Quality Control Review of the Audit of Region XII Development Corporation, Inc., as of and for the Year Ended June 30, 2019

The Office of Inspector General is committed to improving the quality of non-federal audits. In accordance with our responsibilities for audit work performed by non-federal auditors on federal programs, attached is the quality control review (QCR) of the audit of Region XII Development Corporation, Inc., as of and for the year ended June 30, 2019. The single audit was performed by your firm, John D. Morrow, CPA. On our behalf, McBride, Lock & Associates, LLC, performed this QCR to ensure that the audit was conducted in accordance with generally accepted auditing standards (GAAS), Generally Accepted Government Auditing Standards (GAGAS), the requirements of federal regulations at Title 2 C.F.R. Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) including its Compliance Supplement. Please see the enclosed review performed by McBride, Lock & Associates, LLC, for further details on the QCR’s scope and methodology. Firms can receive a QCR rating of pass, pass with deficiency(ies), or fail. McBride, Lock & Associates, LLC, provided the QCR draft report dated March 14, 2021, for the audit for the year ended June 30, 2019. Upon consideration of your response to the draft report, McBride, Lock & Associates, LLC, recommended a fail QCR rating. An audit with a QCR rating of fail is an audit for which the audit documentation either contains quality deficiencies that affect the reliability of the audit results, does not support the opinions contained in the audit report, or both, and which requires correction for the audit under review. In our opinion—based on the review of McBride, Lock & Associates, LLC, audit report, discussions with them, the related audit documentation, and your firm’s written comments on the QCR draft report—the QCR rating of the audit for the year ended June 30, 2019, is a fail. A copy of your firm’s written comments appears as the appendix to the enclosed QCR. Your firm should evaluate the audit documentation related to the deficiencies detailed in the enclosed schedule to identify any additional audit procedures needed to ensure that the audit documentation meets GAAS, GAGAS, and the requirements of Uniform Guidance, including its Compliance Supplement. If additional audit work is deemed to be necessary to support the opinions contained in the audit, your firm should follow the provisions of AICPA Professional Standards’ Statement on Auditing Standards in AU-C § 585 and AU-C § 935.43 with respect to reissuance of the audit. 2 We are sending this letter and the accompanying McBride, Lock & Associates, LLC, QCR to officials at the other federal agencies with direct expenditures listed on the Schedule of Expenditures of Federal Awards to inform them of the results of this review. Additionally, our policy is to make referrals to the appropriate professional association when a review of the audit work as originally submitted results in a QCR rating of fail. Accordingly, we are referring the audit to the Professional Ethics Division of the American Institute of Certified Public Accountants for review and appropriate action. Your written comments on the QCR draft report will be forwarded in their entirety to the American Institute of Certified Public Accountants. This letter—as well as the McBride, Lock & Associates, LLC, QCR—will be posted on the Office of Inspector General’s website pursuant to section 8M of the Inspector General Act of 1978, as amended (5 U.S.C. App., § 8M). We appreciate the cooperation and courtesies your staff extended to McBride, Lock and Associates, LLC, during the QCR. Please direct any inquiries regarding this report to me at (202) 482-2877 or Belinda Riley, Supervisory Auditor, at (202) 527-0544.