Catholic Community Services of Western WashingtonNon-Profit

Type of Finding: Material Weakness in Internal Control over Compliance Federal Agency: Department of Housing and Urban Development; Department of Veterans Affairs Federal Program Name: Emergency Solutions Grant Program; Veterans Affairs Supportive Services for Veteran Families Program Assistance Listing Number: 14.231; 64.033 Federal Award Identification Number and Year: 14.231: SC-111170-2, CW2254906, CW2259491 64.033: 2020-WA-146-24, 2020-WA-146-25, 20-WA-146-FY24, 20-WA-146-FY25 Pass-Through Agency: 14.231: Pierce County Human Services, City of Tacoma 64.033: N/A – Direct Pass-Through Number(s): 14.231: SC-111170-2, CW2254906, CW2259491 64.033: N/A – Direct Award Period: 14.231: July 1, 2024 – June 30, 2025; November 1, 2022 – December 31, 2024 64.033: October 1, 2019 – September 30, 2026 Criteria or specific requirement: 2 CFR 180.300 indicates that participants must check SAM exclusions, collect a certification form, or add a clause or condition to the covered transaction before entering into a covered transaction. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. 2 CFR 200.318(i) requires recipients of federal funds to "maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price." Condition: For selected procurements, insufficient documentation was available to support the procurement decision, ensure the correct procurement method was used, and to verify open competition. All selected covered transactions had a suspension and debarment check performed during the fiscal year under audit; however, checks should be performed prior to entering into a covered transaction. Questioned costs: Note: all vendors ultimately determined not to be suspended or debarred, therefore questioned costs only apply to procurement samples. Context: 14.231:1/5 selected procurements lacked sufficient documentation to support procurement process; 4/5 selected covered transactions lacked support to evidence suspension and debarment was checked prior to entering into the covered transactions. 64.033: 4/5 selected procurements lacked sufficient documentation to support procurement process; 4/5 selected covered transactions lacked support to evidence suspension and debarment was checked prior to entering into the covered transactions. Cause: There is a misunderstanding that costs that are not directly procured for a federal program may be subject to suspension and debarment checks and a misunderstanding that the full contract cost should be considered when determining if a contract is a covered transaction. There is inadequate document management for historic paper files. There are different processes implemented across the various Divisions, which results in inconsistent application of compliance requirements and controls. Effect: Increased possibility of entering into a covered transaction with vendors/contractors who are federally suspended or debarred or to procure goods and services that are less-than-ideal for the program needs. Repeat Finding: 2024-001 Recommendation: CLA recommends performing suspension and debarment checks on all vendors that may be paid for (even if only in part) with federal funds, if the full value of the contract is likely to exceed $25,000. Additional checks should be performed on a regular basis (recommended annually) so that changes to vendor status are caught timely. This may require modification to organizational policies and training amongst staff who perform procurement activities. CLA also recommends that a consistent procurement process and documentation location be used across all Divisions to ensure documentation to support procurement decisions is accessible and maintained. Updated procurement decisions should be documented at the initiation of any new procurements, as well as before entering into any substantial amendments to existing contracts/agreements. Views of responsible officials: There is no disagreement with the audit finding.

