Simpson Housing Services, Inc.Non-Profit

Federal Departments: All departments Assistance Listing #: All programs Internal Controls Significant Deficiency & Compliance Category of Finding – Reporting Criteria - Pursuant to 2 CFR section 200.512(a), the reporting package shall be submitted within the earlier of 30 days after receipt of the auditor's report(s), or nine months after the end of the audit period. Condition - Simpson did not submit the Single Audit Reporting Package for the year ended June 30, 2022 within nine months after the end of the audit period (March 31, 2023). Cause - Simpson faced turnover and short staffing within the accounting department during fiscal year 2022. As a result, the audit was not completed until after the March 31, 2023 deadline. Effect - Failure to submit the required Single Audit Reporting Package timely automatically results in Simpson not qualifying for low-risk auditee status for the subsequent year's Single Audit. Recommendation - We recommend that Simpson develop, document, and implement policies and procedures for to ensure timely submission of the Single Audit Reporting Package.

2022-003 Department of Housing and Urban Development Emergency Solutions Grants Program, Federal Financial Assistance Listing 14.231 Procurement, Suspension, and Debarment Material Weakness in Internal Control Over Compliance Grant Award Number: Affects all grant awards included under Federal Financial Assistance Listing 14.231 on the Schedule. Criteria: 2 CFR Part 200 (Uniform Guidance) requires that a non-federal entity must use its own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procedures conform to applicable federal law and standards. Condition: The Organization has documented procurement procedures that conform to applicable federal standards; however, the procedures were not followed regarding maintaining documentation of obtaining three bids for simplified acquisition small purchases and the conclusion as to which item was selected. In addition, the Organization was not testing vendors for suspension and debarment. Cause: The Organization did not have adequate internal controls in place to ensure that the processes laid out in their procurement policy were followed. Effect: The best price for the purchase may not have been obtained and payments could be made to recipients who were suspended or debarred. Questioned Costs: None reported Context/Sampling: A nonstatistical sample of 45 transactions were selected for testing. Required documentation related to procurement was not maintained for multiple items selected which totaled federal expenditures of $3,039. The total dollar amount of the sample was $24,208. Repeat Finding from Prior Year(s): Yes, Finding #2021-004 Recommendation: We recommend the Organization enhance internal control to ensure all transactions under federal awards follow their written procurement policy and suspension and debarment verification procedures are performed prior to entering into the transactions. Views of Responsible Officials: Management agrees with the finding.

2022-004 Department of Housing and Urban Development Emergency Solutions Grants Program, Federal Financial Assistance Listing 14.231 Earmarking Significant Deficiency in Internal Control Over Compliance Grant Award Number: Affects all grant awards included under Federal Financial Assistance Listing 14.231 on the Schedule. Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: For the two earmarking calculations, there was no formal documentation of a secondary review of the earmarking calculation. Cause: The Organization has designed internal controls over this area; however, the controls were not performed. Effect: The condition may affect the Organization?s ability to support compliance with earmarking requirements. Questioned Costs: None reported. Context/Sampling: Two earmarking calculations out of two were selected for testing for the program. Repeat Finding from Prior Year(s): Yes, Finding #2021-009 Recommendation: We recommend the procedures related to earmarking be reviewed with applicable program employees to ensure proper documentation and review is properly supported and the documentation is retained. Views of Responsible Officials: Management agrees with the finding.

2021-004 Department of Housing and Urban Development Continuum of Care Program, Federal Financial Assistance Listing/CFDA 14.267 Emergency Solutions Grants Program, Federal Financial Assistance Listing/CFDA 14.231 Procurement, Suspension, and Debarment Material Weakness in Internal Control Over Compliance Grant Award Number: Affects all grant awards included under Federal Financial Assistance Listing/CFDA 14.267 and 14.231 on the Schedule. Criteria: 2 CFR Part 200 (Uniform Guidance) requires that a non-federal entity must use its own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procedures conform to applicable federal law and standards. Condition: The Organization has documented procurement procedures that conform to applicable federal standards; however, the procedures were not followed regarding maintaining documentation of obtaining three bids for simplified acquisition small purchases and the conclusion as to which item was selected. In addition, the Organization was not testing vendors for suspension and debarment. Cause: The Organization did not have adequate internal controls in place to ensure that the processes laid out in their procurement policy were followed. Effect: The best price for the purchase may not have been obtained and payments could be made to recipients who were suspended or debarred. Questioned Costs: None reported Context/Sampling: For Federal Financial Assistance Listing/CFDA 14.267, a nonstatistical sample of 60 transactions out of 652 total transactions were selected for testing. Required documentation related to procurement was not maintained for 20 of the items selected which totaled federal expenditures of $2,512.15. The total dollar amount of the sample was $6,310. For Federal Financial Assistance Listing/CFDA 14.231, a nonstatistical sample of 40 transactions out of 774 total transactions were selected for testing. Required documentation related to procurement was not maintained for two of the items selected which totaled federal expenditures of $321. The total dollar amount of the sample was $29,644. Repeat Finding from Prior Year(s): Yes Recommendation: We recommend the Organization enhance internal control to ensure all transactions under federal awards follow their written procurement policy and suspension and debarment verification procedures are performed prior to entering into the transactions. Views of Responsible Officials: Management agrees with the finding.

