COUNTY OF ARAPAHOE IN THE STATE OF COLORADOLocal Government

Community Development Block Grant and COVID-19 Community Development Block Grant – Material Weakness Condition: During testing of the Federal Funding Accountability and Transparency Act (FFATA) reports, it was noted that no FFATA reporting had been completed during the year ended December 31, 2023. Recommendation: We recommend that the County continue with the process being implemented during the fiscal year 2024, which includes completing submission of the reports and tracking the timely submission of the FFATA reports. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: With significant turnover of tenured leadership and employees within the Community Resources Department, Arapahoe County Community Resources took proactive measures in 2023 for review of the Community Development Housing and Homeless Services (CDHHS) programs (CDBG and HOME Investment) by recognized consultants within the field. Community Resources has contracted with two consultants, to assist in a full review and re-development of policies and procedures (Civitas) for the CDBG and HOME programs as well as a full review of all case files (Affordable Housing Consultants). Included with this response are the contracts with both Civitas and Affordable Housing Consultants for verification purposes. The County anticipates their work to be completed and an implementation of updated policies and procedures for these programs by fall of 2024. In response to the direct finding of no FFATA reporting during the year ending December 31st, 2023, Arapahoe County has ensured the entry of all sampled contracts. Demonstration of the report submissions have been submitted for verification purposes. It is important to note that all sub-agreements included the necessary FFATA information for the review period, but Community Resources failed to ensure that this information was entered into the FFATA Subaward Reporting System (FSRS). To ensure internal controls are in place for the FFATA’s timely and accurate submissions for all future subawards, Arapahoe County’s Community Resources Department has created the following internal controls and governance: 1. Creation of the FFATA Reporting Form which will be completed and submitted along with all future subaward agreements and includes all necessary information for complete and accurate submittal into FSRS. 2. Creation of the FFATA Subrecipient Reporting Work Instructions which detail the process, to include roles and responsibilities, for the completion and entry of the FFATA. 3. Update to our Grant Administration Policy which includes the requirement to complete and enter the FFATA in our grant administration oversight and track timely submission of the reports. Name of the contact persons responsible for corrective action: Katherine Smith Planned completion date for corrective action plan: September 30, 2024

HOME Investment Partnerships Program and COVID-19 HOME Investment Partnerships Program - Significant Deficiency Condition: The County did not conduct the required inspections of the HOMEassisted rental housing units during the year ended December 31, 2023. Recommendation: We recommend the County continue to train personnel so that the inspections are completed timely. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: In 2023, performance issues with the administration of the HOME program were discovered, to include the absence of required inspections. With significant turnover of tenured leadership and employees within the Community Resources Department, Arapahoe County Community Resources took proactive measures in 2023 for review of the Community Development Housing and Homeless Services (CDHHS) programs by recognized consultants within the field. Community Resources has contracted with two consultants, to assist in a full review and re-development of policies and procedures (Civitas) for the CDBG and HOME programs as well as a full review of all case files (Affordable Housing Consultants). Included with this response are the contracts with both Civitas and Affordable Housing Consultants for verification purposes. The County anticipates their work to be completed and an implementation of updated policies and procedures for these programs by fall of 2024. The role of Program Administrator over the HOME program was not filled until April of 2024. This role will be responsible for all future HOME program inspections. Community Resources CDHHS employees will be taking part in a two-day training in June 2024 (June 11th and 12th, 2024) for the following:  Davis Bacon & Related Acts (Applicability, wage determinations, payroll review, interviews, common errors and how to correct)  Section 3 (Applicability, Safe Harbor benchmarks, documenting compliance, qualitative efforts)  TBRA Inspections (National Standards for the Physical Inspection of Real Estate (NSPIRE) administrative procedures)  HOME Program - Implementation and Best Practices - Arapahoe County, CO - June 12, 2024  This HOME training is an introductory course focusing on underwriting and subsidy layering requirements.  Eligible Activities (Homeowner rehab programs, Homebuyer programs, Rental housing)  Underwriting (Subsidy layering and underwriting requirements and best practices)  Community Housing Development Organization (CHDO) (Requirements, best practices, management, etc)  Long-term Compliance (HOME Match, eligible beneficiaries, income limits, subsidy layering & limits, affordability, written agreements, etc)  IDIS and Reporting Arapahoe County staff will be conducting monitoring of the two Tenant Based Rental Assistance (TBRA) programs and projects within in the affordability period (20-year span) between mid-June to mid-August of 2024. The remaining HOME program projects, within the affordability period (20-year span) will have audits completed by the end of our 2023 grant cycle, September 30th, 2024. Name of the contact person responsible for corrective action: Katherine Smith Planned completion date for corrective action plan: September 30, 2024

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