COMMUNITY ACTION PARTNERSHIP OF NORTH DAKOTA

Federal Programs – AL 93.568 – Low Income Home Energy Assistance Program Criteria – A good system of internal controls allows for the compliance with Uniform Guidance to monitor funds that are passed through to subrecipients and the continued stewardship of those federal dollars. Condition – For the year ended December 31, 2025, we discussed the policies and procedures in effect for CAPND employees to adequately monitor the subrecipients under the Low Income Home Energy Assistance Program (LIHEAP). We reviewed any subawards between CAPND and subrecipients under the Low Income Home Energy Assistance Program (LIHEAP). We noted one subrecipient was missing a subaward during the year. Although the policies and procedures in effect during the year ended December 31, 2025 were appropriately designed, they were not completed throughout the year. Cause – There was a general misunderstanding between staff and management on the process of completing subrecipient monitoring controls throughout the year. Effect – Noncompliance will not be prevented or detected and corrected in a timely manner. Repeat Finding – This is not a repeat finding. Recommendation - The subrecipient monitoring policies and procedures should be updated to include specific milestones and broken down into specific tasks that are to be achieved throughout the year. These could then be monitored through meetings between the board treasurer and the LIHEAP program coordinator. Redundancies and cross-training could be included to reduce the risk that lapses in monitoring occur due to staff turnover or extended absences. In addition, training for all staff upon employment and periodically throughout the year over LIHEAP policies and procedures would allow for better clarity and understanding. Views of Responsible Officials - Management recognizes the deficiency and plans to implement the auditor’s recommendation.

Federal Programs – AL 93.568 – Low Income Home Energy Assistance Program Criteria – Uniform Guidance requires, for any funds passed through to a subrecipient, that the pass-through entity (CAPND) must perform certain activities to ensure that the subrecipient uses the funds within provisions of the grant award and Uniform Guidance, 2 CFR sections 200.332 (b). This includes issuing subawards granted to subrecipients. Condition – For the year ended December 31, 2025, we reviewed any subawards between CAPND and subrecipients under the Low Income Home Energy Assistance Program (LIHEAP). We noted one subrecipient was missing a subaward during the year. Cause – There was one missing subaward between CAPND and the subgrantee. Effect – Increased risk of potential noncompliance with subrecipient monitoring requirements under Uniform Guidance. Questioned costs – None. Repeat Finding – This is not a repeat finding. Recommendation – The entity should include all required information as determined in CFR Section 200.332(b) in all subawards. Views of Responsible Officials - Management recognizes the deficiency and plans to implement the auditor’s recommendation.

2024-002 Subrecipient Monitoring – Material Weakness Federal Programs – AL 93.569 – Community Service Block Grant Criteria – A good system of internal controls allows for the compliance with Uniform Guidance to monitor funds that are passed through to subrecipients and the continued stewardship of those federal dollars. Condition – For the year ended December 31, 2024, we discussed the policies and procedures in effect for CAPND employees to adequately monitor the subrecipients under the Community Services Block Grant (CSBG). Although the policies and procedures in effect during the year ended December 31, 2024 were appropriately designed, they were not completed throughout the year. Cause – There was a general misunderstanding between staff and management on the process of completing subrecipient monitoring controls throughout the year. Effect – Noncompliance will not be prevented or detected and corrected in a timely manner. Repeat Finding – This is a repeat finding. Recommendation - The subrecipient monitoring policies and procedures should be updated to include specific milestones and broken down into specific tasks that are to be achieved throughout the year. These could then be monitored through meetings between the board treasurer and the CSBG program coordinator. Redundancies and cross-training could be included to reduce the risk that lapses in monitoring occur due to staff turnover or extended absences. In addition, training for all staff upon employment and periodically throughout the year over CSBG policies and procedures would allow for better clarity and understanding. Views of Responsible Officials - Management recognizes the deficiency and plans to implement the auditor’s recommendation.

