Temenos Community Development Corporation

2023-002 Compliance and Internal Controls over Procurement (Material Weakness and Material Noncompliance) U.S. Department of Housing and Urban Development 14.267 – Continuum of Care Program 2023 Funding Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR Section 200.320, the Organization must have and use documented procurement procedures for acquisition of property and services under a federal award or a sub-award. Condition: While the Organization has approved policies and procedures for procurement, these are not consistently followed and therefore no observable evidence was available to verify that proper procurement procedures were followed for 4 out of 8 selected products and services for our testing. Cause: Majority of the purchases subject to potential procurement were from recurring vendors from prior years for whom documentation was not available at the Organization. For any new vendors, the policies were not applied consistently by the upper management. Effect: Not following procurement policies may result in funds to be returned back to grantor and / or impact future funding. Questioned Costs: Known costs of $169,575 and likely costs of $198,266. Perspective: As a result of not having a devoted, full-time employee in the senior financial management position, required controls and record keeping were not properly established. Repeat Finding: Yes Recommendation: The Organization should establish procedures to ensure that controls related to procurement are consistently implemented and that all written records are maintained to support that the compliance requirement is met. Views of Responsible Officials: We concur with the recommendation, please see Corrective Action Plan.

2023-003 Compliance and Internal Controls over Matching (Material Weakness) Internal Controls over Period of Performance and Earmarking (Material Weakness) U.S. Department of Housing and Urban Development 14.267 – Continuum of Care Program 2023 Funding Criteria: Under 2 CFR Section 200.303(a), non‐federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 24 CFR Section 578.73, the Organization must match all grant funds, except for leasing funds, with no less than 25 percent of funds or in-kind contributions from other sources. Furthermore, under 2 CFR Section 200.403 (g) and (h), the Organization’s expenditures must be adequately documented and incurred during the approved budget period, respectively. Condition: Payroll costs that could be potentially chargeable to the grant but were not, were claimed as a matching contribution under the grant by the Organization. However, as noted in finding 2023-001 above, payroll cost allocated to the grants did not agree to the grant hours reported in the approved timesheets for certain samples selected for testing. Because of this finding, we cannot establish the accuracy of payroll claimed as a match for the grant. Review and approval of each payroll batch was conducted, but in 6 out of 6 instances tested, errors in grant allocation were not detected. Cause: While there is a process in place for upper management to review and approve each payroll batch based on hours incurred per timesheet, it appears that the control was not operating effectively as the payroll cost charged to the grant in several instances exceeded the corresponding hours charged to the grant per the timesheet. Effect: Unmatched funds may be required to be returned back to grantor and / or impact future funding. Questioned Costs: Undeterminable Perspective: Payroll charged to the grants exceeded time incurred in 7 out of the 60 samples tested, including 1 out of the 17 samples for contract TX0275L6E002112 where payroll was used as a match. Repeat Finding: Yes. Recommendation: We recommend that part of the review process for payroll include verification that the cost charged to the grant does not exceed the grant hours reported on employee timesheet. Views of Responsible Officials: We concur with the recommendation, please see Corrective Action Plan.

2023-004 Compliance and Internal Controls over Earmarking (Significant Deficiency) U.S. Department of Housing and Urban Development 14.267 – Continuum of Care Program Contract No. TX0425L6E002106 Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 24 CFR Section 578.59, the Organization may use up to 10 percent of any grant awarded under this part for the payment of project administrative costs related to the planning and execution of Continuum of Care activities. Condition: Administrative costs exceeded 10 percent of the total award spent for one of the grants closed during the year. Cause: While the administrative costs drawn on the grant were below the maximum allowed by the grant, not all program costs were drawn on the grant, resulting in administrative costs to be over 10% of funds drawn on the grant. Additionally, as a result of not having a devoted, full-time employee in the senior financial management position, there was no reconciliation performed to check that the administrative costs were limited to 10% of all funds drawn. Effect: Overdrawn administrative costs may be required to be returned back to grantor and / or impact future funding. Questioned Costs: $1,321 Perspective: Required reconciliations to verify the administrative costs as a percentage of amounts drawn were not performed. Controls over earmarking requirements were not implemented. Repeat Finding: Yes Recommendation: The Organization should establish procedures to ensure that controls related to earmarking are consistently implemented which should include reconciling the administrative costs to all drawn funds on individual grants. Views of Responsible Officials: We concur with the recommendation, please see Corrective Action Plan.

