Audit 304593

Assistance Listing Number, Federal Agency, and Program Name - 21.023, U.S. Department of the Treasury, COVID-19 - Emergency Rental Assistance Federal Award Identification Number and Year - ERA2-0476 Pass-through Entity - N/A - Direct funded Finding Type - Material weakness Repeat Finding - No Criteria - Per 2 CFR 200.303(a), nonfederal entities 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 statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the Internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition - The County’s controls over general ledger to schedule of expenditures of federal awards (SEFA) and beneficiary payment database reconciliation did not identify several adjustments that were needed to both the general ledger and the SEFA. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there are no questioned costs Context - The County’s controls to track and reconcile grant activities between the general ledger and SEFA were not adequate to identify all grant activity. As a result, the following adjustments were necessary for the year ended September 30, 2023: • Approximately $550,000 adjustment to record beneficiary payments on the SEFA • Approximately $160,000 adjustment to accrue for subrecipient activity in the general ledger Cause and Effect - The controls in place to ensure that the SEFA and beneficiary payment database reconciled to the general ledger were not effective. As a result, an audit adjustment was posted to the general ledger to record approximately $550,000 of beneficiary payments that was included in the SEFA and beneficiary payment database but not the general ledger. Additionally, the SEFA was initially understated by approximately $160,000 as a result of the County not accruing for its subrecipient activity through September 30, 2023. The SEFA was adjusted to include this amount. Recommendation - We recommend that the County review its processes and controls to ensure that grant activity is properly tracked, properly accounted for in the general ledger, and fully reconciled between the beneficiary database, general ledger, and SEFA to ensure completeness and accuracy of the SEFA. Views of Responsible Officials and Planned Corrective Actions - Management will update processes and controls to ensure completeness of grant activity is received for review and reconciliation.

Assistance Listing Number, Federal Agency, and Program Name - 21.023, U.S. Department of the Treasury, COVID-19 - Emergency Rental Assistance Federal Award Identification Number and Year - ERA2-0476 Pass-through Entity - N/A - Direct funded Finding Type - Significant deficiency Repeat Finding - No Criteria - The County has written procedures for subrecipient monitoring, including risk assessments. The County’s internal policy requires departments to perform a risk assessment on subrecipients prior to an executed agreement and establish a monitoring plan based on the assessed risk. Condition - Controls were not adequate to ensure risk assessments were performed in advance of the executing agreement with the County’s two subrecipients for the ERA program for the fiscal year ended September 30, 2023. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there are no questioned costs Context - By not performing risk assessments before entering into agreements with its two subrecipients, the County did not follow its policy related to timing of subrecipient risk analysis. Cause and Effect - The County’s controls were not adequate to ensure it followed its internal policies concerning subrecipient risk assessments. The lack of controls can result in the County not identifying risks timely. Recommendation - We recommend that the County evaluate whether its controls are adequate to ensure compliance with the Uniform Guidance and internal policies. Views of Responsible Officials and Planned Corrective Actions - Management has developed a new system of risk assessments that will be implemented to receive documentation prior to the execution of awards.

Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.

Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.

Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.

Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.

Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.

Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.

Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.

Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.

Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.

Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.

Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.

Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.

Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.

Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.

Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.201(a), the federal awarding agency or pass-through entity must decide on the appropriate instrument for the federal award (i.e., grant agreement, cooperative agreement, or contract) in accordance with the Federal Grant and Cooperative Agreement Act (31 U.S.C. 631-08). Per guidance within Treasury FAQs, recipients’ use of revenue loss funds does not give rise to subrecipient relationships given that there is no federal program or purpose to carry out in the case of the revenue loss portion of the award. Condition - The County entered into intergovernmental agreements with local communities using the revenue loss provision of the County’s CSLFRF award. Those contracts contained subrecipient language/provisions. The County did not have adequate controls in place to ensure that the form and substance of these agreements were in compliance with the intended nature of the relationship and/or the requirements of the federal award. Questioned Costs - None Identification of How Questioned Costs Were Computed Not applicable, as there were no questioned costs identified Context - The County entered into agreements with local communities to fund various projects to benefit residents in these communities that amounted to approximately $71 million under the revenue loss provisions. During the fiscal year ended September 30, 2023, these communities spent and were reimbursed for approximately $6.7 million of costs under these agreements. The agreements included language that suggested Uniform Guidance applicability and that indicated the existence of a pass through/subrecipient relationship between the County and the local communities. Cause and Effect - The County provided funding to the communities via an intergovernmental agreement that included subrecipient language/provisions. Without further communication to the communities about the intended nature of the relationship, communities may improperly conclude they are subject to certain compliance requirements, including but not limited to incorrectly concluding that they are required to report expenditures incurred under the agreements on their schedule of expenditures of federal awards, which could further lead to those communities to incorrectly concluding that they are subject to the requirement to obtain a single audit and/or to incorrect major program determinations being made in conjunction with their single audit engagements. Recommendation - We recommend the County evaluate its controls to ensure the substance and form of each agreement. We further recommend the County evaluate whether additional guidance needs to be provided to recipients. Views of Responsible Officials and Planned Corrective Actions - Management does not agree with this finding. As noted in the Condition of this finding itself, the agreements in question are intergovernmental agreements , clearly labeled as such. They specifically state they are funding each project with SLFRF funds under the Revenue Replacement Category (Category 6.1). Section 4.01 states “Project Funds must be used for eligible activities for revenue replacement funds as described in the SLFRF final rules, regulations, and guidance.” As Management informed the auditor before auditor edited its preliminary finding to reflect this, “as described in the SLFRF final rules, regulations, and guidance” under 6.1 there are no subrecipients by definition as the County itself is the beneficiary. The County is being "made whole" for calculated revenue loss due to the pandemic under this category; therefore, once the funds are obligated and spent by the County the purpose has been satisfied. The entity receiving those funds would not have subrecipient obligations. FAQ 13.14 confirms this understanding. The communities enter into subrecipient agreements on an annual basis with the County and are very familiar with the format of such agreements. Those agreements always state clearly that they are subrecipient agreements in the title and the introductory paragraph. The communities also enter into intergovernmental agreements with the County on an annual basis. Therefore, they are aware that these two types of agreement are distinct. In this case the agreements are clearly labeled as intergovernmental agreements in the title and the introductory paragraph and there is no mention of subrecipient status in the body of the agreement. In fact, Section 4.05, Relationship of Parties, states “Relationship of the Community to the County is, and will continue to be, that of an independent contractor.” In the subrecipient agreements the County enters into with these communities on an annual basis this clause says the relationship is that of a subrecipient. Therefore, the agreement is clear on the relationship and the communities would know to consult the County if there is any question of compliance requirements. Any language requiring compliance with provisions applicable to subrecipients was paired with the qualifier "applicable." For example Article IX requires compliance with laws only “as applicable”. This is catch-all language and is good legal practice to include for contingencies. In this case, the program being a new federal program, the County intentionally included this catch-all language referencing compliance with 2 CFR 200 (Uniform Guidance) “as applicable” and required the community to “provide any disclosures required by law.” to allow itself the ability to enforce should the laws, rules, or regulations be interpreted in a certain manner to be applicable or even changed. This is based on experience with programs such as the Neighborhood Stabilization Program through HUD where such occurrences were noted. Consequently; the County believes it would actually be irresponsible not to include such language. As far as the recommendation of increased guidance to contracted communities, given the increased guidance available now the County has provided such guidance as needed. Auditor seems to indicate that the communities “may improperly conclude they are subject to certain compliance requirements, including but not limited to incorrectly concluding they are required to report expenditures incurred under the agreements on their schedule of expenditures of federal awards, which could further lead to those communities incorrectly concluding they are subject to the requirement to obtain a single audit and/or incorrect major program determinations being made in conjunction with their single audit engagements.” The finding is essentially noting that if these communities conclude that they have a subrecipient relationship and that the Uniform Guidance is applicable to them as subrecipients it is an improper conclusion. Given the wide availability of FAQs and guidance on this topic, Management agrees it would be an improper conclusion.