2024-003 Subrecipient Monitoring and Allowable Costs – Material Weakness Federal Programs – AL 64.033 – VA Supportive Services for Veteran Families Criteria – A good system of internal controls allows for the compliance with Uniform Guidance to monitor funds that are passed through to subrecipients and the continued stewardship of those federal dollars. Condition – For the year ended December 31, 2024, we discussed the policies and procedures in effect for CAPND employees to adequately monitor the subrecipients under the Supportive Services for Veteran Families (SSVF) grant. Although the policies and procedures in effect during the year ended December 31, 2024 were appropriately designed, they were not completed throughout the year. Cause – There was a general misunderstanding between staff and management on the process of completing subrecipient monitoring controls throughout the year. Effect – Noncompliance will not be prevented or detected and corrected in a timely manner. Repeat Finding – This is not a repeat finding. Recommendation - The subrecipient monitoring policies and procedures should be updated to include specific milestones and broken down into specific tasks that are to be achieved throughout the year. These could then be monitored through meetings between the board treasurer and the SSVF program coordinator. Redundancies and cross-training could be included to reduce the risk that lapses in monitoring occur due to staff turnover or extended absences. In addition, training for all staff upon employment and periodically throughout the year over SSVF policies and procedures would allow for better clarity and understanding. Views of Responsible Officials - Management recognizes the deficiency and plans to implement the auditor’s recommendation.

2024-004 Allowable Costs Federal Programs – AL 64.033 – Supportive Services for Veteran Families (SSVF) Criteria – Uniform Guidance requires, for any funds passed through to a subrecipient, that the pass-through entity (CAPND) must perform certain activities to ensure that the subrecipient uses the funds within provisions of the grant award and Uniform Guidance (2 CFR sections 200.331 (d) through (f)). Condition – For the year ended December 31, 2024, we noted one instance in which noneligible expense by a subrecipient were reimbursed and CAPND drew down on the grant for. Cause – There was a request for by a subrecipient to reimburse expenses that did not exist. This request was authorized by CAPND and the payment was sent to the subrecipient for noneligible expenses. CAPND then drew down on the grant for the non-existing expense. Effect – Noncompliance with the grant. Questioned costs – $159.73 Repeat Finding – This is not a repeat finding. Recommendation – Implement a system of internal control in which all expenses that subrecipient request to be reimbursed have supporting documentation. Views of Responsible Officials – Management recognized the deficiency and plans to implement the auditor’s recommendation.

2024-005 Subrecipient Monitoring Federal Programs – AL 64.033 – Supportive Services for Veteran Families (SSVF) Criteria – Uniform Guidance requires, for any funds passed through to a subrecipient, that the pass-through entity (CAPND) must perform certain activities to ensure that the subrecipient uses the funds within provisions of the grant award and Uniform Guidance (2 CFR sections 200.331 (d) through (f)). Condition – For the year ended December 31, 2024, we noted one instance in which noneligible expense by a subrecipient were reimbursed and CAPND drew down on the grant for. Cause – There was a request for by a subrecipient to reimburse expenses that did not exist. This request was authorized by CAPND and the payment was sent to the subrecipient for noneligible expenses. CAPND then drew down on the grant for the non-existing expense. Effect – Noncompliance with the grant. Questioned costs – $159.73 Repeat Finding – This is not a repeat finding. Recommendation – Implement a system of internal control in which all expenses that subrecipient request to be reimbursed have supporting documentation. Views of Responsible Officials – Management recognized the deficiency and plans to implement the auditor’s recommendation.

2024-006 Subrecipient Monitoring Federal Programs – AL 93.569 – Community Services Block Grant (CSBG) Criteria – Uniform Guidance requires, for any funds passed through to a subrecipient, that the pass-through entity (CAPND) must perform certain activities to ensure that the subrecipient uses the funds within provisions of the grant award and Uniform Guidance (2 CFR sections 200.331 (d) through (f)). This includes the review of independent audits of subrecipients and response to deficiencies detected through audits (2CFR section 200.331 (f)). It also includes requiring all subawards granted to subrecipients have specific identifications with the award to ensure the subaward is clearly identifiable (2 CFR Section 200.331(a)). Condition – For the year ended December 31, 2024, we reviewed CAPND's subrecipient monitoring policy, requested supporting documentation for monitoring activities included, and interviewed key members of management when documentation was not available. Performance of several of the policies noted as required under Uniform Guidance for subrecipient monitoring and per CAPND's internal policies could not be substantiated or were determined to not have occurred during the year under audit. Cause – There was missing required information on subawards granted to subrecipients. Context– Of the total federal expenditures under the program noted above, $283,852 are passed through to subrecipients. The following are specific items noted that were not in compliance with the criteria listed above:  We requested copies of all subawards awarded to subrecipients. Of the five subawards awarded to pass-through entities for the grant year October 2023 to September 2024, all five were missing the following required information under (2 CFR Section 200.331(a)): o Subrecipient's unique entity identifier. o Amount of federal funds obligated by this action by the pass-through entity to the subrecipient. Effect – Increased risk of potential noncompliance with subrecipient monitoring requirements under Uniform Guidance. Question costs – None. Repeat Finding – This is a repeat finding. Recommendation – The entity should include all required information as determined in CFR Section 200.331(a) in all subawards. Views of Responsible Officials – Management recognized the deficiency and plans to implement the auditor’s recommendation.

