedures, 81 transactions were selected in a testing sample from a population which included 315 transactions. Of the 81 transactions tested, the Organization was unable to provide sufficient source documentation to support 21 of the transactions. Further, vendor and contract files were not consistently maintained and failed to provide adequate support to detail the history, method, and selection of procurement. Corrective Actions Taken or Planned: - Collaborate with the CPA firm to develop a standardized process for recording and tracking gift card transactions and allotments, ensuring accountability and traceability. - Add LaKisha (Executive Administrative Assistant) to QuickBooks with specific responsibilities for recording receipts, requisition forms, and matching these to corresponding transactions. Provide QuickBooks training for the Executive Assistant to strengthen understanding and ensure timely and accurate documentation of financial activities. - Develop and enforce a formal policy requiring comprehensive documentation (e.g., invoices, receipts, contracts) for all expenditures over a certain threshold (e.g., $500 or higher). This policy will include requirements for approval and justification prior to disbursement. - Require all staff to complete requisition forms for supplies or purchases in advance of procurement. These forms will include itemized details, purpose of purchase, and approval signatures. - Update processes to ensure vendor and contract files include critical details: procurement history, selection method, contract terms, and vendor agreements. These files will be consistently maintained and reviewed for completeness. - Strengthen the credit card usage process to require staff to submit itemized receipts, purpose of purchase, and pre-approval for all credit card transactions. This will include monthly reconciliations and management review of all credit card statements. - Implement periodic internal reviews to ensure compliance with the new documentation and procurement processes. The CPA firm will assist with quality checks and provide ongoing guidance.

View Audit 337399 Questioned Costs: $1

Finding 518921 (2023-007)

Material Weakness 2023

Eclectic Soul Voices Corporation

IN

Questioned Costs Procurement, Suspension & Debarment § 200.317 § 200.327

Finding 2022-07 Failure to Create and Implement a Suitable Procurement Policy Condition: The Organization created and implemented a procurement policy to govern its federal expenditures. The procurement policy implemented by the Organization failed to include several key elements, including clearly...

Finding 2022-07 Failure to Create and Implement a Suitable Procurement Policy Condition: The Organization created and implemented a procurement policy to govern its federal expenditures. The procurement policy implemented by the Organization failed to include several key elements, including clearly establishing and governing the various expenditure purchasing thresholds, documenting a sufficient bid process for competitive bid proposals, and standards of conduct covering conflict of interest for employees involved in the bid evaluation process. Further, while the policy was in place, the Organization failed to implement the elements of the policy into its procurement process. As part of audit procedures, 12 transactions were included in the testing population and all 12 were tested. Of the testing group, the auditor identified 4 transactions that required competitive bid procedures for which the Organization failed to conduct. The Organization also failed to document its rationale to limit competition for all items tested. Corrective Actions Taken or Planned: - VOICES will revise and implement a formal Procurement Policy that fully aligns with Uniform Guidance and federal regulations. The updated policy will include: + Clear Purchasing Thresholds: Establish thresholds for micro-purchases, small purchases, and formal procurements (e.g., competitive bidding for purchases exceeding $10,000 or other appropriate limits) - Implement a structured bid process that requires: + Multiple bids for purchases exceeding established thresholds. + Documentation of vendor selection rationale, including why competition was limited, if applicable. - Conduct mandatory training for all staff involved in procurement. - Require all vendors and contractors to be checked against the System for Award Management (SAM.gov) to confirm eligibility and compliance with federal procurement requirements.

View Audit 337399 Questioned Costs: $1

Finding 518920 (2023-006)

Material Weakness 2023

Eclectic Soul Voices Corporation

IN

Questioned Costs Allowable Costs / Cost Principles Internal Control / Segregation of Duties § 200.430

Finding 2022-06 Unallowable and Improperly Documented Payroll Expenditures Condition: The Organization failed to establish critical processes and internal controls over payroll expenditures to ensure compliance with Uniform Guidance requirements and several compliance issues were identified. As par...

