Corrective Action Plans

Finding 1206080 (2025-006)

Material Weakness 2025

MN

Allowable Costs / Cost Principles § 200.403

2025-06 Allowability of Rental Assistance Payment- Unallowable Program Expenditure Federal Agency- US Department of Housing and Urban Development Continuum of Care Program -Assistance Listing# 14.267 Hennepin County Contract HS00001366 Year ended June 30, 2025 Material Weakness in Internal Control o...

2025-06 Allowability of Rental Assistance Payment- Unallowable Program Expenditure Federal Agency- US Department of Housing and Urban Development Continuum of Care Program -Assistance Listing# 14.267 Hennepin County Contract HS00001366 Year ended June 30, 2025 Material Weakness in Internal Control over Compliance, Noncompliance Other Matter Recommendation - Agate Housing and Services, Inc. strengthen internal controls to ensure all expenditures charged to the Continuum of Care Program are allowable and comply with applicable federal and program requirements. Corrective action - Agate Housing and Services, Inc agrees with the finding and is in the process of strengthening its controls over its review of program expenditures prior to submitting requests for reimbursement. An additional layer of review/approval by the Director of Contracts and the Chief Operating Officer prior to submission has been implemented. Name of contact person(s) responsible for corrective action - Elizabeth Macha rt, Director of Housing Programs and Sara Wenzel, Associate Director Time Limited Housing Completion date - Management implemented the additional layer of review/approval beginning January 2026.

View Audit 398002

Finding 1206079 (2025-005)

Material Weakness 2025

Agate Housing and Services, Inc.

MN

Allowable Costs / Cost Principles § 200.430

2025-05 Allowability of Payroll Expenditures (repeat finding see 2025-02} Federal Agency- US Department of Housing and Urban Development Continuum of Care Program -Assistance Listing# 14.267 Hennepin County Contract HS00001366 Year ended June 30, 2025 Material Weakness in Internal Control over Compl...

2025-05 Allowability of Payroll Expenditures (repeat finding see 2025-02} Federal Agency- US Department of Housing and Urban Development Continuum of Care Program -Assistance Listing# 14.267 Hennepin County Contract HS00001366 Year ended June 30, 2025 Material Weakness in Internal Control over Compliance, Noncompliance Other Matter Recommendation - Controls be strengthened to ensure the accuracy and completeness of payroll documentation and additional training be provided to staff involved in the payroll process to ensure policies and procedures are followed. Personnel files should include complete and approved documentation of employee pay rates and verified final allocations to programs. Payroll documentation should include an after-the-fact determination of actual hours worked in each program or function of Agate Housing and Services, Inc. Corrective action -Agate Housing and Services, Inc. implemented a new payroll system on January 1, 2025 which incorporates built-in authorization controls and requires all employees to submit time based on actual hours worked in each program or function of the agency where required and by contract allocation method where approved. Management has also reviewed the pay-rate discrepancy identified during the audit and has taken corrective action to ensure the employee was compensated accurately. Going forward, management will perform periodic reviews to confirm pay rate changes are properly documented and that all payroll entries align with approved personnel records. Name of contact person responsible for corrective action - Donna Rapacz, Chief Operating Officer Completion date - Management implemented the above procedure as of January 1, 2025.

View Audit 398002

Finding 1206078 (2025-004)

Material Weakness 2025

Agate Housing and Services, Inc.

MN

Special Tests & Provisions Material Weakness Internal Control / Segregation of Duties

2025-004 Special Tests and Provisions - Rent Reasonableness Federal Agency - US Department of Housing and Urban Development Continuum of Care Program - Assistance Listing# 14.267 Hennepin County Contract HS00001366 Year ended June 30, 2025 Material Weakness in Internal Control over Compliance Recomm...