2023-005 Compliance and Internal Controls over Program Income (Significant Deficiency) U.S. Department of Housing and Urban Development 14.267 – Continuum of Care Program 2023 Funding Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 24 CFR Section 578.57, recipients or subrecipients must examine a program participant's income initially, and at least annually thereafter, to determine the amount of the contribution toward rent payable by the program participant. Condition: While the entity has adopted controls over compliance related to program income, these controls have not been consistently implemented during the year. Additionally for a sample of files selected for scattered locations, no evidence of income calculations to support program income was available within the participant’s files. Cause: Turnover / inadequate staffing in the Organization throughout the year and absence of a senior financial management position resulted in these controls not being consistently implemented. Effect: Without internal controls operating effectively, it is possible that the Organization would be at risk to be out of compliance with the compliance requirements. The Organization cannot effectively manage its federal program with controls that do not operate effectively. Questioned Costs: Undeterminable Perspective: No observable evidence of controls being implemented consistently on the above compliance requirement. Additionally, for 5 of the 7 files selected for scattered locations, no evidence of income calculations to support program income was available within the participant’s files. Repeat Finding: Yes Recommendation: The Organization should establish procedures to ensure that controls related to program income are consistently implemented. In addition, documentation should be included in each participant's files to support income calculations and the participant's share of rent payable to the program. Views of Responsible Officials: We concur with the recommendation, please see Corrective Action Plan.

2023-006 Internal Controls and Compliance over Special Tests and Provisions – Reasonable Rental Rates (Significant Deficiency) U.S. Department of Housing and Urban Development 14.267 – Continuum of Care Program 2023 Funding Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 24 CFR Section 578.49, when grants are used to pay rent for individual housing units, the rent paid must be reasonable in relation to rents being charged for comparable units, taking into account the location, size, type, quality, amenities, facilities, and management services. In addition, the rents may not exceed rents currently being charged for comparable units, and the rent paid may not exceed HUD-determined fair market rents. Condition: While the entity has adopted controls over compliance requirements related to special tests and provisions – reasonable rental rates, these controls have not been consistently implemented during the year. Additionally for a sample of files selected for scattered locations, no evidence of current rental reasonableness verification was available within the participant’s files. Cause: Turnover / inadequate staffing in the Organization throughout the year and absence of a senior financial management position resulted in these controls not being consistently implemented. Effect: Without internal controls operating effectively, it is possible that the Organization would be at risk to be out of compliance with the compliance requirements. The Organization cannot effectively manage its federal program with controls that do not operate effectively. Questioned Costs: Undeterminable Perspective: No observable evidence of controls being implemented consistently on the above compliance requirement. Additionally, for 6 of the 7 sample of files selected for scattered locations, no evidence of current year rental reasonableness verification was available within the participant’s files. Repeat Finding: Yes Recommendation: The Organization should establish procedures to ensure that controls related to special tests and provisions – reasonable rental rates are consistently implemented including maintaining documentation of the verification of rental reasonableness in the program participant's file. Views of Responsible Officials: We concur with the recommendation, please see Corrective Action Plan.

2023-007 Internal Controls over Suspension and Debarment (Significant Deficiency) U.S. Department of Housing and Urban Development 14.267 – Continuum of Care Program 2023 Funding Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Condition: While the entity has adopted controls over compliance requirements related to suspension and debarment, these controls have not been consistently implemented during the year. Cause: Turnover / inadequate staffing in the Organization throughout the year and absence of a senior financial management position resulted in these controls not being consistently implemented. Effect: Without internal controls operating effectively, it is possible that the Organization would be at risk to be out of compliance with the compliance requirements. The Organization cannot effectively manage its federal program with controls that do not operate effectively. Questioned Costs: None Perspective: No observable evidence of controls being implemented consistently on the above compliance requirement. Repeat Finding: Yes Recommendation: The Organization should establish procedures to ensure that controls related to suspension and debarment are consistently implemented. Views of Responsible Officials: We concur with the recommendation, please see Corrective Action Plan.