Finding 2022-06 Unallowable and Improperly Documented Payroll Expenditures Condition: The Organization failed to establish critical processes and internal controls over payroll expenditures to ensure compliance with Uniform Guidance requirements and several compliance issues were identified. As part of audit procedures, 44 transactions were selected in a testing sample from a population of 243 direct payroll transactions. Of the transactions tested, the auditors noted 8 instances of payroll costs overclaimed by way of claiming the same work effort for the same period on multiple grants. The auditors noted 18 instances of failure to properly calculate and allocate the work effort completed by employees that worked on multiple grants and programs. The auditors noted 9 instances of the Organization failing to have approved pay rates on file that matched the amounts paid to the employees. The auditors also noted a significant lack of supervisory approval on timesheets or other time allocation support. Corrective Actions Taken or Planned: - Conduct mandatory training for all supervisors to reinforce the importance of: + Accurate timesheet approval processes. + Proper time allocation for employees working on multiple grants or programs. + Ensuring timely and consistent documentation of payroll expenditures. - Engage Christy Paddock Advisors LLC (CPA firm) to: + Oversee payroll allocation processes to ensure employee time is properly distributed across grants and programs based on actual work effort. + Implement controls to flag and prevent duplicate payroll charges to multiple grants. + Payroll expense reports will be systematically reviewed and approved by the CPA firm and VOICES’ executive team prior to filing federal claims. - Ensure all approved pay rates are documented, signed, and filed for each employee. - Configure QuickBooks to ensure payroll costs and grant allocations are: + Clearly identifiable and traceable. + Linked to corresponding grants and federal claims. - Revise the PTO policy to address liability and improve tracking by: + Implementing a "use-it-or-lose-it" policy with a defined carryover limit. + Removing PTO payout upon termination to reduce financial exposure. + Communicate the updated policy clearly to staff and implement tracking in payroll systems.

View Audit 337399 Questioned Costs: $1

Finding 518919 (2023-005)

Material Weakness 2023

Eclectic Soul Voices Corporation

IN

Questioned Costs Procurement, Suspension & Debarment Allowable Costs / Cost Principles § 200.402

Finding 2022-05 Unallowable and Improperly Documented Direct Expenditures Condition: The Organization failed to establish critical processes and internal controls over direct expenditures to ensure compliance with Uniform Guidance requirements and several compliance issues were identified. As part ...

Finding 2022-05 Unallowable and Improperly Documented Direct Expenditures Condition: The Organization failed to establish critical processes and internal controls over direct expenditures to ensure compliance with Uniform Guidance requirements and several compliance issues were identified. As part of audit procedures, 81 transactions were selected in a testing sample from a population of 315 direct expense transactions. Of the transactions tested, the auditors noted 15 instances of payments to contractors for work that were not sufficiently documented to support the allocatable work efforts performed on the grants in which they were charged. The auditors noted 4 instances where the costs charged to the federal grant were determined to not be reasonable, as they were either unallowable per Uniform Guidance, or were outside of the allowable costs approved in the federal award budgets. The auditors noted 1 instance of a transaction being claimed twice on different federal grants. The auditors also noted a significant lack of approvals for costs spent, as well as a failure to maintain adequate documentation, as noted in Finding 2023-003. Corrective Actions Taken or Planned: - Develop and implement a formal procurement policy to ensure all contractor and vendor selections are based on program needs and comply with federal regulations. The procurement process will include: + Clear criteria for vendor selection and justification. + Requirement to document scope of work, deliverables, and costs before engaging contractors. + Verification of vendor eligibility against the Suspension and Debarment list. - VOICES’ executive team will formally review, approve, and sign off on all expenditures charged to federal grants. - A pre-approval process for all expenditures over a specific threshold (e.g., $500) will be enforced to ensure costs are allowable, reasonable, and allocable to the appropriate grant - Require all contractors to submit detailed invoices that include: + Specific tasks performed + Hours worked or deliverables completed + Allocation to the corresponding grant(s) - Implement procedures to ensure expenses are not claimed more than once on multiple grants. This will include: + Regular reconciliation of federal grant expenses. + Review of expenditures by the executive team and CPA firm to detect duplicates. - Create and enforce a policy for documentation that requires all expenditures over a specific amount to be supported by: + Invoices or receipts + Approved requisition forms + Proof of deliverables (for contractors)

View Audit 337399 Questioned Costs: $1

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