2025-004 Special Tests and Provisions - Rent Reasonableness Federal Agency - US Department of Housing and Urban Development Continuum of Care Program - Assistance Listing# 14.267 Hennepin County Contract HS00001366 Year ended June 30, 2025 Material Weakness in Internal Control over Compliance Recommendation - Agate Housing and Services, Inc. implement internal controls requiring program staff to validate compliance with rent reasonableness requirements and maintain adequate documentation to support final rent determinations. Corrective action - Agate Housing and Services, Inc agrees with the finding and is in the process of strengthening its controls over the verification of landlords and rent reasonableness and retaining such documentation. Name of contact person(s) responsible for corrective action - Elizabeth Macha rt, Director of Housing Programs and Sara Wenzel, Associate Director Time Limited Housing Completion date - Management and the housing team implemented the above procedure December 2025.

View Audit 398002

Finding 1206077 (2025-003)

Material Weakness 2025

Agate Housing and Services, Inc.

MN

Material Weakness Equipment & Real Property Management Matching / Level of Effort / Earmarking § 200.303

2025-003 Allowability of Rental Assistance Payments - Landlord Verifications Federal Agency- US Department of Housing and Urban Development Continuum of Care Program -Assistance Listing# 14.267 Hennepin County Contract HS00001366 Year ended June 30, 2025 Material Weakness in Internal Control over Co...

2025-003 Allowability of Rental Assistance Payments - Landlord Verifications Federal Agency- US Department of Housing and Urban Development Continuum of Care Program -Assistance Listing# 14.267 Hennepin County Contract HS00001366 Year ended June 30, 2025 Material Weakness in Internal Control over Compliance Recommendation - Agate Housing and Services, Inc. strengthen internal controls to ensure landlord verifications are completed and required documentation, including W9 forms, is obtained and retained for all vendors prior to the disbursement of rental assistance funds. Management should implement a procedure to verify required documentation is present before payment approval. Corrective action - Agate Housing and Services, Inc. agrees with the finding and is in the process of strengthening its controls over the verification of landlords. All vendors without TINs have been archived from the accounting system. A new portal has been created on Agate's website for landlords to submit required documentation electronically and paperwork (W9 and Property Tax Records) are attached to vendor profiles in the accounting system prior to issuing payments. Name of contact person(s) responsible for corrective action - Elizabeth Macha rt, Director of Housing Programs and Sara Wenzel, Associate Director Time Limited Housing Completion date - Vendor purge began January 2025 and rollout of new LL portal March 2026

View Audit 398002

Finding 1206076 (2025-001)

Material Weakness 2025

City of Webster

TX

Reporting Internal Control / Segregation of Duties Subrecipient Monitoring § 200.303 § 200.501 § 200.510

2025-001: Insufficient Controls Over Monitoring Federal Expenditures and SEFA Preparation (Significant Deficiency) The City concurs with the finding and will strengthen controls over monitoring federal expenditures and preparation of the Schedule of Expenditures of Federal Awards (SEFA). The Finance...

2025-001: Insufficient Controls Over Monitoring Federal Expenditures and SEFA Preparation (Significant Deficiency) The City concurs with the finding and will strengthen controls over monitoring federal expenditures and preparation of the Schedule of Expenditures of Federal Awards (SEFA). The Finance Department will implement centralized oversight of federal grant activity and maintain a grant tracking schedule to monitor cumulative federal expenditures by program, including reimbursements and receivables. Departments administering federal programs will be required to report grant expenditures to Finance, and periodic reconciliations will be performed between departmental records, reimbursement requests submitted to the pass-through agency, and amounts recorded in the general ledger. At year-end, the Finance Department will prepare the SEFA and perform a formal management review to ensure all federal expenditures are complete and accurately reported and evaluated against the Single Audit threshold in accordance with Uniform Guidance. Personnel involved in grant administration will receive training on applicable Uniform Guidance requirements to support compliance with federal reporting and monitoring requirements. Anticipated Completion Date: June 2026

View Audit 397998

Finding 1206071 (2025-002)

Material Weakness 2025

Learn

CT

Procurement, Suspension & Debarment Allowable Costs / Cost Principles Significant Deficiency

Major Federal Programs Significant Deficiency in Internal Control over Compliance and Other Matter Description of Finding During our testing, we noted LEARN did not have adequate documentation of internal controls designed to ensure vendors were not suspended or debarred. Statement of Concurrence or...

