THE PEREGRINE FUND, INC.Non-Profit

Finding 2025-001 Subrecipient Monitoring (Significant Deficiency) Information on the Federal Programs: Fish and Wildlife Cluster Criteria or Specific Requirement: Under 2 CFR 200.332, pass-through entities are required to evaluate each subrecipient’s risk of noncompliance to determine the appropriate monitoring, monitor subrecipient activities as necessary to ensure compliance with Federal requirements, and verify whether subrecipients that meet the Federal expenditure threshold have obtained a Single Audit. These responsibilities include performing and documenting a subrecipient risk assessment, conducting monitoring activities based on the assessed risk, and obtaining, reviewing, and following up on subrecipient Single Audit reports when applicable. Condition: The Organization does not maintain written policies or procedures that address required subrecipient monitoring activities. The Organization does not perform or document a risk assessment of subrecipients to evaluate their risk of material noncompliance and does not have monitoring procedures that correspond to an assessed level of risk. Additionally, the Organization does not have a policy or consistent practice for determining whether subrecipients are subject to Uniform Guidance Subpart F Single Audit requirements, nor does it obtain or review Single Audit reports from subrecipients that meet the required threshold. Cause: This condition exists because the Organization has not established formal internal controls or written procedures to ensure compliance with all Federal requirements related to subrecipient monitoring. Effect or Potential Effect: As a result, the Organization is not fully compliant with the requirements of 2 CFR 200.332, and there is an increased risk that subrecipient noncompliance may occur and remain undetected. The absence of appropriate risk assessment and monitoring procedures increases the likelihood that programmatic or financial issues at the subrecipient level could go unidentified. Failure to obtain and review required Single Audit reports also increases the risk that audit findings, questioned costs, or other compliance concerns may not be addressed by the Organization in a timely manner. Although no questioned costs were identified during our audit, the control deficiencies described above increase the risk of future questioned costs. Questioned Costs: N/A. Context: This finding was noted during our review of the Organization’s subrecipient monitoring practices and reflects a systemic lack of documented policies and procedures governing the required elements of risk assessment, monitoring, and Single Audit verification. Identification as a Repeat Finding, if Applicable: No. Recommendation: We recommend that the Organization develop and implement comprehensive written subrecipient monitoring policies and procedures that align with 2 CFR 200.332. These procedures should include conducting and documenting a risk assessment for each subrecipient, establishing monitoring activities that are responsive to the level of assessed risk, and implementing a process to determine whether subrecipients are required to obtain a Single Audit and to obtain, review, and follow up on those audit reports as necessary. Establishing these controls will help ensure compliance with Federal requirements and reduce the risk of undetected noncompliance at the subrecipient level.

Finding 2024-003 Procurement, Suspension and Debarment (Significant Deficiency) Information on the Federal Programs: Assistance Listing #15.657 Criteria or Specific Requirement: § 200.318 (i) General procurement standards, states that the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Furthermore: §200.320 (f) Methods of procurement to be followed, states that procurement by noncompetitive proposals is procurement through solicitation of a proposal from only one source and may be used only when certain requirements have been met. Additionally, §200.213 Reporting a determination that a non-Federal entity is not qualified for a Federal award states that non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The non- Federal entity must verify that the person with whom you intend to do business is not excluded or disqualified, by (a) checking SAM Exclusions; (b) collecting a certification from that person; (c) adding a clause or condition to the covered transaction with that person.Condition: During our audit, we noted contractual relationships under the Federal awards for which evidence of procurement procedures and documentation of SAM Exclusion checks were unavailable for our inspection. It is our understanding that some contracts were procured under noncompetitive (sole source) justification. However, in certain instances we were unable to review documentation detailing the history and rationale of the procurements. Cause: The Organization's processes in place during 2024 did not provide for the formalization and retention of procurement records and vendor screenings consistent with the expectations outlined in 2 CFR 200. Additionally, the Organization does not have a formal policy in place related to contractor screenings under CFR §200.213. Effect or Potential Effect: Purchases of goods and services could be made above the prevailing market rates if the prescribed procurement procedures are not adhered to. Additionally, the Organization may have inadvertently selected noncompetitive proposals method when the circumstances did not meet the requirements noted in § 200.320 (f) Methods of procurement to be followed, and thereby failing to administer full and open competition as required by the regulations. Finally, the Organization could inadvertently enter into a contractual relationship with an entity that is suspended, debarred or otherwise included on the US Federal sanction list. Questioned Costs: N/A Context: The Organization failed to adhere to its procurement policy, and hence, noncompliance with Federal standards. Our audit work in this area consisted of internal control testwork over a random sample of expenditures. We consider our samples to be representative of the respective populations, and thus, are statistically valid samples. Identification as a Repeat Finding, if Applicable: Yes, continuation of Finding 2023-003 Recommendation: We then recommend that the Organization ensure its policy is distributed and communicated in a formal manner to its employees, and that management properly enforce compliance with its policy. All procurement actions should be clearly documented in writing and maintained in the vendor or contractor files. We also recommend that the Organization enhance its existing policy related to noncompetitive procurement to ensure include the five specific circumstances in which noncompetitive procurement can be used under CFR 200.320. Additionally, we recommend that the Organization enhance its policies to include screening procedures related to 200.213 Reporting a determination that a non-Federal entity is not qualified for a Federal award.

