REBUILDING TOGETHER, INCNon-Profit

Reportable Finding Considered a Significant Deficiency – Reporting Matching Agency: Department of Housing and Urban Development Program: Rural Capacity Building for Community Development and Affordable Housing Grants ALN# 14.265 Program Year: 2025 Criteria: 2 CFR §200.328 requires that recipients submit financial reports using OMB approved data elements, specifically the Federal Financial Report (SF-425), and such reports must be submitted as required by the Federal award and include all required financial information. The SF-425 is designed to report the cumulative federal share and recipient (matching) share of program expenditures. Condition: During testing of financial reporting for ALN 14.265, we noted that SF-425 reports submitted during the audit period did not include the required matching (non-federal) component. Specifically, the recipient share (matching contributions) was not reported. Cause: The condition appears to be due to inadequate understanding of SF-425 reporting requirements and lack of internal controls to ensure that matching contributions are properly included in required federal financial reports. Effect: Failure to report matching contributions on the SF-425 results in incomplete and inaccurate financial reporting to the federal awarding agency. This may impair the federal agency’s ability to monitor compliance with matching requirements and increase the risk of questioned costs or funding disallowances if matching requirements are not properly reported. Questioned costs: None Perspective: Statistical sampling was not used but sampling methodology followed AICPA guidelines. Repeat finding: This is not a repeat finding. Recommendation: We recommend management implement procedures to ensure all SF-425 reports include complete and accurate reporting of both federal and matching components. Controls should be established to track and reconcile matching contributions to supporting documentation and a supervisor should review to ensure completeness and compliance with reporting requirements prior to submission. Management’s response (unaudited): See Corrective Action Plan

Reportable Finding Considered a Significant Deficiency – Procurement Compliance Agency: Department of Housing and Urban Development Program: Rural Capacity Building for Community Development and Affordable Housing Grants ALN# 14.265 Program Year: 2025 Criteria: 2 CFR §200.320(a)(2) requires that procurements exceeding the micro-purchase threshold use small purchase procedures, including obtaining price or rate quotations from an adequate number of qualified sources. Additionally, 2 CFR §200.318(i) requires non-federal entities to maintain documentation sufficient to detail the history of the procurement, including the rationale for the method of procurement, contractor selection, and the basis for price reasonableness. Further, 2 CFR §200.320(c) permits noncompetitive (sole-source) procurement only when specific conditions are met and requires appropriate justification and documentation. Condition: During testing of procurement for ALN 14.265, we noted that the entity procured services totaling $17,500, exceeding the micro-purchase threshold and requiring small purchase procedures. Review indicated that the procurement was conducted under small purchase procedures; however, price quotations from multiple qualified vendors or other cost analysis were not obtained. In addition, the entity’s internal policy requires at least two price quotes for procurements within this dollar range, and no such quotes were documented. Although management stated the vendor was selected due to the unique nature of the training and specialized qualifications of the provider, the procurement file does not include contemporaneous documentation supporting sole-source eligibility or a formal sole-source justification. Cause: The deficiency occurred due to inadequate internal controls over procurement processes and lack of sufficient understanding and consistent application of procurement requirements. Specifically, management did not ensure that required price quotations were obtained and documented or that sole-source procurements were properly justified and supported. Effect: As a result, the entity did not comply with federal procurement requirements or its internal policy. This increases the risk that full and open competition was not achieved and that the entity may not have obtained services at the most reasonable price. Additionally, insufficient documentation reduces transparency and accountability and may result in questioned costs or increased scrutiny by federal or pass-through entities. Questioned costs: None Perspective: Statistical sampling was not used but sampling methodology followed AICPA guidelines. Repeat finding: This is not a repeat finding. Recommendation: We recommend that management strengthen procurement controls to ensure compliance with 2 CFR 200 and internal policy. Specifically, procedures should be implemented to require and document price quotations from an adequate number of qualified vendors for all procurements above the micro-purchase threshold. For noncompetitive procurements, management should prepare and retain contemporaneous written justification demonstrating that the procurement meets one of the allowable criteria under 2 CFR §200.320(c), supported by appropriate documentation such as market research or evidence of exclusivity. In addition, management should provide training to personnel responsible for procurement to ensure proper and consistent application of procurement requirements. Management’s response (unaudited): See Corrective Action Plan