Major Federal Programs Significant Deficiency in Internal Control over Compliance and Other Matter Description of Finding During our testing, we noted LEARN did not have adequate documentation of internal controls designed to ensure vendors were not suspended or debarred. Statement of Concurrence or NonConcurrence Management agrees with this finding. Our corrective action plan is detailed below. Corrective Action Management has initiated corrective measures to strengthen internal controls over compliance. LEARN reviewed the existing procedure which outlines the steps to review vendor suspension/disbarment. The Business Office communicated the procedure to all staff with responsibilities for creating purchase orders. In addition, the Business Office reviewed all existing purchase orders over $20k and reviewed those vendors for suspension/disbarment. See attached for LEARN’s purchasing policy and the related procedure document. Name of Contact Person Mike Belden, CFO Projected Completion Date June 30, 2026

View Audit 397969

Finding 1206070 (2025-001)

Material Weakness 2025

School District of Beloit

WI

Cash Management

Corrective Action Plan: The District acknowledges its lack of proper consent for billing and will continue to review its procedures for obtaining and maintaining consent forms to ensure that the District has appropriate permission to submit services for reimbursement through the SBS Medicaid System.

View Audit 397963

Finding 1206069 (2025-003)

Material Weakness 2025

Ida County Iowa Community Hospital D/b/a Horn Memorial Hospital

IA

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

Criteria: CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The loan re...

Criteria: CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The loan resolution security agreement states the Hospital must set aside a capital asset replacement account which may be established as a bookkeeping account or as a separate bank account. Funds may be deposited in institutions insured by state and federal government orinvested in marketable securities backed by the full faith and credit of the United States. Condition: The funds that represented the capital asset replacement fund were commingled with an existing board-designated CD account. Views of Responsible Officials and Planned Corrective Action: Management agrees with the funding and will deposit the required capital asset replacement funds in either a separate bank account or general ledger account. Planned Completion Date: December 31, 2026 Person Responsible: Nik Brimeyer, CFO

View Audit 397953

Finding 1206068 (2025-001)

Material Weakness 2025

The Towers LLC

MN

HUD Housing Programs

2025-001 - Management Fees Name of contact person - Vicky Dwyer, CFO, Great Lakes Management Company Corrective action - Management began the process of requesting these changes from HUD prior to when the changes went into effect, working through the mortgage company. However, due to turnover at the...

2025-001 - Management Fees Name of contact person - Vicky Dwyer, CFO, Great Lakes Management Company Corrective action - Management began the process of requesting these changes from HUD prior to when the changes went into effect, working through the mortgage company. However, due to turnover at the mortgage company, the request for approval by HUD was never sent to HUD. As a result, management is now currently in the process of working with HUD, the mortgage company, and ownership’s lawyer to obtain all necessary approvals. Proposed completion date - Management has put in the necessary requests with HUD and the mortgage company to receive the necessary approvals, and the finding will be corrected once HUD has issued its approval or other response to management.

View Audit 397951

Finding 1206067 (2025-001)

Material Weakness 2025

Terraces Assisted Living INC

MN

HUD Housing Programs Material Weakness

2025-001 - Management Fees Name of contact person - Vicky Dwyer, CFO, Great Lakes Management Company Corrective action - Management began the process of requesting these changes from HUD prior to when the changes went into effect, working through the mortgage company. However, due to turnover at the...

2025-001 - Management Fees Name of contact person - Vicky Dwyer, CFO, Great Lakes Management Company Corrective action - Management began the process of requesting these changes from HUD prior to when the changes went into effect, working through the mortgage company. However, due to turnover at the mortgage company, the request for approval by HUD was never sent to HUD. As a result, management is now currently in the process of working with HUD, the mortgage company, and ownership’s lawyer to obtain all necessary approvals. Proposed completion date - Management has put in the necessary requests with HUD and the mortgage company to receive the necessary approvals, and the finding will be corrected once HUD has issued its approval or other response to Management.

