CORRECTIVE ACTION PLAN June 29, 2023 Appalachia Service 'Project, Inc. respectfully submits the following corrective action plan for the year ended December 31, 2022. Name and address of independent public accounting firm: Brown, Edwards & Company, L.L.P. 513 State Street ? Bristol, VA 24201 Audi...
CORRECTIVE ACTION PLAN June 29, 2023 Appalachia Service 'Project, Inc. respectfully submits the following corrective action plan for the year ended December 31, 2022. Name and address of independent public accounting firm: Brown, Edwards & Company, L.L.P. 513 State Street ? Bristol, VA 24201 Audit period: December 31, 2022 The findings from the December 31, 2022 Schedule of Findings and Questioned Costs (the "Schedule" ) are discussed below. The findings are numbered consistently with the number assigned in the Schedule . FINDINGS AND QUESTIONED COSTS - MAJOR FEDERAL AWARD PROGRAM AUDIT 2022-001: Community Development Block Grant - Assistance Listing #14.218 and HOME Investment Partnership Program. Assistance Listing# 14.239, Uniform Guidance Procurement Documentation Condition: ASP does not have written procurement policies that fully align with requirements in the Uniform Guidance. Criteria: In December 2018, the sections of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost -Principles, and Audit Requirements for Federal Awards (Uniform Guidance) covering procurement became effective after a three-year grace period on the implementation date. The Uniform Guidance requires entities to have written policies and procedures in place covering most types of procurement, as well as related matters such as conflicts of interest, avoidance of geographical preferences, bidding thresholds, required contract language, and others. Cause: ASP hasn't been subject to the Uniform Guidance single audit requirements during recent fiscal years and while having various components of policies in places, has not adopted a complete policy. Effect: Procurement procedures may not be conducted in accordance with Uniform Guidance requirements. Questioned Costs: N/A Perspective Information: Several Uniform Guidance procurement requirements were not noted in ASP's procurement policy. Repeat Finding: N Recommendation: ASP should prepare a revised policy for procurement procedures to more closely align with Uniform Guidance requirements. Corrective Action: ASP had updated, adopted and implemented written procurement policies to comply with the sections of Title 2 US. code of 'Federal Regulations Part 200 during 2022. In addition to these policies. ASP had established a Grant Compliance Tea tom ensure compliance with all grant requirements. While ASP intended the above policies and procedures to fully comply with, the Uniform Guidance Requirements, we will revise our procurement policy document to include detail and language that more closely confirms to the Uniform Guidance Requirements. We expect these revisions to be completed by the end of September 2023. 2022-002: Community Development Block Grant- Assistance Listing #14.218, Reporting Condition: ASP, a sub-recipient, did not retain documentation of submission of all required reports to the pass-through entity, the City of Johnson City. Criteria: The grant agreement with the City requires an annual report, a projected expenditures report, and four quarterly reports be submitted by ASP. Cause: ASP did not retain documentation of submission of all required reports and controls and procedures in place did not allow for timely detection and correction of this error. Effect: ASP could not show that all reports that were required of them per the grant agreement were submitted. Questioned Costs: N/A Perspective Information: Several reports required by the grant agreement between ASP and the City of Johnson City were not retained or documented in a way that provides detail as to the form, timeliness , or content of the report submission. - Repeat Finding : No Recommendation: ASP should document and retain evidence of submission of all required reports per the grant agreement, including copies of any reporting, support for timeliness of reporting, and any feedback from the pass-through entity on reporting. Additionally, ASP should review controls and procedures in place to ensure that there are policies to help aid with timely report completion, review, and submission. Corrective Action: ASP complied with and submitted required progress reports, proof of expenditures and communication requests to the Community Development Block Grant (CDBG) administrators at the City of. Johnson City during 2022. Some of the reports were accepted orally therefore producing minimal written records of their occurrence other than a letter of affirmation from the city of Johnson City. ASP will ensure written records of and tracking of all submitted reports for grant compliance even if the grantor accepts verbal reporting. Corrective action for CDBG Grant compliance includes emailed reports in agreement ?with the contract to the CDBRG administrator at the City of Johnson City. ASP will also maintain copies and proof of written submissions in of files. Additionally, any verbal updates accepted in lieu of written reports will be documented in written form and reported to our Board of Directors for recording in our official minutes. ASP has already adjusted our procedures and the above corrective actions will be fully implemented before the next required 2023 quarterly report is due. If the Federal Audit Clearinghouse has questions regarding this plan, please call Greg DeGennaro, CFO at 423- 854-8800. Sincerely yours , Greg DeGennaro Chief Financial Officer