Criteria: Management is responsible for reporting each action that equals or exceeds $30,000 in Federal funds for a subaward to a non-Federal entity or Federal agency, to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) per 2 CFR 170.200. Condition: During our audit, we noted that the Organization’s subaward agreements and modifications subject to reporting under the Federal Funding Accountability and Transparency Act were not submitted to the FSRS as required. Out of 8 subrecipients, 1 was tested and it was found to have not been reported to the FSRS. Statistical sampling was not used; however, sampling was determined using AICPA approved guidelines. Cause: The FFATA reporting required was not filed due to lack of internal controls to ensure reporting requirements are met. Context: There was significant turnover in key management roles that resulted in the reporting requirement being missed. Effect: The FFATA report was not filed in the FSRS system. Questioned costs: There are no questioned costs associated with this finding. Repeat finding: This is a repeat finding from 2021. Recommendation: We recommend that internal controls be put in place to track and review reporting requirements to ensure supervision of report submissions. A calendar should be maintained of reporting requirements and related deadlines. Views of Responsible Officials and Corrective Action Plan (unaudited): See Corrective Action Plan.

a system of internal controls which provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: During our test of controls, we noted that out of 6 testing selections, 2 were missing approvals on timesheets. These were considered to be exceptions and the internal controls were assessed to be functioning to support only a moderate level of control risk over allowable costs and cost principles once considered with other tests of cash disbursements. Cause: Internal controls over review of timesheets were not sufficient and Management failed to review and note approvals prior to recording of payroll. Context: The approvals were missing for one employee’s timesheets multiple times throughout the year. The time charged to the grant agreed with the respective timesheets. Effect: The Organization is not following their internal control policies. There was no evidence of approval. Questioned costs: There are no questioned costs associated with this finding. Repeat finding: This is not a repeat finding. Recommendation: We recommend that the Organization develop an internal review that includes signing off on timesheets to indicate approval that the timesheets accurately reflect the time worked, that it was an allowable activity, and that the payroll charges were allocated appropriately. Views of Responsible Officials and Corrective Action Plan (unaudited): See Corrective Action Plan.

Finding 2021-001: Reportable Finding Considered a Significant Deficiency ? Reporting Assistance Listing Number: 14.278 Agency: Department of Housing and Urban Development Program: Veterans Housing Rehabilitation and Modification Pilot Program Grant Numbers: V-R1-6D-C0-0008, V-R1-9D-C-0-0016, and V-R2-0D-C0-0002 Grant years: 2020 and 2021 Criteria: Management is responsible for reporting each action that equals or exceeds $30,000 in Federal funds for a subaward to a non-Federal entity or Federal agency, to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) per 2 CFR 170.200. Condition: During our audit, we noted that the Organization?s subaward agreements and modifications subject to reporting under the Federal Funding Accountability and Transparency Act were not submitted to the FSRS as required. Out of 21 subrecipients, 3 were tested and all 3 were found to have not been reported to the FSRS. Statistical sampling was not used, however, sampling was determined using AICPA approved guidelines. Cause: The required subaward agreements were not filed and without proper controls to detect and prevent issues like this, the Organization was not aware these reports had not been submitted until discovered during the course of the audit. Context: There was significant turnover in the Grants Manager role during 2021. The federal program is a pilot program with the government. Effect: Required subaward agreements were not submitted to the government. Questioned costs: There are no questioned costs associated with this finding. Repeat finding: This is not a repeat finding. Recommendation: We recommend that controls be put in place for the timely submission of all required reports and for the review and oversight of this submission process. The individual responsible for submitting reports should provide written evidence to another individual that the reports were submitted. Both of these individuals should be aware of the deadlines outlined in the federal award so that if the reviewer does not receive support that the report was properly submitted, they can immediately follow-up with the other individual in order to prevent an unsubmitted report from going unnoticed. Views of Responsible Officials and Planned Corrective Actions (unaudited): See Appendix A.