View Audit 397950

Finding 1206058 (2025-010)

Material Weakness 2025

CITY OF COLSTRIP

MT

Internal Control / Segregation of Duties

NONCOMPLIANCE WITH GRANT TERMS AND CONDITIONS, CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS, ASSISTANCE LISTING No. 21.027, AM-23-0256, AM-23-0255, YEAR ENDED JUNE 30, 2025 Name of contact person: Michelle Richards – City Clerk/Treasurer Corrective Action: Written grant administration policies ...

NONCOMPLIANCE WITH GRANT TERMS AND CONDITIONS, CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS, ASSISTANCE LISTING No. 21.027, AM-23-0256, AM-23-0255, YEAR ENDED JUNE 30, 2025 Name of contact person: Michelle Richards – City Clerk/Treasurer Corrective Action: Written grant administration policies and procedures will be developed. Procedures will include designation of parties responsible for submission of required documents, progress/monitoring reports, draw requests, etc. Proposed Completion Date: Fiscal year 2027

View Audit 397933

Finding 1206057 (2025-009)

Material Weakness 2025

CITY OF COLSTRIP

MT

Procurement, Suspension & Debarment § 200.214 § 200.318 § 200.327

NONCOMPLIANCE WITH PROCUREMENT AND SUSPENSION AND DEBARMENT REQUIREMENTS, CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS, ASSISTANCE LISTING No. 21.027, Name of contact person: Michelle Richards – City Clerk/Treasurer Corrective Action: The city will develop a policy to provide reasonable assuran...

NONCOMPLIANCE WITH PROCUREMENT AND SUSPENSION AND DEBARMENT REQUIREMENTS, CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS, ASSISTANCE LISTING No. 21.027, Name of contact person: Michelle Richards – City Clerk/Treasurer Corrective Action: The city will develop a policy to provide reasonable assurance that procurement of goods and services are made in compliance with applicable federal regulations and that no award, subaward, contract or agreement is made with any suspended or debarred party. Proposed Completion Date: Fiscal year 2027

View Audit 397933

Finding 1206053 (2025-001)

Material Weakness 2025

Lasalle Park Homes Ii, Inc. 073-Ee100-Np-Wah

IN

Subrecipient Monitoring HUD Housing Programs

Finding 2025-001: Management fees of $6,012 were prepaid at December 31, 2025. Comments on the Finding and Each Recommendation: The Agent should reimburse $6,012 to the Community. Action(s) taken or planned on the finding: Agree. During the year ended December 31, 2026, the Agent will reimburse $6,0...

Finding 2025-001: Management fees of $6,012 were prepaid at December 31, 2025. Comments on the Finding and Each Recommendation: The Agent should reimburse $6,012 to the Community. Action(s) taken or planned on the finding: Agree. During the year ended December 31, 2026, the Agent will reimburse $6,012 to the Community.

View Audit 397927

Finding 1206051 (2025-002)

Material Weakness 2025

Redeemer Housing Association, Inc.

OH

HUD Housing Programs

Condition: The Corporation failed to refund the security deposit to a tenant within 30 days of their move out date. Planned Corrective Action: Management acknowledged the noncompliance which occurred during the year ended December 31, 2025, and has reiterated the 30-day HUD requirement to the Corpor...

Condition: The Corporation failed to refund the security deposit to a tenant within 30 days of their move out date. Planned Corrective Action: Management acknowledged the noncompliance which occurred during the year ended December 31, 2025, and has reiterated the 30-day HUD requirement to the Corporation’s managing staff and emphasized the importance of timely recording move-outs in the property management software. In addition, management implemented a weekly monitoring review performed by the Senior Accountant to ensure moveouts are processed and security deposits are issued within the required timeframe. Contact person responsible for corrective action: Bob Reichard, VP of Finance Anticipated Completion Date: July 10, 2025

View Audit 397921

Finding 1206050 (2025-002)

Material Weakness 2025

Miami Valley Lutheran Housing Association of Indiana Iv, Inc.

OH

HUD Housing Programs

Condition: The Corporation failed to refund the security deposit to a tenant within 30 days of their move out date. Planned Corrective Action: Management acknowledged the noncompliance which occurred during the year ended December 31, 2025, and has reiterated the 30-day HUD requirement to the Corpor...

