Corrective Action Plans

Finding 571680 (2023-002)

Significant Deficiency 2023

IN

Subrecipient Monitoring Reporting Internal Control / Segregation of Duties

FINDING 2023-002 Information on the federal program: Federal Agency: Department of the Treasury Pass-Through Entity: N/A – Direct Grant Federal Program: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Assistance Listing Number: 21.027 Compliance Requirement: Reporting Audit Findings: Sign...

FINDING 2023-002 Information on the federal program: Federal Agency: Department of the Treasury Pass-Through Entity: N/A – Direct Grant Federal Program: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Assistance Listing Number: 21.027 Compliance Requirement: Reporting Audit Findings: Significant Deficiency Condition: City of Bloomington completed quarterly reporting in a timely manner substantiated by the City’s expenditure detail. However, management could not differentiate between subrecipients and standard vendor purchases. Context: During our testing procedures over CSLFRF reporting, we noted that segregation of duties is not present in the Federal reporting process. The Deputy Controller prepared and submitted the reports without a secondary review taking place. As a result, the City did not report expenditures for the grant that were consistent with the expenditures reported on the SEFA and could not properly identify subrecipient expenditures. Views of Responsible Officials and Planned Corrective Actions: Management will develop an internal controls process to ensure that there’s segregation of duties within the reporting process for federal programs. Responsible party and timeline for completion: The City’s Controller will oversee the implementation of the corrective action plan, which will be implemented starting during calendar year 2025.

View Audit 362617

Finding 571537 (2023-001)

Significant Deficiency 2023

Town of Ashland

MA

Allowable Costs / Cost Principles Reporting Significant Deficiency

Audit Finding Reference: 2023-001 - Improve Controls and Documentation over Reporting Process Planned Corrective Action: The Town acknowledges the discrepancy noted in the audit finding regarding the timing and documentation of expenditures included in the P&E Annual Report for the ARPA grant. We a...

Audit Finding Reference: 2023-001 - Improve Controls and Documentation over Reporting Process Planned Corrective Action: The Town acknowledges the discrepancy noted in the audit finding regarding the timing and documentation of expenditures included in the P&E Annual Report for the ARPA grant. We appreciate the opportunity to address this issue and confirm that we will implement improvements to strengthen our reporting process. Moving forward, the Town will utilize the MUNIS accounting system more effectively to ensure all expenditures are properly recorded and reported within the appropriate reporting periods. In addition, internal procedures will be reviewed and updated to reinforce timely data entry and review of grant-related transactions. Responsible staff have been made aware of the finding, and steps will be taken to ensure compliance with federal reporting requirements. Planned Implementation Date of Corrective Action: May 2025 Persion Resonsible for Corrective Action: Stephanie Pemberton, Town Accountant Please consider this the Town's official corrective action response to be included in the final audit report.

View Audit 362492

Finding 571357 (2023-007)

Significant Deficiency 2023

Reach Community Development, Inc.

OR

Questioned Costs Allowable Costs / Cost Principles Significant Deficiency

Finding No. 2023-007 CDBG Entitlement Grants Cluster Federal Assistance Listing Number #14.218 Uniform Guidance Compliance Requirement Code: A-Allowable Costs Criteria Owners must use CDBG funded portion of programs to fund minor rehabilitation services to approved recipients /address' in accordanc...

Finding No. 2023-007 CDBG Entitlement Grants Cluster Federal Assistance Listing Number #14.218 Uniform Guidance Compliance Requirement Code: A-Allowable Costs Criteria Owners must use CDBG funded portion of programs to fund minor rehabilitation services to approved recipients /address' in accordance with the Rehabilitation and Preservation Activities (570.202(b)(2) and/or (11)) during the grant period.. Condition The owner paid 1 vendor invoice of 79 tested, that was not incurred during the grant period and charged through to and was reimbursed by PHB under their CDBG Grant. Cause REACH's Community Builders Program Manager did not ensure that the invoices were for the appropriate grant period. Effect or Potential Effect CDBG funds may be spent inappropriately and REACH may be required to repay the grants and it may also result in a possible loss of future grants. Questioned Costs: $35. Context In connection with the procedures applied to compliance testing, there was 1 vendor invoice of 79 tested that was not for cost incurred during the grant period. Repeat Finding: No Recommendation REACH Community Builders Program Manager should follow procedures to ensure each vendor invoice is incurred during the grant period. Views of Responsible Officials Community Builders Program cell phone billing is part of the larger REACH billing system and this does create some challenges in approving billing as our IT department approves this billing. We are putting systems in place for the Community Builders Program Manager will work closer with the finance team to ensure all billing involves are for the correct time periods.