Type of Finding: Significant Deficiency in Compliance and Internal Control over Compliance Federal Agency: Department of Housing and Urban Development; Department of Veterans Affairs Federal Program Name: Emergency Solutions Grant Program; Veterans Affairs Supportive Services for Veteran Families Program Assistance Listing Number: 14.231; 64.033 Federal Award Identification Number and Year: 14.231: HCS-24-31-2401-007, HCS-23-32-2301-007, HCS-24-32-2401-007, SC-111170, CW2254906, CW2259491, SC-111171 64.033: 20-WA-146 - 10/1/23-9/30/26, 2020-WA-146-LT - 8/19/22-9/30/26 Pass-Through Agency: 14.231: Snohomish County Office of Housing, Homelessness & County Development, City of Tacoma, Pierce County Human Services 64.033: N/A – Direct Pass-Through Number(s): 14.231: HCS-24-31-2401-007, HCS-23-32-2301-007, HCS-24-32-2401-007, SC-111170, SC-111171, CW2259491, CW2254906 64.033: N/A – Direct Award Period: 14.231: July 1, 2024 – June 30, 2025; October 1, 2023 – September 30, 2024; October 1, 2024 – September 30, 2025; November 1, 2022 – December 31, 2024; July 1, 2024 – June 30, 2026 64.033: October 1, 2023 – September 30, 2026; August 19, 2022 – September 30, 2026 Criteria or specific requirement: 2 CFR 200.430(g)(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 that provides reasonable assurance that the charges are accurate, allowable, and properly allocated." Condition: 14.231: 2 of 40 payroll expenditures tested was not subject to the timely use of internal control process that reasonably assures that the payroll charges were accurate, allowable, and properly allocated. For 64.033, there was 2 of 40 payroll expenditures tested that lacked appropriate and timely review. In total, there were 4/80 payroll transactions that lacked adequate documentation of the key control. Questioned costs: None Context: 14.231: During testing of payroll disbursements CLA noted that one employee's timecard was not approved by a manager for one pay period in September 2024. The internal control was eventually performed in November 2024, 44 days after CLA would expect to see management review & approval of the employees’ timecard. A second employee's timecard showed timecard review but not approval. 64.033: During testing of payroll disbursements CLA noted that 2 samples had timecards that were not subject to timely review & approval (lack of internal control). Cause: The lack of timely approval appears to have occurred due to an oversight by the person responsible for performing the internal control. Additionally, there was no internal process for ensuring that the internal control was performed by a different employee if the original employee responsible for performing the control separated from the entity. Upon separation of a manager who is responsible for performing this control, a temporary manager with sufficient knowledge of the employee's work, programs worked, and program requirements should be assigned to perform the control to ensure compliance with allowable costs and accurate billing of payroll expenses. Effect: Inadequate allocation of wages to federal programs may result in noncompliance with grant regulations. This can also lead to overcharging the federal grant, which may result in penalties or repayment obligations. Repeat Finding: 2024-002 Recommendation: CLA recommends implementing a process that ensures the control is performed timely by an alternative employee with sufficient understanding of the program requirements to accurately review and approve cost allocations that meet documented time and effort spent on each program. This will include ensuring an appropriate timesheet reviewer is assigned, and that an appropriate back-up reviewer is available. Views of responsible officials: There is no disagreement with the audit finding.

Type of Finding: Significant Deficiency in Compliance and Internal Control over Compliance Federal Agency: Department of Veterans Affairs Federal Program Name: Veterans Affairs Supportive Services for Veteran Families Program Assistance Listing Number: 64.033 Federal Award Identification Number and Year: 20-WA-146-25; 20-WA-146-LT Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 20-WA-146-25: October 1, 2023 – September 30, 2026; 20-WA-146-LT: August 19, 2022 – September 30, 2026 Criteria or specific requirement: 2 CFR 200.303 requires recipients of federal funds to "establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statues, regulations, and terms and conditions of the Federal award." Condition: During testing of cash management and indirect costs, all 5 samples of reimbursement request invoices tested from the King County Division lacked evidence of approval by the Finance Director. The 3 additional samples tested from another Division had evidence of review on the invoices. Questioned costs: None. Context: Each Division implements different procedures and controls related to compliance. For the King County Division, the Finance Director was tasked with reviewing the monthly reimbursement request and the corresponding indirect cost calculations via her review of monthly financials. However, that review was not documented during the year therefore there was not any key control in place. The Director of Federal Compliance was the only one who prepares and request the drawdowns without any oversight; however, this did not result in noncompliance. Cause: There are different processes implemented across the various Divisions, which results in inconsistent application of compliance requirements and controls. Effect: Increased possibility of requesting reimbursement for costs that are unallowable to the program, and for misapplying the indirect cost rate due to human error. Repeat Finding: 2024-003 Recommendation: CLA recommends applying a consistent review process of reimbursement requests across all programs and Divisions, to the extent possible, to reduce the likelihood of missed application of controls in regard to cash management and indirect cost application. Views of responsible officials: There is no disagreement with the audit finding.