Condition: The Corporation failed to refund the security deposit to a tenant within 30 days of their move out date. Planned Corrective Action: Management acknowledged the noncompliance which occurred during the year ended December 31, 2025, and has reiterated the 30-day HUD requirement to the Corporation’s managing staff and emphasized the importance of timely recording move-outs in the property management software. In addition, management implemented a weekly monitoring review performed by the Senior Accountant to ensure moveouts are processed and security deposits are issued within the required timeframe. Contact person responsible for corrective action: Bob Reichard, Vice President, Finance. Anticipated Completion Date: February 27, 2025

View Audit 397918

Finding 1206049 (2025-002)

Material Weakness 2025

Miami Valley Lutheran Housing Association Ii, Inc.

OH

HUD Housing Programs

Condition: The Corporation failed to refund the security deposit to a tenant within 30 days of their move out date. Planned Corrective Action: Management acknowledges noncompliance which occurred during the year ended December 31, 2025, and has reiterated the 30-day HUD requirement to the Corporatio...

Condition: The Corporation failed to refund the security deposit to a tenant within 30 days of their move out date. Planned Corrective Action: Management acknowledges noncompliance which occurred during the year ended December 31, 2025, and has reiterated the 30-day HUD requirement to the Corporation's managing staff and emphasized the importance of timely recording move-outs in the property management software. In addition, management implemented a weekly monitoring review performed by the Senior Accountant to ensure moveouts are processed and security deposits are issued within the required timeframe. Contact person responsible for corrective action: Bob Reichard, Vice President, Finance Anticipated Completion Date: April 10, 2025

View Audit 397915

Finding 1206048 (2025-002)

Material Weakness 2025

Miami Valley Lutheran Housing Association of Indiana Iii, Inc.

OH

HUD Housing Programs

Condition: The Corporation failed to refund the security deposit to a tenant within 30 days of their move out date. Planned Corrective Action: Management acknowledges noncompliance which occurred during the year ended December 31, 2025, and has reiterated the 30-day HUD requirement to the Corporatio...

Condition: The Corporation failed to refund the security deposit to a tenant within 30 days of their move out date. Planned Corrective Action: Management acknowledges noncompliance which occurred during the year ended December 31, 2025, and has reiterated the 30-day HUD requirement to the Corporation's managing staff and emphasized the importance of timely recording move-outs in the property management software. In addition, management implemented a weekly monitoring review performed by the Senior Accountant to ensure moveouts are processed and security deposits are issued within the required timeframe. Contact person responsible for corrective action: Bob Reichard, Vice President, Finance Anticipated Completion Date: July 3, 2025

View Audit 397903

Finding 1206047 (2025-001)

Material Weakness 2025

Eagle Lake Development Corporation

ME

Internal Control / Segregation of Duties

Name of contact person: Michelle Raymond, Management Agent Corrective Action: The Organization will ensure that excess security deposit funds are transferred to the Organization’s operating account on a timely basis in the future. Proposed implementation date: The corrective action plan will be impl...

Name of contact person: Michelle Raymond, Management Agent Corrective Action: The Organization will ensure that excess security deposit funds are transferred to the Organization’s operating account on a timely basis in the future. Proposed implementation date: The corrective action plan will be implemented immediately.

View Audit 397890

Finding 1206041 (2025-001)

Material Weakness 2025

Monte Vista Community Center Housing Authority, Inc.

CO

Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties Allowable Costs / Cost Principles § 200.303

Finding 2025-001: Rural Rental Housing Loans Assistance Listing Number: 10.415 U.S. Department of Agriculture (Repeat of Finding 2024-001) Compliance Requirement: Eligibility, Program Income Type of finding: Internal Control Over Compliance (significant deficiency) Recommendation: The Organization s...

