Corrective Action Plans

Finding 397967 (2023-001)

Material Weakness 2023

The Harry and Jeanette Weinberg Terrace, Inc.

MD

Eligibility HUD Housing Programs Matching / Level of Effort / Earmarking

Project Legal Name: The Harry and Jeanette Weinberg Terrace, INC HUD Project No.: 502-EE015 Audit Firm: CohnReznick Period covered by the audit: Year end June 2023 Corrective Action Plan prepared by: Name: Shantay Hall Position: HUD Compliance Specialist Telephone Number: 571-307-6571 The following ...

Project Legal Name: The Harry and Jeanette Weinberg Terrace, INC HUD Project No.: 502-EE015 Audit Firm: CohnReznick Period covered by the audit: Year end June 2023 Corrective Action Plan prepared by: Name: Shantay Hall Position: HUD Compliance Specialist Telephone Number: 571-307-6571 The following is a recommended format to be followed by the auditee for preparing a corrective action plan: A. Current Findings on the Schedule of Findings, Questioned Costs and Recommendations 1. Finding # 2023‐001; Section 202 Supportive Housing for the Elderly, Assistance Listing 14.157 a. Recommendation: Management should establish procedures and monitor compliance with those procedures to ensure that tenant security deposits are correctly recorded, tenant eligibility is correctly determined and that tenant lease files are properly maintained in accordance with the requirements of HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs b. Action(s) Taken or Planned on the Finding The inspection was conducted under previous management. The Franklin Johnston Group took over July 1st, 2023. The Franklin Johnston EIV policies and procedures require site staff to Run Existing tenant searches within 90 days prior to the move in date which is required to be uploaded to the assigned Compliance specialist for review prior to move in approvals. Although HUD requires quarterly reports, we require monthly. Site teams are only permitted to pull the “By Head of Household Report” at the time of recertification. 90- day EIV’s are to be ran within 90days of the anticipated voucher submission date. Site staff are required to go through our approval process, staff are not required to perform a move with without Compliance Approval. The Franklin Johnston performs quarterly audits to ensure that these processes are being followed along with ensuring that the files are being properly maintained. All site teams members have been trained as it relates to these policies. In addition to this training all site teams are required to attend monthly EIV training/Policies and procedures trainings according to HUD guidelines.

View Audit 306676

Finding 397955 (2023-001)

Significant Deficiency 2023

Youthbuild Lake County, INC

IL

Reporting Significant Deficiency Internal Control / Segregation of Duties § 200.512

There has been changes in our fiscal department that will allow YBLC, Inc to be on time with compliance

View Audit 306666

Finding 397950 (2023-002)

Significant Deficiency 2023

City of South Haven

MN

Internal Control / Segregation of Duties

Segregation of Duties. Name of Contact Person: Melissa Stenson, City Clerk. Correction Action: The finance related tasks will be separated as much as possible and alternative controls will be used to compensate for the lack of separation. The City Council will become more involved in providing so...

Segregation of Duties. Name of Contact Person: Melissa Stenson, City Clerk. Correction Action: The finance related tasks will be separated as much as possible and alternative controls will be used to compensate for the lack of separation. The City Council will become more involved in providing some of these controls. Proposed Completion Date: The City Council will implement the above procedures immediately.

View Audit 306665

Finding 397949 (2023-001)

Significant Deficiency 2023

City of South Haven

MN

Reporting Significant Deficiency

Auditor Prepared Financial Statements. Name of Contact Person: Melissa Stensor, City Clerk. Correction Action: The City Clerk will continue to review GASB pronouncements and GASB disclosure checklists to ensure she is aware of financial statement requirements and new pronouncements. Proposed Compl...

Auditor Prepared Financial Statements. Name of Contact Person: Melissa Stensor, City Clerk. Correction Action: The City Clerk will continue to review GASB pronouncements and GASB disclosure checklists to ensure she is aware of financial statement requirements and new pronouncements. Proposed Completion Date: The City Council will implement the above procedures immediately.

