Corrective Action Plans

Finding 519899 (2023-001)

None 2023

MO

Questioned Costs HUD Housing Programs

Finding No 2023-001 Name of Responsible Party Fred Gibbs FK Gibbs Company, LLC PO Box 410312 Kansas City, MO 64141 Fred@fkgibbs.com M: 913.709.1811 Views of Responsible Official and Corrective Action Expected Date of Completion:

View Audit 339229 Questioned Costs: $1

Finding 519898 (2023-001)

None 2023

Holiday Drive Housing Corporation

MO

Questioned Costs Cash Management HUD Housing Programs

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

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

View Audit 339228 Questioned Costs: $1

Finding 519884 (2023-001)

None 2023

Jo Daviess Residential Services

IL

HUD Housing Programs Reporting Matching / Level of Effort / Earmarking § 200.512

JO DAVIESS RESIDENTIAL SERVICES, INC. 521 S. WEST STREET GALENA, IL 61036 ...

JO DAVIESS RESIDENTIAL SERVICES, INC. 521 S. WEST STREET GALENA, IL 61036 CORRECTIVE ACTION PLAN January 20, 2025 U. S. Department of Housing and Urban Development Ralph Metcalfe Federal Building 77 West Jackson Boulevard Chicago, IL 60604-3507 Jo Daviess Residential Services, Inc. respectfully submits the following Corrective Action Plan for the year ended June 30, 2023. Bernard Robinson & Company, L.L.P. 1501 Highwoods Blvd., Suite 300 Post Office Box 19608 Greensboro, North Carolina 27419-9608 Period: Year ended June 30, 2023 The finding from the June 30, 2023 Schedule of Findings and Questioned Costs is discussed below. The finding is numbered consistently with the number assigned in the schedule. Finding 2023-001: Supportive Housing for the Persons with Disabilities (Section 811), CFDA #14.181 Recommendation: We recommend management and the board of directors ensure that the audit and data collection forms are completed timely and the data collection form and required reporting package are submitted electronically to the FAC each fiscal year going forward. Management's Response: We agree with Finding 2023-001 and the recommendation described in the accompanying schedule of findings and questioned costs. Management will provide additional oversight to ensure the data collection forms are submitted electronically to the FAC each fiscal year going forward within required due dates. If HUD has questions regarding this corrective action plan, please call (815) 288-6691. Sincerely yours, Jeff Stauter Director Kreider Services, Inc. Managing Agent

View Audit 339217

Finding 519881 (2023-002)

Significant Deficiency 2023

North River Commission

IL

With an executive leadership shift that took place in January of 2024, North River Commission, has been revising its staff positions, financial and organization’s processes and its policies, in order to appropriately manage its rapid growth. North River Commission will enforce policies and strict...

With an executive leadership shift that took place in January of 2024, North River Commission, has been revising its staff positions, financial and organization’s processes and its policies, in order to appropriately manage its rapid growth. North River Commission will enforce policies and strict management of financial operations moving forward. Specific modifications and implementations of processes to be completed by North River Commission staff are as follows as they relate to the above findings: Action 1: Review and update payment approval policies to ensure clear procedures for documentation and authorization. Action 2: Review and update the payment approval policy to ensure that all payments require documentation of review and approval by authorized personnel. Action 3: Provide training for all personnel involved in payment processing on the importance of proper approval and documentation procedures. Conduct training sessions for finance and procurement staff on the updated payment approval procedures, emphasizing the importance of proper documentation. Action 4: Implement a system to track the approval status of each payment, with automatic alerts for missing approvals prior to payment processing. The organization is committed to strengthening its internal controls around payment approval. The corrective actions outlined in this plan will address the audit findings and help ensure that all payments are properly reviewed and authorized in compliance with internal policies.

View Audit 339214

Finding 519880 (2023-005)

Significant Deficiency 2023

McLeod County

MN

Procurement, Suspension & Debarment § 200.303

Finding Number: 2023-005 Finding Title: Procurement and Suspension and Debarment Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Name of Contact Person Responsible for Corrective Action: Colleen Robeck, Finance Director Corrective Action Planned: McLeod County recognizes...