Criteria or specific requirement: 2 CFR 180.300 indicates that participants must check SAM exclusions, collect a certification form, or add a clause or condition to the covered transaction before entering into a covered transaction. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: In a statistically valid sample, CLA tested three covered transactions for ALN 21.027, four for ALN 64.033, and three for ALN 93.676, resulting in 1, 2, and 1 covered transactions, respectively (a total of three vendors, as one deficient covered transaction was tested for both 64.033 and 93.676), Condition (Continued): lacked documentation to show if a suspension and debarment check had been performed prior to entering into the covered transaction. Questioned costs: None Context: For 21.027, the procurement was for general organizational purposes, so costs were charged to a general account and then partially allocated to the federal program. Because it was not a cost directly procured for the program, the suspension and debarment check procedures were missed. For the shared selection for 64.033/93.676, the contract was a 48-month service agreement for copier service and supplies. The cost was miscalculated as being less than $25,000, therefore an exclusion check was not performed. The second deficiency for 64.033 was for a contract initiated in 2019. Since then, the organization moved from paper files to electronic file management. Although older paper files are still kept, this particular document was not able to be found. Cause: There is a misunderstanding that costs that are not directly procured for a federal program may be subject to suspension and debarment checks and a misunderstanding that the full contract cost should be considered when determining if a contract is a covered transaction. There is inadequate document management for historic paper files. Effect: There is an increased possibility of entering into a covered transaction with vendors/contractors who are federally suspended or debarred. Without adequate records retained, CCS is at risk of noncompliance with federal suspension and debarment requirements. Repeat Finding: 2023-004 Recommendation: CLA recommends performing suspension and debarment checks on all vendors that may be paid for (even if only in part) with federal funds, if the full value of the contract is likely to exceed $25,000. Additional checks should be performed on a regular basis (recommended annually) so that changes to vendor status are caught timely. This may require modification to organizational policies and training amongst staff who perform procurement activities. Views of responsible officials: There is no disagreement with the audit finding.

Criteria or specific requirement: Per 2 CFR part 200.430(g)(1), "Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed." Furthermore, 2 CFR 200.430(g)(1)(vi) indicates that these records must "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 a 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". Condition: (Aging) In a statistically valid sample, one of 40 payroll expenditures tested was in excess of the hours worked to the major program, per the employee's approved timesheet. (93.676) In a statistically valid sample, one of 60 payroll expenditures tested was in excess of the hours worked to the major program, per the employee's approved timesheet. Questioned costs: None Context: (Aging) In the deficient sample tested, an additional 10.98 hours were charged to the major program that should have been booked to a non-program code, per the approved timesheet. This was due to an allocation setup error in the payroll software. This setup issue only affected one employee, and the full-year impact was immaterial to the program. (93.676) In the deficient sample tested, an additional .88 hours were charged to the major program that should have been booked to another program code not belonging to the major program, per the approved timesheet. This was due to an allocation setup error in the payroll software. The allocation setup was corrected after the prior year audit, but due to timing of the audit recommendations, the issue persisted into part of FY24. The full-year impact was immaterial to the program. Cause: Excessive wages were booked to the major program due to an allocation setup error in the payroll software. The employees in question should have been moved to a holding home department. However, when that process was done for all other employees, these employees were missed. Effect: Inadequate allocation of wages to federal programs may result in noncompliance with grant regulations. This can also lead to overcharging or undercharging the federal grant, which may result in penalties or repayment obligations. Repeat Finding: 2023-001 Recommendation: CLA recommends implementing a review process over ADP allocations to ensure that employees who work across various programs have their wages allocated accurately based on the documented time and effort spent on each program. Views of responsible officials: There is no disagreement with the audit finding.

Criteria or specific requirement: 2 CFR 200.414(f) states that recipients may elect to charge a de minimis rate of up to 10 percent of modified total direct costs (MTDC). 2 CFR 200.1 “Modified Total Direct Cost (MTDC)” excludes equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs, and the portion of each subaward in excess of $50,000. Condition: During testing of indirect costs, 4 of the 4 samples tested erroneously included rental costs in the calculation of Modified Total Direct Costs, resulting in an overcharge of indirect costs to the program. Questioned costs: None. Context: For allowable costs (indirect), a sample of 4 was made from a population of 12 reimbursement requests for the major program. Of the 4 sampled, all rental costs included in the calculation of Modified Total Direct Costs, resulting in a slightly higher indirect cost calculation. Cause: There is a misunderstanding of which costs should be excluded from the MTDC for this specific contract. Occupancy / Space Rental costs are identified but are not removed during the calculation of indirect costs. Effect: Inadequate allocation of indirect costs to federal programs may result in noncompliance with grant regulations, which could result in penalties or repayment obligations. Repeat Finding: 2023-002 Recommendation: CLA recommends that CCS work with the USCCB to update the Reimbursement Request form to include a section that removes items of selected cost from the calculation of indirect costs. Views of responsible officials: There is no disagreement with the audit finding.