Finding 2025-001: Rural Rental Housing Loans Assistance Listing Number: 10.415 U.S. Department of Agriculture (Repeat of Finding 2024-001) Compliance Requirement: Eligibility, Program Income Type of finding: Internal Control Over Compliance (significant deficiency) Recommendation: The Organization should strengthen its internal controls with adopted policies and procedures to ensure a review process is established through adequate segregation of duties. The Organization should consider assessing and realigning the duties and responsibilities of the Executive Director, Administrative Assistant, and Alamosa Property Manager to provide for a review process of tenant eligibility determinations and the monthly housing assistance payment requests for the Sierra Vista Alamosa Housing Complex. Action Taken: This finding was from the actions of the pervious on-site manager, concerning the Alamosa Complex only. Sierra Vista/Alamosa Complex has already implemented the internal control concerning compliance in house. Priscilla and Alonzo will make sure that all internal compliance issues are segregated and check by at least 2 persons in the office, and if needed, the Executive Director can request viewing of internal control procedures as well. Alonzo and Priscilla prepare and review along with signatures of the review and approval dates of internal affairs. "This institution is an equal opportunity provider." If there are questions regarding this plan, please call the responsible party at (719)852-5505. Sincerely yours, Corinna Garcia Executive Director Monte Vista Community Center Housing Authority, Inc.

View Audit 397889

Finding 1206038 (2025-001)

Material Weakness 2025

Heartland Christian Tower, Inc.

OH

The Corporation concurs with the finding. The Corporation obtained the Unique Entity Identifier (UEI) in order to complete and submit the 2022, 2023, and 2024 data collection forms to the Federal Audit Clearinghouse. The completion date for this corrective action was June 16, 2025. Contact: Sean Ale...

The Corporation concurs with the finding. The Corporation obtained the Unique Entity Identifier (UEI) in order to complete and submit the 2022, 2023, and 2024 data collection forms to the Federal Audit Clearinghouse. The completion date for this corrective action was June 16, 2025. Contact: Sean Alexander, Senior Vice President and Chief Financial Officer, National Church Residences.

View Audit 397885

Finding 1206036 (2025-002)

Material Weakness 2025

Tyler Family Circle of Care

TX

Matching / Level of Effort / Earmarking § 200.334

Health Center Program – Assistance Listing No. 93.224 Recommendation: We recommend the organization enhances its current process related to the preparation of the UDS report and reinforce the requirement to maintain documentation to support the amounts reported within the various tables within the U...

Health Center Program – Assistance Listing No. 93.224 Recommendation: We recommend the organization enhances its current process related to the preparation of the UDS report and reinforce the requirement to maintain documentation to support the amounts reported within the various tables within the UDS report. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: We will continue to maintain supporting documentation for our UDS submissions, to include any emails between the reviewer and FCC staff members in regards to questioned amounts and recommended reclassifications. Dental records, which are produced from a separate EMR system and require manual compilation, will be included with our UDS supporting records. Name(s) of the contact person(s) responsible for corrective action: Jennifer A. Breedlove Planned completion date for corrective action plan: March 31, 2026

View Audit 397880

Finding 1206035 (2025-001)

Material Weakness 2025

Tyler Family Circle of Care

TX

Internal Control / Segregation of Duties

Health Center Program – Assistance Listing No. 93.224 Recommendation: Management should consider increasing the frequency of its self-reviews of patient encounters or expanding its sample sizes in addition to providing additional training for front desk staff regarding the collection and verificatio...

Health Center Program – Assistance Listing No. 93.224 Recommendation: Management should consider increasing the frequency of its self-reviews of patient encounters or expanding its sample sizes in addition to providing additional training for front desk staff regarding the collection and verification of patient information for each patient. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: This appears to be a user error where a front desk staff member did not adequately review and input the patient’s information into our EPIC EMR system. We will continue to provide training to our front desk staff to ensure that applications are reviewed in detail and accurate patient information is entered into our systems. We will emphasize that all clinic managers must review SFS applications on a daily basis to verify that the correct slides are entered for each patient. Name(s) of the contact person(s) responsible for corrective action: Jennifer A. Breedlove Planned completion date for corrective action plan: March 31, 2026

View Audit 397880

Finding 1206034 (2025-001)

Material Weakness 2025

Silver Lake Housing, Inc.

