Heading Home

2025-001 (2024-002) – REPORTING Type of Finding: (F) significant Deficiency in Internal Control Over Compliance of Federal Awards, (G) Instance of Non-Compliance Related to Federal Awards Funding Agency: U.S. Department of Housing and Urban Development, passed through the City of Albuquerque Title: Community Development Block Grant AL #: 14.231 Award #:E-24-MC-35-0001 and E-24-MW-35-0001 Statement of Condition Heading Home does not appear to have controls in place for the review and timely submittance of the Project and Expenditure Reports that are required on a recurring basis. Context During our testing of internal controls over compliance, we noted the following: Two of eight reports tested were filed after their due date. Criteria Auditors are required to assess compliance with the reporting requirements for the major program tested. These requirements require a Project and Expenditure Report to be filed on a regular, recurring basis. The reporting frequency and deadlines vary by type of recipient and total allocation amount. Cause: Heading Home did not have procedures in place to ensure these required reports were submitted on time. Effect: Heading Home is not in compliance with Federal Award requirements as they were delinquent in turning in a number of required reports. Failure to submit reports in a timely manner could result in a misstatement going undetected and uncorrected. Recommendation: Ensure documentation is organized and readily available to fulfill Federal Award compliance. Additionally, ensure timing of filing the report is made a priority. Award Period: July 1, 2024 – June 30, 2026 Questioned Costs: None

2023-004 (2021-005) – FEDERAL AND FINANCIAL PROCUREMENT, SUSPENSION, AND DEBARMENT COMPLIANCE Type of Finding: (B, F, G) – Significant Deficiency in Internal Control Over Financial Reporting, Significant Deficiency in Internal Control Over Compliance of Federal Awards and Instance of Non-Compliance Related to Federal Awards Funding Agency: U.S. Department of Housing and Urban Development (HUD) Title: Emergency Solution Grant (ESG) Program AL #: 14.231 Award #: 20-02-HDH-EHA-001, E-22-MC-35-0001 Award Period: July 1, 2022 – June 30, 2023 Questioned Costs: None Statement of Condition Heading Home did not follow federal procurement, suspension and debarment regulations or its federal procurement policy. Context During our testing of procurement, suspension, and debarment we noted the following: • We sampled two (out of a population of two) vendors who received more than $10,000 in fiscal year 2023 and noted no evidence of obtaining bids or quotes. Additionally, adequate sole source documentation was absent to support the procurement. • We sampled two (out of a population of two) vendors for tests of internal control over compliance and noted that Heading Home did not provide evidence of internal controls regarding suspension and debarment requirements. Criteria • Heading Home’s procurement policy states that for purchases exceeding $10,000, three (3) written competitive bids must be obtained before selecting a vendor. • Per 2 CFR 200.320(a)(2)(i) Small purchases - o (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold ($10,000 in fiscal year 2023) but does not exceed the simplified acquisition threshold ($249,999 in fiscal year 2023). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. • Additionally, 2 CFR 200.214 requires vendors awarded contracts expected to equal or exceed $25,000 to be checked for suspension and debarment via the System for Award Management Exclusions (SAM.gov). Heading Home is required to verify that entities it plans to do business with are not excluded or disqualified under the federal procurement regulations and the non-procurement common rule, or otherwise declared ineligible under statutory or regulatory authority. According to §200.303 Internal controls of 2 CFR Part 200, the nonfederal entity (Heading Home) must establish and maintain effective internal control over the Federal award that provide reasonable assurance that Heading Home is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to §180.300 of Subpart C–Responsibilities of Participants Regarding Transactions Doing Business with Other Persons of 2 CFR Part 180, when you entering into a covered transaction with another person at the next lower tier, you must verify that the person you intend to conduct business with is not excluded or disqualified. This can be done by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Cause Heading Home has not followed its policies and procedures related to procurement. Additionally, the procurement policy does not include the requirement for checking suspension and debarment via SAM.gov. Effect Heading Home is not in compliance with its policies and the federal procurement, suspension, and debarment requirements. Heading Home may have entered into contracts with ineligible contractors, exposing itself to potential liability and the risk of losing federal funds. Recommendation We recommend Heading Home follow its internal control policies and procedures related to procurement, as well as the following: • Document controls such as including the procurement files include proof of SAM.gov verification to ensure compliance with federal procurement regulations and internal procurement policy. • Implement policies and procedures to verify contractor suspension or debarment status before awarding contracts using federal funds. • Include the required suspension and debarment clause in contracts with federally funded contractors. View of Responsible Official and Corrective Action Plan Heading Home management agrees with this finding. Management has reviewed existing procurement policies and procedures found in Section III Policy #301 of Heading Home’s fiscal policies and procedures with appropriate staff and will enforce policies and procedures to ensure competitive bids are obtained where required. Management has also reviewed the existing suspension and debarment policies and procedures found in Section III Policy #302 with appropriate staff, and which require vendors to be reviewed on the SAM website, to ensure they have not been suspended or debarred. Although this review was conducted after the fact, each of the five vendors noted in this finding has since been reviewed on the SAM website, and none of them returned a notice of suspension or debarment. Management is in the process of reviewing all vendors paid $10,000 or more against the SAM website and will ensure all vendors are checked against the website who currently meet this requirement, as well as for those anticipated to meet this threshold. Proof of the SAM website review and approval will be maintained in each vendor file. Management reviewed the above mentioned vendors and noted none of them were suspended or debarred. Circumstantial evidence consisting of emails leads the organization to believe bids/quotes were in fact solicited but the actual procurement packets could not be located due to the extensive turnover in management during 2023. Management anticipates the above corrective action plan will be fully implemented by September 30, 2025. The personnel responsible for overseeing implementation include Connie Chavez, Chief Executive Officer; Debbie Brickman, Chief Financial Officer; and Armando Sanchez, contract accountant team lead.