View Audit 306665

Finding 397947 (2023-002)

Significant Deficiency 2023

Cla Homes I, Corp.

VA

HUD Housing Programs Internal Control / Segregation of Duties Special Tests & Provisions

2023-02 Special Test and Provisions - Replacement Reserve Federal agency: US Department of Housing and Urban Development AL number: 14.181, Supportive Housing for Persons with Disabilities Federal Award year: July 1, 2022, through June 30, 2023 Condition: The required $400 monthly deposit to the rep...

2023-02 Special Test and Provisions - Replacement Reserve Federal agency: US Department of Housing and Urban Development AL number: 14.181, Supportive Housing for Persons with Disabilities Federal Award year: July 1, 2022, through June 30, 2023 Condition: The required $400 monthly deposit to the replacement reserve account was not transferred monthly from January 2022 through August 2022. A catch-up transfer occurred in September 2022 to rectify the deficiency. Responsible persons: Susan Keenan, Executive Director and Monica Duggal, Project Manager Actions Taken: Corrective action has been taken, a catch-up transfer occurred on September 19, 2022, to rectify the deficiency and the Entity is up to date on its monthly deposits.

View Audit 306659

Finding 397946 (2023-001)

Significant Deficiency 2023

City of Madisonville, Texas

TX

Equipment & Real Property Management

2023-001 Capital Asset Controls Response and Planned Corrective Action – Implement recommendations as listed in Audit Findings: • City will conduct a physical inventory of all City assets (by department/location). The listing compiled during this process will be reconciled to the existing listing...

2023-001 Capital Asset Controls Response and Planned Corrective Action – Implement recommendations as listed in Audit Findings: • City will conduct a physical inventory of all City assets (by department/location). The listing compiled during this process will be reconciled to the existing listing and the results will be communicated to the Mayor and Council for review. Anticipated Implementation Date – by 06/30/2024 Official Responsible for Corrective Action – Fabrice Kabona, City Manager

View Audit 306651

Finding 397940 (2023-001)

None 2023

Guadalupe County Hsg Development Inc. (sunrise Villa Apts)

TX

Questioned Costs HUD Housing Programs

Management agrees with the finding. Management has submitted the forms for HUD's approval.

View Audit 306645 Questioned Costs: $1

Finding 397911 (2023-003)

Significant Deficiency 2023

Pacific States Marine Fisheries Commission

OR

Matching / Level of Effort / Earmarking Subrecipient Monitoring § 200.303 § 200.329

Timely Performance Reporting for Pacific Fisheries Data Program, 11.437; and Bipartisan Budget Act of 2018 (Disaster Relief Program), 11.022 Recommendation: CLA recommends for the Commission to implement stronger internal monitoring to ensure reports are completed by program managers and submitted ...

Timely Performance Reporting for Pacific Fisheries Data Program, 11.437; and Bipartisan Budget Act of 2018 (Disaster Relief Program), 11.022 Recommendation: CLA recommends for the Commission to implement stronger internal monitoring to ensure reports are completed by program managers and submitted to the Grants Manager timely to ensure ample time for internal review and upload to the Federal Agency. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The Commission will set an internal deadline at least one week prior to the external report due date. The Grant & Contract Specialist will coordinate with the Finance Officer to submit report timely in the event the Grant & Contract Specialist is absent. Name(s) of the contact person(s) responsible for corrective action: Michael Arredondo and Ngu Castro. Planned completion date for corrective action plan: October 15, 2023

View Audit 306634

Finding 397886 (2023-002)

Significant Deficiency 2023

Pacific States Marine Fisheries Commission

OR

Questioned Costs Procurement, Suspension & Debarment Subrecipient Monitoring § 200.303 § 200.318

Sufficient Documentation for Noncompetitive Proposals for Pacific Fisheries Data Program, 11.437 Recommendation: CLA recommends increased internal monitoring to ensure that noncompetitive procurements are sufficiently justified and that internal Sole Source Justification Forms are completed correct...