TX

Cash Management HUD Housing Programs Reporting

Condition: The tenant security deposit cash account was insufficient to cover the tenant security deposit liability. - Response: The reserve for replacement has ample funds to request reimbursements of qualified expenditures and Management plans to make a sizable request for funds in April 2026. If ...

Condition: The tenant security deposit cash account was insufficient to cover the tenant security deposit liability. - Response: The reserve for replacement has ample funds to request reimbursements of qualified expenditures and Management plans to make a sizable request for funds in April 2026. If approved, management can fund the deficiency in the security deposits. Management is also going to request a Budget Based Rent increase in May 2026 for the property due to the extraordinary escalation of operating costs of the last three years. Management believes that with these steps it will be able to return to its previous cash flow position.

View Audit 397875

Finding 1206033 (2025-004)

Material Weakness 2025

Barren County Economic Authority

KY

Reporting Subrecipient Monitoring § 200.303

2025-004 LACK OF INTERNAL CONTROL OVER REPORTING U.S. Department of Housing and Urban Development ALN 14.251 – Economic Development Initiative, Community Project Funding, and Miscellaneous Grants Contract No. B-22-CP-KY-0347 (2022) and B-23-CP-KY-0612 (2023) Criteria and Condition: During our audit ...

2025-004 LACK OF INTERNAL CONTROL OVER REPORTING U.S. Department of Housing and Urban Development ALN 14.251 – Economic Development Initiative, Community Project Funding, and Miscellaneous Grants Contract No. B-22-CP-KY-0347 (2022) and B-23-CP-KY-0612 (2023) Criteria and Condition: During our audit procedures, we noted there was no process in place to ensure periodic reporting was submitted timely and accurately. Cause: Certain internal controls were not in place to prevent or detect lack of periodic reporting, or inaccurate reporting. Effect: Federal funds could be withheld if periodic reports are not submitted, or are inaccurate. Questioned Costs: None Recommendation: We recommend management obtain a greater understanding of the Compliance Supplement requirements over HUD grants, and implement a review process whereby there is a review control over the submission of period reports. Action Taken: The Authority will gain a greater understanding of HUD grants, and will implement a review process over required periodic reporting. Individual(s) responsible for implementing: Maureen Carpenter, CEO Anticipated Completion Date: September 30, 2026

View Audit 397853

Finding 1206031 (2025-003)

Material Weakness 2025

Barren County Economic Authority

KY

Procurement, Suspension & Debarment Subrecipient Monitoring HUD Housing Programs § 200.303 § 200.327

2025-003 PREVAILING WAGE U.S. Department of Housing and Urban Development ALN 14.251 – Economic Development Initiative, Community Project Funding, and Miscellaneous Grants Contract No. B-22-CP-KY-0347 (2022) and B-23-CP-KY-0612 (2023) Criteria and Condition: During our audit procedures, we noted the...

2025-003 PREVAILING WAGE U.S. Department of Housing and Urban Development ALN 14.251 – Economic Development Initiative, Community Project Funding, and Miscellaneous Grants Contract No. B-22-CP-KY-0347 (2022) and B-23-CP-KY-0612 (2023) Criteria and Condition: During our audit procedures, we noted the Authority did not notify contractors that Federal funds would be in payments. As such, contractors did not include federal prevailing wage language in their bids/contracts, and did not provide weekly certified payroll reports to the Authority. Cause: Management was unaware of the requirements of prevailing wage for federal construction grants, and as such, did not communicate to contractors that federal funds would be utilized. Effect: The Authority was not in compliance with the grant requirements in the OMB Compliance Supplement over prevailing wage requirements for laborers and mechanics. Questioned Costs: Unable to determine. Recommendation: We recommend management obtain a greater understanding of the Compliance Supplement requirements over HUD grants, and implement a review process whereby contracts and invoices are not approved without appropriate prevailing wage consideration and certified payrolls. Action Taken: The Authority will gain a greater understanding of HUD grants, and will implement a review process to ensure prevailing wage requirements are considered prior to approving contracts and invoices. Individual(s) responsible for implementing: Maureen Carpenter, CEO Anticipated Completion Date: September 30, 2026

View Audit 397853

Corrective Action Plans

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