View Audit 362297 Questioned Costs: $1

Finding 571356 (2023-006)

Significant Deficiency 2023

Reach Community Development, Inc.

OR

Questioned Costs Allowable Costs / Cost Principles Cash Management

Finding No. 2023-006 CDBG Entitlement Grants Cluster Federal Assistance Listing Number #14.218 Uniform Guidance Compliance Requirement Code: A-Allowable Costs Criteria Owners must use CDBG funded portion of programs to fund minor rehabilitation services to approved recipients /address' in accordanc...

Finding No. 2023-006 CDBG Entitlement Grants Cluster Federal Assistance Listing Number #14.218 Uniform Guidance Compliance Requirement Code: A-Allowable Costs Criteria Owners must use CDBG funded portion of programs to fund minor rehabilitation services to approved recipients /address' in accordance with the Rehabilitation and Preservation Activities (570.202(b)(2) and/or (11)). Condition The owner paid 1 vendor invoice of 79 tested, that were not listed on the CDBG Address List as reported to Portland Housing Bureau (“PHB”) and charged through to and was reimbursed by PHB under their CDBG Grant. Cause REACH's Community Builders Program Manager did not ensure that the invoices were for an approved CDBG property. Effect or Potential Effect CDBG funds may be spent inappropriately and REACH may be required to repay the grants and it may also result in a possible loss of future grants. Questioned Costs: $40. Context In connection with the procedures applied to compliance testing, there was 1 vendor invoice of 79 tested that was not for an approved CDBG property. Repeat Finding: Yes – Finding 2022-007 Recommendation REACH Community Builders Program Manager should follow procedures to match each vendor invoice to the approved CDBG property listing prior to coding to CDBG and passing through for reimbursement from this grant. Views of Responsible Officials This instance was $40 that was in fact allocated incorrectly and the $40 spend was paid back to PHB in October 2024.

View Audit 362297 Questioned Costs: $1

Finding 571355 (2023-005)

Significant Deficiency 2023

Reach Community Development, Inc.

OR

Eligibility Special Tests & Provisions Significant Deficiency

Finding No. 2023-005 CDBG Entitlement Grants Cluster Federal Assistance Listing Number #14.218 Uniform Guidance Compliance Requirement Code: N- Special Tests and Provisions Criteria Tenant lease files are required to be maintained and tenant eligibility determined in accordance with the Clark Count...

Finding No. 2023-005 CDBG Entitlement Grants Cluster Federal Assistance Listing Number #14.218 Uniform Guidance Compliance Requirement Code: N- Special Tests and Provisions Criteria Tenant lease files are required to be maintained and tenant eligibility determined in accordance with the Clark County Community Services CDBG Procedures Manual and grant documents. Condition In connection with our lease file review we noted two instances of seven tenants tested where management was unable to locate tenant files. Cause Management’s policies with respect to eligibility and the maintenance of tenant lease files in accordance with Compliance in Clark County Community Services CDBG Procedures Manual and grant documents were not consistently followed. Effect or Potential Effect This could result in units being rented to ineligible tenants. Questioned Costs: N/A. Context In connection with the procedures applied to our CDBG units testing, two of the seven tenants tested did have lease files available. Repeat Finding: No Recommendation Management should establish procedures and monitor compliance with those procedures to ensure that correct income verification procedures are performed timely, tenant eligibility is correctly determined and that tenant lease files are properly maintained in accordance with the requirements of Clark County Community Services CDBG Procedures Manual and grant documents. Views of Responsible Officials The Compliance Specialist discovered missing files at a property while pulling files for the audit. The Compliance team worked to contact residents and rebuild the files with the missing documents. Compliance management investigated and determined the cause of the missing documents was due to a prior site manager not scanning and filing the appropriate documents, along with high staff turnover during this time. The Compliance team is finalizing a new procedure, in addition to the existing, to audit Yardi Voyager for uploaded completed files after move-in and recertification: the goal of this is to catch missing files and documents timely and hold site teams accountable for following the required procedures.

View Audit 362297

Finding 571354 (2023-004)

Significant Deficiency 2023

Reach Community Development, Inc.