Assistance Listing Number, Federal Agency, and Program Name - 10.557, U.S. Department of Agriculture - WIC Special Supplemental Nutrition Program for Women, Infants, and Children Federal Award Identification Number and Year - E20233245-00 and E20234077-00 Pass-through Entity - Michigan Department of Health and Human Services Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes; 2022-011 Criteria - Per 2 CFR 200.501(g), federal award compliance requirements normally do not pass through to contractors. However, the grant recipient is responsible for ensuring compliance for procurement transactions, which are structured such that the contractor is responsible for program compliance or the contractor’s records must be reviewed to determine program compliance. Condition - Controls in place were not adequate to ensure the County maintained responsibility for compliance with eligibility standards when eligibility determinations are made by the contractor. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there are no questioned costs Context - During eligibility testing, we noted 31 out of 60 eligibility samples where employees of the contractor performed both the intake and the certification and review function, with no further review by a county representative. Cause and Effect - The County is subject to the MI-WIC Policy issued by the Michigan Department of Health and Human Services, which stresses the importance of maintaining appropriate separation of duties when performing the intake and certification of eligible program participants. While the County has designed its controls in conjunction with the MI-WIC Policy guidance, these controls are not adequate to ensure compliance with the Uniform Guidance, which requires the County have controls in place to ensure that a representative of the County performs a review of eligibility intake and certification performed by contractor employees. Recommendation - We recommend the County implement a process by which a county representative performs a review of contractor eligibility determinations. Views of Responsible Officials and Corrective Action Plan - Management has fully implemented a process, as of January 2024, by which a county representative performs a review of contractor eligibility determinations.

Assistance Listing Number, Federal Agency, and Program Name - 10.557, U.S. Department of Agriculture - WIC Special Supplemental Nutrition Program for Women, Infants, and Children Federal Award Identification Number and Year - E20233245-00 and E20234077-00 Pass-through Entity - Michigan Department of Health and Human Services Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes; 2022-011 Criteria - Per 2 CFR 200.501(g), federal award compliance requirements normally do not pass through to contractors. However, the grant recipient is responsible for ensuring compliance for procurement transactions, which are structured such that the contractor is responsible for program compliance or the contractor’s records must be reviewed to determine program compliance. Condition - Controls in place were not adequate to ensure the County maintained responsibility for compliance with eligibility standards when eligibility determinations are made by the contractor. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there are no questioned costs Context - During eligibility testing, we noted 31 out of 60 eligibility samples where employees of the contractor performed both the intake and the certification and review function, with no further review by a county representative. Cause and Effect - The County is subject to the MI-WIC Policy issued by the Michigan Department of Health and Human Services, which stresses the importance of maintaining appropriate separation of duties when performing the intake and certification of eligible program participants. While the County has designed its controls in conjunction with the MI-WIC Policy guidance, these controls are not adequate to ensure compliance with the Uniform Guidance, which requires the County have controls in place to ensure that a representative of the County performs a review of eligibility intake and certification performed by contractor employees. Recommendation - We recommend the County implement a process by which a county representative performs a review of contractor eligibility determinations. Views of Responsible Officials and Corrective Action Plan - Management has fully implemented a process, as of January 2024, by which a county representative performs a review of contractor eligibility determinations.

