Finding No. 2025-002: Activities Allowed or Unallowed and Allowable Costs/Cost Principles – Significant Deficiency in Internal Control over Compliance (Cost Allocation Plan) Federal Program Name: All Pass-through Entity: All Federal Assistance Listing Number: All Criteria In accordance with Title 2 U.S. Code of Federal Regulations Part 200, costs charged to federal awards must be adequately documented, allowable, and allocated to programs based on relative benefits received. Organizations allocating shared or indirect costs among multiple funding sources are required to maintain a reasonable, consistently applied, and current cost allocation methodology. Condition The Organization’s cost allocation plan (“CAP”) has not been formally reviewed or updated in several years and does not reflect the current structure of awards and programs. As a result, the Organization could not demonstrate that costs charged to federal awards were consistently allocated in accordance with a current, formally approved methodology. Questioned Costs None. Context The Organization's cost allocation plan had not been formally reviewed or updated since 2015. The outdated plan was utilized during the audit period to allocate shared costs among multiple funding sources and programs. Effect Without a current and formally maintained CAP, there is an increased risk that costs charged to federal awards may not be properly allocated, may not reflect relative benefits received, or may not be consistently applied in accordance with federal requirements. Cause The Organization does not have established procedures requiring periodic review and update of the CAP to ensure it remains current with changes in operations and funding sources. Repeat Finding Yes Recommendation We recommend that the Organization formally document its cost allocation methodology and establish procedures for periodic review and update of the CAP to ensure it reflects current operations and funding sources. The CAP should be formally approved by governance and retained as support for allocation of shared costs to federal programs. Management’s Response/View of Responsible Officials Management agrees with this finding, see the Corrective Action Plan.
Management has updated its policies and procedures to require a formal annual review and update of the cost allocation plan. This review will occur in conjunction with the finalization and Board approval of the organization’s annual operating budget, ensuring that the CAP aligns with the most current program structure, funding sources, and cost allocation methodologies.
2024-002
Finding No. 2025-003: Activities Allowed or Unallowed and Allowable Costs/Cost Principles –Significant Deficiency in Internal Control over Compliance (Payroll) Federal Program Name: All Pass-through Entity: All Federal Assistance Listing Number: All Criteria In accordance with 2 CFR §200.430(i), charges to federal awards for salaries and wages are required to be based on records that accurately reflect the work performed. These records must support the distribution of the employee’s salary or wages among specific activities or cost objectives. Condition The Organization allocates employees’ payroll costs to grants based on an estimate. Although the payroll allocation is periodically reviewed and revised, differences from actual time and effort can result due to an estimate being used. Questioned Costs Unknown. Context The Organization allocated payroll costs to multiple funding sources based on estimates during the audit period and did not maintain formal documentation to support allocations based on actual time and effort. Effect The employee time and payroll costs that are charged to the grant could differ from the actual time and payroll costs expended in support of the grant activities. Cause The Organization does not have established procedures to ensure that salaries and wages charged to federal awards are supported by records that accurately reflect the work performed. Documentation of personnel expenses should support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and non-federal award; an indirect cost activity and a direct cost activity; two or more indirect activities allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Repeat Finding Yes Recommendation We recommend that management strengthen processes over payroll cost allocations to ensure amounts charged to funding sources are supported by documented actual time and effort. This may include implementing a formal methodology for allocating payroll costs, establishing procedures for employees to track or otherwise document time spent by program or funding source, and performing periodic reviews and adjustments based on actual activity. In addition, management should ensure that sufficient documentation is maintained to support how payroll costs are allocated and that such processes are consistently applied. Management’s Response/View of Responsible Officials Management agrees with this finding, see the Corrective Action Plan.
Management agrees with the finding that payroll costs charged to HUD-funded programs were based on estimated allocations and did not consistently reflect actual time and effort in accordance with 2 CFR §200.430 (Compensation—Personal Services) and applicable HUD program requirements. Management acknowledges the requirement that personnel costs charged to HUD awards (e.g., CDBG, HOME, CoC) must be supported by records that accurately reflect work performed on eligible program activities.