OR

Special Tests & Provisions HUD Housing Programs Significant Deficiency

Finding No. 2023-004 HUD Low Income Housing Preservation and Resident Homeownership Act of 1990 Federal Assistance Listing Number #99.999 Uniform Guidance Compliance Requirement Code: N- Special Tests and Provisions Criteria In accordance with the Use Agreement, Housing Quality Standards require th...

Finding No. 2023-004 HUD Low Income Housing Preservation and Resident Homeownership Act of 1990 Federal Assistance Listing Number #99.999 Uniform Guidance Compliance Requirement Code: N- Special Tests and Provisions Criteria In accordance with the Use Agreement, Housing Quality Standards require that the Owner shall maintain the property in good repair and condition. Condition Management did not have in place proper procedures and controls to ensure that HQS inspections were performed during the year ended December 31, 2023. Cause Management did not perform HQS inspections during the year ended December 31 2023. Effect or Potential Effect Housing units may be out of compliance with HUD Quality Standards. Questioned Costs: Not applicable. Context In connection with the procedures applied to tenant file testing there were 3 instances of the 3 files tested where the passing HQS inspections were not performed during the year ended December 31, 2023. Repeat Finding: No Recommendation Management should resume making sure all units meet the HUD Housing Quality Standards and ensure that the responses to any findings are cleared timely. Views of Responsible Officials REACH did return to doing HQS Inspections in 2023, with staffing shortages it is possible that not every unit was inspected in 2023. Specifically, around the 3 instances of the 3 files tested after the finding were provided to REACH we provided the annual inspection for unit #11 at Beacon. For unit #5 at Beacon the annual inspection was not in the current resident file that was tested because the unit was vacant at the time of 2023 annual inspection. The annual inspection for the last file at Taylor this inspection was missed due to staffing changes at the time. REACH continued to reestablish our annual unit inspection process post COVID in 2024.

View Audit 362297

Finding 571353 (2023-003)

Significant Deficiency 2023

Reach Community Development, Inc.

OR

Eligibility HUD Housing Programs Significant Deficiency

Finding No. 2023-003 HUD HOME Investment Partnerships Program Federal Assistance Listing Number #14.239 Uniform Guidance Compliance Requirement Code: E-Eligibility Criteria Each owner must comply with the requirements set forth in 24 CFR Part 92 regulations as outlined in the "Compliance in HOME Re...

Finding No. 2023-003 HUD HOME Investment Partnerships Program Federal Assistance Listing Number #14.239 Uniform Guidance Compliance Requirement Code: E-Eligibility Criteria Each owner must comply with the requirements set forth in 24 CFR Part 92 regulations as outlined in the "Compliance in HOME Rental Projects: A Guide for Property Owners" published by HUD which requires the property to maintain the contracted number of HOME units as well as the designated splits in bedroom size and High Home/Low Home unit ratios. Condition The owner did not make available to HOME tenants the contracted number and type of HOME units. Cause Management’s policies with respect to maintaining the number and split of contracted HOME units were not consistently followed. Effect or Potential Effect The procedures for determining and maintaining the correct HOME units within the property were not applied. This could result in ineligible tenants occupying HOME designated units. Questioned Costs: Not applicable. Context In connection with the procedures applied to our HOME units testing, one of the five properties tested did not meet the contracted HOME units size portfolio (there should be four 3-bedroom units (there are 5); and there should be three 4-bedroom units (there are 2)). Repeat Finding: Yes - Finding 2022-003 Recommendation Management should follow procedures in place to ensure consistent application and adherence to the requirements in accordance with the “Compliance in HOME Rental Projects: A Guide for Property Owners” published by HUD. Views of Responsible Officials A unit will be re-classified the next time there is a vacant unit of the corresponding size/type.

View Audit 362297

Finding 571352 (2023-002)

Significant Deficiency 2023

Reach Community Development, Inc.

OR

Eligibility HUD Housing Programs Significant Deficiency

Finding No. 2023-002 HUD HOME Investment Partnerships Program Federal Assistance Listing Number #14.239 Uniform Guidance Compliance Requirement Code: E-Eligibility Criteria Tenant lease files are required to be maintained and tenant eligibility determined in accordance with the Compliance in State ...

