Finding 539485 (2024-002)

Health Resources and Services Administration Jacquelyn Kilmer, Harlem United Community AIDS Center, Inc.’s CEO respectfully submits the following corrective action plan for the year ended June 30, 2024: CohnReznick LLP 1301 Avenue of the Americas New York, NY 10019 Audit Period: June 30, 2024 The findings from the June 30, 2024, schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. FINDINGS – FINANCIAL STATEMENT AUDIT Material Weakness Item 2024-001 - Accounting for Leases The Organization adopted Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") 2016-02 (as amended), Leases (Topic 842), on July 1, 2020. Topic 842 required lessees to recognize a right-of-use asset and a corresponding lease liability for virtually all leases. The Organization did not apply Topic 842 for approximately 300 lease agreements for scatter sites that are part of the Organization's Housing Assistance Program. Recommendation We recommend that the Organization read and review all of its lease agreements to ensure that they are properly accounted for under Topic 842. Action Taken We agree with the finding. Management has already implemented a review of all of its existing lease agreements to ensure that we are accounting for them properly under Topic 842. We are also in the process of reviewing our accounting policies in relation to leases. Effectivity Date: July 2024 FINDINGS FEDERAL AWARD PROGRAM AUDITS Significant Deficiency Item 2024-002 - Procurement, Suspension and Debarment - U.S. Department of Health and Human Services, Substance Abuse and Mental Health Services Projects of Regional and National Significance (Assistance Listing Number 93.243) Notice of Award Number 1H79SP082826 for 2023-2025 and Notice of Award Number 5H79TI085189 for 2023 to 2024 The Center did not maintain documentation of its verification of two sample employees and two sample vendors to ascertain if they are suspended or debarred. Recommendation: We recommend that the Organization implement a policy requiring proper documentation of their verification of employees and vendors for suspension and debarment. Action Taken: Management agrees that evidence of exclusion search was not maintained or kept on file. Management has already established a policy in relation to performing verification for suspension and debarment and the Organization will be training all the personnel involved to ensure that proper documentation is kept on file. Effectivity Date: March 2025 Sincerely yours, Signature:  Jacquelyn Kilmer, CEO Harlem United Community AIDS Center, Inc.