Federal Programs – AL 93.569 – Community Services Block Grant Criteria – A good system of internal controls allows for the compliance with Uniform Guidance to monitor funds that are passed through to subrecipients and the continued stewardship of those federal dollars. Condition – For the year ended December 31, 2023, we discussed the policies and procedures in effect for CAPND employees to adequately monitor the subrecipients under the Community Services Block Grant (CSBG). Although the policies and procedures in effect during the year ended December 31, 2023 were appropriately designed, they were not completed throughout the year. Cause – There was a general misunderstanding between staff and management on the process of completing subrecipient monitoring controls throughout the year. Effect – Noncompliance will not be prevented, or detected and corrected in a timely manner Question costs – None. Repeat Finding – This is not a repeat finding. Recommendation – The subrecipient monitoring policies and procedures should be updated to include specific milestones and broken down into specific tasks that are to be achieved throughout the year. These could then be monitored through meetings between the board treasurer and the CSBG program coordinator. Redundancies and cross-training could be included to reduce the risk that lapses in monitoring occur due to staff turnover or extended absences. In addition, training for all staff upon employment and periodically throughout the year over CSBG policies and procedures would allow for better clarity and understanding. Views of Responsible Officials – Management recognized the deficiency and plans to implement the auditor’s recommendation.

Federal Programs – AL 93.569 – Community Services Block Grant Criteria – Uniform Guidance requires, for any funds passed through to a subrecipient, that the pass-through entity (CAPND) must perform certain activities to ensure that the subrecipient uses the funds within provisions of the grant award and Uniform Guidance (2 CFR sections 200.331 (d) through (f)). This includes the review of independent audits of subrecipients and response to deficiencies detected through audits (2CFR section 200.331 (f)). It also includes requiring all subawards granted to subrecipients have specific identifications with the award to ensure the subaward is clearly identifiable (2 CFR Section 200.331(a)). Condition – For the year ended December 31, 2023, we reviewed CAPND's subrecipient monitoring policy, requested supporting documentation for monitoring activities included, and interviewed key members of management when documentation was not available. Performance of several of the policies noted as required under Uniform Guidance for subrecipient monitoring and per CAPND's internal policies could not be substantiated or were determined to not have occurred during the year under audit. Cause – Due to internal control deficiency noted in 2023-002, the subrecipient monitoring requirement was not in compliance during the current year. Context– Of the total federal expenditures under the program noted above, $276,165 are passed through to subrecipients. The following are specific items noted that were not in compliance with the criteria listed above: - We requested copies of the correspondence with subrecipients requesting copies of the financial statement audits performed in compliance with 2 CFR 200. Follow up discussion with CAPND staff confirmed that this requirement was not completed during the year under audit. Subsequently, of the five subrecipient audit reports required to be requested, zero were requested. - We requested copies of all subawards awarded to subrecipients. Of the five subawards awarded to pass-through entities, all five were missing the following required information under (2 CFR Section 200.331(a)): o Subrecipient's unique entity identifier. o Amount of federal funds obligated by this action by the pass-through entity to the subrecipient. Effect – Increased risk of potential noncompliance with subrecipient monitoring requirements under Uniform Guidance. Question costs – None. Repeat Finding – This is not a repeat finding.