Type of Finding: Significant Deficiency in Internal Control over Compliance Federal Agency: Department of Veterans Affairs, Department of Health and Human Services Federal Program Name: VA Supportive Services for Veteran Families Program, Unaccompanied Alien Children Program Assistance Listing Number: 64.033, 93.676 Federal Award Identification Number and Year: 20-WA-146-2023, 90ZU0386-3-0-2022, 90ZU0386-3-0-2023 Pass-Through Agency: United States Conference of Catholic Bishops Award Period: October 1, 2020, to September 30, 2023, January 1, 2022, to December 31, 2022, January 1, 2023, to December 31, 2023 Criteria or specific requirement: Under the standards for documentation of personnel expenses, 2 CFR 200.430(i)(1) states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Furthermore, 2 CFR 200.430(i)(1)(vii) indicates that these records must: "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 a 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". Condition: During testing it was discovered that employees in CCS’s payroll software (ADP) were not being consistently set up to accurately track hours worked per the timesheets to their associated job cost centers. Hours tracked to the major program are sometimes erroneously split-up between the "home department" and the major program cost center. The opposite is also sometimes true in that hours worked under the "home department" are erroneously split between the home department and the major program cost centers, even though those hours were not worked on the major program. This error appears to occur on an employee-by-employee basis, based on the setup of the individual employee. Discussion with management indicates that this error is limited to the SW division and only occurs if an employee has a home department that is a non-holding account. Questioned costs: None Context: (64.033) A sample of 40 was made from a population of 1,044 transactions charged to the major program for salaries and benefit expenses. Of the 40 sampled costs, 1 was found to be out of compliance with the provisions for 2 CFR 200.430 Compensation – personal services of the Uniform Guidance. (93.676) A sample of 40 was made from a population of 926 transactions charged to the major program for salaries and benefit expenses. Of the 40 sampled costs, 7 were found to be out of compliance with the provisions for 2 CFR 200.430 Compensation – personal services of the Uniform Guidance. Cause: There is a misunderstanding on how employees and cost centers must be set up in ADP in order to achieve the desired allocation splits. Effect: Inadequate allocation of wages to federal programs may result in noncompliance with grant regulations. This can also lead to overcharging or undercharging the federal grant, which may result in penalties or repayment obligations. Repeat Finding: No. Recommendation: CLA recommends that those charged with establishing new employees in ADP receive an updated training on the correct setup steps to ensure that employees who work across various programs have their wages allocated accurately based on the documented time and effort spent on each program. CCS has already implemented a fix going forward and is currently assessing the cumulative error for the year under audit. Views of responsible officials: There is no disagreement with the audit finding.

Type of Finding: Significant Deficiency in Internal Control over Compliance Federal Agency: Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: DA-202201-00320-2022, DA-251-2022, DA-230-2022 Pass-Through Agency: King County Regional Homelessness Authority Pass-Through Number(s): DA-202201-00320, DA-251, DA-230 Award Period: January 1, 2022, to December 31, 2022, January 1, 2022, to December 31, 2022, January 1, 2022, to December 31, 2022 Criteria or specific requirement: 2 CFR 200.303(a) states that a 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)". In addition, 2 CFR 200.414(f) states that "...As described in § 200.403, costs must be consistently charged as either indirect or direct costs but may not be double charged or inconsistently charged as both. If chosen, this methodology once elected must be used consistently for all Federal awards until such time as a non-Federal entity chooses to negotiate for a rate, which the non-Federal entity may apply to do at any time". Condition: During testing of indirect costs, 3 of the 11 contracts tested exceeded the 10% de minimis indirect cost rate elected by the organization. Questioned costs: ALN Contract Known Questioned Costs Likely Questioned Costs 21.027 DA-202201-00320 $5,554 None 21.027 DA-251 $22,994 None 21.027 DA-230 $463 None Context: CLA tested the entire population (11 contracts) for indirect costs charged to the major program. Of the contracts tested, 3 were found to be out of compliance with the provisions for 2 CFR 200.303(a) and 2 CFR 200.414(f). Indirect costs exceeding the 10% de minimis cost rate elected by CCS totaled $29,011. Cause: Due to the high volume of client assistance in these programs, there can be several general ledger reclassifications in each month. This is because clients may be eligible for a specific funding source or contract that differs from the original coding. This can lead to multiple general ledgers being sent between the accounting department and the program compliance teams. At times there has been a lack of communication to confirm the general ledger is finalized with indirect at 10%. Program managers will accidentally invoice before the adjustment. Effect: Without adequate documentation and controls in place to ensure costs are reasonable and intended for the program charged, CCS could incorrectly charge expenditures to the federal program, report fraudulent expenditures, or not request appropriate reimbursement that CCS is entitled to under the terms of the grant. Inadequate allocation of indirect costs to federal programs may result in noncompliance with grant regulations, which could result in penalties or repayment obligations. Repeat Finding: No. Recommendation: CLA recommends that emphasis be placed during the billing process to ensure that no more than the 10% de minimis cost rate is charged each month. Views of responsible officials: There is no disagreement with the audit finding.