Finding No. 2023-002 HUD HOME Investment Partnerships Program Federal Assistance Listing Number #14.239 Uniform Guidance Compliance Requirement Code: E-Eligibility Criteria Tenant lease files are required to be maintained and tenant eligibility determined in accordance with the Compliance in State of Oregon Housing and Community Services HOME Program Compliance Manual. Condition In connection with our lease file review we noted four instances of eight tenants tested where management did not provide support that they performed a 3rd party income verification in accordance with policy. Cause Management’s policies with respect to recertifications and eligibility and the maintenance of tenant lease files in accordance with Compliance in State of Oregon Housing and Community Services HOME Program Compliance Manual were not consistently followed. Effect or Potential Effect This could result in units being rented to ineligible tenants. Questioned Costs: Not applicable. Context In connection with the procedures applied to our HOME units testing, four of the eight tenants tested did not have the a 3rd party income verification in accordance with policy. Repeat Finding: Yes - Finding 2022-002 Recommendation Management should establish procedures and monitor compliance with those procedures to ensure that recertifications and correct income verification procedures are performed timely, tenant eligibility is correctly determined and that tenant lease files are properly maintained in accordance with the requirements of Compliance in State of Oregon Housing and Community Services HOME Program Compliance Manual. Views of Responsible Officials For the properties in Washington, they have several sources of HOME funds based on the issuing jurisdiction State, County or City that adds a layer of complexity to the recertification process and due to staffing turnover, both at the properties and REACH main office some of the HOME 3rd party income verifications were missed at recertification. Management has established policies and procedures for complying with the HOME program which includes a centralized tracker for HOME certifications.

View Audit 362297

Finding 571351 (2023-001)

Significant Deficiency 2023

Reach Community Development, Inc.

OR

Special Tests & Provisions HUD Housing Programs Significant Deficiency

Finding No. 2023-001 HUD HOME Investment Partnerships Program Federal Assistance Listing Number #14.239 Uniform Guidance Compliance Requirement Code: N-Special Tests and Provisions Criteria During the period of affordability (i.e., the period for which the nonfederal entity must maintain subsidized...

Finding No. 2023-001 HUD HOME Investment Partnerships Program Federal Assistance Listing Number #14.239 Uniform Guidance Compliance Requirement Code: N-Special Tests and Provisions Criteria During the period of affordability (i.e., the period for which the nonfederal entity must maintain subsidized housing) for HOME assisted rental housing, the participating jurisdiction must perform on-site inspections to determine compliance with property standards and verify the information submitted by the owners no less than (a) every three years for projects containing one to four units, (b) every two years for projects containing five to 25 units, and (c) every year for projects containing 26 or more units. The participating jurisdiction must perform on-site inspections of rental housing occupied by tenants receiving HOME/HOME-ARP-assisted tenant- based rental assistance to determine compliance with housing quality standards (24 CFR sections 92.209(i), 92.251(f), and 92.504(d)). Condition The owner did not ensure passing HQS inspections were performed during 2023. Cause Management did not have in place proper procedures and controls to ensure that HQS inspections were performed during the year ended December 31, 2023. Effect or Potential Effect Housing units may be out of compliance with HUD Quality Standards. Questioned Costs: Not applicable. Context In connection with the procedures applied to tenant file testing there were 8 instances of the 8 files tested where the passing HQS inspections were not performed during the year ended December 31, 2023. Repeat Finding: Yes - Finding 2022-001 Recommendation Management should resume making sure all units meet the HUD Housing Quality Standards and ensure that the responses to any findings are cleared timely. Views of Responsible Officials REACH did return to doing HQS Inspections in 2023. With staffing shortages, it is possible that not every unit was inspected in 2023. REACH continued to reestablish our annual unit inspection process post COVID in 2024. For the finding related to Addy St. This property is managed by a 3rd party management company, REACH’s Asset Management team will work with the management company to ensure all inspections are happening.

View Audit 362297

Finding 571294 (2023-002)

Significant Deficiency 2023

Town of Acushnet

MA

Significant Deficiency Internal Control / Segregation of Duties

Finding 2023-002 – Education Stabilization Fund – AL No.’s 84.425D & 84.425U Department of Education Massachusetts Department of Elementary and Secondary Education Noncompliance and Significant Deficiency Related to Internal Control over Compliance of the Major Program Criteria...