Sufficient Documentation for Noncompetitive Proposals for Pacific Fisheries Data Program, 11.437 Recommendation: CLA recommends increased internal monitoring to ensure that noncompetitive procurements are sufficiently justified and that internal Sole Source Justification Forms are completed correctly and retained for all vendors procured under noncompetitive methods. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The Commission will modify its subcontractor request form and PO form to require competitive supporting documents or non-competitive justification documents to be attached with the subcontractor request or PO form. Contract Specialist and Purchasing Specialist will review request package to ensure all required paperwork completed properly before moving forward with the process. In the pipe line, Requisition Module in Navision Software will be designed to put a hard stop if a purchase order of $10,000 or greater is missing supporting document for competitive/non-competitive procurements. Name(s) of the contact person(s) responsible for corrective action: Kathy Ameral and Michael Arredondo. Planned completion date for corrective action plan: October 15, 2023

View Audit 306634 Questioned Costs: $1

Finding 397877 (2023-001)

Material Weakness 2023

Accord

MN

Internal Control / Segregation of Duties Eligibility Subrecipient Monitoring § 200.303

Compliance and Controls over Compliance – Eligibility Home Investment Partnership Program, AL# 14.239 Material Weakness Accord did not have controls in place to ensure that eligibility criteria and rent calculations were being reviewed and/or approved by someone other than the individual performing...

Compliance and Controls over Compliance – Eligibility Home Investment Partnership Program, AL# 14.239 Material Weakness Accord did not have controls in place to ensure that eligibility criteria and rent calculations were being reviewed and/or approved by someone other than the individual performing the initial determination or annual reexamination. Actions Taken or Planned: Management agrees with this finding. As of December 31, 2023, the Organization has sold all properties financed by HOME funds. Contact Persons: Robert Pickering, Chief Financial Officer

View Audit 306612

Finding 397870 (2023-002)

Significant Deficiency 2023

Msad #27

ME

Allowable Costs / Cost Principles Procurement, Suspension & Debarment § 200.303

Significant Difficiencies, 2023-002 Allowable Costs ond Activities: There is an audit recommendation that the District implement internal control processes and procedures to ensure that each purchase has a purchase order and an approved invoice at the time of payment, clearly indicating pre-approval...

Significant Difficiencies, 2023-002 Allowable Costs ond Activities: There is an audit recommendation that the District implement internal control processes and procedures to ensure that each purchase has a purchase order and an approved invoice at the time of payment, clearly indicating pre-approval for the purchase and coding to ensure it is charged to the correct accounts. Corrective Action: The District already has a requisition/purchase order system in place and will expand it to ensure purchases are pre-approved and that invoices are approved and that the purchase is coded to the appropriate fund. Anticipated Completion Date: This con-ective action has already been implemented during the 2023-2024 fiscal year, once identified by our auditors while they were performing our 2022-2023 audit.

View Audit 306609

Finding 397866 (2023-001)

Material Weakness 2023

Msad #27

ME

Questioned Costs Special Tests & Provisions Internal Control / Segregation of Duties

CORRECTIVE ACTION PLAN (Concerning Audit Finding 2023-001) Contact Person Responsible for Corrective Action: Lucie Tabor, Director of Finance Corrective Action: The Maine School Administrative District 27 will take the following actions to address finding 2023-001: As a Federal response to COVID-19,...

