Helping Hand HouseNon-Profit

Section III: Federal Award Findings Finding 2022-003: Material weakness due to a lack of segregation of duties and effective internal controls. Federal Agency: U.S. Department of Treasury Program Title: Emergency Rental Assistance Program and Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Numbers (ALN): 21.023 and 21.027 Federal Award Years: Year ended December 31, 2022 Pass-through Grantor and identifying numbers: Pierce County; SC-108282, SC-108719, SC-109199 Criteria: 2 CFR 200.303(a) requires that “the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Condition and Context: Helping Hand House has a lack of segregation of duties and internal controls when it comes to the processes related to the requirements of activities allowed, allowable costs / cost principles, period of performance, and reporting. Through the samples related to testing internal controls, we identified the following:  27 out of 60 selections for ALN 21.023 and 7 out of 60 selections for ALN 21.027 in which the same person was involved in preparing the underlying support for expenditures, approving them, and also reviewing and approving the invoices remitted to the Pass-through Grantor for reimbursements. In many cases, the same person was also signing the related check disbursement to the landlord. This is a condition identified using a statistically valid sample. Cause: Management failed to implement proper segregation of duties and internal controls related to the activities surrounding the administration of the federal award programs. Effect: The lack of segregation of duties related to these areas heightens the risk of potential errors and even fraud as it relates to ensuring that the expenditures are appropriate for the award and appropriately remitted for reimbursement. This also weakens the Organization’s ability to ensure compliance with the awards’ requirements. Question Costs: None. Repeat Finding: This is a partially repeated finding of 2021-003. Recommendation: We recommend that Helping Hand House establish written policies and procedures related to the programs stating explicit roles of each individual involved in the process. We also recommend that management conduct regular risk assessments and conduct monitoring functions over the internal controls to ensure that they are effectively working and appropriately documented. Views of Responsible Officials: See Corrective Action Plan.

Finding 2022-004: Material Weakness Due to Unsupported Administration and Program Operations Costs. Federal Agency: U.S. Department of Treasury Program Title: Emergency Rental Assistance Program Assistance Listing Numbers (ALN): 21.023 Federal Award Years: Year ended December 31, 2022 Pass-through Grantor and identifying numbers: Pierce County; SC-108282, SC-108719 Criteria: Charges to federal awards must meet the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart E - Cost Principles. Specifically CFR 200.400(d) indicates the Organization must support the accumulation of costs and provide for adequate documentation to support costs charged to the Federal award. Condition and Context: Administration and program operation costs charged to the award for the period January 1, 2022 through February 28, 2022 lacked supporting documentation to verify whether there were equivalent administrative and program operation expenses incurred by the Organization. All budgets approved by the Pass-through Grantor allowed for such costs to be reimbursed by the award as long as adequate documentation of how the costs were determined was retained. Since the organization did not retain any such documentation, there is no way of knowing if a portion or all of those administration or program operation costs related to actual activities that were performed related to these programs. The Organization most certainly did incur administration and program operation costs that were legitimate to be remitted to the award. However, with no controls in place to ensure that these costs were appropriately accumulated and documented, the amounts reimbursed by the programs might not be appropriate. During our audit, we were able to fully quantify the full amount of administration and program operations costs that were inappropriately supported through discussions with management of the Organization and reviewing the reimbursement requests that were submitted to the Pass-through Grantor. The amounts included in the questioned costs below is the entire amount of such costs that were charged to the program during the period January 1, 2022 through February 28, 2022. Cause: Helping Hand House did not have processes and controls in place to ensure that documentation to ensure that administrative and program operation costs that were charged to the program were appropriately documented. Effect: There is the potential that the Pass-through grantor may require a repayment of a portion or all of the program and administrative costs that were paid for by the program. As such, a loss contingency disclosure has been included in the notes to the financial statements to indicate that there is the potential that the Pass-through Grantor may require some of these amounts to be repaid. This also is the reason for the qualified opinion in the Report On Compliance for Each Major Federal Program. Known Questioned Costs for ALN 21.023: $76,284 Repeat Finding: This is a partially repeated finding of 2021-004. Recommendation: Our testing of information for the months of March to December 2022 indicated that the client made significant improvements in their documentation, and we did not find similar questioned outside of the time period from January 1, 2022 to February 2028, 2022. We recommend that Helping Hand House continue to develop and document procedures and controls for how administrative and program operation costs will be allocated to the federal awards. This information should be retained so that it can be made available at the request of the Pass-through Grantor, the auditor or other relevant parties. Views of Responsible Official: See Corrective Action Plan.

Finding 2022-005: Submission of the Data Collection Form. Criteria: 2 CFR section 200.512(a) states that the data collection form and reporting package must be submitted the earlier of 30 calendar days after receipt of the auditor’s reports or nine months after the end of the audit period to the Federal Audit Clearinghouse (FAC). If the due date falls on a Saturday, Sunday, or federal holiday, the reporting package is due the next business day. Condition and Context: The reporting package for the year ended December 31, 2022 was not submitted by September 30, 2023 to the FAC. Cause: The Organization’s audit for the year ended December 31, 2022 did not begin until April of 2024. This was due to the forensic investigation that is mentioned in Finding 2022-001. The Organization communicated the delay to the appropriate parties. Effect: The Schedule of Expenditures of Federal Awards were not available in a timely manner in order to allow for timely submission of the data collection form related to ALN 21.023 and 21.027. Questioned Costs: None Repeat Finding: This is a partially repeated finding of 2021-005. Recommendation: We recommend that the data collection form is filed timely in the future. In order to do so, steps should be taken to ensure that the appropriate oversight is exercised and controls are put in place to ensure the accuracy and reliability of the financial data which will enable the audits to be completed on a more timely basis. Views of Responsible Official: See Corrective Action Plan.