Finding 2023-002 – Education Stabilization Fund – AL No.’s 84.425D & 84.425U Department of Education Massachusetts Department of Elementary and Secondary Education Noncompliance and Significant Deficiency Related to Internal Control over Compliance of the Major Program Criteria: Where employees work solely or partially on a single Federal program or cost objective, their salaries or wages must be supported by periodic certification that the employee worked on these programs for the period covered by the programs. The certifications should be prepared at least semi-annually, and or monthly and should be signed by the employee or supervisory official having first-hand knowledge of the work performed by the employee. Condition: During our test of controls over compliance with time and effort certifications the school department was not able to provide evidence that required certifications of time and effort for those employees whose time was spent either completely or partially spent on these programs were performed as required by Uniform Guidance. Questioned Costs: Unknown Context: During our test of payroll transactions of the Education Stabilization Fund grants it was noted that the time and effort certifications did not meet the semiannual and or monthly certification requirements. Effect: The School Department was not in compliance with the time and effort certification requirements. Cause: The School Department completed time and effort certifications on an annual basis rather than semi-annual or monthly. Identification as a Repeat Finding: N/A Recommendation: We recommend the School Department follow procedures to ensure that semi-annual certifications and/or monthly certifications are prepared and signed by either the employees and/or supervisory official having first-hand knowledge of the work performed by the employees in a timely manner in order to comply with the time and effort certification requirement. Managements Response: We acknowledge and agree with the recommendation to ensure that semi-annual and/or monthly certifications are prepared and signed by employees and/or supervisory officials who have first-hand knowledge of the work performed by the employees. We understand the importance of complying with the time and effort certification requirements. We would like to communicate that annual certifications were completed in FY 23, however, we will ensure that moving forward these certifications will be on a semi-annual and/or monthly basis. Responsible for Corrective Plan: School Business Manager Estimated Completion Date: Fiscal Year 2024 Action Taken: The Schools are now ensuring that their annual certification process be completed on a semi-annual and/or monthly basis, whichever is deemed necessary for the related position wages.

View Audit 362219

Finding 571195 (2023-106)

Significant Deficiency 2023

Pancare of Florida, INC

FL

Subrecipient Monitoring HUD Housing Programs Significant Deficiency § 200.303

Condition: The Organization could not provide one salary authorization from for sample selection of 40 employees. Corrective Action Planned: The Organization has implemented a process to ensure that all salary authorizations are properly obtained and stored. When there is any change in an employee...

Condition: The Organization could not provide one salary authorization from for sample selection of 40 employees. Corrective Action Planned: The Organization has implemented a process to ensure that all salary authorizations are properly obtained and stored. When there is any change in an employee's status or salary, an Employee Status Form is completed and signed by the employee, their supervisor, and Human Resources, and when required by the COO and CEO. Additionally, the salary authorization form is added to a secure shared file drive. The shared file drive includes a section where all salary changes are listed. Both HR and Finance initial off to confirm that each salary change is supported by the proper documentation during the payroll review process. Person Responsible for Corrective Action: Joe Derry, Chief Financial Officer. Anticipated Completion Date: Implemented.

View Audit 362092

Finding 571193 (2023-104)

Significant Deficiency 2023

Pancare of Florida, INC

FL

Internal Control / Segregation of Duties Subrecipient Monitoring HUD Housing Programs § 200.303

Condition: The Organization did not maintain property documentation to support the review of the report prior to submission to the grantor, other than the review done by the preparer. Corrective Action Planned: The Organization has hire a new Chief Financial Officer as well as additional supporting ...

Condition: The Organization did not maintain property documentation to support the review of the report prior to submission to the grantor, other than the review done by the preparer. Corrective Action Planned: The Organization has hire a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties and best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review as also implemented in 2025. Person Responsible for Corrective Action: Joe Derry, Chief Financial Officer. Anticipated Completion Date: Implemented.

View Audit 362092

Finding 571192 (2023-102)

Significant Deficiency 2023

Pancare of Florida, INC

FL

Subrecipient Monitoring Internal Control / Segregation of Duties Matching / Level of Effort / Earmarking § 200.303 § 200.328

Condition: The Organization did not maintain proper documentation in support of reporting requirements. Corrective Action Planned: The Organization has hire a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in ...

Condition: The Organization did not maintain proper documentation in support of reporting requirements. Corrective Action Planned: The Organization has hire a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal control and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025. Person Responsible for Corrective Action: Joe Derry, Chief Financial Officer. Anticipated Completion Date: Implemented.

View Audit 362092

Finding 570834 (2023-004)

Significant Deficiency 2023

Folsom Cordova Community Partnership

CA

Cash Management Period of Performance Reporting

The organization agrees with the finding. The organization will implement a method to ensure accrued vacation is appropriately adjusted and vacation costs are accurately recorded and allocated to grants. Completed in FY2023-2024

View Audit 361764

Finding 570825 (2023-003)

Significant Deficiency 2023

Folsom Cordova Community Partnership

CA

Reporting Significant Deficiency

The organization agrees with the finding. Now that the organization has filled the accounting director position the delinquent audits are being completed as efficiently as possible.