Assistance Listing Number, Federal Agency, and Program Name - 14.218 - U.S. Department of Housing and Urban Development (HUD) - CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants 93.563 - Title IV D, U.S. Department of Health and Human Service - Child Support Enforcement (CSE) 10.557, U.S. Department of Agriculture - WIC Special Supplemental Nutrition Program for Women, Infants, and Children Federal Award Identification Number and Year - CDBG - B-21-UC-26-0003 and B-22-UC-26-0003 CSE - CSCOM-17-82003 WIC - E20233245-00 and E20234077-00 Pass-through Entity - CDBG - N/A, direct funded CSE - Michigan Department of Health and Human Services WIC - Michigan Department of Health and Human Services Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes 2022-014 Criteria - 2 CFR Appendix V to Part 200 requires each major local government, defined as a local government that receives more than $100 million in direct federal awards, to submit annually to its federal cognizant agency a cost allocation plan whereby central service costs can be identified and assigned to benefited activities on a reasonable and consistent basis. Condition - Controls in place were not adequate to ensure compliance with 2 CFR 200 Appendix V submission requirements for the County’s self-insurance cost allocation process and annual chargeback plan. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs Context - During our review of the County’s process for allocating self insurance costs across the various departments and the annual chargeback plan, we noted the County did not submit its plan for self insurance costs or its annual chargeback plan used to allocate expenditures to the federal grants identified above for the fiscal year ended September 30, 2023 prior to the allocation of these costs. The underlying costs and the allocation methodology were allowable and reasonable, as supported by documentation, thus creating no questioned costs. Beginning in 2020 with the influx of COVID-19 funding, the County received direct funded awards in excess of $100 million, therefore becoming a major local government. Prior to 2020, the County was only required to develop a cost allocation plan in accordance with 2 CFR 200 and maintain the plan and related supporting documentation for audit. Cause and Effect - Procedures and controls in place were not adequate to identify that the County became a major local government, requiring different documentation and submission requirements for self insurance cost allocation process and annual chargeback plan. As a result, no plans were submitted to the cognizant agency for approval. Recommendation - We recommend the County review 2 CFR 200, including the applicable appendixes, to assess the submission and documentation requirements for all cost allocation methodologies. Additionally, we recommend that the County document its methodology for allocating self insurance costs and annual chargeback costs across the various departments, including formalizing its documentation surrounding procedures and controls. Further, we recommend the County implement a process for ensuring these plans are submitted to a federal cognizant agency for approval. Views of Responsible Officials and Planned Corrective Actions - Management communicated with the cognizant agency which confirmed in November 2021, OMB issued guidance relating to CARES Act funding and its effect on indirect cost. Part of this guidance stated that “CARES Act funding should not be included toward the threshold amount for indirect cost submission required in 2 C.F.R. part 200, Appendix VII, paragraph D.1.b”. Therefore, County governments that met the $100 million threshold as a result of CARES Act funding are not required to submit their Central Service Cost Allocation Plan for approval. The CARES Act funding would have increased the County’s funding in excess of $100 million, which should not have been a part of the determination for the original finding. However, since CSLFRF funds were also received increasing the County’s funding in excess of $100 million the annual chargeback plans were submitted to the cognizant agency and U.S. Treasury in 2023 for implementation in FY 24 and will continue to submit subsequent plans to federal cognizant agency, as required by 2 CFR 200 Appendix V.

Assistance Listing Number, Federal Agency, and Program Name - 14.218 - U.S. Department of Housing and Urban Development (HUD) - CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants 93.563 - Title IV D, U.S. Department of Health and Human Service - Child Support Enforcement (CSE) 10.557, U.S. Department of Agriculture - WIC Special Supplemental Nutrition Program for Women, Infants, and Children Federal Award Identification Number and Year - CDBG - B-21-UC-26-0003 and B-22-UC-26-0003 CSE - CSCOM-17-82003 WIC - E20233245-00 and E20234077-00 Pass-through Entity - CDBG - N/A, direct funded CSE - Michigan Department of Health and Human Services WIC - Michigan Department of Health and Human Services Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes 2022-014 Criteria - 2 CFR Appendix V to Part 200 requires each major local government, defined as a local government that receives more than $100 million in direct federal awards, to submit annually to its federal cognizant agency a cost allocation plan whereby central service costs can be identified and assigned to benefited activities on a reasonable and consistent basis. Condition - Controls in place were not adequate to ensure compliance with 2 CFR 200 Appendix V submission requirements for the County’s self-insurance cost allocation process and annual chargeback plan. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs Context - During our review of the County’s process for allocating self insurance costs across the various departments and the annual chargeback plan, we noted the County did not submit its plan for self insurance costs or its annual chargeback plan used to allocate expenditures to the federal grants identified above for the fiscal year ended September 30, 2023 prior to the allocation of these costs. The underlying costs and the allocation methodology were allowable and reasonable, as supported by documentation, thus creating no questioned costs. Beginning in 2020 with the influx of COVID-19 funding, the County received direct funded awards in excess of $100 million, therefore becoming a major local government. Prior to 2020, the County was only required to develop a cost allocation plan in accordance with 2 CFR 200 and maintain the plan and related supporting documentation for audit. Cause and Effect - Procedures and controls in place were not adequate to identify that the County became a major local government, requiring different documentation and submission requirements for self insurance cost allocation process and annual chargeback plan. As a result, no plans were submitted to the cognizant agency for approval. Recommendation - We recommend the County review 2 CFR 200, including the applicable appendixes, to assess the submission and documentation requirements for all cost allocation methodologies. Additionally, we recommend that the County document its methodology for allocating self insurance costs and annual chargeback costs across the various departments, including formalizing its documentation surrounding procedures and controls. Further, we recommend the County implement a process for ensuring these plans are submitted to a federal cognizant agency for approval. Views of Responsible Officials and Planned Corrective Actions - Management communicated with the cognizant agency which confirmed in November 2021, OMB issued guidance relating to CARES Act funding and its effect on indirect cost. Part of this guidance stated that “CARES Act funding should not be included toward the threshold amount for indirect cost submission required in 2 C.F.R. part 200, Appendix VII, paragraph D.1.b”. Therefore, County governments that met the $100 million threshold as a result of CARES Act funding are not required to submit their Central Service Cost Allocation Plan for approval. The CARES Act funding would have increased the County’s funding in excess of $100 million, which should not have been a part of the determination for the original finding. However, since CSLFRF funds were also received increasing the County’s funding in excess of $100 million the annual chargeback plans were submitted to the cognizant agency and U.S. Treasury in 2023 for implementation in FY 24 and will continue to submit subsequent plans to federal cognizant agency, as required by 2 CFR 200 Appendix V.

