KLAMATH & LAKE COMMUNITY ACTION SERVICESNon-Profit

Criteria: Per CFR section 200.305(b), Non-federal entities must minimize the time elapsing between the transfer of funds from the U.S. Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the appropriate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. Condition: KDP noted that the time elapsing between the transfer of funds from KLCAS? pass-through entity and disbursement for program costs was not minimized. Out of a sample of 20 transactions, 4 cash requests had time elapsing of over one month between the time KLCAS received grant funds and when the program costs were paid. Cause: Internal controls in place did not ensure that the time elapsing between receipt of federal funds and payment of program costs was minimized. Questioned Costs: None Effect: Federal funding could be jeopardized if the compliance requirement to minimize time between transfer of funds from KLCAS? pass-through entity and the subsequent disbursement for the program costs is not followed. Recommendation: We highly recommend that KLCAS enhance internal controls to ensure that restricted grant funding is not used for unallowable purposes. View of Responsible Officials and Corrective Action Planned: KLCAS does not dispute this condition. KLCAS has implemented a process, including timelines, to complete payment of program costs within three business days of receiving funds from OHCS. Planned Implementation Date of Corrective Action Plan: Immediately Person Responsible for Corrective Action: Finance Director and Executive Director

Criteria: Grantees may provide assistance to (a) households in which one or more individuals are receiving Temporary Assistance for Needy Families (TANF), Supplemental Security Income (SSI), Supplemental Nutrition Assistance Program (SNAP) benefits, or certain needs-tested veterans? benefits; or (b) households with incomes which do not exceed the greater of 150 percent of the state?s established poverty level, or 60 percent of the state median income. Grantees may establish lower income eligibility criteria, but no household may be excluded solely on the basis of income if the household income is less than 110 percent of the state?s poverty level (42 USC 8624(b)(2)). Grantees must give priority to those households with the highest home energy costs or needs in relation to income and household size (42 USC 8624(b)(5)). Condition: KLCAS was unable to find client files for two out of twenty-five clients selected for eligibility testing and therefore KDP was not able to verify that eligibility determinations were made for the Low-Income Home Energy Assistance Program. Cause: Internal controls in place did not ensure that documentation determining client eligibility was maintained. Questioned Costs: A total of $780 was disbursed to the two clients. Effect: Federal funding could be jeopardized if the compliance requirement to ensure documentation determining client eligibility for the Low-Income Home Energy Assistance Program is not maintained. Recommendation: We recommend that KLCAS enhance internal controls to ensure documentation verifying client eligibility for the Low-Income Home Energy Assistance Program is maintained. View of Responsible Officials and Corrective Action Planned: KLCAS does not dispute this condition. KLCAS has improved its filing system to ensure client files are secured and retained as required by OHCS. KLCAS is confident that the Energy Assistance Team will be able to locate all requested files for the FY20 audit. Planned Implementation Date of Corrective Action Plan: Immediately Person Responsible for Corrective Action: Energy Assistance Team Lead

Criteria: Per the Master Grant Agreement between OHCS and KLCAS, Financial Status Reports (FSR) are due to Oregon Housing and Community Services (OHCS) on the 20th of the month following the end of a quarter. Condition: Of the nine FSRs submitted by KLCAS to OHCS during the year-ended June 30, 2019, six were submitted after the due date as required by the Master Grant Agreement. Cause: Internal controls in place did not ensure that timely submission of FSRs to OHCS was maintained. Questioned Costs: None. Effect: Federal funding could be jeopardized if the compliance requirement to provide timely submission of FSRs to OHCS for the Low-Income Home Energy Assistance Program is not maintained. Recommendation: We recommend that KLCAS enhance internal controls to ensure timely submission of FSRs to OHCS for the Low-Income Home Energy Assistance Program is maintained. View of Responsible Officials and Corrective Action Planned: KLCAS does not dispute this condition. Prior to the current Finance Director and Executive Director arriving at KLCAS, KLCAS was not processing FSRs or quarterly reporting as required so there were many caught up between February and March 2019. KLCAS has implemented processes to ensure that FSRs and other required financial reports/requests are completed in a timely manner, including weekly draws and completion of quarterly/final reports within 20 days of the end of the period, as required by OHCS. Planned Implementation Date of Corrective Action Plan: Immediately Person Responsible for Corrective Action: Finance Director