2021-003 Compliance and Internal Controls over Procurement (Material Weakness) U.S. Department of Housing and Urban Development 14.267 ? Continuum of Care Program 2021 Funding Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR Section 200.320, the Organization must have and use documented procurement procedures for acquisition of property and services under a federal award or a sub-award. Condition: While the Organization has approved policies and procedures for procurement, these are not consistently followed and therefore no observable evidence was available to verify that these policies were applied in procurement of products and services. Cause: Majority of the purchases subject to potential procurement were from recurring vendors from prior years for whom documentation was not available at the Organization. For any new vendors, the policies were not applied consistently because of turnover of the grant accountant. Effect: Not following procurement policies may result in funds to be returned back to grantor and / or impact future funding. Questioned Costs: Undeterminable Perspective: As a result of grant accountant turnover and not having a devoted, full-time employee in the senior financial management position, required controls and record keeping were not properly established. Repeat Finding: Yes Recommendation: The Organization should establish procedures to ensure that controls related to procurement are consistently implemented and that all written records are maintained to support that the compliance requirement is met. Views of Responsible Officials: We concur with the recommendation, please see Corrective Action Plan.

2021-004 Compliance over Period of Performance U.S. Department of Housing and Urban Development 14.267 ? Continuum of Care Program Contract Nos. TX0275L6E001910 and TX0425L6E001904 Criteria: Under 2 CFR Section 200.403 (g) and (h), the Organization?s expenditures must be adequately documented and incurred during the approved budget period, respectively. Condition: We noted that some of the expenditures did not have payment support or the amount claimed did not agree to the supporting invoice, and therefore proper period of performance could not be established. Cause: Turnover / inadequate staffing in the accounting department throughout the year and absence of a senior financial management position resulted in supporting documents not being maintained. Effect: Not having proper supports for expenditures or establishing that they were incurred in the budget period may result in funds to be returned back to grantor and / or impact future funding. Questioned Costs: $32,636 Perspective: Payment support was not available for 5 of the 60 samples selected for testing. Additionally for one expense, the invoice amount did not match the amount claimed. Absent complete information, period of performance could not be established. All exceptions however, were noted before the implementation of a new payment system, effective May 2021. The new payment system only allows for payments to be made once they are approved by authorized individuals and also allows for an appropriate audit trail for payments processed. No exceptions were noted post implementation of the new payment system. Repeat Finding: Yes Recommendation: Management should establish procedures to ensure that all supporting documents are maintained to support that the compliance requirement is met. Views of Responsible Officials: We concur with the recommendation, please see Corrective Action Plan.

2021-005 Compliance and Internal Controls over Matching (Significant Deficiency) U.S. Department of Housing and Urban Development 14.267 ? Continuum of Care Program Contract No. TX0425L6E001904 Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 24 CFR Section 578.73, the Organization must match all grant funds, except for leasing funds, with no less than 25 percent of funds or in-kind contributions from other sources. Condition: The Organization received in-kind contributions from a related party non-profit organization to meet the grant requirement of matching 25% of grant funds from other sources. However, no supporting documentation was available at the Organization to corroborate part of the cost of the in-kind donations provided for match. Cause: The Control adopted by the Organization for the Resident Services Coordinator to sign off on the receiving documents as evidence of in-kind donations received was not consistently implemented during the year. Additionally, with the turnover of grant accountant, reconciliation of grant funds received to actual required match was not performed. Effect: Unmatched funds may be required to be returned back to grantor and / or impact future funding. Questioned Costs: $23,675 Perspective: As a result of grant accountant turnover and not having a devoted, full-time employee in the senior financial management position, required controls and record keeping were not properly established. Repeat Finding: Yes Recommendation: The Organization should establish procedures to ensure that controls related to matching are consistently implemented and that appropriate detail is received and reviewed to validate the in-kind match received to support the cost of match funds reported. Views of Responsible Officials: We concur with the recommendation, please see Corrective Action Plan.

