AccordNon-Profit

Lack of Review Category of Finding – Eligibility Condition – During 2022, Accord did not have controls in place to ensure that eligibility criteria calculations were being reviewed and/or approved by someone other than the individual making the initial determination or annual recertification. Criteria – The HOME Investment Partnership Program has income targeting requirements. Only low-income or very low-income persons as defined in 24 CFR section 92.2, can receive housing assistance. Therefore, the participating jurisdiction must determine if each family is income eligible by calculating the family's annual income, including all persons in the household. 2 CFR section 200.303 requires that organizations who receive federal awards establish and maintain effective internal controls over the federal award that provides reasonable assurance that the organization is managing the federal award in compliance with the federal statues, regulations, and terms and conditions of the award. It also states that controls should be in compliance with guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United State (the Green Book) or the Internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Illustrative specific design and implementation of control activities over eligibility include the following (excerpt from the Green Book): • Proper design of control activities to ensure program compliance should include a process for management to identify and put into effect actions need to carry out specific responses to risks identified in the risk assessment process such as providing benefits to ineligible individuals, calculating amounts to be received for or on behalf of individuals incorrectly, unauthorized changes to system configurations, fraud, unauthorized payments, etc. • Segregations of duties should exist between those determining a participant's eligibility and those reviewing/approving eligibility. Where segregation of duties is not practical, management should select and develop alternative control activities. • Management should establish responsibility and accountability for control activities with management (or other designated personnel) of the unit or function in which the relevant risks reside. Responsible personnel should perform control activities in a timely manner as defined by policies and procedures. Cause – Due to the limited number of staff employed by the Organization in the Housing department there is a lack of adequate segregation of duties in regard to review of eligibility calculations. Effect – By not having proper implementation of controls to ensure that certification/recertifications are reviewed and/or approved, there is a risk that individuals are allowed to either enter in the program when they are not eligible, or continue in the program after becoming ineligible. Questioned Costs – None. Recommendation – We recommend controls be put in place to ensure the eligibility determinations and rent calculations (initial or recertifications) be reviewed and/or approved by someone other than the individual making the determination. Management’s Response and Corrective Action – Management agrees with this finding. As of December 31, 2023, the Organization has sold all properties financed by HOME funds. Responsible party for corrective action: Robert Pickering, Chief Financial Officer Repeat Finding: This is a repeat finding. The finding was reported as 2022-001 in 2022.

Department of Housing and Urban Development AL #14.239 - HOME Investment Partnership Program Material Weakness 2022-001 Lack of Review Category of Finding ? Eligibility Condition ? During 2022, Accord did not have controls in place to ensure that eligibility criteria calculations were being reviewed and/or approved by someone other than the individual making the initial determination or annual recertification. Criteria ? The HOME Investment Partnership Program has income targeting requirements. Only low-income or very low-income persons as defined in 24 CFR section 92.2, can receive housing assistance. Therefore, the participating jurisdiction must determine if each family is income eligible by calculating the family's annual income, including all persons in the household. 2 CFR section 200.303 requires that organizations who receive federal awards establish and maintain effective internal controls over the federal award that provides reasonable assurance that the organization is managing the federal award in compliance with the federal statues, regulations, and terms and conditions of the award. It also states that controls "should" be in compliance with guidance in "standards for Internal Control in the Federal Government" issued by the Comptroller General of the United State (the Green Book) or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Illustrative specific design and implementation of control activates over eligibility include the following (excerpt from the Green Book): - Proper design of control activities to ensure program compliance should include a process for management to identify and put into effect actions need to carry out specific responses to risks identified in the risk assessment process such as providing benefits to ineligible individuals, calculating amounts to be received for or on behalf of individuals incorrectly, unauthorized changes to system configurations, fraud, unauthorized payments, etc. - Segregations of duties should exist between those determining a participant's eligibility and those reviewing/approving eligibility. Where segregation of duties is not practical, management should select and develop alternative control activities. - Management should establish responsibility and accountability for control activities with management (or other designated personnel) of the unit or function in which the relevant risks reside. Responsible personnel should perform control activities in a timely manner as defined by policies and procedures. Cause ? Due to the limited number of staff employed by the Organization in the Housing department there is a lack of adequate segregation of duties in regard to review of eligibility calculations. Effect ? By not having proper implementation of controls to ensure that certification/recertifications are reviewed and/or approved, there is a risk that individuals are allowed to either enter in the program when they are not eligible, or continue in the program after becoming ineligible. Questioned Costs ? None. Recommendation ? We recommend controls be put in place to ensure the eligibility determinations and rent calculations (initial or recertifications) be reviewed and/or approved by someone other than the individual making the determination. Management?s Response and Corrective Action ? Management agrees with this finding. Beginning in January 2022, management has contracted out the eligibility determination process to a third-party contractor with significant experience in affordable housing and similar processes. Management is working with the contractor to include a second individual in this process so that there will be a review performed by someone other than the individual making the initial determination or annual recertification. Responsible party for corrective action: Robert Pickering, Chief Financial Officer Ernest Johnson, Housing Associate Director Repeat Finding: This is a repeat finding. The finding was reported as 2021-001 in 2021.

