ECONOMIC ACTION COMMITTEE OF THE GULF COAST

Finding 2025-003 – Late Submission of Reporting Package and Data Collection Form Federal Reporting Requirement: Uniform Guidance – Subpart F Reporting Requirements Type of Finding: Significant Deficiency in Internal Control Over Compliance Noncompliance with Federal Reporting Requirements No Questioned Costs Criteria: Under 2 CFR § 200.512(a)(1), the audit, Data Collection Form, and reporting package must be submitted to the Federal Audit Clearinghouse within 30 calendar days after the auditee receives the auditor’s report or nine months after the end of the audit period, whichever is earlier. In addition, 2 CFR § 200.303 requires recipients and subrecipients to establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance of compliance with applicable Federal statutes, regulations, and the terms and conditions of Federal awards. Recipients and subrecipients are also required to evaluate and monitor compliance and take prompt action when instances of noncompliance are identified. Condition: The Organization did not timely submit its reporting packages and Data Collection Forms for the two preceding audit periods. For the year ended December 31, 2023, the reporting package was due no later than September 30, 2024. The Organization submitted the reporting package to the Federal Audit Clearinghouse on March 15, 2025, 166 days after the required submission date. For the year ended December 31, 2024, the reporting package was due no later than September 30, 2025. The Organization submitted the reporting package to the Federal Audit Clearinghouse on March 13, 2026, 164 days after the required submission date. Accordingly, the Organization did not comply with the reporting deadlines prescribed by 2 CFR § 200.512(a). Cause: The Organization did not have sufficiently effective procedures in place to monitor the status and timely completion of the annual audit and related Federal Audit Clearinghouse submission. Delays in completing the annual audit, including delays associated with obtaining and providing information necessary for completion of the audit, contributed to the late submissions. Effect or Potential Effect: Failure to timely submit the audit, reporting package, and Data Collection Form constitutes noncompliance with the reporting requirements of 2 CFR § 200.512. Late submission delays the availability of required audit information to Federal agencies and pass-through entities and may affect the Organization’s ability to qualify as a low-risk auditee in future periods or otherwise result in increased Federal or pass-through entity oversight. Recommendation: We recommend that management maintain a formal compliance calendar identifying the applicable Federal Audit Clearinghouse submission deadline and assign responsibility for monitoring compliance with that deadline. Management should regularly monitor the status of the annual audit, timely provide requested information to the auditors, promptly address outstanding audit items, and communicate with the auditors throughout the audit process to facilitate completion of the audit and submission of the reporting package and Data Collection Form within the required timeframe. Views of Responsible Officials and Planned Corrective Action: Management has added the Federal Audit Clearinghouse submission deadline to its annual compliance calendar and assigned responsibility for monitoring the deadline to the Executive Director. Management will actively monitor the progress of the annual audit, timely respond to auditor requests, and communicate with the auditors regarding outstanding items that could delay completion of the audit. The Board will provide oversight of the process. Management intends for these procedures to facilitate timely completion of the annual audit and submission of the reporting package and Data Collection Form within the timeframe required by Uniform Guidance. Repeat Finding: Yes. This finding is a repeat of Finding 2024-006.

