CORVALLIS NEIGHBORHOOD HOUSING SERVICES, INC.Non-Profit

DevNW Management understands the importance of timely review and accuracy of federal award data and its presentation. Award guidelines were reviewed and implemented with the intent of accurate presentation of information. During 2021, the Finance Department had turnover in a number of critical staff positions. A Senior Staff Accountant and Staff Accountant left our employment by the first quarter of 2021 and we were unable to re-hire these positions until the end of July 2021. We had one final critical staff change at the end of 2021, the departure of our Accounts Payable Specialist, and that position was not rehired until April 2022. We headed into the 2021 audit with a team of dedicated but relatively new staff. While the Finance team still incurred capacity issues related to the training of new staff in 2021, the increase in Finance Staff gave us the ability to segregate functions and allowed for multi- tiered review of end-of-year close and preparation of audit schedules. The Finance staff had a process in place to review contracts, follow up with funders and confirm components of the annual SEFA schedule. New staff were compiling confirmations, these were reviewed by the Controller and then the Controller and CFO reviewed the documents for accuracy prior to distribution to funders. Confirmations were one of the main sources for compiling the SEFA schedule. One funding source included in the 2021 SEFA schedule was from NeighborWorks America. This particular grant was also included on the 2020 SEFA schedule, but it was incorrectly identified as Federal funds (the funds came to NeighborWorks through Wells Fargo Bank) and they should have been excluded from the SEFA schedule. An additional grant contract from Oregon Health Authority that was also recorded as Federal Funds in 2020 came to us in 2021 but the funding source per the contract was from general funds in 2021 and should not have been included in the SEFA schedule. While these funds went through a multiple review process, the confusion of presenting them on the 2020 SEFA caused us to include them in error in the 2021 schedule. A major funder for Community LendingWorks, Lane County, signed a confirmation that noted the funds were federal and listed CLW as a Sub-Recipient. Based on this documentation from the funder, we included it in the SEFA. We later learned that this was an error on the funder?s part as they considered us a Contractor and it should not have been included in the SEFA schedule. Additionally, two debt items were left off of the SEFA schedule, a Small Business Administration Federal loan and a Community Frameworks Loan. Accuracy and compliance are the forefront of department and organization goals. Management and staff?s plan to attain these goals include; Single Audit education, detailed review of the final 2021 SEFA audit schedule, compiling an ongoing SEFA schedule as part of the end-of-month process, and a Finance Team Member added to all contract negotiations will be implemented in 2022 to mitigate these errors in the future. All management involved in negotiating contracts and all Finance staff will attend Single Audit training to clarify those specific components of a contract that must be communicated and properly documented specifically as Federal Funded Awards. Also, the compilation of the grant matrix for each organization will now include a debt schedule to monitor funding received from all sources of federal awards. The SEFA schedule will become an active part of the finance department?s end-of-month process and not compiled annually. Name of contact people responsible for corrective action: Emily Reiman, Chief Executive Officer; Corinne Carmody-Riley, Chief Financial Officer. Anticipated completion date: The above changes will go into effect with the August 31, 2022 closing process performed on September 20, 2022.

2020-001

DevNW Management understands the importance of timely review and accuracy of federal award data and its presentation. Award guidelines were reviewed and implemented with the intent of accurate presentation of information. Due to emergency response funding related to the COVID pandemic, the compilation of the 2020 SEFA award schedule was significantly larger (both in number of funding sources and overall dollar amount, representing a 254% increase) than any historical schedule compiled by DevNW, or pre-merger, NEDCO or Willamette Neighborhood Housing Services. Finance staff had a process in place to review contracts, follow up with funders and confirm components of the annual schedule. However, in the process of compiling the schedule for 2020, two funding sources showed the full funds received instead of the funds expended in 2020. This error was not caught prior to submission to our auditors due to an inadequate review process. During the early part of 2021, the Finance team also experienced a 30% reduction in staff due to turnover (and an unusually tight job market that caused a delay in replacing these positions) and this had a significant impact on remaining staff regarding their capacity to maintain day to day department functions, while also managing the details for a larger-than-usual audit ? e.g. the review for our SEFA award schedule. Accuracy and compliance are the forefront of department and organization goals. Management and staff?s plan to attain these goals include; hiring and maintaining qualified staff and implementing a thorough review processes for SEFA compilation. Name of contact people responsible for corrective action: Emily Reiman, Chief Executive Officer; Corinne Carmody-Riley, Chief Financial Officer. Anticipated completion date: The above changes will go into effect with the August 31, 2021 closing process performed on September 22, 2021.