Finding 2021-003: Material weakness due to a lack of segregation of duties and effective internal controls Federal Agency: U.S. Department of Treasury Program Title: Emergency Rental Assistance Program and Corona Virus Relief Fund Assistance Listing Numbers (ALN): 21.023 and 21.019 Federal Award Years: Year ended December 31, 2023 Pass-through Grantor and identifying numbers: Pierce County; SC-108112, SC-108282, SC-108719, SC- 108080 Criteria: 2 CFR 200.303(a) requires that “the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Condition and Context: Helping Hand House has a lack of segregation of duties and internal controls when it comes to the processes related to the requirements of activities allowed, allowable costs / cost principles, period of performance, and reporting. Through the samples related to testing internal controls, we identified the following:  14 out of 60 selections for ALN 21.023 and 17 out of 60 selections for ALN 21.019 lacked sufficient evidence of approval of disbursements of rental assistance.  46 out of 60 selections for ALN 21.023 and 40 out of 60 selections for ALN 21.019 in which the same person was involved in preparing the underlying support for expenditures, approving them, and also reviewing and approving the invoices remitted to the Pass-through Grantor for reimbursements. This is a condition identified using a statistically valid sample. Cause: Management also failed to implement proper segregation of duties and internal controls related to the activities surrounding the administration of the federal award programs. Effect: The lack of segregation of duties related to these areas heightens the risk of potential errors and even fraud as it relates to ensuring that the expenditures are appropriate for the award and appropriately remitted for reimbursement. This also weakens the Organization’s ability to ensure compliance with the awards’ requirements. Question Costs: None Repeat Finding: Not applicable. Recommendation: We recommend that Helping Hand House establish written policies and procedures related to the programs stating explicit roles of each individual involved in the process. We also recommend that management conduct regular risk assessments and conduct monitoring functions over the internal controls to ensure that they are effectively working and appropriately documented. Views of Responsible Officials: See Corrective Action Plan.

Finding 2021-004: Material Weakness Due to Unsupported Administration and Program Operations Costs Federal Agency: U.S. Department of Treasury Program Title: Emergency Rental Assistance Program and Corona Virus Relief Fund Assistance Listing Numbers (ALN): 21.023 and 21.019 Federal Award Years: Year ended December 31, 2023 Pass-through Grantor and identifying numbers: Pierce County; SC-108112, SC-108282, SC-108719, SC- 108080 Criteria: Charges to federal awards must meet the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart E - Cost Principles. Specifically CFR 200.400(d) indicates the Organization must support the accumulation of costs and provide for adequate documentation to support costs charged to the Federal award. Condition and Context: Administration and program operation costs charged to the award for the period ended December 31, 2021 lacked supporting documentation to verify whether there were equivalent administrative and program operation expenses incurred by the Organization. All budgets approved by the Pass-through Grantor allowed for such costs to be reimbursed by the award as long as adequate documentation of how the costs were determined was retained. Since the organization did not retain any such documentation, there is no way of knowing if a portion or all of those administration or program operation costs related to actual activities that were performed related to these programs. The Organization most certainly did incur administration and program operation costs that were legitimate to be remitted to the award. However, with no controls in place to ensure that these costs were appropriately accumulated and documented, the amounts reimbursed by the programs might not be appropriate. During our audit, we were able to fully quantify the full amount of administration and program operations costs that were inappropriately supported through discussions with management of the Organization and reviewing the reimbursement requests that were submitted to the Pass-through Grantor. The amounts included in the questioned costs below is the entire amount of such costs that were charged to the program during the year ended December 31, 2021. Cause: Helping Hand House did not have processes and controls in place to ensure that documentation to ensure that administrative and program operation costs that were charged to the program were appropriately documented. Effect: There is the potential that the Pass-through grantor may require a repayment of a portion or all of the program and administrative costs that were paid for by the program. As such, a loss contingency disclosure has been included in the notes to the financial statements to indicate that there is the potential that the Pass-through Grantor may require some of these amounts to be repaid. This also is the reason for the qualified opinion in the Report On Compliance for Each Major Federal Program. Known Questioned Costs for ALN 21.023: $329,572 Known Questioned Costs for ALN 21.019: $164,757 Repeat Finding: Not applicable. Recommendation: We recommend that Helping Hand House develop and document procedures and controls for how administrative and program operation costs will be allocated to the federal awards. This information should be retained so that it can be made available at the request of the Pass-through Grantor, the auditor or other relevant parties. Views of Responsible Official: See Corrective Action Plan.

Finding 2021-005: Submission of the Data Collection Form Criteria: 2 CFR section 200.512(a) states that the data collection form and reporting package must be submitted the earlier of 30 calendar days after receipt of the auditor’s reports or nine months after the end of the audit period to the Federal Audit Clearinghouse (FAC). If the due date falls on a Saturday, Sunday, or federal holiday, the reporting package is due the next business day. Condition and Context: The reporting package for the year ended December 31, 2021 was not submitted by September 30, 2022 to the FAC. Cause: The Organization’s audit for the year ended December 31, 2021 did not begin until November of 2023. This was due to the forensic investigation that is mentioned in Finding 2021-001. The Organization communicated the delay to the appropriate parties. Effect: The Schedule of Expenditures of Federal Awards were not available in a timely manner in order to allow for timely submission of the data collection form related to ALN 21.023 and 21.019. Questioned Costs: None Repeat Finding: Not applicable. Recommendation: We recommend that the data collection form is filed timely in the future. In order to do so, steps should be taken to ensure that the appropriate oversight is exercised and controls are put in place to ensure the accuracy and reliability of the financial data which will enable the audits to be completed on a more timely basis. Views of Responsible Official: See Corrective Action Plan.