2021-005 Department of Housing and Urban Development Continuum of Care Program, Federal Financial Assistance Listing/CFDA 14.267 Matching, Earmarking Significant Deficiency in Internal Control Over Compliance Grant Award Number: Affects all grant awards included under Federal Financial Assistance Listing/CFDA 14.267 on the Schedule. Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: For the three matching submissions and earmarking calculations, there was no formal secondary review of the matching and earmarking documentation prior to submission, and one of the submissions did not meet the matching requirement. Cause: The Organization has designed internal controls over this area; however, the controls were not performed. Effect: The condition may affect the Organization?s ability to support compliance with matching and earmarking requirements. Questioned Costs: $1,664 Context/Sampling: Three matching submissions and earmarking calculations out of three were selected for testing for the program. Repeat Finding from Prior Year(s): No Recommendation: We recommend the procedures related to matching be reviewed with applicable program employees to ensure the control process is properly supported and the documentation is retained and matching requirements are met. Views of Responsible Officials: Management agrees with the finding.

2021-006 Department of Housing and Urban Development Continuum of Care Program, Federal Financial Assistance Listing/CFDA 14.267 Special Tests and Provision Significant Deficiency in Internal Control Over Compliance Grant Award Number: Affects all grant awards included under Federal Financial Assistance Listing/CFDA 14.267 on the Schedule. Criteria: In accordance with the CFDA 14.267 Special Tests and Provision, rent paid to landlords for participants under the program must be reasonable in relation to rents being charged in the area for comparable space and may not exceed rents currently being charged by the same landlord for comparable unassisted space. Condition: The Organization did not perform participant rent reasonableness assessments in a timely manner or maintain evidence of a review of the assessments in all cases. Cause: The Organization did not have adequate internal controls in place to ensure that rent reasonableness assessments were performed prior to the participant signing the lease. This assessment process was impacted by the coronavirus pandemic. It is important to note that the assessments were completed but were not completed prior to the participant signing the lease. Effect: Rent paid to landlords on behalf of participants may have been higher in comparison to other rental properties in a similar area during the period the reasonableness assessment was not completed. Questioned Costs: None reported Context/Sampling: A nonstatistical sample of 10 participants out of 47 participants were selected for special testing and provisions testing. There was one participant where the review was not completed timely and where there was not documented evidence of the review. Repeat Finding from Prior Year(s): Yes Recommendation: We recommend the Organization enhance internal controls to ensure all rent reasonableness forms are completed prior to participants signing the lease. Views of Responsible Officials: Management agrees with the finding.

2021-007 Department of Housing and Urban Development Continuum of Care Program, Federal Financial Assistance Listing/CFDA 14.267 Period of Performance Significant Deficiency in Internal Control Over Compliance Grant Award Number: Affects all grant awards included under Federal Financial Assistance Listing/CFDA 14.267 on the Schedule. Criteria: Internal control procedures should ensure that the expenditures are reviewed to make sure they are in the correct period of performance and that documentation of the review and approval is maintained. Condition: The Organization has an internal control process designed to review and approve the expenditures in the proper period of performance, but the controls were not performed as designed. Cause: The controls in place were not performed as designed and did not have documentation that the invoices were approved. Effect: Eight of the expenditures tested did not have documentation of the approval. Questioned Costs: None reported Context/Sampling: A nonstatistical sample of 60 participants out of 1,389 expenditures were selected for period of performance testing. There were eight expenditures where there was no documented evidence of the review. Repeat Finding from Prior Year(s): No Recommendation: We recommend the procedures related to period of performance be reviewed with applicable program employees to ensure the control process is properly supported and the documentation is retained. Views of Responsible Officials: Management agrees with the finding.

