RUBY'S PLACE, INC

2023-005: Subrecipient Monitoring FALN: 16.320 Program or Cluster Name: Services for Trafficking Victims Agency: U.S. Department of Justice Criteria: RP must maintain a subrecipient monitoring checklist for each subrecipient it works with. Maintenance of monitoring checklists ensure that reporting timelines are met in accordance with federal grant agreements and that waste and abuse of federal awards are identified timely. Condition: Subrecipient monitoring is being done by RP for each subrecipient organization. However, a routine and comprehensive checklist is not maintained for each subrecipient organization that RP works with. Furthermore, RP did not consistently communicate reporting timelines as outlined by the federal awarding agencies. Finally, while there was evidence of subrecipient review, signed reports indicating evidence of review by multiple RP personnel were not consistently maintained. Cause: Due to the turnover in finance personnel during fiscal 2023 and in the past, there has been a loss of institutional knowledge among RP personnel regarding grant compliance requirements and best practices. Effect: There is a lack of appropriate oversight and monitoring of the underlying subrecipient organizations by RP. The lack of consistent oversight opens up the opportunity for potential waste and abuse of federal funding and resources by the underlying subrecipient organization. Repeat Finding: No Recommendation: We recommend that RP consistently fills out a Subrecipient Monitoring Checklist for each subrecipient organization. Management’s Response: See Corrective Action Plan.

Finding 2022-001; Assistance Listing Number: 14.267; Program Title: Continuum of Care Program; Federal Agency: U.S. Department of Housing and Urban Development; Criteria - The Continuum of Care Program requires that the Organization perform a test of rent reasonableness at least annually to determine if rents paid for program participants are comparable to fair market rents in the vicinity of the participants housing.; Condition - The Organization was using the U.S. Department of Housing and Urban Development’s (“HUD”) published Fair Market Rents (“FMR”) to determine the reasonableness of the rents paid, and not performing an analysis of rents in the immediate area of the participants housing.; Cause - The Organization was applying a method of determining reasonable rents that had been allowable under prior awards, prior to migration of the programs funding to the Continuum of Care program under assistance listing number 14.267.; Context - While the Organization did not utilize the required method of determining fair market rents required under the Continuum of Care Program, the Organization was employing a method of determining fair rents utilizing FMR data from HUD.; Effect - The potential existed that calculated fair market rents were less than provided by FMR data from HUD. Based on the Organization’s subsequent calculation of fair market rents, no units were paying above rent limits imposed by the Continuum of Care Program.; Questioned Costs - None; Prior Audit Finding - No; Recommendation - The Organization should, at least annually, perform a survey of FMR utilizing an acceptable approach outlined by the Continuum of Care program. The Organization should document their comparison to FMR in each program participant’s file prior to a participant’s lease signing.; Views of Responsible Officials - The Organization agrees with the finding, and will perform procedures to implement the recommendation.

Finding 2022-002; Assistance Listing Number; 14.267, 16.320; Program Title - Continuum of Care Program; Services for Trafficking Victims; Federal Agency - U.S. Department of Housing and Urban Development; U.S. Department of Justice; Criteria - Uniform Guidance section 200.302 Financial Management requires non-federal entities to maintain accurate accounting of federal expenditures within its accounts, and to provide adequate controls over those expenditures.; Condition - Our test of controls over expenditures of non-payroll transactions identified nine of thirty and eleven of thirty transactions in Continuum of Care Program and Services for Trafficking Victims program, respectively, that did not include sufficient documentation of controls over allocation of costs. Errors included unapproved purchase orders, self-approved purchase orders, and expenditures without documentation of approval for the expenditure or allocation.; Cause - The Organization is experiencing challenges in transitioning to a hybrid remote office structure and turnover in the Organization.; Context - Expenditures were supported by receipts and invoices without exception. Expenditures without sufficient documentation of controls over allocation of costs appeared to be reasonable costs for programmatic activities.; Effect - Without consistent application of control processes, deviations that may be fraud will be difficult to differentiate from legitimate transactions, such as purchases for program participant day to day living expenses and gift cards.; Questioned Costs - None.; Prior Audit Finding - No.; Recommendation - The Organization should adopt a self-monitoring process to verify that documented controls are being consistently followed. The Executive Director’s expenditures should be approved by a member of the finance committee, or a relevant program manager if the cost is for a budgeted program expenditure.; Views of Responsible Officials - The Organization agrees with the finding, and will perform procedures to implement the recommendation.