BYRD BARR PLACE

Finding 2022-001 Significant deficiency in internal control over allowable costs. Federal Agency: Department of the Treasury Program Title: Emergency Rental CFDA Number: 21.023 Award Numbers: OH21-BBP1 Award Period: May 15, 2021 ? September 30, 2022 Criteria 2 U.S. Code of Federal Regulations (CFR) 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart E section 200.430 requires that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition/Context for Evaluation During our audit, we tested salary costs charged to the federal award, noting compensation expenses consisted of the entire salary of one employee who did not work on more than one federal award and allocated compensation costs for multiple other employees. Allocated compensation costs were charged to the award based upon budget estimates which were not adjusted for actual time dedicated to the award and did not support the distribution of salary or wages among specific cost objectives. Questioned Costs Not applicable Effect or Potential Effect The Organization may have charged costs to the federal award in excess or below actual benefit received by the award. Repeat Finding Partially, see prior year finding 2021-002 Recommendation We recommend the Organization implement the necessary internal controls to ensure documentation is retained to support actual effort spent on federal awards. Views of Responsible Officials of Auditee Management concurs with the finding and has provided the accompanying corrective action plan.

Corrective Action Plan Fiscal Year Ended December 31, 2022 Finding: 2022-1 Contact: Duane Landon, CFO duane@byrdbarr.place 206.812.4947 Finding: Timesheets did not support payroll allocations for ERAP versus LIHEAP. Corrective Action: Time will be allocated based on the number of files processed per program and timesheets will be completed to reflect this allocation. Proposed Completion Date: This has already been implemented for 2023.

2021-002

Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: 21.023 Program: Emergency Rental Assistance Program Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-federal entities receiving federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with federal statues, regulations, and the terms and conditions of the federal award. Per 2 CFR Section 200.430 Compensation ? Personal Services: ?Standards for Documentation of Personnel Expenses (1) Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-federal entity?s written policy; (v) Comply with the established accounting policies and practices of the non-federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and non-federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.(viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-federal entity?s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-federal entity?s system of internal controls includes processes to review after-the-fact interim charges made to a federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the federal award is accurate, allowable, and properly allocated.? Condition: We noted that Byrd Barr Place allocated payroll and nonpayroll expenditures to the Seattle Emergency Rental Assistance program during 2021 based on budget allocation rates. Employees properly tracked and reported their time based on actual time spent, however, when payroll and related costs were charged in the accounting system, they were charged based on the budgeted allocated rates or employee schedules. There was no procedure in place to determine if a true-up was necessary from allocated costs. Nineteen timesheets were tested during the audit, and all were charged based on budgeted allocated rates. Twenty-seven nonpayroll expenditures were tested during the audit, and twelve were charged based on budgeted allocated rates, the remaining fifteen selections were for direct assistance, and as such no allocation rate was necessary. Questioned Costs: Undetermined Context: This is a condition identified per review of Byrd Barr Place?s compliance with specified requirements using a statistically valid sample. Payroll costs including fringe benefits for the Seattle Emergency Rental Assistance Program in 2021 were $74,433. Nonpayroll costs for the Seattle Emergency Rental Assistance Program, excluding direct assistance, were $126,021 in 2021. Effect: Without adequate controls in place to ensure costs based on budgeted allocations are reasonable and reconcile to the actual time spent on the program, Byrd Barr Place could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement Byrd Barr Place is entitled to under the terms of the grant. Cause: Byrd Barr Place did not have policies and procedures in place to review and reconcile the estimated amounts of payroll expenditures charged to the Seattle Emergency Rental Assistance Program to the actual expenditures incurred. Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: We recommend that Byrd Barr Place implement policies and procedures to review for any necessary budget to actual adjustments, and we recommend that sufficient documentation be maintained to support any adjustments made as required by 2 CFR 200.430. Views of Responsible Officials: Management agrees with this finding. See the corrective action plan.

Corrective Action Plan Fiscal Year Ended December 31, 2021 Finding: 2021-02 Contact: Duane Landon, CFO duane@byrdbarr.place 206.812.4947 Finding: Timesheets did not support payroll allocations for SERAP Corrective Action: We are currently reviewing options and will implement to most cost effective method that still meets requirements. Proposed Completion Date: June 1st, 2023.

2020-003 ? Activities Allowed or Unallowed; Allowable Costs/Cost Principles Program: Coronavirus Relief Fund CFDA No.: 21.019 Federal Grantor: U.S. Department of the Treasury Award No. and Year: 2020 Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control and Instance of Non-Compliance Criteria: 2 CFR Part 200.403, Factors affecting allowability of costs, states that except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal Awards: be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles and conform to any limitation or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. Further, per the Treasury FAQ related to the Coronavirus Relief Fund, the intent of the fund was not to provide general fiscal assistance, but rather to assist with COVID-19 related necessary expenditures. With respect to nonpayroll expenses charged to grant programs, Byrd Barr Place?s internal control policy requires review, by the CFO, of all expenses prior to their entry in the general ledger system. Condition: During our testing of the Organization?s compliance with the Activities Allowed or Unallowed, & Allowable Costs/Cost Principles compliance requirements, we noted that credit card expenditures charged to the grant included the purchase of flowers as a gift for a partner organization with which Byrd Barr Place put together a health equity initiative, as well as the purchase of a polaroid camera to create a volunteer appreciation wall. These transactions amounted to $221. These costs do not qualify as reasonable and necessary to the federal program. Cause: In an attempt to utilize all available COVID-19 funding before the expiration date, several purchases were reclassified to be expended under Coronavirus Relief Funding per the instructions of the credit card holders. The CFO did not review these transactions in accordance with normal internal control procedures. Effect or Potential Effect: Unallowed activities and unallowable costs were charged to the grant. Questioned Costs: Known questioned costs are $211. Context: We sampled 33 nonpayroll transactions and found two errors for a known error of $221. This was not a statistically valid sample. Repeat Finding: This is not a repeat finding. Recommendations: All employees with responsibility over federal funds should receive training on the types of costs and activities that are allowable under Byrd Barr Place?s federal program. Additionally, all transactions should go through a second level of review before they are charged to a federal award. Views of Responsible Officials: Management agrees with this finding. See the corrective action plan.

Corrective Action Plan Fiscal Year Ended December 31, 2020 Finding: 2020-003 Contact: Duane Landon, CFO duane@byrdbarr.place 206.812.4947 We concur with the finding; two small credit card charges were treated as allowable costs incorrectly. Byrd Barr Place?s activity significantly increased in 2020 compared to previous years, yet our administrative capacity did not grow accordingly. Demands for our services doubled, while we were trying to navigate the pandemic and its impacts on our staffing and operations. As such, the misidentification of these transactions were not detected in a timely manner. Corrective Action: Individuals authorized to make purchases will be trained on what costs are allowable and unallowable. Accounting staff will participate in the training as a refresher. Both the Accountant and CFO or Controller will review credit card charges, including year-to-date and other payments for allowability. Proposed Completion Date: July 31, 2021