One Roof Community HousingNon-Profit

Federal Agency: U.S. Department of Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds Federal Assistance Listing Number: 21.027 Federal Award Identification Number and Year: N/A / SLFRP1191-2021 Pass-Through Agency: City of Duluth / St. Louis County Pass-Through Number(s): N/A Award Period: 7/7/2023 - 10 years from date certificate of completion is issued / 5/19/2021 - 12/31/2026 Type of Finding:  Material Weakness in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/portal/public/SAM/ (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition: During our testing we noted the Organization did not apply its suspension and debarment procedures for one contractor sampled as they did not perform nor retain adequate documentation in accordance with Uniform Guidance. Questioned Costs: N/A Context: Three out of three selections did not have any suspension/debarment procedures followed until after entering into the covered transaction. Cause: Management was aware of the suspension and debarment requirements dictated by the Uniform Guidance, however, did not follow their policy for either checking sam.gov or receiving a selfcertification from the contractor. Effect: Potential for the Organization to do business with entities that are suspended or debarred which is not allowed per Uniform Guidance. Repeat Finding: This is a repeat finding – see finding 2023-001. Recommendation: The Organization should ensure they follow their suspension and debarment policy. The Organization should ensure documents are retained to support whether suspension and debarment policies were followed for contractors in years past. Views of responsible officials and planned corrective actions: There are no disagreements with the audit finding. The Organization will ensure they follow their suspension and debarment policy moving forward and documentation is retained.

Criteria - Uniform Guidance requires that One Roof determine whether any individual or entity receiving federal funds is currently debarred, suspended, excluded, or disqualified by the Department of the Treasury, or any other Federal department or agency, and reported within 30 days. Based on this criteria, One Roof was required to determine whether vendors selected to complete the construction of the housing project known as Plover Place were debarred, suspended, excluded, or disqualified prior to making any payments to them. Condition - One Roof did not perform any procedures to determine whether vendors that were selected were currently debarred, suspended, excluded, or disqualified. Context - We tested a sample of the vendors selected for the construction of Plover Place. The results of our testing indicated that none of the vendors selected were suspended or debarred. Cause - One Roof personnel were not aware of this requirement. Effect - Disbursement of federal funds to a person or entity that is currently debarred or suspended could occur and not be reported. Failure to report such a disbursement may result in required repayment of the federal award received by One Roof and render One Roof ineligible to apply for additional federal awards in future funding rounds. Recommendation - We recommend that management implement a policy to test whether individuals or entities receiving funds are currently debarred or suspended, and to report the results if necessary. Auditee’s comments and response - One Roof is in the process of updating policies to include testing if individuals or entities that are vendors for One Roof are debarred or suspended. Responsible party for corrective action: Peter Krieger, Housing Development & Construction Director.

SECTION II - FINDINGS - FINANCIAL STATEMENTS AUDIT No matters were reported SECTION III ? FINDINGS AND QUESTIONED COSTS -MAJOR FEDERAL AWARD PROGRAM AUDIT 2022-001: Debarred, suspended, excluded, or disqualified individual or entity Federal Department: Department of the Treasury Assistance Listing #: 21.020 Internal Controls Material Weakness Category of Finding ? Procurement, Suspension, and Debarment Criteria - The CDFI grant agreements require that One Roof determine whether any individual or entity receiving any portion of assistance is currently debarred, suspended, excluded, or disqualified by the Department of the Treasury, or any other Federal department or agency, and report any funds awarded to these individuals or entities to CDFI within 30 days. Condition - One Roof currently does not perform any procedures to determine if a person or entity receiving any assistance is currently debarred or suspended. Context - We tested 4 loans funded using CDFI funds during the audit. The results of our testing indicated that none of these 4 loans were given to debarred or suspended individuals or entities. Cause - One Roof personnel were not aware of this requirement. Effect - Disbursement of CDFI assistance to a person or entity that is currently debarred or suspended could occur and not be reported. Failure to report such a disbursement may result in required repayment of assistance received by One Roof and render One Roof ineligible to apply for additional assistance from CDFI in future funding rounds. Recommendation - We recommend that management implement a policy to test whether individuals or entities receiving funds are currently suspended or debarred, and to report the results to CDFI in a timely manner. Auditee?s comments and response - One Roof is in the process of updating policies to include a process to determine if individuals or entities that apply for loans are debarred or suspended. Responsible party for corrective action: Jackie Kemp, Senior Director - Housing Programs

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