View Audit 361764

Finding 570729 (2023-001)

Significant Deficiency 2023

Community Care Management Corporation

CA

Reporting Significant Deficiency Internal Control / Segregation of Duties

Views of Responsible Officials and Corrective Actions: Community Care Management Corporation agrees with the audit finding concerning missing source documentation, especially related to revenue. Leadership attributes the issue to frequent turnover in financial management roles, which affected ledg...

Views of Responsible Officials and Corrective Actions: Community Care Management Corporation agrees with the audit finding concerning missing source documentation, especially related to revenue. Leadership attributes the issue to frequent turnover in financial management roles, which affected ledger maintenance, reconciliations, and financial reporting. To address this, Community Care Management Corporation has implemented a corrective action plan that includes: • Hiring qualified financial staff and providing targeted training. • Enforcing improved documentation and retention protocols. • Establishing stronger internal controls and monthly reconciliations. • Launching periodic internal audits for continuous improvement. • Upgrading accounting systems and regularly reporting progress to leadership. These actions aim to restore sound financial practices, ensure audit readiness, and maintain compliance with accounting standards.

View Audit 361716

Finding 570640 (2023-002)

Significant Deficiency 2023

Leap Social Enterprise INC

NJ

Internal Control / Segregation of Duties Reporting Significant Deficiency

Number Criteria RecommendaƟon Management Response Person (s) Responsible Timeline Finding Number 2022-004 Federal programs: All Major programs Category: Internal control / Compliance 2 CFR secƟon 200.512 (a)(1) establishes that the audit must be completed and the reporting required by paragraph (b) ...

Number Criteria RecommendaƟon Management Response Person (s) Responsible Timeline Finding Number 2022-004 Federal programs: All Major programs Category: Internal control / Compliance 2 CFR secƟon 200.512 (a)(1) establishes that the audit must be completed and the reporting required by paragraph (b) (1) of this section submiƩed within the earlier of 30 calendar days aŌer receipt of the auditor's report(s), or nine months aŌer the end of the audit period. Unless restricted by Federal law or regulaƟon, the auditee must make report copies available for public inspecƟon. Auditees and auditors must ensure that their respective parts of the reporting package do not include protected personally idenƟfiable information. Data Collection Form and Single Audit reporting package shall be submiƩed by the established due date. The Entity had a hard time securing an audiƟng firm in Puerto Rico that understands the services the organization provides, as charter schools legislation is new on the island. Also, due to COVID-19 the auditing firms that we approached could not take on new clients due to employees shortage. All of this led to delays. The company has engaged a reputable CPA firm in Puerto Rico and now is working to alleviate the delay in completing the single audit. Yusein Durakov (CFO) Brenda Ortiz (Business Specialist) By July,2025 data collection and single audits reporting package will be submited. This makes the entity current. A schedule of submiƩals will be added to the SOP and monitored by the Board of Governors.

View Audit 361667

Finding 570639 (2023-001)

Significant Deficiency 2023

Leap Social Enterprise INC

NJ

Cash Management Subrecipient Monitoring Significant Deficiency § 200.305

For recipients and subrecipients other than States, payment methods must minimize the time elapsing between the transfer of funds from the Federal agency or the pass-through entity and the disbursement of funds by the recipient or subrecipient regardless of whether the payment is made by electronic ...

For recipients and subrecipients other than States, payment methods must minimize the time elapsing between the transfer of funds from the Federal agency or the pass-through entity and the disbursement of funds by the recipient or subrecipient regardless of whether the payment is made by electronic funds transfer or by other means. See § 200.302(b)(6). Except as noted in this part, the Federal agency must require recipients to use only OMB approved, government-wide information collections to request payment. The management of the Instuitution should reinforce its cash management procedures and internal controls to ensure the disbursement of funds in the required tme frame. Advance payment requests are done under the advance method to cover anticipated cash needs. The Federal drawdowns are requested by the Finance Office on a monthly basis and Drawdowns are based on budget forecasting and subrecipient encumbrances. All procedures for drawdowns were handled most efficiently and with proper accounting standards. However, there are instances that took more than five days to make the payments to some vendors because of invoices being received late, missing information, management resolved the issues with the vendors but the time it takes is longer than the five days. The finance department now is monitoring the upcoming expenditures and making the reimbursement request closely to the date of payments due to the vendors. Yusein Durakov (CFO) Brenda Ortiz (Business Specialist) Procedures have been implemented