Department of Housing and Urban Development AL #14.239 - HOME Investment Partnership Program Material Weakness 2021-001 Compliance and Controls over Compliance Category of Finding ? Eligibility Condition ? During 2020, Accord did not have controls in place to ensure that eligibility criteria and rent calculations were being reviewed and/or approved by someone other than the individual making the initial determination or annual recertification. Criteria ? The HOME Investment Partnership Program has income targeting requirements. Only low-income or very low-income persons as defined in 24 CFR section 92.2, can receive housing assistance. Therefore, the participating jurisdiction must determine if each family is income eligible by calculating the family's annual income, including all persons in the household. 2 CFR section 200.303 requires that organizations who receive federal awards establish and maintain effective internal controls over the federal award that provides reasonable assurance that the organization is managing the federal award in compliance with the federal statues, regulations, and terms and conditions of the award. It also states that controls "should" be in compliance with guidance in "standards for Internal Control in the Federal Government" issued by the Comptroller General of the United State (the Green Book) or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Illustrative specific design and implementation of control activates over eligibility include the following (excerpt from the Green Book): ? Proper design of control activities to ensure program compliance should include a process for management to identify and put into effect actions need to carry out specific responses to risks identified in the risk assessment process such as providing benefits to ineligible individuals, calculating amounts to be received for or on behalf of individuals incorrectly, unauthorized changes to system configurations, fraud, unauthorized payments, etc. ? Segregations of duties should exist between those determining a participant's eligibility and those reviewing/approving eligibility. Where segregation of duties is not practical, management should select and develop alternative control activities. ? Management should establish responsibility and accountability for control activities with management (or other designated personnel) of the unit or function in which the relevant risks reside. Responsible personnel should perform control activities in a timely manner as defined by policies and procedures. Cause ? During 2021, Accord hired a contractor to perform reviews of files to approve tenant eligibility before tenants moved in and at recertification in response to the finding in the 2020 Single Audit. However, based on inquiries of the housing department staff, this process was abandoned when it began to interfere with performing certifications and recertifications on a timely manner. Effect ? By not having proper implementation of controls to ensure that certifications/recertifications are reviewed and/or approved, there is a risk that individuals are allowed to either enter in the program when they are not eligible, or continue in the program after becoming ineligible. Questioned Costs ? None. Context ? A sample of four units were selected from a population of 47 units (26 vacant all year) for eligibility testing. No instances of non-compliance were noted, but none of the files were reviewed and/or approved by an individual other than the one making the eligibility determination. Subsequent to testing we were informed that the controls designed were not implemented for most of the year. Recommendation ? We recommend controls be put in place to ensure all re-certification are completed on a timely basis, documentation supporting eligibility is maintained, and that documentation is maintained showing all eligibility determination and rent calculations (initial or recertifications) are reviewed and/or approved by someone other than the individual making the determination. Management?s Response and Corrective Action ? Management agrees with this finding. Beginning in February 2022, management has contracted out the eligibility determination process to a third-party contractor with significant experience in affordable housing and similar processes. Responsible party for corrective action: Robert Pickering, Chief Financial Officer Ernest Johnson, Housing Associate Director Repeat Finding: This is a repeat finding. The finding was reported as 2020-002 in 2020.