CORRECTIVE ACTION PLAN (Concerning Audit Finding 2023-001) Contact Person Responsible for Corrective Action: Lucie Tabor, Director of Finance Corrective Action: The Maine School Administrative District 27 will take the following actions to address finding 2023-001: As a Federal response to COVID-19, the Federal and State Governments provided grants to school districts to address the COVID-19 pandemic response for Schools. The CARES and ESSER Grants were initially distributed with a very short timeline on spending, initially by the end on December 2020, then subsequently extended to March 31 st and then extended beyond with additional Grants provided (ESSER I, 2 and ESSER ARP). This made for a very confusing and intense period to spend, track and coordinate spending and projects across three School Districts that the Valley Unified Education Service Center oversees. Also, the initial Grant that was provided to school Districts (CARES/ESSER I) were done so without clear directives from the Department of Education as to whether these were State Funds or Federal Funds . We were well under way with Committing and spending the funds before it was communicated that the initial funds were State funds (CARES), but subsequent ones were Federal Funds. By then, most of our projects were well under way and/or had been committed and we were now dealing with COVID-19 illnesses, remote school days, school shutdowns and delays/difficulties getting our products and contractors to pro vi de their services on the timeline we needed for the grants. These grants ran concurrently with one another and panned four Fiscal Years: 2020-21 , 2021-2022, 2022-2023 and 2023-2024. It is very rare that we have the opportunity to use Federal funds to address building or renovation projects for our school districts , so we have had no experience with the David Bacon prevailing wage requirement prior to these Federal fund , and therefore, this was not something on our radar at the time. Most of the Federal funding grants that we are used to (ESEA and Special Education) are spent on wages and purchases of materials and equipment, not projects of the scope that we were able to provide using ESSER Grant Funds. For any future projects requiring contractors, we will ensure that MSAD 27 provides the Davis Bacon requirement for prevailing wage rates including the information with the Request for Proposals or Bids (if applicable) and also with the contracts for the service once awarded. We will then ensure that the prevailing wage rates app licable to the contractor were paid to the workers (if applicable) prior to us paying the invoice to the contractor. Anticipated Compl etion Date: August 31 , 2024 to develop the policy and procedure for future Request for Propo als/ Bids that require the Davis Bacon prevailing wage rates.

View Audit 306609 Questioned Costs: $1

Finding 397865 (2023-001)

None 2023

Windham Housing Development Fund Company, Inc.

NY

Reporting § 200.512

Finding #2023-001 Prior Year Reporting Package and Data Collection Not Filed Timely: Recommendation: We recommend that management implement procedures to ensure that reporting packages and data collection forms are filed timely in the future. Action taken: Windham Housing Development Fund Company,...

Finding #2023-001 Prior Year Reporting Package and Data Collection Not Filed Timely: Recommendation: We recommend that management implement procedures to ensure that reporting packages and data collection forms are filed timely in the future. Action taken: Windham Housing Development Fund Company, Inc. agrees with the auditor’s recommendations and will implement procedures to ensure timely filing in the future. For questions regarding this corrective action plan, please contact Molly Whitbeck, Executive Director, at (518) 943-6700.

View Audit 306603

Finding 397864 (2023-001)

None 2023

Tannersville Housing Development Fund Company, Inc.

NY

Subrecipient Monitoring Reporting § 200.512

Finding #2023-001 Prior Year Reporting Package and Data Collection Not Filed Timely: Recommendation: We recommend that management implement procedures to ensure that reporting packages and data collection forms are filed timely in the future. Action taken: Tannersville Housing Development Fund Com...

Finding #2023-001 Prior Year Reporting Package and Data Collection Not Filed Timely: Recommendation: We recommend that management implement procedures to ensure that reporting packages and data collection forms are filed timely in the future. Action taken: Tannersville Housing Development Fund Company Inc. agrees with the auditor’s recommendations and will implement procedures to ensure timely filing in the future. For questions regarding this corrective action plan, please contact Molly Whitbeck, Executive Director, at (518)943-6700.

View Audit 306602

Finding 397863 (2023-001)

None 2023

Orchard Housing Development Fund Company, Inc.

NY

Subrecipient Monitoring Reporting § 200.512

Finding #2023-001 Prior Year Reporting Package and Data Collection Not Filed Timely: Recommendation: We recommend that management implement procedures to ensure that reporting packages and data collection forms are filed timely in the future. Action taken: Orchard Housing Development Fund Company,...

Finding #2023-001 Prior Year Reporting Package and Data Collection Not Filed Timely: Recommendation: We recommend that management implement procedures to ensure that reporting packages and data collection forms are filed timely in the future. Action taken: Orchard Housing Development Fund Company, Inc. agrees with the auditor’s recommendations and will implement procedures to ensure timely filing in the future. For questions regarding this corrective action plan, please contact Molly Whitbeck, Executive Director, at (518) 943-6700.