Finding Number: 2023-005 Finding Title: Procurement and Suspension and Debarment Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Name of Contact Person Responsible for Corrective Action: Colleen Robeck, Finance Director Corrective Action Planned: McLeod County recognizes the importance of internal controls over Federal Funding to be compliant with the Title 2 U.S. Code of Federal Regulations and is working on a procurement policy to address these issues. There is no misuse of funds, issues with allocation, nor concerns with any handling of funds; however, internal controls assist to assure compliance and will be implemented once complete. Anticipated Completion Date: McLeod County Finance department is finishing up the procurement policy and will have the State Auditor’s Office review it for compliance before it is taken to County Board for approval by March 31, 2025.

View Audit 339209

Finding 519878 (2023-001)

Significant Deficiency 2023

Boothbay Harbor Sewer District

ME

Procurement, Suspension & Debarment Internal Control / Segregation of Duties § 200.138 § 200.318

Management will review their current procurement policies and make any necessary changes to update the policies to be compliant with 2 CFR Sections 200.138 – 300.327. We anticipate that the corrective action will be completed within 12 months.

View Audit 339201

Finding 519875 (2023-004)

Material Weakness 2023

Town of Lafontaine

IN

Matching / Level of Effort / Earmarking Material Weakness Reporting § 200.302 § 200.303 § 200.328 § 200.329

FINDING 2023 - 004 Finding Subject: Water and Waste Disposal System for Rural Communities - Reporting Summary of Finding: Material Weakness, Modified Opinion Contact Person Responsible for Corrective Action: Pamela Whitener Contact Phone Number and Email Address: 765-981-4591 clerk@lafontaine.in.gov...

FINDING 2023 - 004 Finding Subject: Water and Waste Disposal System for Rural Communities - Reporting Summary of Finding: Material Weakness, Modified Opinion Contact Person Responsible for Corrective Action: Pamela Whitener Contact Phone Number and Email Address: 765-981-4591 clerk@lafontaine.in.gov Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: We were of the understanding that Commonwealth filed these reports. Going forward the Clerk will submit the reports after review by the Deputy-Clerk and the Town Council. Anticipated Completion Date: January 2025

View Audit 339193

Finding 519874 (2023-003)

Material Weakness 2023

Town of Lafontaine

IN

Equipment & Real Property Management Internal Control / Segregation of Duties § 200.303 § 200.313

FINDING 2023 - 003 Finding Subject: Water and Waste Disposal System for Rural Communities - Equipment Summary of Finding: Material Weakness, Other Maatters Contact Person Responsible for Corrective Action: Pamela Whitener Contact Phone Number and Email Address: 765-981-4591 clerk@lafontaine.in.gov V...

FINDING 2023 - 003 Finding Subject: Water and Waste Disposal System for Rural Communities - Equipment Summary of Finding: Material Weakness, Other Maatters Contact Person Responsible for Corrective Action: Pamela Whitener Contact Phone Number and Email Address: 765-981-4591 clerk@lafontaine.in.gov Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: We have purchased the Silversmith Program to track Capital Assets. All equipment purchased with federal money will be listed in the program and reviewed yearly. Anticipated Completion Date: January 2025

View Audit 339193

Finding 519859 (2023-002)

Material Weakness 2023

City of Tulare

CA

Allowable Costs / Cost Principles § 200.302 § 200.328

We concur with the finding and understand the importance of establishing appropriate internal controls. Staff was aware of this condition prior to the beginning of the audit process and, therefore, acquired a consultant to prepare the Project and Expenditure Reports for review prior to submission.

View Audit 339152

Finding 519858 (2023-010)

Significant Deficiency 2023

Milwaukee Public Schools

WI

Allowable Costs / Cost Principles

Corrective Action Planned: The Milwaukee Public School District, specifically the Department of Financial Planning and Budget Services, oversees important Medicaid compliance tasks like billing, quarterly reports, the finalization of the IEP Ratio, and annual reports. To avoid any future findings, t...