Type of Finding: Material Weakness in Internal Control over Compliance Pass-Through Agency: Pacific Mountain Workforce Development, King County Regional Homelessness Authority, City of Bellevue, King County, City of Des Moines, United States Conference of Catholic Bishops Pass-Through Number(s): TCJN-ARPA-011-PY21, DA-202201-00320, DA-202212-01125, DA-230, 10270, 6204070, DA-251, SLFRP4086, 20-WA-146, 20-WA-146LT, S20-WA-500, 90ZU0386-3-0, 90ZU0386-3-0 Award Period: May 1, 2022 to June 30, 2023, January 1, 2022 to December 31, 2022, January 1, 2023 to December 31, 2023, January 1, 2022 to December 31, 2022, January 1, 2023 to December 31, 2024, January 1, 2022 to December 31, 2024, January 1, 2022 to December 31, 2022, September 1, 2021 to August 31, 2022, October 1, 2020 to September 30, 2023, August 19, 2022 to September 30, 2026, October 1, 2019 to September 30, 2023, January 1, 2022 to December 31, 2022, January 1, 2023 to December 31, 2023 Criteria or specific requirement: 2 CFR 200.303(a) states that a 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)". In addition, 2 CFR 200.329(c)(1) states that the non-federal entity must submit performance reports at the interval required by the federal awarding agency or pass-through entity to best inform improvements in program outcomes and productivity. Condition: During testing of indirect costs, cash management, and reporting, it was noted that documentation was not retained secondary review of financial reports, performance reports, or special reports. In addition, during testing of reporting, it was noted that some reports were not filed timely and reported some incorrect demographics. Questioned costs: None. Context: (21.027) For allowable costs (indirects), a sample of 8 was made from a population of 63 reimbursement requests for the major program. Of the 8 sampled, all were missing evidence of authorized personnel review. For reporting, a sample of 16 monthly, quarterly, and annual reports (varied) was made from a population of 91 total reports. Of the 16 sampled, 15 were missing evidence of authorized personnel review. In addition, 1 monthly performance report was not filed timely. (64.033) For allowable costs (indirects) and cash management, a sample of 8 was made from a population of 35 reimbursement requests for the major program. Of the 8 sampled, all were missing evidence of authorized personnel review. For reporting, a sample of 11 monthly, quarterly, and annual reports (varied) was made from a population of 40 total reports. Of the 11 sampled, all were missing evidence of authorized personnel review. In addition, 2 quarterly performance reports reported some incorrect demographics. (93.676) For allowable costs (indirects) and cash management, a sample of 3 was made from a population of 12 reimbursement requests for the major program. Of the 3 sampled, all were missing evidence of authorized personnel review. For reporting, a sample of 5 monthly and quarterly reports (varied) was made from a population of 16 total reports. Of the 5 sampled, all were missing evidence of authorized personnel review. In addition, 1 quarterly performance report was not filed timely and reported some incorrect demographics. Cause: Documentation is not retained as proof of authorized personnel review on monthly, quarterly, and annual financial, performance and special reports. For late filing, controls are not in place to ensure that timely report filings are made in the event that an employee responsible for report submission is out of office during the due date. Effect: Without adequate documentation and controls in place to ensure costs are reasonable and intended for the program charged, CCS could incorrectly charge expenditures to the federal program, report fraudulent expenditures, or not request appropriate reimbursement that CCS is entitled to under the terms of the grant. Inadequate allocation of indirect costs to federal programs may result in noncompliance with grant regulations, which could result in penalties or repayment obligations. The late filing of reports can present risks, such as outdated and unreliable information or the inability to detect potential fraud or irregularities. In addition, delayed reports can impede regulatory authorities’ ability to monitor compliance, detect patterns or trends, and assess risks in a timely manner. Repeat Finding: No. Recommendation: CLA recommends that documentation is retained as proof of authorized personnel review. In addition, CCS should consider backup measures to ensure the timely filing of financial, performance and special reports even during the absence of an employee. Views of responsible officials: There is no disagreement with the audit finding.