2021-008 Department of Housing and Urban Development Emergency Solutions Grants Program, Federal Financial Assistance Listing/CFDA 14.231 Allowable Activities and Costs Significant Deficiency in Internal Control Over Compliance Grant Award Number: Affects all grant awards included under Federal Financial Assistance Listing/CFDA 14.231 on the Schedule. Criteria: Internal control procedures should ensure the correct hazard pay is paid to employees. Condition: There was no formal documentation of review and approval of hazard pay to employees in the program. Cause: The Organization has designed internal controls over this area; however, the controls were not performed. Effect: The condition could cause the Organization to not be in compliance with allowable activities and costs requirements. Questioned Costs: N/A Context/Sampling: A nonstatistical sample of three months out of 12 were selected for testing. Repeat Finding from Prior Years: No Recommendation: We recommend management revise their internal controls to make sure management is maintaining proper documentation for hazard pay paid to employees in the program. Views of Responsible Officials: Management is in agreement with this finding.

2021-009 Department of Housing and Urban Development Emergency Solutions Grants Program, Federal Financial Assistance Listing/CFDA 14.231 Earmarking Significant Deficiency in Internal Control Over Compliance Grant Award Number: Affects all grant awards included under Federal Financial Assistance Listing/CFDA 14.231 on the Schedule. Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: For the three earmarking calculations, there was no formal documentation of a secondary review of the earmarking calculation. Cause: The Organization has designed internal controls over this area; however, the controls were not performed. Effect: The condition may affect the Organization?s ability to support compliance with earmarking requirements. Questioned Costs: N/A Context/Sampling: Three earmarking calculations out of three were selected for testing for the program. Repeat Finding from Prior Year(s): No Recommendation: We recommend the procedures related to earmarking be reviewed with applicable program employees to ensure proper documentation and review is properly supported and the documentation is retained. Views of Responsible Officials: Management agrees with the finding.

Department of Housing and Urban Development Continuum of Care Program, CFDA 14.267 Procurement, Suspension, and Debarment Material Weakness in Internal Over Compliance Grant Award Number: Affects all grant awards included under CFDA 14.267 on the Schedule of Expenditures of Federal Awards. Criteria: 2 CFR Part 200 (Uniform Guidance) requires that a non-Federal entity must use its own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procedures conform to applicable federal law and standards. Condition: The Organization has documented procurement procedures that conform to applicable federal standards; however, the procedures were not followed regarding maintaining documentation of obtaining a minimum of three prices and the conclusion as to which item was selected. In addition, the Organization was not testing vendors for suspension and debarment. Cause: The Organization did not have adequate internal controls in place to ensure that the processes laid out in their procurement policy were followed. Effect: The best price for the purchase may not have been obtained and payments could be made to recipients who were suspended or debarred. Questioned Costs: None reported Context/Sampling: A nonstatistical sample of 40 transactions out of 675 total transactions was selected for testing. Required documentation related to procurement was not maintained for 16 of the items selected which totaled federal expenditures of $3,621. The total dollar amount of the sample was $5,247. Repeat Finding from Prior Year(s): No Recommendation: We recommend the Organization enhance internal control to ensure all transactions under Federal awards follow their written procurement policy and suspension and debarment verification procedures are performed prior to entering into the transactions. Views of Responsible Officials: Management agrees with the finding.

Department of Housing and Urban Development Continuum of Care Program, CFDA 14.267 Special Tests and Provision Significant Deficiency in Internal Over Compliance Grant Award Number: Affects all grant awards included under CFDA 14.267 on the Schedule of Expenditures of Federal Awards. Criteria: In accordance the CFDA 14.267 Special Tests and Provision, rent paid to landlords for participants under the program must be reasonable in relation to rents being charged in the area for comparable space and may not exceed rents currently being charged by the same landlord for comparable unassisted space. Condition: The Organization did not perform participant rent reasonableness assessments in a timely manner or maintain evidence of a review of the assessments. Cause: The Organization did not have adequate internal controls in place to ensure that rent reasonableness assessments were performed prior to participant signing the lease. This assessment process was impacted by the coronavirus pandemic. It is important to note that the assessments were completed but were not completed prior to the participant signing the lease. Effect: Rent paid to landlords on behalf of participants may have been higher in comparison to other rental properties in a similar area during the period the reasonableness assessment was not completed. Questioned Costs: None reported Context/Sampling: A nonstatistical sample of 9 participants out of 60 participants were selected for special testing and provisions testing. There were 3 participants where the review was not completed timely and 1 where there was not documented evidence of the review. Repeat Finding from Prior Year(s): No Recommendation: We recommend the Organization enhance internal controls to ensure all rent reasonableness forms are completed prior to participants signing the lease. Views of Responsible Officials: Management agrees with the finding.