Assistance Listing Number, Federal Agency, and Program Name - 14.218 - U.S. Department of Housing and Urban Development (HUD) - CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants 93.563 - Title IV D, U.S. Department of Health and Human Service - Child Support Enforcement (CSE) 10.557, U.S. Department of Agriculture - WIC Special Supplemental Nutrition Program for Women, Infants, and Children Federal Award Identification Number and Year - CDBG - B-21-UC-26-0003 and B-22-UC-26-0003 CSE - CSCOM-17-82003 WIC - E20233245-00 and E20234077-00 Pass-through Entity - CDBG - N/A, direct funded CSE - Michigan Department of Health and Human Services WIC - Michigan Department of Health and Human Services Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes 2022-014 Criteria - 2 CFR Appendix V to Part 200 requires each major local government, defined as a local government that receives more than $100 million in direct federal awards, to submit annually to its federal cognizant agency a cost allocation plan whereby central service costs can be identified and assigned to benefited activities on a reasonable and consistent basis. Condition - Controls in place were not adequate to ensure compliance with 2 CFR 200 Appendix V submission requirements for the County’s self-insurance cost allocation process and annual chargeback plan. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs Context - During our review of the County’s process for allocating self insurance costs across the various departments and the annual chargeback plan, we noted the County did not submit its plan for self insurance costs or its annual chargeback plan used to allocate expenditures to the federal grants identified above for the fiscal year ended September 30, 2023 prior to the allocation of these costs. The underlying costs and the allocation methodology were allowable and reasonable, as supported by documentation, thus creating no questioned costs. Beginning in 2020 with the influx of COVID-19 funding, the County received direct funded awards in excess of $100 million, therefore becoming a major local government. Prior to 2020, the County was only required to develop a cost allocation plan in accordance with 2 CFR 200 and maintain the plan and related supporting documentation for audit. Cause and Effect - Procedures and controls in place were not adequate to identify that the County became a major local government, requiring different documentation and submission requirements for self insurance cost allocation process and annual chargeback plan. As a result, no plans were submitted to the cognizant agency for approval. Recommendation - We recommend the County review 2 CFR 200, including the applicable appendixes, to assess the submission and documentation requirements for all cost allocation methodologies. Additionally, we recommend that the County document its methodology for allocating self insurance costs and annual chargeback costs across the various departments, including formalizing its documentation surrounding procedures and controls. Further, we recommend the County implement a process for ensuring these plans are submitted to a federal cognizant agency for approval. Views of Responsible Officials and Planned Corrective Actions - Management communicated with the cognizant agency which confirmed in November 2021, OMB issued guidance relating to CARES Act funding and its effect on indirect cost. Part of this guidance stated that “CARES Act funding should not be included toward the threshold amount for indirect cost submission required in 2 C.F.R. part 200, Appendix VII, paragraph D.1.b”. Therefore, County governments that met the $100 million threshold as a result of CARES Act funding are not required to submit their Central Service Cost Allocation Plan for approval. The CARES Act funding would have increased the County’s funding in excess of $100 million, which should not have been a part of the determination for the original finding. However, since CSLFRF funds were also received increasing the County’s funding in excess of $100 million the annual chargeback plans were submitted to the cognizant agency and U.S. Treasury in 2023 for implementation in FY 24 and will continue to submit subsequent plans to federal cognizant agency, as required by 2 CFR 200 Appendix V.