2023-005 (2021-006) – FEDERAL MATCHING COMPLIANCE Type of Finding: (F, G) – Significant Deficiency in Internal Control Over Compliance of Federal Awards and Instance of Non-Compliance Related to Federal Awards Funding Agency: U.S. Department of Housing and Urban Development (HUD) Title: Emergency Solution Grant (ESG) Program AL #: 14.231 Award #: 22-02-HDH-EHA-001 Award Period: July 1, 2022 – June 30, 2023 Questioned Costs: None Statement of Condition During our review of internal controls covering matching funds, we noted that Heading Home did not have formal documentation to demonstrate compliance with the matching requirements of the ESG program related to agreements 22-02-HDH-EHA-001. Context Heading Home was required to match $79,403, during fiscal year 2023. Heading Home was ultimately deemed to be compliant with the required match. Heading Home was ultimately deemed compliant with the required match, as it had secured significant funding from other non-federal sources. Additionally, they demonstrated compliance retroactively, further supporting their compliance. However, there was no formal process to document and track the matching requirement related to federal expenses. Criteria The ESG program requires recipients to match the funding provided by HUD. Per 24 CFR 576.201(a) “The recipient must make matching contributions to supplement the recipient's ESG program in an amount that equals the recipient's fiscal year grant for ESG.” Cause Heading Home lacks internal controls to ensure matching requirements are adequately evaluated, documented, and fulfilled. Effect When related matches for federal expenses are not tracking, Heading Home would not know if they are in compliance. Recommendation We recommend Heading Home develop and implement internal controls to ensure that matching requirements of the ESG program are fulfilled and appropriately documented. View of Responsible Official and Corrective Action Plan Heading Home management agrees with this finding and is currently developing controls to ensure compliance with all grant matching requirements. The new controls will address a thorough review of each grant agreement, documentation of matching funds contributed by the organization, including cash contributions, in-kind donations, and volunteer hours, and the method of tracking match progress by either spreadsheet and/or within the accounting system. An appropriate individual will be assigned the responsibility for monitoring compliance and the internal controls over matching compliance including document retention and recordkeeping. Management is confident the match would have been met, but did not maintain the documentation necessary to prove this. Management anticipates the corrective action plan will be fully implemented by July 1, 2025. The personnel responsible for overseeing implementation include Connie Chavez, Chief Executive Officer; Debbie Brickman, Chief Financial Officer; and Armando Sanchez, contract accountant team lead.