2024-003
Finding No. 2025-004: Reporting and Annual Audit Submission – Noncompliance Federal Program Name: All Pass-through Entity: All Federal Assistance Listing Number: All Criteria As set forth in 2 CFR §200.512 - Report Submission, the audit must be completed and the Data Collection Form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditors’ report, or nine months after the end of the audit period. The due date for the audit and reporting package submission was June 30, 2026. Condition The Organization did not submit the audit, Data Collection Form, and reporting package by the required deadline of June 30, 2026. Questioned Costs None. Context The Data Collection Form and reporting package were required to be submitted by June 30, 2026. The audit was not completed and submitted by the required deadline due to delays in the preparation of financial reporting information and supporting schedules. Effect The Organization was not in compliance with the reporting requirements of 2 CFR §200.512, as the audit, Data Collection Form, and reporting package were not submitted by the required deadline. Cause Significant delays in the audit process resulted in the late filing. Repeat Finding No Recommendation We recommend that the Organization implement procedures to ensure that financial statements, supporting schedules, and Single Audit requirements are prepared and completed on a timely basis to support compliance with federal reporting deadlines. Management’s Response/View of Responsible Officials Management agrees with this finding, see the Corrective Action Plan.
Operation Hope has retained a new audit firm and developed a new schedule to ensure future audits are completed in a timely manner and reports are submitted by the due date.
2024-004
Finding No. 2025-005: Reasonable Rental Rates – Significant Deficiency in Internal Control over Compliance Federal Program Name: Continuum of Care Pass-through Entity: All Federal Assistance Listing Number: 14.267 Criteria In accordance with 24 CFR §578.49(b)(1), Continuum of Care grant recipients must ensure that rents charged are reasonable in relation to rents for comparable unassisted units. Rent reasonableness determinations must be performed and documented at initial occupancy and when rents are increased, and must be supported by appropriate documentation, including comparable market data. Supporting documentation must be maintained in participant files to evidence compliance with program requirements. Condition Supporting documentation, including lease agreements and eligibility forms, within tenant files was not always sufficient to demonstrate compliance with program requirements. The rent reasonableness determinations lacked evidence of approval or audit trail to substantiate the timing or completion of the review. Questioned Costs Unknown. Context The Organization did not consistently maintain effective controls over tenant file documentation, including lease agreements, to ensure that documentation was complete, current, and available to support rent reasonableness determinations during the period. Effect Documentation supporting rent reasonableness determinations and tenant eligibility files was incomplete and not consistently maintained in a manner that clearly demonstrated compliance with HUD requirements, including evidence of timely performance and review of required procedures. Cause The Organization did not have formalized procedures to ensure consistent preparation, review, retention, and organization of rent reasonableness documentation and tenant file records, including clearly defined responsibility for maintaining complete and accessible documentation. Repeat Finding Yes Recommendation We recommend that the Organization implement formal procedures to ensure rent reasonableness determinations are properly documented, including identification of preparer and reviewer. In addition, the Organization should strengthen tenant file maintenance procedures to ensure all required supporting documentation is complete, current, and readily available, and that responsibilities for file maintenance and review are clearly assigned and consistently followed. Management’s Response/View of Responsible Officials Management agrees with this finding, see the Corrective Action Plan.
Management has updated the policies and procedures manual to address this finding. For each housing unit, we are using the Department of Housing and Urban Development (HUB) rent reasonableness form at lease signing. This form will be updated annually for each unit. We will also be following the HUD fair market rent determinations.
2024-005
Finding No. 2024-002: Activities Allowed or Unallowed and Allowable Costs/Cost Principles – Significant Deficiency in Internal Control over Compliance (Cost Allocation Plan) Federal Program Name: All Pass-through Entity: All Federal Assistance Listing Number: All Criteria In accordance with 2 CFR §200.403 and §200.405, costs charged to federal awards must be adequately documented, allowable, and allocated to programs based on relative benefits received. Organizations allocating shared or indirect costs among multiple funding sources are required to maintain a reasonable, consistently applied, and current cost allocation methodology. Condition The Organization’s cost allocation plan (“CAP”) has not been formally reviewed or updated in several years and does not reflect the current structure of awards and programs. As a result, the Organization could not demonstrate that costs charged to federal awards were consistently allocated in accordance with a current, formally approved methodology. Questioned Costs None. Context The Organization's cost allocation plan had not been formally reviewed or updated since 2015. The outdated plan was utilized during the audit period to allocate shared costs among multiple funding sources and programs. Effect Without a current and formally maintained CAP, there is an increased risk that costs charged to federal awards may not be properly allocated, may not reflect relative benefits received, or may not be consistently applied in accordance with federal requirements. Cause The Organization does not have established procedures requiring periodic review and update of the CAP to ensure it remains current with changes in operations and funding sources. Repeat Finding No Recommendation We recommend that the Organization formally document its cost allocation methodology and establish procedures for periodic review and update of the CAP to ensure it reflects current operations and funding sources. The CAP should be formally approved by governance and retained as support for allocation of shared costs to federal programs. Management’s Response/View of Responsible Officials Management agrees with this finding, see the Corrective Action Plan.