Assistance Listing Number, Federal Agency, and Program Name - 14.218 - U.S. Department of Housing and Urban Development (HUD) - CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants 93.563 - Title IV D, U.S. Department of Health and Human Service - Child Support Enforcement (CSE) 10.557, U.S. Department of Agriculture - WIC Special Supplemental Nutrition Program for Women, Infants, and Children Federal Award Identification Number and Year - CDBG - B-21-UC-26-0003 and B-22-UC-26-0003 CSE - CSCOM-17-82003 WIC - E20233245-00 and E20234077-00 Pass-through Entity - CDBG - N/A, direct funded CSE - Michigan Department of Health and Human Services WIC - Michigan Department of Health and Human Services Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes 2022-014 Criteria - 2 CFR Appendix V to Part 200 requires each major local government, defined as a local government that receives more than $100 million in direct federal awards, to submit annually to its federal cognizant agency a cost allocation plan whereby central service costs can be identified and assigned to benefited activities on a reasonable and consistent basis. Condition - Controls in place were not adequate to ensure compliance with 2 CFR 200 Appendix V submission requirements for the County’s self-insurance cost allocation process and annual chargeback plan. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs Context - During our review of the County’s process for allocating self insurance costs across the various departments and the annual chargeback plan, we noted the County did not submit its plan for self insurance costs or its annual chargeback plan used to allocate expenditures to the federal grants identified above for the fiscal year ended September 30, 2023 prior to the allocation of these costs. The underlying costs and the allocation methodology were allowable and reasonable, as supported by documentation, thus creating no questioned costs. Beginning in 2020 with the influx of COVID-19 funding, the County received direct funded awards in excess of $100 million, therefore becoming a major local government. Prior to 2020, the County was only required to develop a cost allocation plan in accordance with 2 CFR 200 and maintain the plan and related supporting documentation for audit. Cause and Effect - Procedures and controls in place were not adequate to identify that the County became a major local government, requiring different documentation and submission requirements for self insurance cost allocation process and annual chargeback plan. As a result, no plans were submitted to the cognizant agency for approval. Recommendation - We recommend the County review 2 CFR 200, including the applicable appendixes, to assess the submission and documentation requirements for all cost allocation methodologies. Additionally, we recommend that the County document its methodology for allocating self insurance costs and annual chargeback costs across the various departments, including formalizing its documentation surrounding procedures and controls. Further, we recommend the County implement a process for ensuring these plans are submitted to a federal cognizant agency for approval. Views of Responsible Officials and Planned Corrective Actions - Management communicated with the cognizant agency which confirmed in November 2021, OMB issued guidance relating to CARES Act funding and its effect on indirect cost. Part of this guidance stated that “CARES Act funding should not be included toward the threshold amount for indirect cost submission required in 2 C.F.R. part 200, Appendix VII, paragraph D.1.b”. Therefore, County governments that met the $100 million threshold as a result of CARES Act funding are not required to submit their Central Service Cost Allocation Plan for approval. The CARES Act funding would have increased the County’s funding in excess of $100 million, which should not have been a part of the determination for the original finding. However, since CSLFRF funds were also received increasing the County’s funding in excess of $100 million the annual chargeback plans were submitted to the cognizant agency and U.S. Treasury in 2023 for implementation in FY 24 and will continue to submit subsequent plans to federal cognizant agency, as required by 2 CFR 200 Appendix V.

Assistance Listing Number, Federal Agency, and Program Name - 14.218 - U.S. Department of Housing and Urban Development (HUD) - CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants 93.563 - Title IV D, U.S. Department of Health and Human Service - Child Support Enforcement (CSE) 10.557, U.S. Department of Agriculture - WIC Special Supplemental Nutrition Program for Women, Infants, and Children Federal Award Identification Number and Year - CDBG - B-21-UC-26-0003 and B-22-UC-26-0003 CSE - CSCOM-17-82003 WIC - E20233245-00 and E20234077-00 Pass-through Entity - CDBG - N/A, direct funded CSE - Michigan Department of Health and Human Services WIC - Michigan Department of Health and Human Services Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes 2022-014 Criteria - 2 CFR Appendix V to Part 200 requires each major local government, defined as a local government that receives more than $100 million in direct federal awards, to submit annually to its federal cognizant agency a cost allocation plan whereby central service costs can be identified and assigned to benefited activities on a reasonable and consistent basis. Condition - Controls in place were not adequate to ensure compliance with 2 CFR 200 Appendix V submission requirements for the County’s self-insurance cost allocation process and annual chargeback plan. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs Context - During our review of the County’s process for allocating self insurance costs across the various departments and the annual chargeback plan, we noted the County did not submit its plan for self insurance costs or its annual chargeback plan used to allocate expenditures to the federal grants identified above for the fiscal year ended September 30, 2023 prior to the allocation of these costs. The underlying costs and the allocation methodology were allowable and reasonable, as supported by documentation, thus creating no questioned costs. Beginning in 2020 with the influx of COVID-19 funding, the County received direct funded awards in excess of $100 million, therefore becoming a major local government. Prior to 2020, the County was only required to develop a cost allocation plan in accordance with 2 CFR 200 and maintain the plan and related supporting documentation for audit. Cause and Effect - Procedures and controls in place were not adequate to identify that the County became a major local government, requiring different documentation and submission requirements for self insurance cost allocation process and annual chargeback plan. As a result, no plans were submitted to the cognizant agency for approval. Recommendation - We recommend the County review 2 CFR 200, including the applicable appendixes, to assess the submission and documentation requirements for all cost allocation methodologies. Additionally, we recommend that the County document its methodology for allocating self insurance costs and annual chargeback costs across the various departments, including formalizing its documentation surrounding procedures and controls. Further, we recommend the County implement a process for ensuring these plans are submitted to a federal cognizant agency for approval. Views of Responsible Officials and Planned Corrective Actions - Management communicated with the cognizant agency which confirmed in November 2021, OMB issued guidance relating to CARES Act funding and its effect on indirect cost. Part of this guidance stated that “CARES Act funding should not be included toward the threshold amount for indirect cost submission required in 2 C.F.R. part 200, Appendix VII, paragraph D.1.b”. Therefore, County governments that met the $100 million threshold as a result of CARES Act funding are not required to submit their Central Service Cost Allocation Plan for approval. The CARES Act funding would have increased the County’s funding in excess of $100 million, which should not have been a part of the determination for the original finding. However, since CSLFRF funds were also received increasing the County’s funding in excess of $100 million the annual chargeback plans were submitted to the cognizant agency and U.S. Treasury in 2023 for implementation in FY 24 and will continue to submit subsequent plans to federal cognizant agency, as required by 2 CFR 200 Appendix V.

