BOYSVILLE OF MICHIGAN INCNon-Profit

2025-001 Finding Type Material Weakness, Noncompliance – Procurement Federal Program COVID-19 Coronavirus State and Local Fiscal Recovery Funds, ALN #21.027 Criteria Pursuant to 2 CFR §200.320, federal funds must be managed in a manner that ensures full and open competition. The procurement method used for each transaction must be appropriate based on the dollar amount and conditions. Condition During our testing, we noted that the Organization did not obtain price quotes prior to selecting vendors whose expenditures exceeded the micro-purchase threshold. Cause This issue originated in the prior year and impacted various current year expenditures as well. The Organization has the proper procurement policies in place. However, due to a short timeframe for the project, an individual within the Organization’s management did not comply with the policy in an attempt to expedite the project’s completion. The Organization’s internal controls failed to detect and correct the noncompliance. The individual in management who made this decision is no longer employed at the Organization; therefore, documentation on the matter is insufficient and current management is unaware of the communications that occurred with the grantor concerning the timing of gathering price quotes and the necessity to expedite the process. Effect The Organization incurred expenditures of $159,595 that were not in compliance with procurement standards. Questioned Costs Known questioned costs - $159,595 Questioned costs were identified by the Organization as instances of noncompliance prior to the commencement of audit testing. We performed audit testing over a sample of 25 procurement transactions and did not identify any additional instances of noncompliance beyond those reported by the Organization.   Identification of a Repeat Finding This is a repeat finding from the prior year’s audit, finding number 2024-001. Recommendation We recommend that the Organization designate an additional responsible party who has knowledge of federal procurement requirements review all projects to ensure compliance. Additionally, all correspondence with the grantor regarding deviations from these requirements should be maintained, including evidence of grantor pre-approval. Response As noted in the corrective action plan, management agrees with this finding.

2024-001 Finding Type Material Weakness, Noncompliance Federal Program Coronavirus State and Local Fiscal Recovery Funds, ALN #21.027 Criteria Pursuant to 2 CFR §200.320, federal funds must be managed in a manner that ensures full and open competition. The procurement method used for each transaction must be appropriate based on the dollar amount and conditions. Condition During our testing, we noted that the Organization did not obtain price quotes prior to selecting a vendor whose expenditures exceeded the micro-purchase threshold. Cause The Organization has the proper procurement policies in place. However, due to a short timeframe for the project, an individual within the Organization’s management did not comply with the policy in an attempt to expedite the project’s completion. The Organization’s internal controls failed to detect and correct the noncompliance. The individual in management who made this decision is no longer employed at the Organization; therefore, documentation on the matter is insufficient and current management is unaware of the communications that occurred with the grantor concerning the timing of gathering price quotes and the necessity to expedite the process. Effect The Organization incurred expenditures of $182,483 that were not in compliance with procurement standards. Questioned Costs $182,483 Identification of a Repeat Finding This is not a repeat finding from the prior year’s audit. Recommendation We recommend the Organization has an additional responsible party who has knowledge of federal procurement requirements review all projects to ensure compliance. Additionally, all correspondence with the grantor regarding deviations from these requirements should be maintained, including evidence of grantor pre-approval. Response As noted in the corrective action plan, management agrees with this finding.

SECTION III FEDERAL AWARD AUDIT FINDINGS 2022-001 Finding Type Significant Deficiency Federal Program Emergency Solutions Grant Program, ALN #14.231 Criteria Pursuant to 2 CFR ?180, Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Covered transactions include contracts for goods and services that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR ?180.220. Condition During our testing, we noted that the Organization does not review the System for Award Management?s (SAM) Excluded Parties Listing prior to engaging in covered transactions with vendors. Cause There are no formal policies or procedures in place to review the SAM Excluded Parties Listing prior to procuring goods and services from vendors. Effect The Organization is at risk of procuring goods or services from a vendor that has been suspended or debarred by the Federal government. This could result in significant questioned costs. Identification of a Repeat Finding This is not a repeat finding from the prior year?s audit. Questioned Costs None. Recommendation We recommend management establish procedures to ensure that suspension and debarment exclusion verifications are performed prior to engaging in covered transactions with vendors. These procedures should include reviewing the SAM Excluded Parties Listing prior to adding a new vendor to the accounting system, as well as annually for any recurring vendors with procurement transactions equaling or exceeding $25,000. Response Management will implement a new policy to ensure that suspension and debarment exclusion verifications are performed prior to engaging in covered transactions with vendors.

SECTION III FEDERAL AWARD AUDIT FINDINGS 2021-002 Finding Type Material Weakness Federal Program Continuum of Care Program, ALN #14.267 Criteria Pursuant to 2 CFR ?200.334, financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a federal award must be retained for a period of three years from the date of submission of the final expenditure report. An effective system of internal control over compliance retains this documentation to substantiate compliance with the federal award. Condition During our testing, we noted that tenant lease agreements were not retained by the Organization and were instead provided by either the landlord or the non-profit organization who assumed the program on December 31, 2021, as discussed below. Cause On December 31, 2021, Holy Cross Services, Inc. transferred its Continuum of Care program funds to another non-profit organization. At this time, all tenant files were given to the non-profit organization, with no copies being retained by Holy Cross Services, Inc. During the audit, there was difficulty retrieving these files from the non-profit organization for various tenants, so the landlord?s provided the lease agreements instead. Effect Failure to properly retain federal program documentation could result in amounts being subject to disallowance if the files could not be retrieved from other external parties. Identification of a Repeat Finding This is not a repeat finding from the prior year?s audit. Questioned Costs None. Recommendation We recommend the Organization retain copies of all federal program documentation to ensure proper support can be easily retrieved for audit purposes. Response Management believes this was a one-time occurrence related to the transfer of the program to another non-profit organization. Management will implement a new record retention policy to ensure that if another program is transferred, copies of relevant documentation will be maintained.

CFDA Number, Federal Agency, and Program Name - 10.553 and 10.555 - Child Nutrition Cluster Federal Award Identification Number and Year - 460008001 Pass-through Entity - Michigan Department of Education Office of Health and Nutrition Services Finding Type - Material weakness Repeat Finding - No Criteria - Per 2 CFR 200.510(b), the auditee must also prepare a schedule of expenditures of federal awards (SEFA) 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. Condition - Controls in place did not ensure the SEFA was complete and accurate. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Expenditures of approximately $93,000 related to the child nutrition cluster were improperly excluded from the SEFA as of September 30, 2019. The SEFA was subsequently adjusted to include the expenditures. The exclusion of the expenditures from the SEFA impacted major program determination. Cause and Effect - Controls in place did not identify expenditures awarded under the child nutrition cluster as federally funded and, as a result, these expenditures were improperly omitted from the SEFA. An adjustment was required to be made to increase federal expenditures per the SEFA by approximately $93,000. Recommendation - We recommend the Organization review its procedures and controls to ensure data accumulated to prepare the SEFA is accurate and complete. Views of Responsible Officials and Corrective Action Plan - The Organization will ensure all SEFA account reconciliations are performed and documented as reviewed in a timely manner. All calculations will be reviewed and approved my management on a consistent and timely basis.