2019-002 Material Weakness ? Subrecipient Monitoring Information on Federal Program ? CFDA 64.033 ? VA Supportive Services for Veteran Families Criteria ? A good system of internal controls allows for the compliance with Uniform Guidance to monitor funds that are passed through to subrecipients and the continued stewardship of those federal dollars. Condition ? For the year ended December 31, 2019, we discussed the policies and procedures in effect for CAPND employees to adequately monitor the subrecipients under the VA Supportive Services for Veteran Families (SSVF) grant. Although the policies and procedure in effect during the year ended December 31, 2019 were appropriately designed, they were not completed throughout the year. Cause ? Key employees within CAPND that were responsible for the monitoring of subrecipients in the VA SSVF program turned over during the year. In addition, there was a general misunderstanding among staff and management on the process of completing subrecipient monitoring controls throughout the year. Effect or Potential Effect ? Noncompliance with subrecipient monitoring requirements under Uniform Guidance may occur and may materially affect the program compliance. Questioned Costs ? None noted. Context ? While testing CAPND?s monitoring of funds awarded to subrecipients we noted that while the policies and procedures were well designed and documented, they were not completed consistently throughout the year under audit. Repeating Finding ? This is not a repeat finding. Recommendation ? The subrecipient monitoring policies and procedures should be updated to include specific milestones and broken down into specific tasks that are to be achieved throughout the year. These could then be monitored through meetings between the executive director and the SSVF Program Coordinator (or equivalent position). Redundancies and cross-training could be included to reduce the risk that lapses in monitoring occur due to staff turnover or extended absences. In addition, training for all staff upon employment and periodically throughout the year over the SSVF policies and procedures would allow for better clarity and understanding. The training should incorporate all staff due to the significance of the program to CAPND.

2019-003 Significant Deficiency ? Reporting Information on Federal Program ? CFDA 64.033 ? VA Supportive Services for Veteran Families Criteria ? A good system of internal controls allows for the completion and review of all grant reports prior to submission to granting or oversight agencies. Condition ? For the year ended December 31, 2019, we requested copies of reports required to be submitted under the grant to test for the review of the data prior to reports being submitted. Cause ? While controls over the review of required grant reports were appropriately designed, they were not followed consistently throughout the year. New staff tasked with preparing the Federal Financial Report were not aware that the internal control policy required review of the report by the executive director prior to submission. Staff were not able to keep up with the review of client intake data uploaded for the HMIS reports due to a lack of availability of staff to perform the review and turnover within the position responsible for this review. Effect or Potential Effect ? The reports could be prepared inaccurately or untimely and these errors would not be prevented, or detected and corrected by employees in the normal course of their duties. Questioned Costs ? None noted. Context ? For the year ended December 31, 2019, we requested the copy of the Federal Financial Report submitted and documentation of the executive director?s review. CAPND was unable to provide documentation supporting of the review and subsequent inquiry identified that the report was not reviewed prior to submission. Of the twelve HMIS reports submitted to Veterans Affairs during the year, we selected two months to request the documentation that SSVF staff compared the data to the client intake forms submitted. The entity was unable to provide documentation and subsequent inquiry with SSVF staff was unable to support that these reviewed occurred during the year. Repeating Finding ? This is not a repeat finding. Recommendation ? Policies and procedures related to grant reporting should be reviewed with CAPND staff to develop cross training. This will provide for additional staffing when demand for reviewing client intake data is high as well as allow for coverage in the instances where positions may turn over.