2021-006 Compliance and Internal Controls over Earmarking (Significant Deficiency) U.S. Department of Housing and Urban Development 14.267 ? Continuum of Care Program Contract No. TX0425L6E001904 Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 24 CFR Section 578.59, the Organization may use up to 10 percent of any grant awarded under this part for the payment of project administrative costs related to the planning and execution of Continuum of Care activities. Condition: Administrative costs exceeded 10 percent of the total award spent for one of the grants closed during the year. Cause: While the administrative costs drawn on the grant were below the maximum allowed by the grant, not all program costs were drawn on the grant, resulting in administrative costs to be over 10% of funds drawn on the grant. Additionally, there was no reconciliation performed to check that the administrative costs were limited to 10% of all funds drawn. Effect: Overdrawn administrative costs may be required to be returned back to grantor and / or impact future funding. Questioned Costs: $10,650 Perspective: As a result of grant accountant turnover and not having a devoted, full-time employee in the senior financial management position, required reconciliations to verify the administrative costs as a percentage of amounts drawn were not performed. Repeat Finding: Yes (for controls only) Recommendation: The Organization should establish procedures to ensure that controls related to earmarking are consistently implemented which should include reconciling the administrative costs to all drawn funds on individual grants. Views of Responsible Officials: We concur with the recommendation, please see Corrective Action Plan.

2021-007 Internal Controls over Suspension and Debarment, Program Income and Special Tests and Provisions ? Reasonable Rental Rates (Material Weakness) U.S. Department of Housing and Urban Development 14.267 ? Continuum of Care Program 2021 Funding Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Condition: While the entity has adopted controls over compliance requirements related to suspension and debarment, program income and special tests and provisions ? reasonable rental rates, these controls have not been consistently implemented during the year. Cause: Turnover / inadequate staffing in the Organization throughout the year and absence of a senior financial management position resulted in these controls not being consistently implemented. Effect: Without internal controls operating effectively, it is possible that the Organization would be at risk to be out of compliance with the compliance requirements. The Organization cannot effectively manage its federal program with controls that do not operate effectively. Questioned Costs: None Perspective: No observable evidence of controls being implemented consistently on the above compliance requirements because of turnover / inadequate staffing in the Organization and absence of a senior financial management position. Repeat Finding: Yes Recommendation: The Organization should establish procedures to ensure that controls related to suspension and debarment, program income and special tests and provisions ? reasonable rental rates are consistently implemented. Views of Responsible Officials: We concur with the recommendation, please see Corrective Action Plan.

2020-004 Compliance and Internal Controls over Matching (Material Weakness) U.S. Department of Housing and Urban Development 14.267 ?Continuum of Care Program 2020 Funding Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 24 CFR Section 578.73, the Organization must match all grant funds, except for leasing funds, with no less than 25 percent of funds or in-kind contributions from other sources. Condition: The Organization received in-kind contributions from a related party non-profit organization to meet the grant requirement of matching 25% of grant funds from other sources. However, no supporting documentation was available at the Organization to corroborate the cost of the in-kind donations provided for match. Additionally, matching funds collected were $6,735 below the 25% threshold for one of the grants closed during the year. Cause: The Control adopted by the Organization for review of match funds to independent sources by the Executive Director was not consistently implemented during the year. Additionally, with the turnover of grant accountant, reconciliation of grant funds received to actual required match was not performed. Effect: Unmatched funds may be required to be returned back to grantor and / or impact future funding. Questioned Costs: Undeterminable Perspective: As a result of grant accountant turnover and not having a devoted, full-time employee in the senior financial management position, required controls and record keeping were not properly established. Repeat Finding: No Recommendation: The Organization should establish procedures to ensure that controls related to matching are consistently implemented and that appropriate detail is received and reviewed to validate the cost of the in-kind match received to support the cost of match funds reported. Views of Responsible Officials: We concur with the recommendation, please see Corrective Action Plan.