Information on the Federal Programs: Assistance Listing #15.657 Criteria or Specific Requirement: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, paragraph 318 “General procurement standards” states that the non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards. Furthermore, paragraph 319 “Competition” states that all procurement transactions must be conducted in a manner providing full and open competition consistent with these standards. Condition: During 2023, the Organization developed a procurement policy, which requires full and open competition for purchases of goods and services of $10,000 or greater. During our audit, we noted contractual relationships for which evidence of procurement procedures was unavailable for inspection. Cause: The Organization did not adhere to its procurement policy in that it failed to perform the prescribed procurement procedures throughout the fiscal year. Effect or Potential Effect: Purchases of goods and services could be made above the prevailing market rates if the prescribed procurement procedures are not adhered to, and thus, there lies the potential that the Organization will not receive the best value for its purchases. The procurement process should also allow for an evaluation of potential conflicts of interest with prospective vendors and contractors. Furthermore, failure to perform the proper procurement procedures could result in disallowance of federal expenditures based on lack of fair competition. Questioned Costs: Indeterminable Context: The Organization failed to adhere to its procurement policy, and hence, noncompliance with Federal standards. Our audit work in this area consisted of internal control testwork over a random sample of expenditures. We consider our samples to be representative of the respective populations, and thus, are statistically valid samples. Identification as a Repeat Finding, if Applicable: Not applicable Recommendation: We then recommend that the Organization ensure its policy is distributed and communicated in a formal manner to its employees, and that management properly enforce compliance with its policy. All procurement actions should be clearly documented in writing and maintained in the vendor or contractor files.

Section III - Federal Award Findings and Questioned Costs 2021-002 Direct Programs ? Department of Interior CFDA# 15.657 Award # F15AC00414 California Condor Restoration Reporting Significant Deficiency in Internal Control over Compliance Criteria: 2 CFR Section 200.514(c) states that the Organization must have internal controls over reporting. Condition: During our internal control testing over reporting, we noted 2 performance reports were not reviewed. Cause: The Organization?s existing control procedures for ensuring performance reports were reviewed was not strong enough to ensure that the performance reports were reviewed. Effect: The Organization had no documentation of approval over performance reports by an employee above the grant manager. Questioned Costs: None Reported Context/Sampling: A statistical sample of 2 of 6 performance reports were selected for testing. Repeat Finding from Prior Year: No Recommendation: The Organization should review the current control process over review of performance reports to ensure that information submitted for reporting is accurate. Views of Responsible Officials: The Organization agrees with the finding.

2019-001 Direct Programs ? Department of Interior CFDA# 15.608 Award # F15AC00414 California Condor Restoration Activities Allowed or Unallowed & Allowable Costs/Principles Significant Deficiency in Internal Control over Compliance Criteria: 2 CFR Section 200.514(c) states that the Organization must have internal controls over Federal award expenditures. Condition: During our internal control testing over allowable costs we noted 6 instances where a supervisor or manager level employees had no documentation of approval of time charged to this program. Cause: The Organization?s existing control procedures for ensuring timesheets were approved was not strong enough to ensure that time charged to this grant was approved. Effect: The Organization had no documentation of approval over timesheets for supervisors and manager level employees. Questioned Costs: None Reported Context/Sampling: A statistical sample of 32 out of 180 program expenses comprising $45,183 of $329,358 total expense were selected for testing. Repeat Finding from Prior Year: No Recommendation: The Organization should review the current control process over review of supervisor and manager level employee?s payroll to ensure that time charged to the grant is reviewed and approved. Views of Responsible Officials: The Organization agrees with the finding.

2019-002 Direct Programs ? Department of Interior CFDA# 15.608 Award # F15AC00414 California Condor Restoration Procurement, Suspension & Debarment Significant Deficiency in Internal Control over Compliance Criteria: 2 CFR Section 215.43 states that the Organization must have police and procedures that comply with the Uniform Grant Guidance procurement, suspension, and debarment requirements. Condition: During our review of the Organization?s policies over procurement, suspension, and debarment we noted that the policy was not in compliance with 2 CFR Section 215.43. Cause: The Organization?s existing control procedures over procurement, suspension, and debarment were not updated to meet the new requirements. Effect: The Organization?s procurement, suspension, and debarment policy is not in compliance with 2 CFR Section 215.43. Questioned Costs: None Reported Context/Sampling: No sample was used. Repeat Finding from Prior Year: No Recommendation: The Organization should review the current control process over review of their procurement, suspension, and debarment policies to ensure they are in line with 2 CFR Section 215.43. Views of Responsible Officials: The Organization agrees with the finding.