MY SISTER'S PLACE, INC.Non-Profit

Finding 2025-001 – Procurement, suspension and debarment Assistance Listing #: 14.267 Criteria: In accordance with the Uniform Guidance, recipients who receive federal funding shall fully comply with Subpart C of 2 CFR Part 180, which requires nonfederal entities to verify that the person/entity with whom you intend to do business is not excluded or disqualified, if the expected payments are equal to or exceed $25,000. A non-federal entity has three options for performing this verification: 1) checking SAM exclusions; 2) collecting a certification from that person; or 3) adding a clause or condition to the covered transaction with that person. Condition: During fiscal year 2025, MSP contracted with several vendors for products and services who were paid more than $25,000. There was no evidence documenting that these vendors were checked for suspension and debarment prior to payment. Cause: There were several vendors who were paid cumulatively more than $25,000 during fiscal year 2025. Most of these payments related to payments to client landlords. Documentation was not retained and we were unable to verify that the vendors had been checked for suspension and debarment. Effect: We were unable to determine that the required checks for suspension and debarment had been performed as the documentation was not retained. Questioned Costs: N/A Repeat Finding: Yes Recommendation: We recommend MSP perform follow its internal processes and retain documentation of the suspension and debarment check in the vendor file as support for vendors who are paid or expected to be paid over $25,000 prior to funds being disbursed. Response: MSP will still perform the verifications by using the System for Award Management (SAM) and Office of Inspector General (OIG) websites. We will start saving documentation that will support the required vendor verifications.

Finding 2025-002 – Allowable costs – payroll Assistance Listing #: 93.671, 14.267 Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated. The Uniform Guidance allows for use of budget estimates on an interim basis. When using budget estimates on an interim basis, grantees must reconcile estimates against actual time or effort on a regular basis to ensure that estimates conform to actual staff activity. Grantees must make adjustments in the payroll distribution to align with actual time. Condition: As noted in the prior year, MSP charges payroll costs to the federal award programs using a set percentage based on budget and not based on employee’s actual time or effort amongst various programs. Cause: Individual payroll amounts were allocated to grant awards based on internally developed budgets of employees' time. Management continues to work on a solution that will capture costs across the various programs for those employees who work in multiple programs. Effect: The salary costs charged to the federal programs may have been under or over reported based on the actual level of effort. Questioned Costs: N/A Repeat Finding: Yes Recommendation: As noted previously, we recommend MSP make changes overall its timekeeping processes to ensure that payroll costs accurately reflect the work performed and if budget estimates are utilized, that they are reconciled and trued up on a consistent basis. Response: Management continues to work with ADP to modify the existing time card structure. They will assist MSP with creating time cards that will allow employees to sign in to any designated work department therefore the hours will be appropriately broken out by department/grant. The enhancement is still a work in progress and should be in effect no later than May 31, 2026.

Finding 2024-001 – Procurement, suspension and debarment Assistance listing#: 14.267 Criteria: In accordance with the Uniform Guidance, recipients who receive federal funding shall fully comply with Subpart C of 2 CFR Part 180, which requires nonfederal entities to verify that the person/entity with whom you intend to do business is not excluded or disqualified, if the expected payments are equal to or exceed $25,000. A non-federal entity has three options for performing this verification: 1) checking SAM exclusions; 2) collecting a certification from that person; or 3) adding a clause or condition to the covered transaction with that person. Condition: During fiscal year 2024, MSP contracted with several vendors for products and services who were paid more than $25,000. There was no evidence documenting that these vendors were checked for suspension and debarment prior to payment. Cause: Although there were no individual services greater than $25,000, there were several vendors who were paid cumulatively more than $25,000. Most of these payments related to payments to client landlords. Per inquiry, the suspension and debarment status of these vendors was not checked during the fiscal year 2024. Effect: Without verifying whether vendors are suspended or debarred prior to payment, MSP faces a heightened risk that they are expending federal dollars to excluded parties. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend MSP perform and document each verification on vendors over $25,000 prior to funds being disbursed. An alternative would be for the standard contract to address suspension and debarment and obtain the certification from the vendors at the time the contract is executed. Additionally, we recommend that MSP’s policies and procedures be updated to reflect the need to check vendors for suspension and debarment on an annual basis. Response: MSP now performs and documents verification on all vendors and subcontractors. This practice has been implemented prior to the completion of the FY 2024 audit. Additionally, policies and procedures have been updated to reflect appropriate suspension and debarment considerations.

Finding 2024-002 – Allowable costs – payroll Assistance Listing #: 93.671 Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated. The Uniform Guidance allows for use of budget estimates on an interim basis. When using budget estimates on an interim basis, grantees must reconcile estimates against actual time or effort on a regular basis to ensure that estimates conform to actual staff activity. Grantees must make adjustments in the payroll distribution to align with actual time. Condition: During fiscal year 2024, MSP charged payroll costs to the federal award programs using a set percentage based on budget and not based on employee’s actual time or effort amongst various programs. Cause: Individual payroll amounts were allocated to grant awards based on internally developed budgets of employees' time. Management was unaware that while this is an accepted method, eventually a "true-up" or reconciliation to actual time incurred on specific grants is required. Effect: The salary costs charged to the federal programs may have been under or over reported based on the actual level of effort. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend MSP make changes overall its timekeeping processes to ensure that payroll costs accurately reflect the work performed and if budget estimates are utilized, that they are reconciled and trued up on a consistent basis. Response: MSP plans to implement changes overall to timekeeping processes to ensure that payroll costs accurately reflect the work performed and to reconcile and true up any budget estimates on a consistent basis.