View Audit 306601

Finding 397862 (2023-001)

Significant Deficiency 2023

Healthy Start, Inc.

PA

Cash Management Matching / Level of Effort / Earmarking

DEPARTMENT OF HEALTH AND HUMAN SERVICES Healthy Start, Inc. respectfully submits the following corrective action plan for the year ended September 30, 2023. Healthy Start Initiative, Assisted Listing Number 93.926 2023-01 - Federal funds to cover e...

DEPARTMENT OF HEALTH AND HUMAN SERVICES Healthy Start, Inc. respectfully submits the following corrective action plan for the year ended September 30, 2023. Healthy Start Initiative, Assisted Listing Number 93.926 2023-01 - Federal funds to cover expenditures incurred under one federal award were drawn down from another federal project. Recommendation: Procedures should be established to ensure that federal funds are drawn down from the correct federal project. Management’s Corrective Action Plan: Management has reviewed the past processes and procedures and added a 2- step verification/authentication process for approval and drawdown of federal funds. Effective Date: Immediately Purpose: To minimize the time elapsing between the transfer of funds from the U.S.Treasury and disbursement for direct program cost. Procedure: · The Staff Accountant or other authorized member of the finance team initiates the drawdown amount from the PMS system and will screenshot a copy of the drawdown via email to another authorized member of the Team for their review and approval. · Second Finance team member reviews the transactions, compares them to the drawdown worksheets for each federal project and verifies that amounts will be drawn down from the correct project funds. · An email approving the transaction is then forwarded to the staff accountant or team member, initiating the drawdown, giving them permission to submit the request for payment. Any questions regarding this procedure should be directed to Jada Shirriel, Chief Executive Officer at 412-247-4009.

View Audit 306598

Finding 397858 (2023-001)

Significant Deficiency 2023

City of Weslaco

TX

Internal Control / Segregation of Duties Reporting Significant Deficiency § 200.328

The City will review the current procedures for maintaining documentation for when quarterly project and expenditures reports are completed, reviewed and submitted. Contact Person: Rosie Cavazos, CFO Proposed Implementation date: September 30, 2024

View Audit 306592

Finding 397723 (2023-001)

Significant Deficiency 2023

Atcc Global & Subsidiaries

VA

Reporting § 200.502 § 200.510

Prior to submitting the SEFA each year, a Staff Accountant in ATCC’s Finance & Accounting team will prepare the SEFA, it will be reviewed and approved by ATCC’s Federal Solutions Finance team and the CFO/Controller for completeness, accuracy, and compliance with CFR Section 200.510(b), confirm consi...

Prior to submitting the SEFA each year, a Staff Accountant in ATCC’s Finance & Accounting team will prepare the SEFA, it will be reviewed and approved by ATCC’s Federal Solutions Finance team and the CFO/Controller for completeness, accuracy, and compliance with CFR Section 200.510(b), confirm consistency with the trial balance, and correct any inconsistencies prior to submitting the SEFA report.

View Audit 306580

Finding 397722 (2023-006)

Significant Deficiency 2023

Window Rock Unified School District No. 8

AZ

Reporting School Nutrition Programs Special Tests & Provisions § 200.512 § 200.520

2023-006 Late Audit Submission Programs: Impact Aid, Education Stabilization Fund (COVID-19) Federal Assistance #: 84.041, 84.425 Federal Agency: U.S. Department of Education Grantor Number: N/A Questioned Costs: N/A Type of Finding: Noncompliance Compliance Requirement: L. Reporting Planned complet...

2023-006 Late Audit Submission Programs: Impact Aid, Education Stabilization Fund (COVID-19) Federal Assistance #: 84.041, 84.425 Federal Agency: U.S. Department of Education Grantor Number: N/A Questioned Costs: N/A Type of Finding: Noncompliance Compliance Requirement: L. Reporting Planned completion date for corrective action plan: For the period ending June 30, 2024. Name of the contact person responsible for corrective action: Contact person: Becky Tinney, Business Manager Condition: The District did not submit their audit for the fiscal year ending June 30, 2023, timely. The audit was submitted on May 16, 2024. Corrective Action Plan: The District will implement procedures to ensure that all audit documentation is available for auditing in a timely manner and the audit report is submitted within the appropriate timeframe.

