Cedar Valley Friends of the Family, Inc.Non-Profit

Federal Program: Assistance listing number 14.231, Emergency Solutions Grant Program ? United States Department of Housing and Urban Development. Compliance Requirement: Allowable Costs Criteria: A properly designed system of internal control over compliance allows entities to meet those requirements set forth by the federal government. The Organization is required to ensure that costs are adequately documented. Condition: As part of the Organization's internal controls, all payroll changes are documented with a written letter to employees, a copy of which is maintained in the employee personnel file. Our audit results, which included the testing of twenty-five payroll transactions, indicated the following: - Two items tested had hourly rates paid that did not agree to the letters in the personnel files. These employees were paid the correct approved rates and the letters were determined to be incorrect. - Two items tested had an employee that was not paid at the correct rate, resulting in payroll in excess of approved rates of approximately $127. - One item tested did not have documentation in the personnel file. It was determined that this employee was paid at the correct rate. Cause: As updates are made, there is no review after the fact of the payroll changes and the amounts entered into the payroll system. Questioned Costs: The results of this noncompliance did not result in any questioned costs. Potential Effect: Disqualification from the Emergency Solutions Grant Program. Recommendation: The Organization should establish procedures to ensure wage approval letters are accurate and match payroll records, and all support for pay rates are maintained in personnel files. Responsible Official's Response: Management agrees with the finding and the recommendation.

Federal Program: Assistance listing number 14.267 ? United States Department of Housing and Urban Development. Compliance Requirement: Matching Criteria: A properly designed system of internal control over compliance allows entities to meet those requirements set forth by the federal government. Under the Continuum of Care Program, the Organization is required to meet a matching requirement for the federal funds. Condition: Match calculations did not agree to claim that was filed. Cause: Two individuals were calculating the match requirements using different formulas. The individual responsible for grant claim submission was not using the correct matching formula, which was not identified by the Organization during the claim review and approval process. Questioned Costs: The results of this noncompliance did not result in any questioned costs. Potential Effect: Disqualification from the Continuum of Care Program. Recommendation: The Organization should establish procedures to ensure the match is being calculated correctly and the appropriate amount is being claimed and complies with federal grant requirements. All claims should include proper review and approvals by an individual independent of the calculation process. Responsible Official?s Response: Management agrees with the finding and the recommendation.

Federal Program: Assistance listing number 14.267 ? United States Department of Housing and Urban Development. Compliance Requirement: Procurement Criteria: A properly designed system of internal control over compliance allows entities to meet those requirements set forth by the federal government. Under the Continuum of Care Program, the Organization is required to maintain and follow a procurement policy in accordance with the Uniform Guidance. Condition: The Organization does not have a procurement policy that is in line with the Uniform Guidance. In addition, there was a lack documentation of procurement procedures for certain expenditures. Cause: The Organization has not adopted a formal procurement policy that aligns with the Uniform Guidance requirements and the individual responsible did not maintain sufficient documentation. Questioned Costs: The results of this noncompliance did not result in any questioned costs. Potential Effect: Disqualification from the Continuum of Care Program. Recommendation: The Organization should review and update its current procurement policy and maintain all documentation to support procurement procedures performed. Responsible Official?s Response: Management agrees with the finding and the recommendation.

Part III - Findings For Federal Awards: INSTANCES OF NON-COMPLIANCE: No matters were noted. INTERNAL CONTROL DEFICIENCIES: CFDA NUMBER 16.575 - Federal Victims of Crime Federal Award Year: 2019 Prior Year Finding Number: 2018-001 U.S. Department of Justice 2019-002 Segregation of Duties -The Organization did not properly segregate custody, record- keeping and reconciling functions for revenues and expenses, including those related to federal programs. See 2019-00 I.

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