2023-006 (2022-006) – LATE DATA COLLECTION FORM Type of Finding: (G) –Instance of Non-Compliance Related to Federal Awards Funding Agency: All (see Schedule of Expenditures of Federal Awards) Title: All (see Schedule of Expenditures of Federal Awards) AL #: All (see Schedule of Expenditures of Federal Awards) Award #: All (see Schedule of Expenditures of Federal Awards) Award Period: All (see Schedule of Expenditures of Federal Awards) Questioned Costs: None Statement of Condition Heading Home submitted the data collection form after the required due date. Context Heading Home was required to submit its data collection form for the year ended June 30, 2023, by March 31, 2024. Criteria The audit shall be completed, and the data collection form and reporting package shall be electronically transmitted within the earlier period of 30 days after receipt of the auditor's reports, or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day (2 CFR 200.512(a)). Cause Heading Home did not submit the June 30, 2023, data collection form and reporting package by the due date due to significant program expansion and a backlog created within the administrative team. This delay also affected the preparation and completion of the fiscal year 2023 audit. Effect Heading Home is not in compliance with Federal Award data collection form requirements and could jeopardize future federal funding. Recommendation Heading Home should implement procedures and controls to ensure that all future audit reports and data collection forms are completed promptly. View of Responsible Official and Corrective Action Plan Heading Home management is in agreement with this finding. After years of turnover in key management positions steps have been taken to address staffing challenges and these positions have been successfully staffed with high-quality individuals who bring extensive knowledge and expertise to their roles. These positions include a new Chief Executive Officer, Director of Operations, Chief Financial Officer, and Director of Human Services. To address challenges in accounting and finance Heading Home has contracted with a local CPA firm specializing in nonprofit accounting and financial reporting to assist the CFO with daily accounting tasks, the monthly close, financial reporting to management and the board of directors, and to facilitate and ensure audits are completed timely each year. The new management group is committed to maintaining a skilled and competent team in key financial roles. Heading Home’s accounting team is now in the process of preparing for the 2024 audit and anticipates the audit to be completed by December 31, 2025. While this will once again result in a late filing, the new management team has made significant strides in a short amount of time and anticipates that the 2025 and all future audits will be submitted on or before the March 31st due date. Management anticipates the above corrective action plan to be fully implemented by March 30, 2026. Personnel responsible for ensuring implementation include Connie Chavez, Executive Director, Debbie Brickman, Chief Financial Officer, and Armando Sanchez, contract accountant team lead.

2023-008 – LACK OF DOCUMENTED APPROVAL FOR FEDERAL EXPENSE DISBURSEMENTS Type of Finding: (F) – Significant Deficiency in Internal Control Over Compliance of Federal Awards Funding Agency: U.S. Department of the Treasury Title: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds AL #: 21.027 Award #: 202300279, 202300281, 202300280, 202300455 Award Period: July 1, 2022 – June 30, 2023 Questioned Costs: None Statement of Condition During testing of federal expense disbursements, it was noted that non-payroll transactions did not contain proper documentation of approvals. Context During our testing of internal controls over compliance, it was noted that 11 out of all 11 sampled non-payroll transactions did not include documentation of approval from an appropriate official. No non-compliance was noted. Criteria According to the organization's internal control policy and federal grant management standards 2 CFR § 200.303 Internal Controls during testing of Allowable Activities/Unallowable Activities, “The recipient and subrecipient must (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Cause High turnover in the accounting department and an increase in transaction volume negatively impacted the documentation of approvals by an appropriate official. Effect Failure to maintain documented approvals for federal disbursements increases the risk of unauthorized or improper expenditures, which could lead to questioned costs, potential disallowance of federal funding, and reputational harm. It also represents a breakdown in internal control over financial reporting and compliance. Recommendation We recommend that management reinforce existing policies requiring documented approval by appropriate officials for all disbursements. Departments should be retrained on the approval requirements, and periodic reviews should be implemented to ensure compliance. Additionally, the finance department should implement a checklist or automated control to verify that documented approval is present before processing payments. View of Responsible Official and Corrective Action Plan Heading Home management is in agreement with this finding. Management has reviewed the existing policies and procedures found in Section II Policy #201 of Heading Homes fiscal policies and procedures with appropriate staff and will enforce the policies and procedures to ensure all invoices and funds requests are properly reviewed and approved prior to processing. All invoices and requests for funds for fiscal year 2024 will be reviewed to ensure the payment request is reasonable and necessary. The invoice or funds request will be signed and dated by the preparer, as well as by the reviewer as evidence of approval for processing the payment. All invoices and funds requests will be maintained in the cloud server in a manner that allows them to be easily retrieved when needed. The disbursements in question were reviewed and found to be to vendors regularly used by Heading Home and Heading Home firmly believes that documentation of approval existed at one point in time. However, with the complete turnover in executive personnel during 2023, and the fact that the prior administration utilized an online system for document storage that the current administration has very little access to, we were unable to locate the approvals for these payments. Management anticipates the above corrective action plan to be fully implemented by June 30, 2024. Personnel responsible for ensuring implementation include Connie Chavez, Chief Executive Officer, Debbie Brickman, Chief Financial Officer, and Armando Sanchez, contract accountants team lead.