Assistance Listing Number, Federal Agency, and Program Name - 14.218 - U.S. Department of Housing and Urban Development (HUD) - CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants 93.563 - Title IV D, U.S. Department of Health and Human Service - Child Support Enforcement (CSE) 10.557, U.S. Department of Agriculture - WIC Special Supplemental Nutrition Program for Women, Infants, and Children Federal Award Identification Number and Year - CDBG - B-21-UC-26-0003 and B-22-UC-26-0003 CSE - CSCOM-17-82003 WIC - E20233245-00 and E20234077-00 Pass-through Entity - CDBG - N/A, direct funded CSE - Michigan Department of Health and Human Services WIC - Michigan Department of Health and Human Services Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes 2022-014 Criteria - 2 CFR Appendix V to Part 200 requires each major local government, defined as a local government that receives more than $100 million in direct federal awards, to submit annually to its federal cognizant agency a cost allocation plan whereby central service costs can be identified and assigned to benefited activities on a reasonable and consistent basis. Condition - Controls in place were not adequate to ensure compliance with 2 CFR 200 Appendix V submission requirements for the County’s self-insurance cost allocation process and annual chargeback plan. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs Context - During our review of the County’s process for allocating self insurance costs across the various departments and the annual chargeback plan, we noted the County did not submit its plan for self insurance costs or its annual chargeback plan used to allocate expenditures to the federal grants identified above for the fiscal year ended September 30, 2023 prior to the allocation of these costs. The underlying costs and the allocation methodology were allowable and reasonable, as supported by documentation, thus creating no questioned costs. Beginning in 2020 with the influx of COVID-19 funding, the County received direct funded awards in excess of $100 million, therefore becoming a major local government. Prior to 2020, the County was only required to develop a cost allocation plan in accordance with 2 CFR 200 and maintain the plan and related supporting documentation for audit. Cause and Effect - Procedures and controls in place were not adequate to identify that the County became a major local government, requiring different documentation and submission requirements for self insurance cost allocation process and annual chargeback plan. As a result, no plans were submitted to the cognizant agency for approval. Recommendation - We recommend the County review 2 CFR 200, including the applicable appendixes, to assess the submission and documentation requirements for all cost allocation methodologies. Additionally, we recommend that the County document its methodology for allocating self insurance costs and annual chargeback costs across the various departments, including formalizing its documentation surrounding procedures and controls. Further, we recommend the County implement a process for ensuring these plans are submitted to a federal cognizant agency for approval. Views of Responsible Officials and Planned Corrective Actions - Management communicated with the cognizant agency which confirmed in November 2021, OMB issued guidance relating to CARES Act funding and its effect on indirect cost. Part of this guidance stated that “CARES Act funding should not be included toward the threshold amount for indirect cost submission required in 2 C.F.R. part 200, Appendix VII, paragraph D.1.b”. Therefore, County governments that met the $100 million threshold as a result of CARES Act funding are not required to submit their Central Service Cost Allocation Plan for approval. The CARES Act funding would have increased the County’s funding in excess of $100 million, which should not have been a part of the determination for the original finding. However, since CSLFRF funds were also received increasing the County’s funding in excess of $100 million the annual chargeback plans were submitted to the cognizant agency and U.S. Treasury in 2023 for implementation in FY 24 and will continue to submit subsequent plans to federal cognizant agency, as required by 2 CFR 200 Appendix V.

Assistance Listing Number, Federal Agency, and Program Name - 14.218 - U.S. Department of Housing and Urban Development (HUD) - CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants 93.563 - Title IV D, U.S. Department of Health and Human Service - Child Support Enforcement (CSE) 10.557, U.S. Department of Agriculture - WIC Special Supplemental Nutrition Program for Women, Infants, and Children Federal Award Identification Number and Year - CDBG - B-21-UC-26-0003 and B-22-UC-26-0003 CSE - CSCOM-17-82003 WIC - E20233245-00 and E20234077-00 Pass-through Entity - CDBG - N/A, direct funded CSE - Michigan Department of Health and Human Services WIC - Michigan Department of Health and Human Services Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes 2022-014 Criteria - 2 CFR Appendix V to Part 200 requires each major local government, defined as a local government that receives more than $100 million in direct federal awards, to submit annually to its federal cognizant agency a cost allocation plan whereby central service costs can be identified and assigned to benefited activities on a reasonable and consistent basis. Condition - Controls in place were not adequate to ensure compliance with 2 CFR 200 Appendix V submission requirements for the County’s self-insurance cost allocation process and annual chargeback plan. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs Context - During our review of the County’s process for allocating self insurance costs across the various departments and the annual chargeback plan, we noted the County did not submit its plan for self insurance costs or its annual chargeback plan used to allocate expenditures to the federal grants identified above for the fiscal year ended September 30, 2023 prior to the allocation of these costs. The underlying costs and the allocation methodology were allowable and reasonable, as supported by documentation, thus creating no questioned costs. Beginning in 2020 with the influx of COVID-19 funding, the County received direct funded awards in excess of $100 million, therefore becoming a major local government. Prior to 2020, the County was only required to develop a cost allocation plan in accordance with 2 CFR 200 and maintain the plan and related supporting documentation for audit. Cause and Effect - Procedures and controls in place were not adequate to identify that the County became a major local government, requiring different documentation and submission requirements for self insurance cost allocation process and annual chargeback plan. As a result, no plans were submitted to the cognizant agency for approval. Recommendation - We recommend the County review 2 CFR 200, including the applicable appendixes, to assess the submission and documentation requirements for all cost allocation methodologies. Additionally, we recommend that the County document its methodology for allocating self insurance costs and annual chargeback costs across the various departments, including formalizing its documentation surrounding procedures and controls. Further, we recommend the County implement a process for ensuring these plans are submitted to a federal cognizant agency for approval. Views of Responsible Officials and Planned Corrective Actions - Management communicated with the cognizant agency which confirmed in November 2021, OMB issued guidance relating to CARES Act funding and its effect on indirect cost. Part of this guidance stated that “CARES Act funding should not be included toward the threshold amount for indirect cost submission required in 2 C.F.R. part 200, Appendix VII, paragraph D.1.b”. Therefore, County governments that met the $100 million threshold as a result of CARES Act funding are not required to submit their Central Service Cost Allocation Plan for approval. The CARES Act funding would have increased the County’s funding in excess of $100 million, which should not have been a part of the determination for the original finding. However, since CSLFRF funds were also received increasing the County’s funding in excess of $100 million the annual chargeback plans were submitted to the cognizant agency and U.S. Treasury in 2023 for implementation in FY 24 and will continue to submit subsequent plans to federal cognizant agency, as required by 2 CFR 200 Appendix V.