View Audit 306579

Finding 397721 (2023-002)

Significant Deficiency 2023

Breakthrough Phase Iii, Inc.

TN

HUD Housing Programs Internal Control / Segregation of Duties

CORRECTIVE ACTION PLAN Breakthrough Phase III, Inc. respectfully submits the following corrective action plan for the year ended June 30, 2023. Purkey, Carter, Compton, Swann, & Carter, PLLC PO. Box 727 Morristown, Tennessee 37815 Audit period: July 1, 2022 —June 30, 2023 The findings from...

CORRECTIVE ACTION PLAN Breakthrough Phase III, Inc. respectfully submits the following corrective action plan for the year ended June 30, 2023. Purkey, Carter, Compton, Swann, & Carter, PLLC PO. Box 727 Morristown, Tennessee 37815 Audit period: July 1, 2022 —June 30, 2023 The findings from the schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. Section A of the schedule, Summary of Audit Results, does not include findings and is not addressed. FINDINGS — FINANCIAL STATEMENT AUDIT None FINDINGS — FEDERAL AWARD PROGRAMS AUDITS FINDING N0. 2023-002: Ineffective operation of internal controls by management Management conducted recertifications of the Project’ 5 tenants; however, cannot locate any tenant ﬁles for the fiscal year under audit. Criteria: According to HUD Handbook 4350.3, owners must conduct a recertification of family income and composition at least annually by the tenant’s recertification anniversary date. Owners then must recompute the tenants’ rents and assistance payments, if applicable, based on the information gathered. Owners must also keep all tenant ﬁle and recertiﬁcation documentation as required by HUD. Cause of Condition: Management did not have systems in place to ensure tenant ﬁles and recertiﬁcation documentation were kept in accordance with HUD requirements. Recommendation: Auditor recommends management review HUD Handbook 4350.3 and put proper internal controls in place to ensure tenant ﬁles are in compliance with HUD and kept in accordance with HUD requirements. Action Taken: Personnel at Breakthrough Corporation that are handling the operations of the Project have gone through HUD—related training and are working diligently to get the tenant files up to date and in accordance with HUD compliance.

View Audit 306573

Finding 397720 (2023-001)

Significant Deficiency 2023

Breakthrough Phase Iii, Inc.

TN

HUD Housing Programs Reporting

CORRECTIVE ACTION PLAN Breakthrough Phase III, Inc. respectfully submits the following corrective action plan for the year ended June 30, 2023. Purkey, Carter, Compton, Swann, & Carter, PLLC PO. Box 727 Morristown, Tennessee 37815 Audit period: July 1, 2022 —June 30, 2023 The findings from...

CORRECTIVE ACTION PLAN Breakthrough Phase III, Inc. respectfully submits the following corrective action plan for the year ended June 30, 2023. Purkey, Carter, Compton, Swann, & Carter, PLLC PO. Box 727 Morristown, Tennessee 37815 Audit period: July 1, 2022 —June 30, 2023 The findings from the schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. Section A of the schedule, Summary of Audit Results, does not include findings and is not addressed. FINDINGS — FINANCIAL STATEMENT AUDIT None FINDINGS — FEDERAL AWARD PROGRAMS AUDITS FINDING NO. 2023-001: Late REAC submission for Section 811 Supportive Housing for Persons with Disabilities, ALN #14.181 Criteria: The Project is required to submit audited ﬁnancial statements with the REAC system within 90 days after year end. Cause of Condition: The Project did not have systems in place to submit the audited ﬁnancial statements within the required 90 days. Recommendation: Auditor recommends management implement systems to ensure audited ﬁnancial statements are submitted to REAC as required by the U.S. Department of Housing and Urban Development within 90 days after the fiscal year end. Action Taken: Personnel at Breakthrough Corporation have contracted with an outside accounting firm to handle the bookkeeping and will ensure that the year end financial reports will be provided to necessary third parties as soon as possible after the end of the fiscal year.

