Hannas House

Finding SA 2024-001 Reporting: Untimely Submissions of Standard Form Performance Progress Report (SF PPR) and Standard Form Federal Financial Report (SF 425) (Significant Deficiency) Federal Program Information Assistance Listing Number: 93.676 Federal Program Title: Unaccompanied Children Program Federal Agency: U.S. Department of Health and Human Services Passed Through Entity: Not Applicable Federal Award Numbers: 90ZU0440-02-00, 90ZU0440-02-01 and 90ZU0440-03-00 Project Name: Residential Shelter and or Transitional Foster Care Services for Unaccompanied Children Licensed and Texas Exempt and Florida delicensed only Compliance Requirement: Reporting Criteria Per the requirements of Assistance Listing Number 93.676, Unaccompanied Children Program, and as outlined in the OMB Compliance Supplement and the Notice of Award (NoA), recipients must submit the SF PPR (Program Progress Report) and SF 425 (Federal Financial Report) on a quarterly basis for each budget period. The SF PPR must include programmatic information for the applicable period, with a cumulative final report due within 90 days after the end of the project period, including any authorized extension periods. The SF 425 must reflect the financial activity for the reporting period and be submitted within the prescribed deadlines. All required SF PPR and SF 425 reports must be submitted electronically in GrantSolutions and Payment Management System (PMS) site, respectively, as specified in the NoA. Condition The Organization submitted five SF PPR and four SF 425 reports beyond the due dates. The Organization indicated that the annual SF PPR report was submitted on time on September 30, 2024. However, supporting email correspondence could not be located. Accordingly, the submission date in this finding reflects the date the report was later uploaded to the GrantSolutions website which is September 29, 2025. Per inquiry with Patrick Rajasingam, Director of Development, for the SF 425 reports for Q1 and Q2 of 2024, the Organization was unable to certify submissions due to a system issue within the PMS. The Organization maintained ongoing correspondence with both the grantor and PMS administrators between June 2023 and February 2024 to document the issue. Once the certification function was restored in September 2024, the Organization promptly submitted the outstanding reports. Copies of the related email communications have been provided for auditor review. For the remaining reports, delays were primarily due to additional time required for compiling, reconciling, and reviewing the programmatic and financial information prior to submission. Effect Failure to comply with the required reporting deadlines increases the risk of delayed, restricted, or reduced federal funding. Noncompliance with these requirements may also affect the Organization’s eligibility for future federal awards. Questioned Costs None Recommendation We recommend that the Organization improve its reporting process by setting earlier internal deadlines, keeping clear records of communications with the grantor and system administrators, and requesting waivers when delays are caused by system issues outside the Organization’s control. These steps will help ensure reports are submitted on time and in line with Compliance Supplement and the NoA requirements. Views of responsible officials and planned corrective actions Management acknowledges the importance of timely and accurate federal reporting and recognizes that system barriers and internal processes must be addressed to ensure compliance. They are committed to maintaining proactive communication with federal partners and implementing internal controls to prevent recurrence. The following are the planned correction actions from the Organization: • Establish a comprehensive reporting calendar with automated reminders to ensure all deadlines are met. • Assign multiple staff with responsibility for report submissions to provide redundancy. • Conduct quarterly compliance reviews by finance and executive leadership to verify timely reporting. Personnel responsible for implementation: Connie Franks, Chief Executive Officer and Aaliyah Rajasingam, Chief Operating Officer Date of implementation: September 23, 2025 – All corrective actions are effective immediately and will ensure consistent compliance with federal reporting requirements going forward.

Finding SA 2023-001 Absence of a System in the Preparation of Schedule of Expenditures of Federal Awards (SEFA) Criteria: The following sections of the Uniform Guidance provide the following requirements: Section §200.510 (b) Schedule of Expenditures of Federal Awards; 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). While not required, the auditee may choose to provide the information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. For example, when a Federal program has multiple Federal award years, the auditee may list the amounts of Federal awards expended for each Federal award year separately. At a minimum, the schedule must: • List individual Federal programs by Federal agency. For a cluster of programs, provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. • Provide the Federal awards expended for each individual Federal program and the Assistance Listings number or other identifying number when the Assistance Listings information is not available. For a cluster of programs also provide the total for the cluster. Section 200.303: The non-federal entity should establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal Award. Section 200.1 defines internal control for non-Federal entities as the processes designed and implemented by non-Federal entity to provide reasonable assurance regarding the achievement of the objectives in the following categories: (i) Effectiveness and efficiency of operations; (ii) Reliability of reporting for internal and external use Condition During the audit, we noted that Hannas House does not have a system in place to prepare an accurate and complete SEFA. The internal financial records and documentation of the Organization did not clearly distinguish between federal and non-federal expenditures for 4 out of 5 federal programs, representing 6% of the total federal expenditures. As a result, additional audit procedures, which included sending confirmation letters to grantors, were necessary to compile an accurate SEFA for financial statement reporting purposes. Cause/Effect The absence of a properly prepared SEFA increases the risk of noncompliance with federal requirements. This could lead to incomplete or inaccurate reporting of federal expenditures exposing the Organization to potential sanctions. Questioned Costs None Recommendation We recommend that the Organization develop and implement a formal system to ensure accurate and reliable information are readily available for preparing a complete and compliant SEFA. The accounting system should be designed to properly track federal expenditures separately from non-federal expenditures to facilitate easy identification and aggregation of federal award information. Employees should receive proper training on the requirements of the Uniform Guidance to ensure compliance with SEFA preparation standards. Views of Responsible Personnel and Planned Corrective Actions: The Organization’s Accounting Department, under the direction of the Chief Executive Officer, Connie Franks will ensure that federal grants received are clearly delineated on the trial balance through a clear description that the source of funds is from a federal source and that the related expenditures are clearly identified from other expenditures on the trial balance for properly preparation of SEFA. Completion of the referenced corrective action will be implemented by January 2025.

Finding SA 2023-002 Reporting: Late Submission of Single Audit Reporting Package Criteria Per 2 CFR §200.508(a) and §200.512(a) of the Uniform Guidance, entities that expend $750,000 or more in federal awards in a fiscal year must arrange for an audit in accordance with 2 CFR 200.509 and submit the Single Audit reporting package to the Federal Audit Clearinghouse (FAC) no later than nine months after the end of the fiscal year or 30 days after the receipt of the audit report, whichever is earlier. Timely submission is critical to ensure compliance with federal requirements and continued eligibility for federal funding. Condition The Organization did not submit the Single Audit reporting packages for the 2022 and 2023 audits within the required reporting timeline. Cause/Effect The late submission was due to delays in the Organization’s financial closing process. This non-compliance with the Uniform Guidance may result in the imposition of penalties and/or unnecessary costs. Questioned Costs None Recommendation We recommend that the Organization strengthen its internal controls over its financial accounting and reporting process to ensure consistent compliance with the Uniform Guidance. Views of responsible officials and planned corrective actions: The Organization’s Accounting Department, under the direction of the Chief Executive Officer, Connie Franks will ensure that there’s proactive communication, dedicated resource allocation, and regular status checks on the deadline. He should ensure everyone involved understands the deadlines and responsibilities to avoid any delays. Completion of the referenced corrective action will be implemented by January 2025.