Management has updated its policies and procedures to require a formal annual review and update of the cost allocation plan. This review will occur in conjunction with the finalization and Board approval of the organization’s annual operating budget, ensuring that the CAP aligns with the most current program structure, funding sources, and cost allocation methodologies. As part of this process, management will: • Evaluate the reasonableness and appropriateness of allocation methodologies; • Ensure consistency in application across all programs and funding streams; and • Document and approve any necessary revisions to the cost allocation plan prior to implementation. Management believes this corrective action will ensure that the CAP remains current, appropriately reflects organizational activities, and complies with applicable Federal requirements. Ongoing adherence to this process will strengthen internal controls over cost allocation and financial reporting.
Finding No. 2024-003: Activities Allowed or Unallowed and Allowable Costs/Cost Principles –Significant Deficiency in Internal Control over Compliance (Payroll) Federal Program Name: All Pass-through Entity: All Federal Assistance Listing Number: All Criteria In accordance with 2 CFR §200.430(i), charges to federal awards for salaries and wages are required to be based on records that accurately reflect the work performed. These records must support the distribution of the employee’s salary or wages among specific activities or cost objectives. Condition The Organization allocates employees’ payroll costs to grants based on an estimate. Although the payroll allocation is periodically reviewed and revised, differences from actual time and effort can result due to an estimate being used. Questioned Costs Unknown. Context The Organization allocated payroll costs to multiple funding sources based on estimates during the audit period and did not maintain formal documentation to support allocations based on actual time and effort. Effect The employee time and payroll costs that are charged to the grant could differ from the actual time and payroll costs expended in support of the grant activities. Cause The Organization does not have established procedures to ensure that salaries and wages charged to federal awards are supported by records that accurately reflect the work performed. Documentation of personnel expenses should support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and non-federal award; an indirect cost activity and a direct cost activity; two or more indirect activities allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Repeat Finding No Recommendation We recommend that management strengthen processes over payroll cost allocations to ensure amounts charged to funding sources are supported by documented actual time and effort. This may include implementing a formal methodology for allocating payroll costs, establishing procedures for employees to track or otherwise document time spent by program or funding source, and performing periodic reviews and adjustments based on actual activity. In addition, management should ensure that sufficient documentation is maintained to support how payroll costs are allocated and that such processes are consistently applied. Management’s Response/View of Responsible Officials Management agrees with this finding, see the Corrective Action Plan.
Management agrees with the finding that payroll costs charged to HUD-funded programs were based on estimated allocations and did not consistently reflect actual time and effort in accordance with 2 CFR §200.430 (Compensation—Personal Services) and applicable HUD program requirements. Management acknowledges the requirement that personnel costs charged to HUD awards (e.g., CDBG, HOME, CoC) must be supported by records that accurately reflect work performed on eligible program activities. Corrective Actions Implemented: The Organization has strengthened internal controls over payroll allocation for HUD-funded programs by implementing a formal monthly review and reconciliation process based on after-the-fact determinations of actual activity. Under this enhanced process: • Payroll costs charged to HUD awards are reviewed monthly and supported by documentation that reflects actual time and effort by eligible activity and funding source. • Payroll distribution reports are evaluated for accuracy, allowability, and alignment with HUD-eligible program activities. • Allocated payroll costs are compared to actual program delivery (e.g., beneficiary services, project activities, administrative vs. program caps, where applicable). • Timely cost adjustments are recorded, as necessary, to ensure payroll charges are properly aligned with work performed and eligible cost objectives. • All adjustments are documented, reviewed, and approved by appropriate supervisory and finance personnel. Expected Outcome: Management believes these corrective actions will ensure that payroll costs charged to HUD-funded programs are accurate, allowable, properly documented, and aligned with eligible program activities, and fully compliant with Uniform Guidance and HUD requirements. These enhancements will strengthen internal controls, improve reporting reliability (including IDIS/financial reporting where applicable), and reduce the risk of noncompliance in future monitoring or audit reviews.