Type of Finding: Significant Deficiency in Internal Control over Compliance Federal Agency: Department of Veteran Affairs Federal Program Name: VA Supportive Services for Veteran Families Program Assistance Listing Number: 64.033 Federal Award Identification Number and Year: S20-WA-500-2023 Award Period: October 1, 2019 to September 30, 2023 Criteria or specific requirement: 2 CFR 200.318(i) states that "the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price". In addition, 2 CFR 200.320(a)(2)(i) states that "... If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity". 2 CFR 180.300 also indicates that participants must check SAM exclusions, collect a certification form, or add a clause or condition to the covered transaction before entering into a covered transaction. Condition: For the sampled procurement selection, documentation was not retained for the adequate number of price comparisons prior to exercising the procurement, as required, and stated in CCS’s written procurement policy. In addition, documentation was not retained for the vendor showing the vendor was checked for suspension and debarment prior to entering into the transaction. Questioned costs: None Context: CLA tested the entire population (1) of procurement transactions charged to the major program that exceeded CCS’s established Micro Purchase threshold of $10,000. The transaction was found to be out of compliance with the procurement requirements, as documentation was not retained detailing the history of the procurement, including the rationale for the method of procurement, selection of contract type, basis for contractor selection, and the basis for the contract price. Documentation should be retained to evidence the adequate number of price comparisons, price analyses, and rationale of acquisition, including to limit competition where competition is limited. In addition, documentation was not retained for the vendor showing that the vendor was checked for suspension and debarment prior to entering into the transaction. Cause: Documentation retained for the procurement transaction was not adequate to show proof of compliance with CFRs 200.318 – 200.327. Effect: Without adequate records retained, CCS is at risk of noncompliance with the standards of procurement. Repeat Finding: No. Recommendation: CLA recommends updating the Procurement, Suspension and Debarment certification form to include more rigorous documentation as required by CFRs 200.318 – 200.327, including such documentation as the procurement threshold of the transaction, price comparisons and analyses made, bids obtained, proof of any limited competition, dated vendor screenings, and signed authorization of the appropriate program personnel. CLA also recommends emphasizing the importance of the procurement standards and established policy to all authorized purchasers within CCS. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Veterans Affairs Federal Program Title: VA Homeless Providers Grand and Per Diem Program CFDA Number: 64.033 Pass-Through Agency: Catholic Housing Services Award Period: October 1, 2019 ? September 30, 2020 Type of Finding: Significant Deficiency in Internal Control over Compliance Finding Identification Number: 2020-001 Type of Finding: Significant deficiency in Internal Control over Compliance Criteria: Per UG ?200.309, only expenses incurred during the period of performance may be charged to the Federal Award. The grant award states expenditures must be incurred during the grant award period. Condition: We noted that three of the twenty-four expenditures tested were incurred prior to the grant award start date and charged to the incorrect grant. Context: Three of the expenditures totaling $1,432 charged to the 2019-2020 grant were incurred during 2018-2019 grant period. Cause: The Organization did not consistently review invoices to ensure they were incurred during the grant period. Effect: The Organization overcharged the 2019-2020 grant award. Recommendation: We recommend the Organization review its procedures that ensure grants are charged in the proper reporting period with grant personnel to ensure that the cost reimbursements only include costs that are from the correct period. Management?s Response: Management concurs with the recommendation. Management is updating their procedures to ensure that costs are recorded and reported in the proper period.

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