CLARE TOWERS, INC.

2019-001 Agency: U.S. Department of Housing and Urban Development CFDA Number: 14.181 Federal Program: Supportive Housing for Persons with Disabilities Statement of Condition: The Project did not have adequate and effective controls over compliance in place as it relates to procurement requirements of the Uniform Guidance. We noted that the Project does not have a written procurement policy that meets the requirements of the Uniform Guidance. Criteria: Uniform Guidance requires that controls are implemented to ensure the Project is in compliance with procurement requirements. Those requirements include (1) a written policy reflective of the purchase requirements, (2) implemented controls in place to ensure compliance with such a policy and (3) the Project follows the policy for all applicable procurements. Questioned Costs: No questioned costs were identified. Context: This finding appears to be a systematic problem. Effect: Inadequate controls over this area of compliance resulted in a policy that did not meet the requirements outlined in the Uniform Guidance. Cause: Management overlooked updating their procurement policy to be in compliance with the Uniform Guidance. Recommendation: We recommend management implement processes and controls to identify when policies and procedures require updates to be in compliance with the Uniform Guidance. Management should also update their procurement policy to be in compliance with the requirements of the Uniform Guidance Management's Response: Management agrees that the procurement policy in place did not meet the requirement. Management will correct and put proper procedures in place immediately.

Clare Towers, Inc. CORRECTIVE ACTION PLAN ?200.516 FOR THE YEAR ENDED June 30, 2019 Finding Number 2019-001 Planned Corrective Action Finding: During the 2019 fiscal year compliance audit the Project did not have adequate and effective controls over compliance in place as it relates to procurement requirements of the Uniform Guidance. We noted that the Project does not have a written procurement policy that meets the requirements of the Uniform Guidance. Corrective Response: Management agrees that the procurement policy in place did not meet the requirement. Management has already updated in the procurement policy and is currently being reviewed for compliance with the federal regulation. The procurement policy will be place and being utilized no later than 12/31/2019. Anticipated Completion Date 12/31/2019 Responsible Contact Person Executive Director