Corrective Action Planned: The Milwaukee Public School District, specifically the Department of Financial Planning and Budget Services, oversees important Medicaid compliance tasks like billing, quarterly reports, the finalization of the IEP Ratio, and annual reports. To avoid any future findings, the office is taking the following actions: First, the Department is working on better training and understanding of Medicaid compliance tasks. They've hired additional staff members to help review their procedures for Medicaid activities. This review will ensure that all necessary tasks and deadlines are clearly documented with instructions for completing each task. These materials will be updated annually and shared with District staff and third-party vendors, such as MJ Cares and PCG, to keep everyone informed on the required tasks and how to finish them correctly. Additionally, the Director of Financial Planning and Budget Services is focused on retaining knowledge and ensuring accountability for successful results. Staff members are being cross-trained within their department and are also collaborating with others, including the Office of Finance and the Office of Specialized Services. Department leaders will hold quarterly meetings with staff to make sure all Medicaid activities are carried out properly. the specific actions to be taken to eliminate or mitigate the recurrence of the finding. Name(s) of Contact Person(s) Responsible for Corrective Action: Budget Director Anticipated Completion Date: June 2025

View Audit 339133

Finding 519856 (2023-009)

Significant Deficiency 2023

Milwaukee Public Schools

WI

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

Corrective Action Planned: Capital Assets will be entered into BusinessPlus in a timely manner which is within 30 days of physical receipt of the asset. BusinessPlus was adjusted to accept the source of funding information and account code used. This will be updated in the policies and procedures....

Corrective Action Planned: Capital Assets will be entered into BusinessPlus in a timely manner which is within 30 days of physical receipt of the asset. BusinessPlus was adjusted to accept the source of funding information and account code used. This will be updated in the policies and procedures. Name(s) of Contact Person(s) Responsible for Corrective Action: Chief Financial Officer, Facilities and Maintenance Director and General Accounting Manager Anticipated Completion Date: April 2025

View Audit 339133

Finding 519850 (2023-001)

Material Weakness 2023

Southeast Arkansas Economic Development District, Inc.

AR

Questioned Costs Subrecipient Monitoring § 200.331 § 200.333

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

View Audit 339115 Questioned Costs: $1

Finding 519849 (2023-001)

Significant Deficiency 2023

Anchorage Affordable Housing and Land Trust

AK

Reporting § 200.512

Name of Contact Person: Robin Ward Corrective Action Planned: Due to turnover of the start up of the Organization's rental operation, the accounting for the for the rental properties was performed by the managment company. The Organization was unable to have the annual audit completed within the req...

Name of Contact Person: Robin Ward Corrective Action Planned: Due to turnover of the start up of the Organization's rental operation, the accounting for the for the rental properties was performed by the managment company. The Organization was unable to have the annual audit completed within the required timeframe, and subsequently was late in submission of the FAC report. The Organization has contracted with the management company's accountants to combine all the accounting into one set of records and to conduct audit preparation and other financial services as requested. The Organization will work on getting financial information in a timely fashion and submit the reporting package in accordance with the guidelines. Anticipated completion date: January 2025.

View Audit 339112

Finding 519845 (2023-006)

Material Weakness 2023

Productive Alternatives, Inc.

MN

Procurement, Suspension & Debarment

Formula Grants for Rural Area and Tribal Transit Program Federal Assistance Listing #20.509 Recommendation: The Organization should ensure they follow their suspension and debarment policy. The Organization should ensure documents are retained to support whether suspension and debarment policies we...

Formula Grants for Rural Area and Tribal Transit Program Federal Assistance Listing #20.509 Recommendation: The Organization should ensure they follow their suspension and debarment policy. The Organization should ensure documents are retained to support whether suspension and debarment policies were followed for contractors in years past. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The Organization will ensure they follow their suspension and debarment policy moving forward and documentation is retained. Name(s) of the contact person(s) responsible for corrective action: Denise DeMartelaere, Co-Director of Finance Planned completion date for corrective action plan: 12/31/2025

View Audit 339087

Finding 519844 (2023-005)

Material Weakness 2023

Productive Alternatives, Inc.

MN

Procurement, Suspension & Debarment § 200.318 § 200.326

Formula Grants for Rural Area and Tribal Transit Program Federal Assistance Listing #20.509 Recommendation: The Organization should review 2 CFR sections 200.318 through 200.326 and state requirements for procurement. The Organization should ensure documents are retained to support whether procurem...