Finding 2021-002: Reportable Finding Considered a Significant Deficiency ? Subrecipient Communication Assistance Listing Number: 14.278 Agency: Department of Housing and Urban Development Program: Veterans Housing Rehabilitation and Modification Pilot Program Grant Number: V-R1-6D-C0-0008, V-R1-9D-C-0-0016, and V-R2-0D-C0-0002 Grant years: 2021 Criteria: Management is responsible for communicating all required information to subrecipients under the federal award as defined by 2 CFR 200.332. Condition: During our audit, we tested 3 out of 21 subrecipients and obtained subrecipient contracts and other subaward communications noting there was 1 instance where the Organization did not communicate all of the required information to the subrecipient of a federal award. This included not communicating all federal program and federal compliance requirements. Statistical sampling was not used, however, sampling was determined using AICPA approved guidelines. Cause: For the exception noted, there was no subaward contract created or signed between the Organization and the subrecipient. The only written communication was a brief grant notification letter. Some trainings were held as well, though neither of these fully communicated all of the required information. Context: There was significant turnover in the Grants Manager role during 2021. The federal program is a pilot program with the government. This error was not found to be pervasive. Effect: As the required information was not communicated to the subrecipient, they may have been unaware of all of the requirements related to receipt of a federal award. Questioned costs: There are no questioned costs associated with this finding. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization make a standard sub-recipient agreement that includes all of the required communications as outlined in 2 CFR 200.332 for every subaward granted. The Organization should not disburse funds or work with any subrecipient that does not sign this agreement as evidence of their understanding of all federal award and federal compliance requirements communicated to them via the written contract. Views of Responsible Officials and Planned Corrective Actions (unaudited): See Appendix A.

Finding 2021-003: Reportable Finding Considered a Significant Deficiency ? Allowable Costs Assistance Listing Number: 14.278 Agency: Department of Housing and Urban Development Program: Veterans Housing Rehabilitation and Modification Pilot Program Grant Number: V-R1-6D-C0-0008, V-R1-9D-C-0-0016, and V-R2-0D-C0-0002 Grant years: 2021 Criteria: Costs charged to a grant must be based on actual allowable expenses incurred in accordance with the cost principles as detailed in the Uniform Guidance at 2 CFR 200 Subpart E. Condition: During our audit, we noted mathematical errors on a Labor Distribution worksheet that was utilized in determining direct labor charges to the grant award. Cause: Formulas were incorrectly referencing a higher labor rate for individuals with lower rates. Lack of review procedures resulted in this error not being caught and corrected in a timely manner. Context: There was significant turnover in the Grants Manager role during 2021. The error is under the grant award?s materiality but is pervasive to the grant year. Effect: The grant was over-charged for labor for the fiscal year. Questioned costs: The grant was charged approximately $18,500 in excess due to the labor calculation error. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization make a standard Labor Distribution worksheet that is reviewed by someone other than the person preparing the report. The Schedule of Expenditures of Federal Awards detail should be reviewed quarterly by an appropriate person other than the preparer. We also recommend that the excess funds drawn in error be paid back to the agency. Views of Responsible Officials and Planned Corrective Actions (unaudited): See Appendix A.

Finding 2019-002: Internal Controls over Activities Allowed or Unallowed ? Significant Deficiency CFDA: 94.006 AmeriCorps Criteria: Management is responsible for designing and implementing proper controls over the process of activities allowed and unallowed under the federal program per 2 CFR 200.303. Condition and context: During our testing of internal controls over compliance and compliance with regards to activities allowed and unallowed, we noted the following: 1) There is no documented review and approval over the rate established for the payment to AmeriCorps members for their participation in the AmeriCorps program. 2) Out of 60 items selected for tested, we noted one AmeriCorps member who was paid an amount in excess of the maximum allowed determined by the Organization. As a result, we reviewed all participants receiving funds from the AmeriCorps grant and noted that a total of 14 members who received amounts in excess of the maximum allowed. Cause: The Organization did not have proper internal controls in place for activities allowed or unallowed.Effect: Audit procedures detected AmeriCorps participants were paid in excess of the maximum amount internally established by the Organization. Questioned costs: None. Repeat finding: No Recommendation: We recommend the following: 1) Maintain documented review and approval over the rate established for the payment to AmeriCorps members for their participation in the AmeriCorps program. 2) Ensure controls are in place to ensure AmeriCorps members do not receive more than the maximum allowed fee. Management?s Response: See corrective action plan.