Finding No. 2024-004: Reporting and Annual Audit Submission – Noncompliance Federal Program Name: All Pass-through Entity: All Federal Assistance Listing Number: All Criteria As set forth in 2 CFR §200.512 - Report Submission, the audit must be completed and the Data Collection Form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditors’ report, or nine months after the end of the audit period. The due date for the audit and reporting package submission was June 30, 2025. Condition The Organization did not submit the audit, Data Collection Form, and reporting package by the required deadline of June 30, 2025. Questioned Costs None. Context The Data Collection Form and reporting package were required to be submitted by June 30, 2025. The audit was not completed and submitted by the required deadline due to delays in the preparation of financial reporting information and supporting schedules. Effect The Organization was not in compliance with the reporting requirements of 2 CFR §200.512, as the audit, Data Collection Form, and reporting package were not submitted by the required deadline. Cause Significant delays in the audit process resulted in the late filing. Repeat Finding No Recommendation We recommend that the Organization implement procedures to ensure that financial statements, supporting schedules, and Single Audit requirements are prepared and completed on a timely basis to support compliance with federal reporting deadlines. Management’s Response/View of Responsible Officials Management agrees with this finding, see the Corrective Action Plan.
Operation Hope has retained a new audit firm and developed a new schedule to ensure future audits are completed in a timely manner and reports are submitted by the due date.
Finding No. 2024-005: Reasonable Rental Rates – Significant Deficiency in Internal Control over Compliance Federal Program Name: Continuum of Care Pass-through Entity: All Federal Assistance Listing Number: 14.267 Criteria In accordance with 24 CFR §578.49(b)(1), Continuum of Care grant recipients must ensure that rents charged are reasonable in relation to rents for comparable unassisted units. Rent reasonableness determinations must be performed and documented at initial occupancy and when rents are increased, and must be supported by appropriate documentation, including comparable market data. Supporting documentation must be maintained in participant files to demonstrate compliance with program requirements. Condition Supporting documentation, including lease agreements and eligibility forms, within tenant files was not always sufficient to demonstrate compliance with program requirements. The rent reasonableness determinations lacked evidence of approval or audit trail to substantiate the timing or completion of the review. Questioned Costs Unknown. Effect Documentation supporting rent reasonableness determinations and tenant eligibility files was incomplete and not consistently maintained in a manner that clearly demonstrated compliance with HUD requirements, including evidence of timely performance and review of required procedures. Cause The Organization did not have formalized procedures to ensure consistent preparation, review, retention, and organization of rent reasonableness documentation and tenant file records, including clearly defined responsibility for maintaining complete and accessible documentation. Repeat Finding No Recommendation We recommend that the Organization implement formal procedures to ensure rent reasonableness determinations are properly documented, including identification of preparer and reviewer. In addition, the Organization should strengthen tenant file maintenance procedures to ensure all required supporting documentation is complete, current, and readily available, and that responsibilities for file maintenance and review are clearly assigned and consistently followed. Management’s Response/View of Responsible Officials Management agrees with this finding, see the Corrective Action Plan.
Management has updated the policies and procedures manual to address this finding. For each housing unit, we are using the Department of Housing and Urban Development (HUB) rent reasonableness form at lease signing. This form will be updated annually for each unit. We will also be following the HUD fair market rent determinations.
2021-001 PROCUREMENT, SUSPENSION AND DEBARMENT Grantor: U. S. Department of Housing and Urban Development ? HUD Federal Program Name: Continuum of Care Program CFDA Number: 14.267 Pass-through Entities: CT Department of Housing Supportive Housing Works CT Coalition Against Domestic Violence Criteria: When procuring property and services, entities must follow the procurement standards set out at 2 CFR sections 200.318-200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform applicable federal statutes and the procurement requirements identified in 2 CFR part 200. Condition: The procurement policy in place during the first half of fiscal 2021 had not been updated to comply with the requirement of the Uniform Guidance as stated above, and did not specify a micro-purchase or small purchase threshold above which written quotes would be required. A formal written policy for ensuring vendors are not suspended or debarred was not included in the existing policy and therefore this process was not being executed in a consistent manner. Additionally, since implementation of the new policy mid-year, while it appears that required bids and quotes are now being obtained, the documentation of such is not always kept with the related voucher packages so may not be readily available for viewing by auditors, and the documentation supporting the suspension and debarment vendor check was also not made available. Questioned Costs: None. Effect: Certain purchases could be incurred at higher amounts than might have been the case had multiple written quotes been obtained prior to the transaction. However, all purchases tested appeared to be in the normal course of business and costs appeared reasonable. Our testing did not result in any questioned costs. Additionally, the potential existed that a vendor that could either be suspended or debarred could have unknowingly been utilized due to the existing process. Cause: The agency did not timely complete the process to update its policies and procedures to conform with the Uniform Guidance by the expiration of the extended implementation deadline cited in the Uniform Guidance. The new policy was implemented in the middle of fiscal 2021. Recommendation: Additional training of relevant staff regarding the new policies and procedures should be continued, especially regarding retention of adequate documentation of bids, quotes, or other procedures including documentation of the checking of vendors against the suspension and debarment lists. Views of Responsible Officials: A new procurement policy, including an appropriate, comprehensive process to ensure vendors are not suspended or debarred, was prepared and implemented effective in April 2021. Relevant staff have been and continue to be trained appropriately regarding execution of related procedures to ensure all aspects are being properly performed.