Finding 2024-005 - Reporting Federal Award Information: Federal Agency: U.S. Department of Health and Human Services Pass-Through Entity: Texas Department of Housing and Community Affairs Assistance Listing Number (ALN): 93.568 Federal Program Name: Low-Income Home Energy Assistance Type of Finding: Material Weakness in Internal Control Over Compliance Reporting Compliance Requirement No Questioned Costs Criteria: Under 2 CFR 200.303, the Organization is required to establish and maintain effective internal control over Federal awards that provides reasonable assurance of compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Additionally, 2 CFR 200.302(a) requires that the financial management system provide accurate, current, and complete disclosure of the financial results of each Federal award. Further, 2 CFR 200.334 requires financial records, supporting documents, statistical records, and all other records pertinent to a Federal award be retained to support amounts reported. The OMB Compliance Supplement identifies Reporting as a compliance requirement for this program and requires that financial reports be supported by underlying accounting records and subject to appropriate review prior to submission. Condition: During our audit, we noted that financial reports submitted to the Federal awarding agency were not consistently supported by retained documentation demonstrating how reported amounts were calculated. In addition, there was no documented evidence of supervisory review or approval of the reports prior to submission. During interim testing of reports, we noted that certain periodic financial reports submitted to the pass-through entity did not reconcile to the Organization’s general ledger at the time of submission. The variances were attributable to journal entries, voided checks, and other posting adjustments recorded after report submission. While cumulative and final reports ultimately agreed to the Organization’s accounting records and no amended reports were required, documentation reconciling the differences at the time of submission was not retained. documentation was retained for amounts reported to the Federal awarding agency or to require documented supervisory review of reports prior to submission. Effect or Potential Effect: The absence of supporting documentation and independent review increases the risk that inaccurate, incomplete, or unsupported information could be reported to the Federal awarding agency and not be detected in a timely manner. Although no questioned costs were identified as a result of our audit procedures, this deficiency creates a reasonable possibility that material noncompliance with reporting requirements could occur and not be prevented or detected on a timely basis. Questioned Costs: None. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that management implement procedures to:  Retain supporting documentation for all amounts reported to Federal awarding agencies, including reconciliations to the general ledger;  Require documented supervisory review and approval of reports prior to submission; and  Ensure that adjustments occurring after report submission are documented and, when necessary, corrected through revised reporting. Views of Responsible Officials and Planned Corrective Action: Management acknowledged that supporting documentation was not consistently retained and that supervisory review was not formally documented. Management has indicated that procedures will be implemented to ensure reports are reconciled to accounting records, properly supported, and reviewed prior to submission.

Finding 2024-006 – DCF Audit Submission Federal Reporting Requirement: Uniform Guidance – Subpart F Reporting Requirements Type of Finding: Significant Deficiency in Internal Control Over Compliance Noncompliance with Federal Reporting Requirements No Questioned Costs Criteria: Under 2 CFR 200.512(a), the auditee must submit the reporting package and Data Collection Form (DCF) to the Federal Audit Clearinghouse (FAC) no later than the earlier of:  30 calendar days after receipt of the auditor’s report(s), or  Nine months after the end of the audit period. Further, 2 CFR 200.303 requires the Organization to establish and maintain effective internal control over Federal awards to provide reasonable assurance that the entity complies with Federal statutes, regulations, and the terms and conditions of Federal awards. Effective internal control includes procedures to monitor compliance with required reporting deadlines. Condition: The Organization did not submit the reporting package and Data Collection Form (DCF) for the year ended December 31, 2023 within the timeframe required by 2 CFR 200.512(a). The reporting package was due no later than September 30, 2024 (nine months after fiscal year-end). The Organization submitted the reporting package to the Federal Audit Clearinghouse (FAC) on March 15, 2025, which was 166 days after the required deadline. Cause: The Organization did not have adequate procedures in place to monitor and ensure timely submission of the reporting package and Data Collection Form. In addition, broader financial reporting control deficiencies contributed to delays in completing the audit process, which affected the timeliness of submission. Effect or Potential Effect: Failure to submit the reporting package and Data Collection Form timely constitutes noncompliance with Uniform Guidance reporting requirements. Late submission delays Federal oversight and public transparency of audit results and increases the risk of heightened Federal scrutiny or potential funding restrictions. Questioned Costs: None. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that management implement procedures to ensure timely submission of the reporting package and Data Collection Form. Such procedures should include:  Establishing a formal compliance calendar with assigned responsibility;  Monitoring audit progress against statutory deadlines; and  Addressing underlying financial reporting control deficiencies that impact audit completion timelines. Views of Responsible Officials and Planned Corrective Action: Management acknowledged that the prior year reporting package and Data Collection Form were not submitted within the required timeframe. Management indicated that procedures will be implemented to monitor deadlines and improve the timeliness of financial reporting and audit completion going forward.