Insight HousingNon-Profit

Finding Reference Number: 2025-002 Reportable finding considered a significant deficiency - Inadequate Controls over Procurement documentation retention Program name and CFDA: Supportive Services for Veteran Families (SSVF) 64.033 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) 21.027 Federal award identification number: SSVF – 23-CA-437 CSLFRF – UNKNOWN Federal award year: SSVF – 10/1/2022-9/30/2025 CSLFRF – 8/1/2024-6/30/2025 Federal awarding agency: SSVF – Department of Veterans Affairs CSLFRF – Department of the Treasury Name of pass-through entity: SSVF – None CSLFRF – Alameda County Criteria Federal procurement requirements under 2 CFR 200.318–200.320 outline expectations for maintaining documentation to show procurement activity aligns with written procedures and promotes full and open competition. Additionally, 2 CFR 180.300, incorporated by 2 CFR 200.214, requires organizations to verify that vendors are not suspended or debarred before entering into an agreement. This verification can be completed by checking SAM.gov or obtaining a vendor certification. Statement of Condition Organization has written procurement procedures and consistently performs cost analyses for rental assistance-related procurements. Audit testing also confirmed that none of the vendors involved were suspended or debarred. However, the Organization was not able to provide documentation showing that suspension/debarment checks were performed before onboarding these vendors. While the procedures appear to be followed in practice, the documentation step was not retained. Cause It appears that documentation was not transitioned between staff members when the individual who initially performed these procedures left the organization. Effect or Potential Effect Without documentation of these checks, the Organization cannot fully demonstrate compliance with federal procurement and suspension/debarment requirements. Although no ineligible vendors were used, the missing documentation increases the risk that future procurements could be questioned or require additional follow-up. Questioned Costs None Recommendation We recommend the Organization take a few steps to strengthen this process going forward:  Incorporate a simple, consistent step for keeping documentation of SAM.gov checks or vendor certifications in each procurement file.  Communicate this requirement to the staff performing vendor onboarding so expectations are clear.  Periodically review procurement files to make sure documentation is being consistently retained. These adjustments should help ensure the strong practices already in place are fully supported by required documentation. Reportable Views of Responsible Officials See corrective action plan.

Finding 2020-2 Lack of Internal Control for Supportive Services for Veteran Families Program Finding Type: Federal Awards Finding Federal Program: Supportive Services for Veteran Families; U.S. Department of Veterans Affairs; CFDA Number 64.033; Awards Number 18-CA-437, 20-CA-437, S20-CA-502. Criteria: Under the Uniform Guidance, the Organization 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 statues, regulations, and the terms and conditions of the Federal award. Costs must be adequately documented in order to be allowable under Federal awards. Condition: Of the 40 veteran files we tested, we noted 2 files lacked timely recertifications (every three months), 1 file that had incorrect rent reasonableness calculations, and 1 file omitted verifications of income. Cause: There is a lack of standardized procedures to ensure consistent case file documentation, as well as a lack of supervisory monitoring. Effect: Management may not have adequate documentation to support eligibility. Recommendation: The agency should establish procedures to ensure that case manager duties are adequately segregated to deter mistakes, abuse or fraud. Prior to placement or payment, each case should include procedures for the independent verification of eligibility, placement, and payment. View of Responsible Officials: : Management agrees with this finding and have prepared a Corrective Action Plan. In FY 21/22 BFHP will be hiring a Director of Operations and a Quality Improvement Coordinator who will oversee Quality Management for the agency which will include auditing client files on a quarterly basis to ensure compliance. Policies and procedures will be reviewed and updated to reflect the Program Manager?s responsibility to conduct timely reviews of all eligibility forms and to disallow the issuance of Temporary Financial Assistance (TFA) forms without all relevant documentation of eligibility. Program Managers will be required to review each case file monthly to ensure accuracy of all documentation. Staff will go through annual training on how to process client eligibility and quarterly training on documenting eligibility for issuance of TFA?s. Training attendance will be tracked and reviewed by management.

Finding 2020-3 Supporting Documentation and Internal Controls Finding Type: Federal Awards Finding Criteria Under Title 2 CFR Section 200, the Organization must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with requirements activities allowed or unallowed and the allowable costs and cost principles. Costs must be adequately documented in order to be allowable under Federal awards. Condition During our procedures to gain an understanding and test BFHP?s internal controls, we noted the following exception: ? Cash Disbursements Cycle ? We noted 18 out of 63 cash disbursements where invoice supporting documentation was unavailable for auditor review. Cause BFHP had significant turnover in the organization during the year, which contributed to the missing support identified above. Effect Without the necessary supporting documentation, the organization exposes themselves to risks of the inability to substantiate transactions to their funders. Recommendation It is our recommendation that management strive to maintain all necessary documentation and moving forward, ensure there are proper procedures in place to maintain the internal controls, even in times of transition. View of Responsible Officials: Management agrees with this finding and offers the following explanation. During the fiscal year under review there was a confluence of events that negatively affected our ability to archive supporting documents and follow all internal controls. These events include: ? Year over year agency growth of over 100%: In the spring of 2020 the agency began receiving numerous additional grant funds partially in response to COVID 19. The volume of accounting transactions increased dramatically. ? Pandemic: Simultaneously to when the agency began experiencing tremendous growth the effects of the COVID-19 pandemic forced our staff accountants to work remotely from their homes. Working remote proved challenging as at that time we did not have the IT infrastructure in place to properly support working from home. We believe the missing cash disbursement documents are directly due to the movement of hard copies back & forth from the main office to home offices. ? Staff turnover: Shortly after the start of the current FY 20/21 the department began experiencing turnover. Within the next few months there was 100% turnover. It was difficult to re-staff the department and fill new positions created from our growth during the height of the pandemic. We will be able to complete properly follow internal controls and archive supporting documents in a proper manner going forward. Currently: ? The department has been fully restaffed with permanent direct hires, including a Director of Finance, Accounting Manager, Three (3) Staff Accountants, and a Payroll Specialist. ? The staff is back to working most of their hours on-site, which allows for better collaboration and more timely/accurate results. ? In addition, we will be upgrading our software prior to FY 22/23.

2019-001 Allowable Costs for Veteran Supportive Services Finding Type: Material Weakness in Internal Control over Compliance Program: Supportive Services for Veteran Families; U.S. Department of Veterans Affairs; CFDA Number 64.033; Award Number 18-CA-437. Criteria: Under the Uniform Guidance, the Organization 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 statues, regulations, and the terms and conditions of the Federal award. Costs must be adequately documented in order to be allowable under Federal awards. Condition: Of the 40 veteran files we tested, we noted 7 files that had incorrect rent reasonableness calculations, 3 files lacked timely recertification (every three months), and 1 file omitted verifications of income. Cause: There is a lack of standardized procedures to ensure consistent case file documentation, as well as a lack of supervisory monitoring. Effect: Management may not have adequate documentation to support eligibility. Recommendation: The agency should establish procedures to ensure that case manager duties are adequately segregated to deter mistakes, abuse or fraud. Prior to placement or payment, each case should include procedures for the independent verification of eligibility, placement, and payment. View of Responsible Officials: Management agrees with this finding and has prepared a Corrective Action Plan.

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