2020-005 Compliance and Internal Controls over Procurement (Material Weakness) U.S. Department of Housing and Urban Development 14.267 ?Continuum of Care Program 2020 Funding Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR Section 200.320, the Organization must have and use documented procurement procedures for acquisition of property and services under a federal award or a sub-award. Condition: While the Organization has approved policies and procedures for procurement, these are not consistently followed and therefore no observable evidence was available to verify that these policies were applied in procurement of products and services. Cause: Majority of the purchases subject to potential procurement were from recurring vendors from prior years for whom documentation was not available at the Organization. For any new vendors, the policies were not applied consistently because of turnover of the grant accountant. Effect: Not following procurement policies may result in funds to be returned back to grantor and / or impact future funding. Questioned Costs: Undeterminable Perspective: As a result of grant accountant turnover and not having a devoted, full-time employee in the senior financial management position, required controls and record keeping were not properly established. Repeat Finding: No Recommendation: The Organization should establish procedures to ensure that controls related to procurement are consistently implemented and that all written records are maintained to support that the compliance requirement is met. Views of Responsible Officials: We concur with the recommendation, please see Corrective Action Plan.

2020-006 Compliance and Internal Controls over Period of Performance (Significant deficiency) U.S. Department of Housing and Urban Development 14.267 ?Continuum of Care Program 2020 Funding Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR Section 200.403 (g) and (h), the Organization?s expenditures must be adequately documented and incurred during the approved budget period, respectively. Condition: We noted that some of the expenditures did not have payment support and therefore proper period of performance could not be established. Cause: Turnover / inadequate staffing in the accounting department throughout the year and absence of a senior financial management position resulted in supporting documents not being maintained. Effect: Not having proper supports for expenditures or establishing that they were incurred in the budget period may result in funds to be returned back to grantor and / or impact future funding. Questioned Costs: $36,340 Perspective: Payment support was not available for 9 of the 60 samples selected for testing. Repeat Finding: Yes Recommendation: Management should establish procedures to ensure that controls related to disbursements are consistently implemented and that all supporting documents are maintained to support that the compliance requirement is met. Views of Responsible Officials: We concur with the recommendation, please see Corrective Action Plan.

2020-007 Internal Controls over Earmarking, Suspension and Debarment, Program Income and Special Tests and Provisions ? Reasonable Rental Rates (Material Weakness) U.S. Department of Housing and Urban Development 14.267 ?Continuum of Care Program 2020 Funding Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Condition: While the entity has adopted controls over compliance requirements related to earmarking, suspension and debarment, program income and special tests and provisions ? reasonable rental rates, these controls have not been consistently implemented during the year. Cause: Turnover / inadequate staffing in the Organization throughout the year and absence of a senior financial management position resulted in these controls not being consistently implemented. Effect: Without internal controls operating effectively, it is possible that the Organization would be at risk to be out of compliance with the compliance requirements. The Organization cannot effectively manage its federal program with controls that do not operate effectively. Questioned Costs: None Perspective: No observable evidence of controls being implemented consistently on the above compliance requirements because of turnover / inadequate staffing in the Organization and absence of a senior financial management position. Repeat Finding: Yes for program income and special tests and provisions ? reasonable rental rates. Recommendation: The Organization should establish procedures to ensure that controls related to earmarking, suspension and debarment, program income and special tests and provisions ? reasonable rental rates are consistently implemented. Views of Responsible Officials: We concur with the recommendation, please see Corrective Action Plan.