View Audit 361667

Finding 570384 (2023-031)

Significant Deficiency 2023

Kentucky State University

KY

Student Financial Aid Reporting Significant Deficiency § 200.512

Single Audit Report Submission Federal Agency: Various Federal Program Name: Research and Development Cluster, Education Stabilization Fund, Supplemental Nutritional Assistance Program (SNAP), Federal Supplemental Educational Opportunity Grant Program, Federal Pell Grant Program; Federal Direct Stu...

Single Audit Report Submission Federal Agency: Various Federal Program Name: Research and Development Cluster, Education Stabilization Fund, Supplemental Nutritional Assistance Program (SNAP), Federal Supplemental Educational Opportunity Grant Program, Federal Pell Grant Program; Federal Direct Student Loans; Federal Work Study Program, Federal Perkins Loan Program Assistance Listing Number: Various Recommendation: We recommend the University implement and maintain an effective system of internal controls over timely submission of the single audit reporting package. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: As a result of staffing turnover in the Finance area, the University engaged consulting support to assist in readying for financial statementpreparation and the audit of fiscal years ending 6.30.23 and 6.30.24, with oversight from the University management. The University will develop a fiscal year‐end close process that includes submission of the single audit report. Name(s) of the contact person(s) responsible for corrective action: Melissa Hicks, Controller Planned completion date for corrective action plan: December 31, 2025

View Audit 361386

Finding 570382 (2023-030)

Significant Deficiency 2023

Kentucky State University

KY

Reporting Significant Deficiency Internal Control / Segregation of Duties

Annual and Quarterly Reporting Federal Agency: Department of Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Recommendation: We recommend the University should implement and maintain an effective system of internal controls over the administration of ...

Annual and Quarterly Reporting Federal Agency: Department of Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Recommendation: We recommend the University should implement and maintain an effective system of internal controls over the administration of HEERF funds to ensure funds are reported accurately and timely, in accordance with grant requirements. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: KSU Grants Accounting will maintain proper documentation for HEERF reporting. Grants Accounting will monitor HEERF funds to ensure compliance with guidelines. KSU will assign responsibility for Direct Outreach to appropriate employees in Student Financial Aid and provide training on job duties. Grants Accounting will follow‐up to verify corrections needed for previous reports, correct reports, and submit corrected reports. Name(s) of the contact person(s) responsible for corrective action: Dorothy Daley, Director of Grants; Varah Barnett, Financial Aid Director Planned completion date for corrective action plan: December 31, 2025

View Audit 361386

Finding 570381 (2023-029)

Significant Deficiency 2023

Kentucky State University

KY

Significant Deficiency Internal Control / Segregation of Duties § 200.403

Supporting Documentation Federal Agency: Department of Agriculture Federal Program Name: Supplemental Nutritional Assistance Program (SNAP) Assistance Listing Number: 10.561 Recommendation: We recommend the University develop a procedure for ensuring all expenditures made via corporate credit card...

Supporting Documentation Federal Agency: Department of Agriculture Federal Program Name: Supplemental Nutritional Assistance Program (SNAP) Assistance Listing Number: 10.561 Recommendation: We recommend the University develop a procedure for ensuring all expenditures made via corporate credit card receive appropriate approval. We also recommend management maintain proper recordkeeping and retention of documentation. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The University is improving its processes surrounding obtaining supporting receipts from employees who check out a Kroger GoCard. Procedures are in place to reconcile the Expense Log to receipts on a weekly basis to discover any missing documents much sooner to allow Purchasing to retrieve a copy from the store or the Kroger web site. Name(s) of the contact person(s) responsible for corrective action: Fran Pinkston, Director of Purchasing & Procurement Planned completion date for corrective action plan: December 31, 2025

View Audit 361386

Finding 570309 (2023-027)

Significant Deficiency 2023

Kentucky State University

KY

Significant Deficiency Internal Control / Segregation of Duties § 200.403

Supporting Documentation Federal Agency: Various Federal Program Name: Research and Development Cluster Assistance Listing Number: Various Recommendation: We recommend the University develop a procedure for ensuring all expenditures made via corporate credit card receive appropriate approval. We a...

