Montgomery Area Mental Health Authority, Inc.Non-Profit

Finding 2022-006, Failure To Obtain Subleases With Program Participants Residing In Housing Contact Person: Katrina Hawkins, Director of Residential Services Carastar agrees with this audit finding. This finding relates to Carastar’s HUD Supportive Housing Program (SHP). Carastar will follow its internal control policies and procedures and ensure subleases are obtained timely, both during intake and renewal. Of note, on January 2, 2024, the Director of Residential Services performed a review of all current HUD SHP participants and current subleases are present in 100% of current participants’ files. Completion Date: Implemented September 2023

Finding 2022-007, Inaccurate Occupancy Charge Calculations Contact Person: Katrina Hawkins, Director of Residential Services Carastar agrees with this audit finding. This finding relates to Carastar’s HUD Supportive Housing Program (SHP). Due to employee turnover in certain management positions, the Chief Operations Officer, who has considerable experience in the HUD compliance area, will conduct a training session with the current Director of Residential Services, Director of Accounting, and other applicable staff regarding the overall income evaluation process, to include the component of occupancy charge calculations. Carastar will follow its internal control policies and procedures and ensure a supervisory review of occupancy charge calculations is evidenced on the calculation worksheet maintained in the participant file. In the event the Director of Residential Services is the initial preparer of the occupancy charge calculation, then the Director of Accounting or Chief Operations Officer will perform the supervisory review. The Chief Operations Officer will perform a management level review of participant files on a periodic, random basis to ensure accuracy with the HUD Continuum of Care’s compliance requirements regarding the overall income evaluation process. Completion Date: February 2024

June 28, 2022 Fiscal Year 2021 Corrective Action Plan 2021-1: Significant deficiency / noncompliance Condition: Failure to submit timely quarterly drawdown request in accordance with 24 CFR 578.85(c)(3). Response: In January 2021 the Authority's COO and HUD Grant Administrator passed away. A new COO was hired in February 2021 but did not receive access to the HUD e-LOCCS system until June 2021. During June and July, the new COO was studying the HUD Continuum of Care grant guidelines and gaining the knowledge necessary to properly administer the HUD grant at the Authority. The new COO prepared drawdown request documentation and compiled the supporting documentation for those drawdown requests between August and November. Compiling the supporting documentation took longer than expected due to an unforeseen accounting staff shortage caused by medical issues, The result of these events was that two of the four quarterly drawdowns were not completed timely in accordance with HUD regulations (24 CFR 578.85(c)(3)). During review of the Authority's annual APR, the regional HUD CPD representative requested a reason as to the cause of the untimely drawdowns and a summary of implemented plans to ensure that at least quarterly draws would be completed in order to guarantee that expenditures deadlines would be met in the future. The responses were satisfactory and no further issues with the grant were noted by the HUD CPD representative. Implemented plans include: The Accounting Department holds regular monthly meetings. As HUD grant administrator, the COO attends those meetings to inform accounting staff of any HUD grant updates and upcoming draw deadlines. The Accounting Department maintains a billing spreadsheet that the Accounting Director and COO use to track monthly and quarterly billings that the Authority needs to submit to its various funding sources. The Accounting Director monitors the spreadsheet weekly and the COO monitors it monthly to ensure the Authority remains on track with billing. WWW.CARASTARORG The Executive Director and COO discussed and approved the Accounting Director to receive an e-LOCCS user ID to facilitate the drawdown process in the event the COO is unable to do so. The COO will reach out to the Authority's regional HUD Financial Analyst representative during fiscal year 2022 to authorize and obtain this new user access. Corrective Action Pian: During the audit of the fiscal year 2021 financial statements, Moses and Moses CPAs noted the Authority's noncompliance with 24 CFR 578.85(c)(3) and recommended the accounting department strengthen its internal controls by adding an additional control: a second user having access to the e-LOCCS system in the case of accidental lockout or staff turnover. Doing so will aid in ensuring the department has the flexibility needed to accommodate such situations should they arise in the future. The Authority agrees with this recommendation. The recommendation is currently in progress and is expected to be completed during July 2022. Laurie Harris Chief Operations Officer Carastar Health