2019-001Finding - Eligibility of Program ParticipantsThe auditee did not provide Rent Schedules or Program Participant Files for 2018CriteriaCFR 24. Section 578.77 - Calculating occupancy charges and rent states:(a) Occupancy agreements and leases. Auditee signed occupancy agreements or leases (or subleases) with program participants residing in housing.(b) Calculation of occupancy charges. Auditee are not required to impose occupancy charges on program participants as a condition of residing in the housing. However, if occupancy charges are imposed, they may not exceed the highest of:(1) 30 percent of the family's monthly adjusted income (adjustment factors include the number of people in the family, age of family members, medical expenses, and child-care expenses);(2) 10 percent of the family's monthly income; or(3) If the family is receiving payments for welfare assistance from a public agency and a part of the payments (adjusted in accordance with the family's actual housing costs) is specifically designated by the agency to meet the family's housing costs, the portion of the payments that is designated for housing costs.(4) Income. Income must be calculated in accordance with 24 CFR 5.609 and 24 CFR 5.611(a). Auditee must examine a program participant's income initially, and if there is a change in family composition (e.g., birth of a child) or a decrease in the resident's income during the year, the resident may request an interim reexamination, and the occupancy charge will be adjusted accordingly.(c) Resident rent.(1) Amount of rent.(i) Each program participant on whose behalf rental assistance payments are made must pay a contribution toward rent in accordance with section 3(a)(1) of the U.S. Housing Act of 1937 (42 U.S.C. 1437a(a)(1)).(ii) Income of program participants must be calculated in accordance with 24 CFR 5.609 and 24 CFR 5.611(a).(2) Review. Auditee must examine a program participant's income initially, and at least annually thereafter, to determine the amount of the contribution toward rent payable by the program participant. Adjustments to a program participant's contribution toward the rental payment must be made as changes in income are identified.(3) Verification. As a condition of participation in the program, each program participant must agree to supply the information or documentation necessary to verify the program participant's income. Program participants must provide the recipient with information at any time regarding changes in income or other circumstances that may result in changes to a program participant's contribution toward the rental payment.ConditionThe auditee?s internal controls are inadequate to ensure eligibility of all program participants residing in housing. The calculation of occupancy charges and rent could not be review for eligibility. We could not verify program participant income nor whether income was verified for changes during the year.RecommendationsWe recommend that the auditee establish procedures to ensure eligibility or program participants.

2019-001Finding - Eligibility of Program ParticipantsThe auditee did not provide Rent Schedules or Program Participant Files for 2018CriteriaCFR 24. Section 578.77 - Calculating occupancy charges and rent states:(a) Occupancy agreements and leases. Auditee signed occupancy agreements or leases (or subleases) with program participants residing in housing.(b) Calculation of occupancy charges. Auditee are not required to impose occupancy charges on program participants as a condition of residing in the housing. However, if occupancy charges are imposed, they may not exceed the highest of:(1) 30 percent of the family's monthly adjusted income (adjustment factors include the number of people in the family, age of family members, medical expenses, and child-care expenses);(2) 10 percent of the family's monthly income; or(3) If the family is receiving payments for welfare assistance from a public agency and a part of the payments (adjusted in accordance with the family's actual housing costs) is specifically designated by the agency to meet the family's housing costs, the portion of the payments that is designated for housing costs.(4) Income. Income must be calculated in accordance with 24 CFR 5.609 and 24 CFR 5.611(a). Auditee must examine a program participant's income initially, and if there is a change in family composition (e.g., birth of a child) or a decrease in the resident's income during the year, the resident may request an interim reexamination, and the occupancy charge will be adjusted accordingly.(c) Resident rent.(1) Amount of rent.(i) Each program participant on whose behalf rental assistance payments are made must pay a contribution toward rent in accordance with section 3(a)(1) of the U.S. Housing Act of 1937 (42 U.S.C. 1437a(a)(1)).(ii) Income of program participants must be calculated in accordance with 24 CFR 5.609 and 24 CFR 5.611(a).(2) Review. Auditee must examine a program participant's income initially, and at least annually thereafter, to determine the amount of the contribution toward rent payable by the program participant. Adjustments to a program participant's contribution toward the rental payment must be made as changes in income are identified.(3) Verification. As a condition of participation in the program, each program participant must agree to supply the information or documentation necessary to verify the program participant's income. Program participants must provide the recipient with information at any time regarding changes in income or other circumstances that may result in changes to a program participant's contribution toward the rental payment.ConditionThe auditee?s internal controls are inadequate to ensure eligibility of all program participants residing in housing. The calculation of occupancy charges and rent could not be review for eligibility. We could not verify program participant income nor whether income was verified for changes during the year.RecommendationsWe recommend that the auditee establish procedures to ensure eligibility or program participants.