View Audit 306573

Finding 397719 (2023-002)

Significant Deficiency 2023

Breakthrough Phase Ii, Inc.

TN

HUD Housing Programs Internal Control / Segregation of Duties

CORRECTIVE ACTION PLAN Breakthrough Phase II, Inc. respectfully submits the following corrective action plan for the year ended June 30, 2023. Purkey, Carter, Compton, Swann, & Carter, PLLC PO. Box 727 Morristown, Tennessee 37815 Audit period: July 1, 2022 —June 30, 2023 The findings from...

CORRECTIVE ACTION PLAN Breakthrough Phase II, Inc. respectfully submits the following corrective action plan for the year ended June 30, 2023. Purkey, Carter, Compton, Swann, & Carter, PLLC PO. Box 727 Morristown, Tennessee 37815 Audit period: July 1, 2022 —June 30, 2023 The findings from the schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. Section A of the schedule, Summary of Audit Results, does not include findings and is not addressed. FINDINGS — FINANCIAL STATEMENT AUDIT None FINDINGS — FEDERAL AWARD PROGRAMS AUDITS FINDING N0. 2023-002: Ineffective operation of internal controls by management Management conducted recertifications of the Project’ 5 tenants; however, cannot locate any tenant ﬁles for the fiscal year under audit. Criteria: According to HUD Handbook 4350.3, owners must conduct a recertification of family income and composition at least annually by the tenant’s recertification anniversary date. Owners then must recompute the tenants’ rents and assistance payments, if applicable, based on the information gathered. Owners must also keep all tenant ﬁle and recertiﬁcation documentation as required by HUD. Cause of Condition: Management did not have systems in place to ensure tenant ﬁles and recertiﬁcation documentation were kept in accordance with HUD requirements. Recommendation: Auditor recommends management review HUD Handbook 4350.3 and put proper internal controls in place to ensure tenant ﬁles are in compliance with HUD and kept in accordance with HUD requirements. Action Taken: Personnel at Breakthrough Corporation that are handling the operations of the Project have gone through HUD—related training and are working diligently to get the tenant files up to date and in accordance with HUD compliance.

View Audit 306572

Finding 397718 (2023-001)

Significant Deficiency 2023

Breakthrough Phase Ii, Inc.

TN

HUD Housing Programs Reporting

CORRECTIVE ACTION PLAN Breakthrough Phase II, Inc. respectfully submits the following corrective action plan for the year ended June 30, 2023. Purkey, Carter, Compton, Swann, & Carter, PLLC PO. Box 727 Morristown, Tennessee 37815 Audit period: July 1, 2022 —June 30, 2023 The findings from...

CORRECTIVE ACTION PLAN Breakthrough Phase II, Inc. respectfully submits the following corrective action plan for the year ended June 30, 2023. Purkey, Carter, Compton, Swann, & Carter, PLLC PO. Box 727 Morristown, Tennessee 37815 Audit period: July 1, 2022 —June 30, 2023 The findings from the schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. Section A of the schedule, Summary of Audit Results, does not include findings and is not addressed. FINDINGS — FINANCIAL STATEMENT AUDIT None FINDINGS — FEDERAL AWARD PROGRAMS AUDITS FINDING NO. 2023-001: Late REAC submission for Section 811 Supportive Housing for Persons with Disabilities, ALN #14.181 Criteria: The Project is required to submit audited ﬁnancial statements with the REAC system within 90 days after year end. Cause of Condition: The Project did not have systems in place to submit the audited ﬁnancial statements within the required 90 days. Recommendation: Auditor recommends management implement systems to ensure audited ﬁnancial statements are submitted to REAC as required by the U.S. Department of Housing and Urban Development within 90 days after the fiscal year end. Action Taken: Personnel at Breakthrough Corporation have contracted with an outside accounting firm to handle the bookkeeping and will ensure that the year end financial reports will be provided to necessary third parties as soon as possible after the end of the fiscal year.