Assistance Listing Number, Federal Agency, and Program Name - 14.218 - U.S. Department of Housing and Urban Development (HUD) - CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants 93.563 - Title IV D, U.S. Department of Health and Human Service - Child Support Enforcement (CSE) 10.557, U.S. Department of Agriculture - WIC Special Supplemental Nutrition Program for Women, Infants, and Children Federal Award Identification Number and Year - CDBG - B-21-UC-26-0003 and B-22-UC-26-0003 CSE - CSCOM-17-82003 WIC - E20233245-00 and E20234077-00 Pass-through Entity - CDBG - N/A, direct funded CSE - Michigan Department of Health and Human Services WIC - Michigan Department of Health and Human Services Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes 2022-014 Criteria - 2 CFR Appendix V to Part 200 requires each major local government, defined as a local government that receives more than $100 million in direct federal awards, to submit annually to its federal cognizant agency a cost allocation plan whereby central service costs can be identified and assigned to benefited activities on a reasonable and consistent basis. Condition - Controls in place were not adequate to ensure compliance with 2 CFR 200 Appendix V submission requirements for the County’s self-insurance cost allocation process and annual chargeback plan. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs Context - During our review of the County’s process for allocating self insurance costs across the various departments and the annual chargeback plan, we noted the County did not submit its plan for self insurance costs or its annual chargeback plan used to allocate expenditures to the federal grants identified above for the fiscal year ended September 30, 2023 prior to the allocation of these costs. The underlying costs and the allocation methodology were allowable and reasonable, as supported by documentation, thus creating no questioned costs. Beginning in 2020 with the influx of COVID-19 funding, the County received direct funded awards in excess of $100 million, therefore becoming a major local government. Prior to 2020, the County was only required to develop a cost allocation plan in accordance with 2 CFR 200 and maintain the plan and related supporting documentation for audit. Cause and Effect - Procedures and controls in place were not adequate to identify that the County became a major local government, requiring different documentation and submission requirements for self insurance cost allocation process and annual chargeback plan. As a result, no plans were submitted to the cognizant agency for approval. Recommendation - We recommend the County review 2 CFR 200, including the applicable appendixes, to assess the submission and documentation requirements for all cost allocation methodologies. Additionally, we recommend that the County document its methodology for allocating self insurance costs and annual chargeback costs across the various departments, including formalizing its documentation surrounding procedures and controls. Further, we recommend the County implement a process for ensuring these plans are submitted to a federal cognizant agency for approval. Views of Responsible Officials and Planned Corrective Actions - Management communicated with the cognizant agency which confirmed in November 2021, OMB issued guidance relating to CARES Act funding and its effect on indirect cost. Part of this guidance stated that “CARES Act funding should not be included toward the threshold amount for indirect cost submission required in 2 C.F.R. part 200, Appendix VII, paragraph D.1.b”. Therefore, County governments that met the $100 million threshold as a result of CARES Act funding are not required to submit their Central Service Cost Allocation Plan for approval. The CARES Act funding would have increased the County’s funding in excess of $100 million, which should not have been a part of the determination for the original finding. However, since CSLFRF funds were also received increasing the County’s funding in excess of $100 million the annual chargeback plans were submitted to the cognizant agency and U.S. Treasury in 2023 for implementation in FY 24 and will continue to submit subsequent plans to federal cognizant agency, as required by 2 CFR 200 Appendix V.

Assistance Listing Number, Federal Agency, and Program Name - 14.218, Department of Housing and Urban Development (HUD), CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants, COVID-19 CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants (CDBG-CV) Federal Award Identification Number and Year - B-16-UC-26-0003, B-17-UC-26-0003, B-18-UC-26-0003, B-19-UC-26-0003, B-20-UC-26-0003, B-21-UC-26-0003, B-22-UC-26-0003, and COVID-19-CDBG-CV Pass-through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - Per 24 CFR 91.520, a grantee's Consolidated Annual Performance and Evaluation Report (CAPER) is due 90 days after the close of a jurisdiction's program year. Condition - The County did not have adequate controls in place to submit the Consolidated Annual Performance and Evaluation Report for the program year ended June 30, 2023 within 90 days after the close of the program year. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - The County is required to file the CAPER annually, and the report is due to HUD within 90 days after the end of the program year. The CAPER for the program year ended June 30, 2023 was due to HUD on October 1, 2023, but the County filed the CAPER on October 6, 2023. Cause and Effect - The County was aware of the CAPER due date; however, certain clarifications were requested from HUD regarding certain portions of the CAPER, which caused a delay in filing the CAPER. Recommendation - We recommend the County build a timeline for preparation and completion of the CAPER to ensure timely filing. Views of Responsible Officials and Planned Corrective Actions - Management agrees with the finding. Prior to submitting the CAPER, it was brought to the attention of staff that the CDBG Financial Summary Report had to be completed and attached to the CAPER. Staff held discussions with HUD during an MSHDA conference in September 2022 to obtain assistance in completing the report. It was suggested that a meeting would be necessary to provide technical assistance for the report. Staff met with HUD on October 4 to discuss the report and provide further guidance. The CAPER was completed and submitted on October 6. The CDBG Financial Summary Report was completed as part of the CAPER. Management will ensure the CAPER is submitted prior to the deadline moving forward.