2019-003Schedule of Expenditure of Federal Awards (SEFA)CriteriaThe Auditee?s responsibility per the Uniform Guidance, section 200.508, is to ?prepare appropriate financial statements, including the schedule of expenditures of Federal awards?ConditionThe auditee?s internal controls are inadequate to ensure all federal program expenditures are identified and reported. The SEFA preparer relies on information from multiple departments which may or may not be complete.Effect of ConditionThe auditee?s SEFA did not contain complete information for amount of awards by CFDA, complete date of funding awards, one award did n=ot contain a CFDA number.RecommendationsWe recommend that the auditee establish procedures to test the completeness of the SEFA to ensure that all federal programs are included.

2019-004Condition:Temenos Community Development Corporation (TCDC) did not provide copies of the U. S. Housing and Urban Development?s contract or invoices. The vouchers were not signed by preparer and reviewed for completeness and accuracy by the supervisor.Criteria:Temenos Community Development Corporation (TCDC) policies and procedures states that invoices will be completed by the preparer, adequate documentation is attached supporting all cost requested for reimbursement, attach backup showing accounts that needs to be reclassified. Obtain approval and signatures from management. Two separate signature are required; the preparer and the approval by the supervisor before submission to funding agency. Authorized individuals must both print and sign their namesCause:During 2019 the TCDC had a high turn-over in the accounting department. Because of the high turnover vouchers could not be located by preparers or the manager.Effect:We could not determine whether invoices were submitted approved by management, submitted timely or were accurate.RecommendationsManagement should ensure that vouchers completed accurately, signed by preparer and reviewed by supervisor before submitting to HUD.

Schedule of Expenditures of Federal (SEFA)2019-005FindingThe auditee did not provide an accurate and complete SEFA for 2019CriteriaTitle 2 Subtitle A Chapter 2 Part 200 Subpart F (?200.508) includes the following auditee responsibilities?. (b) Prepare appropriate financial statements, including the schedule of expenditures of Federal awards in accordance with ?200.510 Financial statements Title 2 Subtitle A Chapter 2 Part 200 Subpart F (?200.510) includes the following auditee responsibilities. (b) The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with ?200.502 Basis for determining Federal awards expended. At a minimum, the schedule must:(1) List individual Federal programs by Federal agency. For a cluster of programs, provide thecluster name, list individual Federal programs within the cluster of programs, and provide theapplicable Federal agency name.(2) For Federal awards received as a subrecipient, the name of the pass-through entity andidentifying number assigned by the pass-through entity must be included.(3) Provide total Federal awards expended for each individual Federal program and the CFDAnumber or other identifying number when the CFDA information is not available. For a clusterof programs also provide the total for the cluster.(4) Include the total amount provided to subrecipients from each Federal program.(5) For loan or loan guarantee programs described in ?200.502 Basis for determining Federalawards expended, paragraph (b), identify in the notes to the schedule the balancesoutstanding at the end of the audit period. This is in addition to including the total Federalawards expended for loan or loan guarantee programs in the schedule.(6) Include notes that describe that significant accounting policies used in preparing theSchedule.Management is responsible for developing internal control procedures which provide reasonableassurance the auditee?s Schedule of Expenditures of Federal Awards (the Schedule) is complete andaccurate. Sound internal controls require a review of the Schedule be performed and documented toverify the information reported is complete and accurate before finalizing the Schedule.ConditionThe auditee?s internal controls are inadequate to ensure all federal program expenditures are identified and reported. The SEFA preparer relies on information from multiple departments which may or may not be complete. We requested the auditee?s 2018 SEFA. The SEFA did not list all Federal programs by CFDA number, did not provide total awards expended and CFDA number, did not include notes describing accounting procedures used in preparing the Schedule.Review of the auditee?s reconciliation of amounts reported in the SEFA and accompanying notes to the corresponding amounts reported in the financial statements used to prepare the SEFA could not be performed. We could not compare the SEFA to the prior year. We could not determine whether the SEFA is fairly presented in relation to the financial statement as a wholeRecommendationsWe recommend that the auditee establish procedures to prepare and accurately complete the SEFA in accordance with requirements