View Audit 306572

Finding 397717 (2023-002)

Significant Deficiency 2023

Breakthrough Phase I, Inc.

TN

HUD Housing Programs Internal Control / Segregation of Duties

CORRECTIVE ACTION PLAN Breakthrough Phase I, Inc. respectfully submits the following corrective action plan for the year ended June 30, 2023. Purkey, Carter, Compton, Swann, & Carter, PLLC PO. Box 727 Morristown, Tennessee 37815 Audit period: July 1, 2022 —June 30, 2023 The findings from ...

CORRECTIVE ACTION PLAN Breakthrough Phase I, Inc. respectfully submits the following corrective action plan for the year ended June 30, 2023. Purkey, Carter, Compton, Swann, & Carter, PLLC PO. Box 727 Morristown, Tennessee 37815 Audit period: July 1, 2022 —June 30, 2023 The findings from the schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. Section A of the schedule, Summary of Audit Results, does not include findings and is not addressed. FINDINGS — FINANCIAL STATEMENT AUDIT None FINDINGS — FEDERAL AWARD PROGRAMS AUDITS FINDING N0. 2023-002: Ineffective operation of internal controls by management Management conducted recertifications of the Project’ 5 tenants; however, cannot locate any tenant ﬁles for the fiscal year under audit. Criteria: According to HUD Handbook 4350.3, owners must conduct a recertification of family income and composition at least annually by the tenant’s recertification anniversary date. Owners then must recompute the tenants’ rents and assistance payments, if applicable, based on the information gathered. Owners must also keep all tenant ﬁle and recertiﬁcation documentation as required by HUD. Cause of Condition: Management did not have systems in place to ensure tenant ﬁles and recertiﬁcation documentation were kept in accordance with HUD requirements. Recommendation: Auditor recommends management review HUD Handbook 4350.3 and put proper internal controls in place to ensure tenant ﬁles are in compliance with HUD and kept in accordance with HUD requirements. Action Taken: Personnel at Breakthrough Corporation that are handling the operations of the Project have gone through HUD—related training and are working diligently to get the tenant files up to date and in accordance with HUD compliance.

View Audit 306570

Finding 397716 (2023-001)

Significant Deficiency 2023

Breakthrough Phase I, Inc.

TN

HUD Housing Programs Reporting

CORRECTIVE ACTION PLAN Breakthrough Phase I, Inc. respectfully submits the following corrective action plan for the year ended June 30, 2023. Purkey, Carter, Compton, Swann, & Carter, PLLC PO. Box 727 Morristown, Tennessee 37815 Audit period: July 1, 2022 —June 30, 2023 The findings from ...

CORRECTIVE ACTION PLAN Breakthrough Phase I, Inc. respectfully submits the following corrective action plan for the year ended June 30, 2023. Purkey, Carter, Compton, Swann, & Carter, PLLC PO. Box 727 Morristown, Tennessee 37815 Audit period: July 1, 2022 —June 30, 2023 The findings from the schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. Section A of the schedule, Summary of Audit Results, does not include findings and is not addressed. FINDINGS — FINANCIAL STATEMENT AUDIT None FINDINGS — FEDERAL AWARD PROGRAMS AUDITS FINDING NO. 2023-001: Late REAC submission for Section 811 Supportive Housing for Persons with Disabilities, ALN #14.181 Criteria: The Project is required to submit audited ﬁnancial statements with the REAC system within 90 days after year end. Cause of Condition: The Project did not have systems in place to submit the audited ﬁnancial statements within the required 90 days. Recommendation: Auditor recommends management implement systems to ensure audited ﬁnancial statements are submitted to REAC as required by the US. Department of Housing and Urban Development within 90 days after the fiscal year end. Action Taken: Personnel at Breakthrough Corporation have contracted with an outside accounting firm to handle the bookkeeping and will ensure that the year end financial reports will be provided to necessary third parties as soon as possible after the end of the fiscal year.

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