Catholic Charities and Community Services Farm Labor Housing Corporation

Federal Agency: U.S. Department of Agriculture (USDA) Federal Program and Assistance Listing Number: Farm Labor Housing Loans and Grants, 10.405

2025-001 Reporting – Significant Deficiency in Internal Control Over Compliance

Criteria and Condition: There are certain reports that must be submitted under the program on an annual basis. Some of these reports were not completed and submitted to the USDA.

Context: There are four forms required to be filed with the USDA annually: Form FIN1000, Multi-Family Information System Proposed Budget, Form 3560-7, Multiple Family Housing Project Budget/Utility Allowance; Form 3560-10, Multi-Family Housing Borrower Balance Sheet; and Form 3560-13, Borrower Certification of Performance Standards. For both Plaza Del Milagro and Plaza Del Sol, none of these forms were filled or prepared for submission.

Cause: Due to organizational turnover – personnel had not yet been trained on the use of the USDA MINC reporting system by the filing deadline.

Effect: The organization did not meet the reporting requirements under the program. There are no questioned costs because of this finding.

Recommendation: The organization should complete and file the forms immediately.

Views Responsible Officials and Planned Corrective Actions: We concur with the observations and recommendations as placed forth by our auditors – KCM. In addition to staff turnover, there was also USDA Account Executive turnover. We had reached out to alert the new Account Executive, Marijane Gunter, we would be delayed and are currently working on getting the appropriate forms filed.

Federal Agency: U.S. Department of Agriculture (USDA) Federal Program and Assistance Listing Number: Farm Labor Housing Loans and Grants, 10.405

2024-001 Reporting – Significant Deficiency in Internal Control Over Compliance

Criteria and Condition: There are certain reports that must be submitted under the program on an annual basis. One of these reports was not completed and submitted to the USDA. Others did not appear to be accurately completed.

Context: There are three forms required to be filed with the USDA annually: Form 3560-7, Multiple Family Housing Project Budget/Utility Allowance; Form 3560-10, Multi-Family Housing Borrower Balance Sheet; and Form 3560-13, Borrower Certification of Performance Standards. For Plaza Del Milagro and Plaza Del Sol, form 3560-13 was not filed. In addition, the fiscal year 2023 form 3560-7, submitted in 2024, had the following discrepancies between what was filed and audited (See table). Cause: The organization did not have proper controls in place to complete and file form 3560-13 in a timely manner or complete form 3560-7 accurately.

Effect: The organization did not meet the reporting requirements under the program. There are no questioned costs because of this finding.

Recommendation: The organization should complete and file form 3560-13 immediately. Also, the organization should implement controls to adequately identify, complete and file form 3560-7 accurately.

Views Responsible Officials and Planned Corrective Actions: We concur with the observations and recommendations as placed forth by our auditors – KCM. As a result of employee turnover in fiscal year 2024, the company experienced difficulties completing certain forms. Since then, however, controls have been implemented to reduce the risk of noncompliance. These include the hiring of a new compliance manager and the cross-collaboration of three property accountants, with a master trial balance shared to support teammates when they are on vacation or turnover occurs.

We will work to re/file these forms immediately and begin tracking their status to prevent inaccurate/untimely filing.

Federal Agency: U.S. Department of Agriculture (USDA) Federal Program and Assistance Listing Number: Farm Labor Housing Loans and Grants, 10.405 2023-001 Reporting – Significant Deficiency in Internal Control Over Compliance Criteria and Condition: There are certain reports that must be submitted under the program on an annual basis. Some of these reports were not completed and submitted to the USDA. Context: There are three forms required to be filed with the USDA annually: Form 3560-7, Multiple Family Housing Project Budget/Utility Allowance; Form 3560-10, Multi-Family Housing Borrower Balance Sheet; and Form 3560-13, Borrower Certification of Performance Standards. For Plaza Del Milagro, forms 3560-7, 3560-10, and 3560-13 were not filed. For Plaza Del Sol, form 3560-13 was not filed. Cause: The organization did not have proper controls in place to complete and file the forms in a timely manner. Effect: The organization did not meet the reporting requirements under the program. There are no questioned costs because of this finding. Recommendation: The organization should file the reports immediately. Also, the organization should implement controls to adequately identify, complete and file reports in a timely manner. Views Responsible Officials and Planned Corrective Actions: We concur with the observations and recommendations as placed forth by our auditors – KCM. We experienced personnel related issues and did not adequately have bench strength in place to compensate. To address: 1. We will, with due haste, file the outstanding reports. 2. Have initiated a review and update of a ministry-wide master deliverables schedule to ensure compliance with timely filings. 3. Will ensure multiple team members are familiar with and capable of completing the filing.