GOOD SHEPHERD OF COLORADO I

2020-001 Agency: U.S. Department of Housing and Urban Development CFDA Number: 14.181 Program: Supportive Housing for Persons with Disabilities Statement of condition: The Organization did not have adequate and effective controls over compliance in place as it relates to eligibility. There is currently no control in place to verify the existing tenant search report is obtained as part of the application process. This finding is a repeat finding from the prior year. See prior year finding 2019-001. Criteria: Uniform Guidance requires that the Organization's controls over compliance must be properly designed, in place and operating effectively to ensure the Organization is in compliance with the eligibility requirements of HUD. Questioned costs: The amount of questioned costs cannot be determined. Context: The controls surrounding eligibility were found not to be effective. Effect: Without proper controls in place it is possible that noncompliance could go undetected. Cause: Management has indicated the Organization has not updated policies and procedures or completed appropriate training to ensure compliance with this requirement. Recommendation: We recommend management review their current documented processes and controls surrounding eligibility to ensure they meet the requirements of the Uniform Guidance. It would also be advisable to provide training around these processes and controls to ensure that they are occurring consistently. Management's Response: An existing tenant search is being completed as a fundamental component of new tenant certifications as required. Completion of this requirement is supported by inclusion of the procedure on the new tenant checklist that is completed as part of the new tenant certification process. However, management agrees with the repeat finding that existing tenant searches and other certification paperwork have not always been finalized in advance of tenant physical move-in. Management?s 2019 corrective action plan was directed at administering training to operations staff to address lack of perceived risk affecting compliance (i.e.- Bethesda has not had incidences where it has identified, subsequent to tenant physical move-in, that a tenant did not meet the qualifications for occupancy/assistance). However, delivery of training is pending resolution of COVID-19 issues that limit the availability of staff due to needed focus on COVID-19 risks. In the interim, the Compliance Department has implemented procedures to more closely monitor the status of outstanding certifications to increase attention to (and work to minimize) tenant certification non-compliance.

2020-002 Agency: U.S. Department of Housing and Urban Development CFDA Number: 14.181 Federal Program: Supportive Housing for Persons with Disabilities Statement of Condition: The Organization did not have adequate and effective controls over compliance in place as it relates to procurement requirements of the Uniform Guidance. We noted that the Organization does not have a written procurement policy that meets the requirements of the Uniform Guidance. We noted a transaction that did not have a price or rate quotation comparison. This is a repeat finding from the prior year. See prior year finding 2019-002. Criteria: Uniform Guidance requires that controls are implemented to ensure the Organization is in compliance with procurement requirements. Those requirements include (1) a written policy reflective of the purchase requirements, (2) implemented controls in place to ensure compliance with such a policy and (3) the Organization follows the policy for all applicable procurements. CFR Section 200.320 identifies that price or rate quotations must be obtained from an adequate number of qualified sources for small purchases, which are those identified as greater than $3,500, but less than $150,000. Questioned Costs: The amount of questioned costs cannot be determined. Context: This finding appears to be a systematic problem in internal controls over compliance. One (1) of the two (2) transactions tested did not have a price or rate quotation comparison. Effect: Inadequate controls over this area of compliance resulted in a policy that did not meet the requirements outlined in the Uniform Guidance. This also led to the Organization not being in compliance with procurement requirements. Cause: Management overlooked finalizing an updated procurement policy to be in compliance with the Uniform Guidance, which led to noncompliance with Uniform Guidance requirements. An updated policy has been drafted, but not yet approved by the Organization. Recommendation: We recommend management implement processes and controls to identify when policies and procedures require updates to be in compliance with the Uniform Guidance. Management should also update their procurement policy to be in compliance with the requirements of the Uniform Guidance. Management's Response: A procurement policy was written in fiscal year 2020 to rectify this finding. During fiscal year 2021, the policy will be planned for approval by leadership of the Organization. Once approved, the policy will be communicated to Bethesda employees.

2019-001 Agency: U.S. Department of Housing and Urban Development CFDA Number: 14.181 Program: Supportive Housing for Persons with Disabilities Statement of condition: The Organization did not have adequate and effective controls over compliance in place as it relates to eligibility. There is currently no control in place to verify the existing tenant search report is obtained as part of the application process. Criteria: Uniform Guidance requires that the Organization's controls over compliance must be properly designed, in place and operating effectively to ensure the Organization is in compliance with the eligibility requirements of HUD. Questioned costs: The amount of questioned costs cannot be determined. Context: The controls surrounding eligibility were found not to be effective. Effect: Without adequate controls it is possible the Organization may not be in compliance with certain HUD requirements surrounding tenant eligibility. Cause: Management has indicated the Organization inadvertently did not create controls to obtain the existing tenant search report as part of the tenant application process. Recommendation: We recommend management review their current documented processes and controls surrounding eligibility to ensure they meet the requirements of the Uniform Guidance. It would also be advisable to provide training around these processes and controls to ensure that they are occurring consistently. Management's Response: Management has reviewed the tenant application and move-in processes as of August 2019 and noted that that the existing tenant search is run as a part of the tenant application process. Management is providing training to operations staff in December 2019 to ensure that application packets are fully completed for tenants prior to move-in, in accordance with HUD requirements. This will allow central staff to complete the rest of the approval process in a timely manner, including the existing tenant search.

2019-002 Agency: U.S. Department of Housing and Urban Development CFDA Number: 14.181 Federal Program: Supportive Housing for Persons with Disabilities Statement of Condition: The Organization did not have adequate and effective controls over compliance in place as it relates to procurement requirements of the Uniform Guidance. We noted that the Organization does not have a written procurement policy that meets the requirements of the Uniform Guidance. We noted a transaction that did not have a price or rate quotation comparison. Criteria: Uniform Guidance requires that controls are implemented to ensure the Organization is in compliance with procurement requirements. Those requirements include (1) a written policy reflective of the purchase requirements, (2) implemented controls in place to ensure compliance with such a policy and (3) the Organization follows the policy for all applicable procurements. CFR Section 200.320 identifies that price or rate quotations must be obtained from an adequate number of qualified sources for small purchases, which are those identified as greater than $3,500, but less than $150,000. Questioned Costs: The amount of questioned costs cannot be determined. Context: This finding appears to be a systematic problem in internal controls over compliance. We tested one (1) of two (2) transactions noted that were greater than $3,500, but less than $150,000. Effect: Inadequate controls over this area of compliance resulted in a policy that did not meet the requirements outlined in the Uniform Guidance. This resulted in the Organization not being in compliance with procurement requirements. Cause: Management overlooked updating their procurement policy to be in compliance with the Uniform Guidance, which led to noncompliance with Uniform Guidance requirements. Recommendation: We recommend management implement processes and controls to identify when policies and procedures require updates to be in compliance with the Uniform Guidance. Management should also update their procurement policy to be in compliance with the requirements of the Uniform Guidance Management's Response: Management has reviewed the Uniform Guidance requirements as it relates to procurement and is currently working to implement a written policy that meets said requirements. In the interim, facilities staff will be instructed to obtain the appropriate price or rate quotations as specified by CFR Section 200.320 for HUD related expenditures.

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