2019-004 Material Noncompliance ? Subrecipient Monitoring Information on Federal Program ? CFDA 64.033 ? VA Supportive Services for Veteran Families Criteria ? Uniform Guidance requires, for any funds passed through to a subrecipient, that the pass-through entity (CAPND) must perform certain activities to ensure that the subrecipient uses the funds within provisions of the grant award and Uniform Guidance (2 CFR sections 200.331(d) through (f)). This includes the review of independent audits of subrecipients and response to deficiencies detected through audits (2CFR section 200.331(f)). Condition ? For the year ended December 31, 2019, we reviewed CAPND?s subrecipient monitoring policy, requested supporting documentation for monitoring activities included, and interviewed key members of management when documentation was not available. Performance of several of the policies noted as required under Uniform Guidance for subrecipient monitoring and per CAPND?s internal policies could not be substantiated or were determined to not have occurred during the year under audit. Cause ? Due to internal control deficiency noted in 2019-002, the subrecipient monitoring policies were not followed during the current year. Questioned Costs ? $13,445 Context ? Of the total federal expenditures under the program noted above, $861,005 are passed through to subrecipients. The following are specific items noted that were not in compliance with the criteria listed above: - We requested copies of the correspondence with subrecipients requesting copies of the financial statement audits performed in compliance with 2 CFR 200. The documentation provided indicated that these requests were all sent in January 2020. Follow up discussion with CAPND staff confirmed that this requirement was not completed during the year under audit. Subsequently, of the eight subrecipient audit reports requested, only seven audit reports were received. Due to the timing of the request, there was no follow up on federal findings noted in the audited financial statements. - Of the 17 subrecipient expenditure reimbursements requests reviewed, we noted one where the subrecipient did not sign confirming the appropriateness of expenditures under the program. The CAPND?s monitoring policy requires the subrecipient executive director to sign the reimbursement request certifying that they have reviewed the expenditures for allowability under Uniform Guidance and the program. This error was in relation to the CAPND?s monitoring of the subrecipients? compliance with allowable costs. - Of the approximately 600 veterans included in the SSVF program for the year ended December 31, 2019, we selected 40 to test against CAPND?s subrecipient monitoring policies. For 13 of those selected for testing documentation was unable to be provided indicating that CAPND had reviewed the subrecipients? determination of the veteran?s eligibility under the SSVF program requirements as required by their internal monitoring policies. Subsequent discussion with CAPND staff indicated this procedure was not consistently performed during the year. This error was in relation to CAPND?S monitoring of the subrecipients? compliance with eligibility. - The SSVF Program Guide requires that the pass-through entity performs a ?desk audit? using the Uniform Monitoring Packet at each subrecipient on an annual basis. This includes the review of the subgrantee compliance with grant requirements and the review of any errors noted, completion of a corrective action plan, and acknowledgement of the corrective action plan by the subgrantee. Of the 8 subgrantees in the program for the year ended December 31, 2019, it was noted that one Uniform Monitoring Packet included documented errors but omitted a corrective action plan and acknowledgement from the subrecipient. Upon discussion with CAPND staff, additional documentation could not be produced supporting the communication of the errors or corrective action plan with the subrecipient. This error was in relation to CAPND?s monitoring of the subrecipients? compliance with special tests and provisions as outlined in the SSVF Program Guide. - Of the $184,620 in federal expenditures passed through to one of the subrecipients, it was determined that $13,445 in temporary financial assistance was provided to veterans who had not been recertified every 90 days as required by the SSVF Program Guide rendering them ineligible under the program. Recommendation ? The subrecipient monitoring policies and procedures should be updated to include specific milestones and broken down into specific tasks that are to be achieved throughout the year. These could then be monitored through meetings between the executive director and the SSVF Program Coordinator (or equivalent position). Redundancies and cross-training could be included to reduce the risk that lapses in monitoring occur due to staff turnover or extended absences. In addition, training for all staff upon employment and periodically throughout the year over the SSVF policies and procedures would allow for better clarity and understanding. The training should incorporate all staff due to the significance of the program to CAPND.

2019-005 Noncompliance ? Procurement Information on Federal Program ? CFDA 64.033 ? VA Supportive Services for Veteran Families Criteria ? Procurement requirements within Uniform Guidance (2CFR section 200.318(c)) require written standards of conduct that cover conflicts of interest. CAPND?s policies include obtaining written conflict of interest statements from board members annually including disclosure of any potential related parties. Condition ? For the year ended December 31, 2019, we requested copies of the conflict of interest statements signed by the board members. CAPND staff were unable to provide these as they were not signed by the board members during the year under audit. Cause ? Because the board of directors is comprised of the executive directors for each member community action agency, the requirement to sign a conflict of interest form is included in each subgrant award. CAPND did not request these documents for the grant period that fell during the audit period. Effect or potential effect ? Federal expenditures could be paid to unidentified related parties and procurement standards specific to related party transactions would be omitted. Questioned Costs ? None noted. Context ? Of the 8 community action partnerships members that make up the board of directors, none were required to sign a conflict of interest statement. This did not follow CAPND?s procurement standards. Repeat Finding ? This is not a repeat finding. Recommendation ? Blank conflict of interest statements and the procurement policy section referring to the statements could be sent with the grant award at the beginning of each grant year. Review of outstanding conflict of interest statements and known conflicts could be done at the beginning of each board meeting and blank conflict of interest statements provided in board packets. As a last resort, funding could be withheld until the statements are signed by each agency representative on the board.

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