U.S. Department of Housing and Urban Development AUDIT FINDINGS: Finding Reference Number: 2021-001 Description of Finding: Operation Hope of Fairfield, Inc. and Related Entities had not updated its procurement policy to conform to the new requirements in accordance with the Uniform Guidance. The policy in effect during the first half of fiscal 2021 did not specify a micro-purchase or small purchase threshold above which written quotes would be required. Additionally, a written policy for ensuring vendors are not suspended or debarred was not included in the existing policy and therefore this process was not being executed in a consistent manner. Statement of Concurrence or Nonconcurrence: Operation Hope of Fairfield, Inc. and Related Entities concurs with this audit finding. Corrective Action: A new Uniform Guidance-compliant procurement policy, including an appropriate, comprehensive process to ensure vendors are not debarred, was prepared and implemented in April 2021. Relevant staff have been and continue to be trained appropriately regarding execution of related procedures to ensure all aspects are being properly performed, Name of Contact Person: Carla Miklos Executive Director 203-292-5588x204 c.miklos@operationhopect.org Projected Completion Date: Immediately
2020-001
2020-001 PROCUREMENT, SUSPENSION AND DEBARMENT Grantor: U. S. Department of Housing and Urban Development ? HUD Federal Program Name: Continuum of Care Program Criteria: When procuring property and services, entities must follow the procurement standards set out at 2 CFR sections 200.318-200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. Condition: The procurement policy in place during fiscal 2020 had not been updated to comply with the requirement of the Uniform Guidance as stated above, and did not specify a micro-purchase or small purchase threshold above which written quotes would be required. Additionally, a formal written policy for ensuring vendors are not suspended or debarred was not included in the existing policy and therefore this process is not executed in a consistent manner. Questioned Costs: None. Effect: Certain purchases could be incurred at higher amounts than might have been the case had multiple written quotes been obtained prior to the transaction. However, all purchases tested appeared to be in the normal course of business and costs appeared reasonable. Our testing did not result in any questioned costs. Additionally, the potential existed that a vendor that could either be suspended or debarred could have unknowingly been utilized due to the existing process. Cause: The agency did not timely complete the process to update its policies and procedures to conform with the Uniform Guidance by the expiration of the extended implementation deadline cited in the Uniform Guidance. Recommendation: Policies and procedures should be implemented in accordance with the Uniform Guidance to ensure adequate bids, quotes, or other procedures are followed when obtaining goods and services at various price points and a regular schedule for checking vendors against the suspension and debarment lists should also be implemented. Views of Responsible Officials: A new procurement policy, including an appropriate, comprehensive process to ensure vendors are not suspended or debarred, has been prepared and will be implemented as soon as approved by the Board. Relevant staff will be trained appropriately once the policy has been approved.
U.S. Department of Housing and Urban Development AUDIT FINDINGS: Finding Reference Number: 2020-001 Description of Finding: Operation Hope of Fairfield, Inc. and Related Entities had not updated its procurement policy to conform to the new requirements in accordance with the Uniform Guidance. The policy in effect during fiscal 2020 did not specify a micro-purchase or small purchase threshold above which written quotes would be required. Additionally, a written policy for ensuring vendors are not suspended or debarred was not included in the existing policy and therefore this process is not executed in a consistent manner. Statement of Concurrence or Nonconcurrence: Operation Hope of Fairfield, Inc. and Related Entities concurs with this audit finding. Corrective Action: A new Uniform Guidance-compliant procurement policy, including an appropriate, comprehensive process to ensure vendors are not debarred, has been prepared and will be implemented as soon as it has been approved by the Board. Name of Contact Person: Carla Miklos Executive Director 203-292-5588x204 c.miklos@operationhopect.org Projected Completion Date: Immediately
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