Formula Grants for Rural Area and Tribal Transit Program Federal Assistance Listing #20.509 Recommendation: The Organization should review 2 CFR sections 200.318 through 200.326 and state requirements for procurement. The Organization should ensure documents are retained to support whether procurement policies were followed for vendors procured in years past. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The Organization will review the procurement standards as well as ensure documents are retained to support whether procurement policies were followed. Name(s) of the contact person(s) responsible for corrective action: Denise DeMartelaere, Co-Director of Finance Planned completion date for corrective action plan: 12/31/2025

View Audit 339087

Finding 519843 (2023-004)

Material Weakness 2023

Productive Alternatives, Inc.

MN

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

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

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

View Audit 339087 Questioned Costs: $1

Finding 519788 (2023-004)

Material Weakness 2023

Taylor County, Wi

WI

Procurement, Suspension & Debarment

Recommendation: We recommend that the County review its policies over suspension and debarment review to ensure they are maintaining compliance and controls over verifying or contracting with vendors that are allowable. Explanation of disagreement with audit finding: There is no disagreement with t...

Recommendation: We recommend that the County review its policies over suspension and debarment review to ensure they are maintaining compliance and controls over verifying or contracting with vendors that are allowable. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The County will need to develop a countywide set of procedures for department heads to follow regarding procurement transactions regarding the use of possible suspended or debarred vendors. These procedures will need to be followed by all County departments. Name(s) of the contact person(s) responsible for corrective action: Tracy Hartwig, Finance Director Planned completion date for corrective action plan: December 31, 2024

View Audit 338962

Finding 519725 (2023-002)

Material Weakness 2023

Central Decatur Community School District

IA

Internal Control / Segregation of Duties

The District reviews this audit finding internally on an annual basis, identifying control procedures and processes that would leverage movement toward the maximum internal control possible with available staffing although this is difficult with a limited number of employees.

View Audit 338828

Finding 519722 (2023-002)

Material Weakness 2023

Eau Claire Cooperative Health Center, Inc.

SC

Reporting

We have reviewed the comments provided herein and are in agreement with the comments and will remediate the findings as follows: We are reviewing the staffing of our finance department in an effort to ensure that on a go forward basis we reduce turnover and have individuals with adequate training ...

We have reviewed the comments provided herein and are in agreement with the comments and will remediate the findings as follows: We are reviewing the staffing of our finance department in an effort to ensure that on a go forward basis we reduce turnover and have individuals with adequate training and subject matter knowledge to perform assigned functions in accordance with appropriate standards and expectations. We are always receptive to positive constructive criticism in our effort to improve upon compliance and financial reporting. Sincerely yours, Sonja McCausland

View Audit 338825

Finding 519721 (2023-001)

Material Weakness 2023

Eau Claire Cooperative Health Center, Inc.

SC

Reporting Internal Control / Segregation of Duties

We have reviewed the comments provided herein and are in agreement with the comments and will remediate the findings as follows: We are reviewing the staffing of our finance department in an effort to ensure that on a go forward basis we reduce turnover and have individuals with adequate training ...

We have reviewed the comments provided herein and are in agreement with the comments and will remediate the findings as follows: We are reviewing the staffing of our finance department in an effort to ensure that on a go forward basis we reduce turnover and have individuals with adequate training and subject matter knowledge to perform assigned functions in accordance with appropriate standards and expectations. We are always receptive to positive constructive criticism in our effort to improve upon compliance and financial reporting. Sincerely yours, Sonja McCausland

View Audit 338825

Finding 519714 (2023-002)

Significant Deficiency 2023

Advent House Ministries, Inc.

MI

Allowable Costs / Cost Principles Reporting Significant Deficiency

January 7, 2025 Advent House Ministries, Inc. respectfully submits the following corrective action plan for the year ended December 31, 2023. Auditor: Maner Costerisan 2425 E. Grand River Avenue, Suite 1 Lansing, MI 48912 Audit Period: The finding from the December 31, 2023 schedule of findings and ...