Supporting Documentation Federal Agency: Various Federal Program Name: Research and Development Cluster Assistance Listing Number: Various Recommendation: We recommend the University develop a procedure for ensuring all expenditures made via corporate credit card receive appropriate approval. We also recommend management maintain proper recordkeeping and retention of documentation. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The University is improving its processes surrounding obtaining supporting receipts from employees who check out a Kroger GoCard. Procedures are in place to reconcile the Expense Log to receipts on a weekly basis to discover any missing documents much sooner to allow Purchasing to retrieve a copy from the store or the Kroger web site. Name(s) of the contact person(s) responsible for corrective action: Fran Pinkston, Director of Purchasing & Procurement Planned completion date for corrective action plan: December 31, 2025

View Audit 361386

Finding 570233 (2023-024)

Significant Deficiency 2023

Kentucky State University

KY

Questioned Costs Student Financial Aid Significant Deficiency

240 Day Escheatment Federal Agency: U.S. Department of Education Federal Program Name: Federal Supplemental Educational Opportunity Grant Program; Federal Pell Grant Program; Federal Direct Student Loan; Federal Work Study Program Assistance Listing Number: 84.007; 84.063; 84.268; 84.033 Recommend...

240 Day Escheatment Federal Agency: U.S. Department of Education Federal Program Name: Federal Supplemental Educational Opportunity Grant Program; Federal Pell Grant Program; Federal Direct Student Loan; Federal Work Study Program Assistance Listing Number: 84.007; 84.063; 84.268; 84.033 Recommendation: We recommend the University review its policies and procedures related to outstanding student refund checks to ensure they are being returned to the Department of Education after 240 days. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Management of the areas involved in the escheatment process will develop a business procedure addressing this finding. A regular process will be implemented to ensure the University complies with requirements. The process will be integrated with our month‐end close process to ensure that it occurs in a timely manner. Name(s) of the contact person(s) responsible for corrective action: Melissa Hicks, Controller, Varah Barnett, Director of Financial Aid, Danyel Tolbert, Bursar Planned completion date for corrective action plan: December 31, 2025

View Audit 361386 Questioned Costs: $1

Finding 570228 (2023-023)

Significant Deficiency 2023

Kentucky State University

KY

Student Financial Aid Significant Deficiency Matching / Level of Effort / Earmarking

Fiscal Operations Report and Application to Participate (FISAP) Federal Agency: U.S. Department of Education Federal Program Name: Federal Supplemental Educational Opportunity Grant Program, Federal Pell Grant Program; Federal Direct Student Loans; Federal Work Study Program; Federal Perkins Loan P...

Fiscal Operations Report and Application to Participate (FISAP) Federal Agency: U.S. Department of Education Federal Program Name: Federal Supplemental Educational Opportunity Grant Program, Federal Pell Grant Program; Federal Direct Student Loans; Federal Work Study Program; Federal Perkins Loan Program Assistance Listing Number: 84.007; 84.063; 84.268; 84.033; 84.038 Recommendation: We recommend management maintain and safeguard all necessary data and documentation to support the FISAP. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: As of March 2024, the Office of Financial Aid has been completely restructured and has new financial aid administrators. The Office of Financial Aid now performs a manual check to ensure FISAP information is in Banner. This entails maintaining worksheets within COD updated. Name(s) of the contact person(s) responsible for corrective action: Varah Barnett, Director of Financial Aid Planned completion date for corrective action plan: July 1, 2024

View Audit 361386

Finding 570227 (2023-022)

Significant Deficiency 2023

Kentucky State University

KY

Student Financial Aid Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Federal Perkins Loan Program Reconciliation Federal Agency: U.S. Department of Education Federal Program Name: Federal Perkins Loan Program Assistance Listing Number: 84.038 Recommendation: We recommend reviewing procedures around Perkins Loan Program funds and implementing reconciliations and rev...

Federal Perkins Loan Program Reconciliation Federal Agency: U.S. Department of Education Federal Program Name: Federal Perkins Loan Program Assistance Listing Number: 84.038 Recommendation: We recommend reviewing procedures around Perkins Loan Program funds and implementing reconciliations and review to the third‐party servicer reports. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The university is in the process of implementing policies and procedures regarding reconciliations for Perkins loan services managed by a 3rd party supplier. Name(s) of the contact person(s) responsible for corrective action: Danyel Tolbert ‐Bursar Planned completion date for corrective action plan: June 30, 2025

View Audit 361386

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