2022-004 (2021-005) – FEDERAL AND FINANCIAL PROCUREMENT, SUSPENSION, AND DEBARMENT COMPLIANCE Type of Finding: (B, E, F) – Significant Deficiency in Internal Control Over Financial Reporting, Significant Deficiency in Internal Control Over Compliance of Federal Awards and Instance of Non-Compliance Related to Federal Awards Funding Agency: U.S. Department of Housing and Urban Development (HUD) Title: Emergency Solution Grant (ESG) Program AL #: 14.231 Award #: All (see Schedule of Expenditures of Federal Awards) Award Period: July 1, 2021 – June 30, 2022 Questioned Costs: None Statement of Condition Heading Home did not follow federal procurement and suspension and debarment regulation nor its federal procurement policy. Context During our testing of procurement, suspension, and debarment we noted the following: • We sampled five out of five vendors which were paid more than $10,000 in fiscal year 2022, and noted there was no evidence of bids or quotes obtained. Additionally, adequate sole source documentation was not maintained to support the procurement. • We sampled three out of three vendors for tests of internal control over compliance and compliance and we noted Heading Home did not show evidence of internal controls over compliance with suspension and debarment requirements. Criteria • Heading Home’s procurement policy states that for the purchase of goods or services in excess of $10,000 three (3) competitive bids must be obtained in writing prior to selecting a vendor. • Per 2 CFR 200.320(a)(2)(i) Small purchases - o (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold ($10,000 in fiscal year 2022) but does not exceed the simplified acquisition threshold ($249,999 in fiscal year 2022). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. • Additionally, 2 CFR 200.214 requires vendors awarded contracts expected to equal or exceed $25,000 to be checked for suspension and debarment via the System for Award Management Exclusions (SAM.gov). Heading Home is required to verify that entities it plans to do business with are not excluded or disqualified under the federal procurement regulations and non-procurement common rule, or otherwise declared ineligible under statutory or regulatory authority. According to §200.303 Internal controls of 2 CFR Part 200, the nonfederal entity (Heading Home) must establish and maintain effective internal control over the Federal award that provides reasonable assurance Heading Home is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to §180.300 of Subpart C–Responsibilities of Participants Regarding Transactions Doing Business with Other Persons of 2 CFR Part 180, when you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. This can be done by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Cause Heading Home is not following their own policies and procedures related to procurement. Additionally, Heading Home’s procurement policy does not note the requirement for checking suspension and debarment via SAM.gov. Effect Heading Home is not in compliance with their own policies and the federal procurement, suspension, and debarment requirements. Heading Home may have entered into contracts with ineligible contractors and exposed itself to potential liability and loss of federal funds. Recommendation We recommend Heading Home follow their internal control policies and procedures related to procurement, as well as the following: • Document controls to ensure compliance with federal procurement regulation and its federal procurement policy. • Implement policies and procedures to verify the suspension and debarment status of contractors before awarding contracts using federal funds. • Include the required suspension and debarment clause in its contracts with contractors using federal funds. View of Responsible Official and Corrective Action Plan Heading Home management is in agreement with this finding. Management has reviewed the existing procurement policies and procedures found in Section III Policy #301 of Heading Homes fiscal policies and procedures with appropriate staff and will enforce the policies and procedures to ensure competitive bids are obtained where required. Management has also reviewed the existing suspension and debarment policies and procedures found in Section III Policy #302 with appropriate staff and which requires these vendors to be reviewed on the SAM website to ensure they have not been suspended or debarred. While after the fact, each of the five vendors noted in this finding have since been reviewed on the SAM website and none of them returned any notices of having been suspended or debarred. Management is in the process of going back and reviewing all vendors paid $10,000 or more against the SAM website and will ensure all vendors are checked against the website who currently meet this requirement as well as for those it is anticipated will meet this threshold. Proof of the SAM website review and approval will be maintained in each vendor file. Management anticipates the above corrective action plan to be fully implemented by June 30, 2024. Personnel responsible for ensuring implementation include Connie Chavez, Chief Executive Officer, Debbie Brickman, Chief Financial Officer, and Armando Sanchez, contract accountants team lead.