January 7, 2025 Advent House Ministries, Inc. respectfully submits the following corrective action plan for the year ended December 31, 2023. Auditor: Maner Costerisan 2425 E. Grand River Avenue, Suite 1 Lansing, MI 48912 Audit Period: The finding from the December 31, 2023 schedule of findings and questioned costs is discussed below. The finding is numbered consistently with the number assigned in the schedule. Findings - Financial Statement Audit Finding 2023-001 - Significant Deficiency Recommendation: Advent House Ministries, Inc. should consider obtaining the necessary skills, knowledge, or experience to prepare and/or review the footnotes related to the financial statements of the Organization. Action Taken: We concur with the recommendation, the Organization has contracted with an accountant in 2024 with the skills, knowledge, and experience to address the above recommendation. Finding - Federal audit Finding 2023-002 - Significant Deficiency Recommendation: Advent House Ministries, Inc. currently has procedures and controls in place to effectively monitor the status of the submission of the data collection form and the reporting package to ensure that the required information is submitted in a timely manner. The cause related to this finding was not due to failure in internal controls, therefore, we have no further recommendation for the Organization at this time. Action to be Taken: The Organization concurs with the facts of this finding and has procedures in place to ensure the timely submission of the data collection form and the reporting package. Sincerely yours, Susan Cancro, Executive Director

View Audit 338820

Finding 519623 (2023-001)

Material Weakness 2023

Longview School District No. 122

WA

Subrecipient Monitoring Internal Control / Segregation of Duties Special Tests & Provisions

CORRECTIVE ACTION PLAN FOR FINDINGS REPORTED UNDER UNIFORM GUIDANCE Longview School District No. 122 September 1, 2022 through August 31, 2023 This schedule presents the corrective action the District is planning to take for findings included in this report in accordance with Title 2 U.S. Code of F...

CORRECTIVE ACTION PLAN FOR FINDINGS REPORTED UNDER UNIFORM GUIDANCE Longview School District No. 122 September 1, 2022 through August 31, 2023 This schedule presents the corrective action the District is planning to take for findings included in this report in accordance with Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Finding ref number: 2023-001 Finding caption: The District did not have adequate internal controls for ensuring compliance with federal wage rate requirements. Name, address, and telephone of District contact person: Joan Parsons, Lead Accountant 2715 Lilac St Longview, WA 98632 (360)575-7177 Corrective action the auditee plans to take in response to the finding: The District has now enhanced its process surrounding collection and verification of certified payroll reports to include sending a weekly inquiry to the point of contact for the prime contractor for each federally-funded construction project. The inquiry requests the prime contractor to: • disclose if the prime contractor performed any work on the project that would be subject to Davis-Bacon prevailing wage requirements and if so, supply the certified payroll reports • identify any subcontractors who performed work on the project that would be subject to Davis-Bacon prevailing wage requirements, and if so, supply the certified payroll reports This communication is sent via email, read receipt requested, and the prime contractor’s response (or lack thereof) is documented and followed up on as necessary. Anticipated date to complete the corrective action: This process was implemented June 2024.

View Audit 338730

Finding 519582 (2023-001)

None 2023

Metro North Gardens Housing Development Fund Corporation

NY

Please be advised that we are aware of the requirement to deposit surplus cash by 90 days after the year end. So, while the deposit was due by 12/31/23, at that time the project didn’t have available cash to make that deposit in the amount of $35,253. We were waiting for several large checks to get ...

Please be advised that we are aware of the requirement to deposit surplus cash by 90 days after the year end. So, while the deposit was due by 12/31/23, at that time the project didn’t have available cash to make that deposit in the amount of $35,253. We were waiting for several large checks to get deposited for tenants who were delinquent, and we also had major increases in our insurance costs and those premiums were due in late December 2023. The required deposit will be made by May 31, 2024.

View Audit 338667

Finding 519523 (2023-002)

Material Weakness 2023

Fort Defiance Housing Corporation D/b/a Sandstone Housing

NM

Reporting Subrecipient Monitoring Material Weakness

Submission of Single Audit Reports (Material Weakness) (Repeat Finding 2022-001) Criteria – Section 200.512 of the Uniform Guidance states that the single audit shall be completed and the data collection form and reporting package shall be submitted within the earlier of 30 calendar days after rece...