Finding 2020-002 ? Compliance and Controls over Compliance ? Eligibility Home Investment Partnership Program, CFDA 14.239 Condition: During 2020, Accord did not complete the annual re-examinations for two of the eight tenants selected for testing. These annual re-examinations are used to verify the tenant meets the low income or very low-income designations as determined by HUD and also used to complete the rent calculations for the HOME-assisted units. Accord did not have controls in place to ensure these re-examinations were being completed on a timely basis, and that eligibility criteria and rent calculations were being reviewed and/or approved by someone other than the individual making the initial determination or annual recertification. Criteria: The Home Investment Partnership Program (the Program) has income targeting requirements. Only low-income or very low-income persons, as defined in 24 CFR section 92.2, can receive housing assistance (24 CFR section 92.1). Therefore, the participating jurisdiction must determine if each family is income eligible by determining the family's annual income, including all persons in the household, as provided for in 24 CFR section 92.203. Participating jurisdictions must maintain records for each family assisted (24 CFR section 92.508). 2 CFR section 200.303 indicates that the internal controls required to be established by a nonfederal entity receiving Federal awards ?should? be in compliance with guidance in ?Standards for Internal Control in the Federal Government,? issued by the Comptroller General of the United States (the Green Book) or the ?Internal Control Integrated Framework? (revised in 2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Illustrative specific design and implementation of control activities over eligibility include the following (excerpted from the Green Book): ? Proper design of controls activities to ensure program compliance should include a process for management to identify and put into effect actions needed to carry out specific responses to risks identified in the risk assessment process such as providing benefits to ineligible individuals, calculating amounts to be received for or on behalf of individuals incorrectly, unauthorized changes to system configurations, fraud, unauthorized payments, etc. ? Segregations of duties should exist between those determining a participant's eligibility and those reviewing/approving eligibility. Where segregation of duties is not practical, management should select and develop alternative control activities. ? Management should establish responsibility and accountability for control activities with management (or other designated personnel) of the unit or function in which the relevant risks reside. Responsible personnel should perform control activities in a timely manner as defined by policies and procedures. Cause: In years prior to 2019, there had been controls in place for the Director of Housing to review each individual?s file to verify that procedures were followed, eligibility criteria was met, and rent calculations were accurate prior to acceptance into the program, or during the annual recertification process. Per inquiries with the housing department staff, the Auditor determined that this control was not in place during 2019 and 2020. Management has engaged an outside consultant to assist in the review of file and train compliance staff, however the corrective action plan was not fully completed. Additionally, Accord had difficulties with completing the recertifications in 2020 due to the impacts of COVID-19. Questioned Costs: None Effect: By not having a proper implementation of controls to ensure that re-examinations are completed and reviewed and/or approved, there is a risk that individuals are allowed to continue in the program after becoming ineligible and that rent calculations do not determine the proper split between the tenant payment and the project rental assistance payment. Context: A sample of eight tenants were selected for audit from a population of 26 tenants for eligibility testing. The test found two instances of noncompliance. The 2020 re-examinations for one of these two tenants is currently in process, pending receipt of supporting documentation from the tenants. The 2020 re-examination for the other tenant was completed on March 11, 2021, which was after year end. The eligibility determination and rent calculations for these tenants for 2020 were based on the 2019 re-examinations. Our sample was determined to be a statistically valid sample. Repeat Finding of Immediate Prior Year: Yes Recommendation: We recommend controls be put in place to ensure all re-examinations are completed on a timely basis, documentation supporting eligibility is maintained, and that all eligibility determinations and rent calculations (initial or re-examinations) are reviewed and approved by someone other than the individual making the determination. View of Responsible Officials and Planned Corrective Actions: Management agrees with this finding. Refer to Accord's Corrective Action Plan on page 43 for further details.

2019-001 ? Controls over Eligibility Determination. CFDA 14.239 Home Investment Partnership Program Criteria: The Home Investment Partnership Program (the Program) has income targeting requirements. Only low-income or very low-income persons, as defined in 24 CFR section 92.2, can receive housing assistance (24 CFR section 92.1). Therefore, the participating jurisdiction must determine if each family is income eligible by determining the family's annual income, including all persons in the household, as provided for in 24 CFR section 92.203. Participating jurisdictions must maintain records for each family assisted (24 CFR section 92.508). 2 CFR section 200.303 indicates that the internal controls required to be established by a nonfederal entity receiving Federal awards ?should? be in compliance with guidance in ?Standards for Internal Control in the Federal Government,? issued by the Comptroller General of the United States (the Green Book) or the ?Internal Control Integrated Framework? (revised in 2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Illustrative specific design and implementation of control activities over eligibility include the following (excerpted from the Green Book): ? Proper design of controls activities to ensure program compliance should include a process for management to identify and put into effect actions needed to carry out specific responses to risks identified in the risk assessment process such as providing benefits to ineligible individuals, calculating amounts to be received for or on behalf of individuals incorrectly, unauthorized changes to system configurations, fraud, unauthorized payments, etc. ? Segregations of duties should exist between those determining a participant's eligibility and those reviewing/approving eligibility. Where segregation of duties is not practical, management should select and develop alternative control activities. ? Management should establish responsibility and accountability for control activities with management (or other designated personnel) of the unit or function in which the relevant risks reside. Responsible personnel should perform control activities in a timely manner as defined by policies and procedures. was being reviewed and/or approved by someone other than the individual making the initial determination or annual recertification. Context: In prior years, there had been controls in place for the Director of Housing to review each individual?s file to verify that procedures were followed and eligibility criteria was met prior to acceptance into the program, or during the annual recertification process. Per inquiries with the housing department staff, the Auditor determined that this control was not in place during 2019. Questioned Costs: None Cause: During 2019, Accord experienced significant turnover within its housing department. Effect: By not having a proper design of controls to ensure that eligibility determination is reviewed and/or approved, there is a risk that ineligible individuals are allowed into the program or individuals are allowed to continue in the program after becoming ineligible. Repeat Finding of Immediate Prior Year: No Recommendation: We recommend all eligibility determinations (initial or recertification) are reviewed and approved by someone other than the individual making the determination. View of Responsible Officials and Planned Corrective Actions: Management agrees with this finding. An outside consultant has been engaged to assist in the review of the files and train compliance staff to verify that tenant files contain the documentation to support eligibility requirements.