2022-005 (2021-006) – FEDERAL MATCHING COMPLIANCE Type of Finding: (E, F) – Significant Deficiency in Internal Control Over Compliance of Federal Awards and Instance of Non-Compliance Related to Federal Awards Funding Agency: U.S. Department of Housing and Urban Development (HUD) Title: Emergency Solution Grant (ESG) Program AL #: 14.231 Award #: 202101171, 202200142, 20-02-HDH-EHA-001 Award Period: July 1, 2021 – June 30, 2022 Questioned Costs: None Statement of Condition During our review of internal controls covering matching funds, we noted Heading Home did not have formal documentation to demonstrate compliance with the matching requirements of the ESG program related to contracts 202101171, 202200142, 20-02-HDH-EHA-001. Context Heading Home was required to match $396,366.16, $319,604.90, and $32,562.55, respectively during fiscal year 2022. Heading Home was ultimately deemed to be compliant with the required match, however, there is no formal process to document and track the match requirement related to federal expenses. Criteria The ESG program requires recipients to match the funding provided by HUD. Cause Heading Home does not have internal controls to ensure matching requirements are adequately evaluated, documented, and met. Effect When related matches for federal expenses are not tracking, Heading Home would not know if they are in compliance. Recommendation We recommend Heading Home design and implement internal controls to ensure that matching requirements of the ESG program are met and appropriately documented. View of Responsible Official and Corrective Action Plan Heading Home management is in agreement with this finding and is currently developing controls to ensure compliance with all grant matching requirements. The new controls will address a thorough review of each grant agreement, documentation of matching funds contributed by the organization, including cash contributions, in-kind donations, and volunteer hours, and the method of tracking match progress by either spreadsheet and/or within the accounting system. An appropriate individual will be assigned the responsibility for monitoring compliance and the internal controls over matching compliance including document retention and recordkeeping. Management anticipates the above corrective action plan to be fully implemented by June 30, 2024. Personnel responsible for ensuring implementation include Connie Chavez, Chief Executive Officer, Debbie Brickman, Chief Financial Officer, and Armando Sanchez, contract accountants team lead.

2022-006 – LATE DATA COLLECTION FORM Type of Finding: (F) –Instance of Non-Compliance Related to Federal Awards Funding Agency: All (see Schedule of Expenditures of Federal Awards) Title: All (see Schedule of Expenditures of Federal Awards) AL #: All (see Schedule of Expenditures of Federal Awards) Award #: All (see Schedule of Expenditures of Federal Awards) Award Period: All (see Schedule of Expenditures of Federal Awards) Questioned Costs: None Statement of Condition Heading Home submitted the data collection form after the required due date. Context Heading Home was required to submit their data collection form for the year ended June 30, 2022, by March 31, 2023. Criteria The audit shall be completed, and the data collection form and reporting package shall be electronically transmitted within the earlier period of 30 days after receipt of the auditor's reports, or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day (2 CFR 200.512(a)). Cause Heading Home did not submit the June 30, 2022, data collection form and reporting package by the due date due to significant program expansion and the backlog created for the administrative team. This also caused a delay in preparing and completing the fiscal year 2022 audit. Effect Heading Home is not in compliance with Federal Award data collection form requirements and could jeopardize future federal funding. Recommendation Heading Home should implement procedures and controls to ensure that all future audit reports and data collection forms are completed in a timely manner. View of Responsible Official and Corrective Action Plan Heading Home management is in agreement with this finding. After years of turnover in key management positions steps have been taken to address staffing challenges and these positions have been successfully staffed with high-quality individuals who bring extensive knowledge and expertise to their roles. These positions include a new Chief Executive Officer, Director of Operations, Chief Financial Officer, and Director of Human Services. To address challenges in accounting and finance Heading Home has contracted with a local CPA firm specializing in nonprofit accounting and financial reporting to assist the CFO with daily accounting tasks, the monthly close, financial reporting to management and the board of directors, and to facilitate and ensure audits are completed timely each year. The new management group is committed to maintaining a skilled and competent team in key financial roles. Heading Home’s accounting team is in the process of preparing for the 2023 audit and anticipates the audit to be completed by June 30, 2024. While this will once again result in a late filing, the new management team has made significant strides in a short amount of time and anticipates that the 2024 and all future audits will be submitted on or before the March 31st due date. Management anticipates the above corrective action plan to be fully implemented by June 30, 2024. Personnel responsible for ensuring implementation include Connie Chavez, Executive Director, Debbie Brickman, Chief Financial Officer, and Armando Sanchez, contract accountants team lead.