Submission of Single Audit Reports (Material Weakness) (Repeat Finding 2022-001) Criteria – Section 200.512 of the Uniform Guidance states that the single audit shall be completed and the data collection form and reporting package shall be submitted within the earlier of 30 calendar days after receipt of the auditor’s report, of nine months after the end of the audit period. Condition and Context – The organization did not complete its single audit and submit its data collection form and reporting package for the year ended December 31, 2023 by the required deadline. Cause and Effect – Due to a delay in the finalization of the Schedule of Expenditures of Federal Awards and the compiling of records and supporting documentation relation to the financial statement audit and compliance audit, the Organization was late in completing its single audit and submitting its data collection form and reporting package to the Federal Audit Clearinghouse. Questioned Costs – None noted. Recommendation – We recommend that the organization improve its financial reporting close process in order to complete its annual single audit and submit the data collection form and reporting package to the Federal Audit Clearinghouse by the required deadline. Corrective Action Plan – FDHC provided all items requested by auditors on or before the required deadline (typically within 24 hours of request). Due to circumstances out of FDHC’s control, FDHC received a default judgement close to the time of audit issuance. This default judgement was based upon an ongoing court case that began in 2019. Once the auditors were notified of default judgement, the auditors made the decision not to issue until they could thoroughly review all relevant court documents related to the default judgement. The late issuance of the audit was not due to the readiness of FDHC accounting team. We do not feel that this will be an issue going forward. FDHC CEO, Shelby Garcia, and FDHC legal counsel will continue to keep auditors updated on any future court proceedings.

View Audit 338530

Finding 519520 (2023-001)

Material Weakness 2023

Fort Defiance Housing Corporation D/b/a Sandstone Housing

NM

Reporting Procurement, Suspension & Debarment Material Weakness

Improve Procedures over the Preparation of the Schedule of Expenditure of Federal Awards (Material Weakness) As part of our audit procedures, we audit the completeness and the accuracy of the Schedule of Expenditures of Federal Awards. Management is responsible for the preparation of the Schedul...

Improve Procedures over the Preparation of the Schedule of Expenditure of Federal Awards (Material Weakness) As part of our audit procedures, we audit the completeness and the accuracy of the Schedule of Expenditures of Federal Awards. Management is responsible for the preparation of the Schedule of Expenditures of Federal Awards in accordance with the requirements of the Uniform Guidance. This schedule is an integral component of the Organization’s reporting in accordance with the Uniform Guidance as it identifies total federal awards expended for each individual federal program and it serves as the primary basis for the auditor’s major program determination. During our audit, we became aware of evidence which indicated that in a prior year loans that had been thought to be forgiven by USDA were in fact repurchased by USDA. The debt should have been reflected on the Schedule of Expenditures of Federal Awards under the Section 538 program. The Schedule of Expenditures of Federal Awards was Corrected during the audit, however, it appears the errors were made due to a lack of sufficient Internal controls over the preparation of the Schedule of Expenditures of Federal Awards. Recommendation – We recommend that the Organization implement adequate procedures, including Staff training and formal review and verification process by supervisory personnel, as part of its annual process to prepare the Schedule of Expenditures of Federal Awards in order to ensure its accuracy. Corrective Action Plan – The repurchase of the loans occurred in 2022 and all documents regarding the Repurchase of the loans were provided to FDHC who then provided all documents to auditors. At that time it was not made clear to FDHC that the repurchase of the loans should be included on the Schedule of Expenditures of Federal Awards under the Section 538 program. The repurchase was not included on the 2022 Schedule of Expenditures of Federal Awards under the Section 538 program and this was not an issue on FDHC’s 2022 audit which was also provided to and reviewed by USDA. It was not until 2024 that this came into question. FDHC reached out to USDA to verify if this repurchase should be included on the Schedule of Expenditures of Federal Awards under the Section 538 program. After going through multiple channels of USDA, it was determined that FDHC should include the repurchase of the Schedule of Expenditures of Federal Awards under the Section 538 program. Now that FDHC has been made aware that this needs to be included, CEO, Shelby Garcia, FDHC will get written confirmation from USDA as to the nature of any future debt restructurings/forgiveness, and the corrective action plan has been in place since the start of the fiscal year.

View Audit 338530

Corrective Action Plans

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