2021-004 ? Preparation of the Schedule of Expenditures of Federal Awards Federal program information: Funding agency: All Federal Awards. Title: All Federal Awards. CFDA number: All Federal Awards. Award period: July 1, 2020 - June 30, 2021 Criteria: 2 CFR 200.510(b) requires that the auditee prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee?s financial statements. Condition: The SEFA was not accurately prepared and required multiple adjustments to correctly present federal expenditures. Cause: Internal controls have not been adequately designed and implemented to ensure accurate preparation of the SEFA in accordance with the Uniform Guidance. Effect: The SEFA was not prepared in accordance with Uniform Guidance resulting in noncompliance and multiple audit adjustments were needed to correct. Auditors? Recommendation: Design and implement internal controls to ensure accurate preparation of the SEFA as required by the Uniform Guidance. The SEFA should include the federal portion of expenditures, the name of the grant, name of grantor, the CFDA number, and pass-through entity information as applicable. The SEFA must also be reconciled to federal revenues and expenditures per the general ledger. Management Response: Heading Home management agrees with the finding. Management will create and implement policies and procedures to ensure accurate and timely preparation of the SEFA.

2021-005 ? Procurement, Suspension and Debarment Federal program information: Funding agency: U.S. Department of Housing and Urban Development (HUD) Title: Emergency Solution Grant (ESG) Program CFDA number: 14.231 Award period: July 1, 2020 - June 30, 2021 Criteria: Heading Home?s procurement policy states that for the purchase of goods or services in excess of $10,000 three (3) competitive bids must be obtained in writing prior to selecting a vendor. Additionally, 2 CFR 200.214 requires vendors awarded contracts expected to equal or exceed $25,000 to be checked for suspension and debarment via the System for Award Management Exclusions (SAM.gov). Condition: During our evaluation of twenty-five (25) ESG transactions we found the following: ? Seven transactions where competitive bids were not obtained and adequate sole source documentation was not maintained to support the procurement. ? Three vendors were paid in excess of $25,000 and were not checked for suspension and debarment via SAM.gov. Questioned Costs: None Effect: Heading Home is not incompliance with the procurement, suspension, and debarment requirements of the ESG program. Auditors? Recommendation: Enforce current internal controls surrounding procurement, suspension and debarment. Management Response: Heading Home management agrees with this finding. Management will reeducate employees and enforce current procurement policies and procedures to ensure competitive bids are obtained and federal suspension and debarment requirements are met.

2021-006 ? Matching Federal program information: Funding agency: U.S. Department of Housing and Urban Development (HUD) Title: Emergency Solution Grant (ESG) Program Contract Number: 20-02-HDH-EHA-001 CFDA number: 14.231 Award period: July 1, 2020 - June 30, 2021 Criteria: The ESG program requires recipients to match the funding provided by HUD. Condition: During our assessment of internal controls covering matching funds, we found that Heading Home did not have formal documentation to demonstrate compliance with the matching requirements of the ESG program related to contract 20-02-HDH-EHA- 001. Head Home was required to match $47,239 during fiscal year 2021. Heading Home was ultimately deemed to be compliant with the required match, however, the analysis did not occur until it was brought to management?s attention during audit fieldwork. Questioned Costs: None Effect: Heading Home does not have internal controls to ensure matching requirements are adequately evaluated, documented, and met. Auditors? Recommendation: Design and implement internal controls to ensure that matching requirements of the ESG program are met and appropriately documented. Management Response: Management agrees with this finding. Management will design and implement policies and procedures to ensure that grant requirements including matching requirements are adequately tracked and documented.

GSA_MIGRATION