Assistance Listing Number, Federal Agency, and Program Name - 14.218, Department of Housing and Urban Development (HUD), CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants, COVID-19 CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants (CDBG-CV) Federal Award Identification Number and Year - B-16-UC-26-0003, B-17-UC-26-0003, B-18-UC-26-0003, B-19-UC-26-0003, B-20-UC-26-0003, B-21-UC-26-0003, B-22-UC-26-0003, and COVID-19-CDBG-CV Pass-through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - Per 24 CFR 91.520, a grantee's Consolidated Annual Performance and Evaluation Report (CAPER) is due 90 days after the close of a jurisdiction's program year. Condition - The County did not have adequate controls in place to submit the Consolidated Annual Performance and Evaluation Report for the program year ended June 30, 2023 within 90 days after the close of the program year. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - The County is required to file the CAPER annually, and the report is due to HUD within 90 days after the end of the program year. The CAPER for the program year ended June 30, 2023 was due to HUD on October 1, 2023, but the County filed the CAPER on October 6, 2023. Cause and Effect - The County was aware of the CAPER due date; however, certain clarifications were requested from HUD regarding certain portions of the CAPER, which caused a delay in filing the CAPER. Recommendation - We recommend the County build a timeline for preparation and completion of the CAPER to ensure timely filing. Views of Responsible Officials and Planned Corrective Actions - Management agrees with the finding. Prior to submitting the CAPER, it was brought to the attention of staff that the CDBG Financial Summary Report had to be completed and attached to the CAPER. Staff held discussions with HUD during an MSHDA conference in September 2022 to obtain assistance in completing the report. It was suggested that a meeting would be necessary to provide technical assistance for the report. Staff met with HUD on October 4 to discuss the report and provide further guidance. The CAPER was completed and submitted on October 6. The CDBG Financial Summary Report was completed as part of the CAPER. Management will ensure the CAPER is submitted prior to the deadline moving forward.

Assistance Listing Number, Federal Agency, and Program Name - 14.218, Department of Housing and Urban Development (HUD), CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants, COVID-19 CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants (CDBG-CV) Federal Award Identification Number and Year - B-16-UC-26-0003, B-17-UC-26-0003, B-18-UC-26-0003, B-19-UC-26-0003, B-20-UC-26-0003, B-21-UC-26-0003, B-22-UC-26-0003, and COVID-19-CDBG-CV Pass-through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - Per 24 CFR 91.520, a grantee's Consolidated Annual Performance and Evaluation Report (CAPER) is due 90 days after the close of a jurisdiction's program year. Condition - The County did not have adequate controls in place to submit the Consolidated Annual Performance and Evaluation Report for the program year ended June 30, 2023 within 90 days after the close of the program year. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - The County is required to file the CAPER annually, and the report is due to HUD within 90 days after the end of the program year. The CAPER for the program year ended June 30, 2023 was due to HUD on October 1, 2023, but the County filed the CAPER on October 6, 2023. Cause and Effect - The County was aware of the CAPER due date; however, certain clarifications were requested from HUD regarding certain portions of the CAPER, which caused a delay in filing the CAPER. Recommendation - We recommend the County build a timeline for preparation and completion of the CAPER to ensure timely filing. Views of Responsible Officials and Planned Corrective Actions - Management agrees with the finding. Prior to submitting the CAPER, it was brought to the attention of staff that the CDBG Financial Summary Report had to be completed and attached to the CAPER. Staff held discussions with HUD during an MSHDA conference in September 2022 to obtain assistance in completing the report. It was suggested that a meeting would be necessary to provide technical assistance for the report. Staff met with HUD on October 4 to discuss the report and provide further guidance. The CAPER was completed and submitted on October 6. The CDBG Financial Summary Report was completed as part of the CAPER. Management will ensure the CAPER is submitted prior to the deadline moving forward.

Assistance Listing Number, Federal Agency, and Program Name - 14.218, Department of Housing and Urban Development (HUD), CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants, COVID-19 CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants (CDBG-CV) Federal Award Identification Number and Year - B-16-UC-26-0003, B-17-UC-26-0003, B-18-UC-26-0003, B-19-UC-26-0003, B-20-UC-26-0003, B-21-UC-26-0003, B-22-UC-26-0003, and COVID-19-CDBG-CV Pass-through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - Per 24 CFR 91.520, a grantee's Consolidated Annual Performance and Evaluation Report (CAPER) is due 90 days after the close of a jurisdiction's program year. Condition - The County did not have adequate controls in place to submit the Consolidated Annual Performance and Evaluation Report for the program year ended June 30, 2023 within 90 days after the close of the program year. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - The County is required to file the CAPER annually, and the report is due to HUD within 90 days after the end of the program year. The CAPER for the program year ended June 30, 2023 was due to HUD on October 1, 2023, but the County filed the CAPER on October 6, 2023. Cause and Effect - The County was aware of the CAPER due date; however, certain clarifications were requested from HUD regarding certain portions of the CAPER, which caused a delay in filing the CAPER. Recommendation - We recommend the County build a timeline for preparation and completion of the CAPER to ensure timely filing. Views of Responsible Officials and Planned Corrective Actions - Management agrees with the finding. Prior to submitting the CAPER, it was brought to the attention of staff that the CDBG Financial Summary Report had to be completed and attached to the CAPER. Staff held discussions with HUD during an MSHDA conference in September 2022 to obtain assistance in completing the report. It was suggested that a meeting would be necessary to provide technical assistance for the report. Staff met with HUD on October 4 to discuss the report and provide further guidance. The CAPER was completed and submitted on October 6. The CDBG Financial Summary Report was completed as part of the CAPER. Management will ensure the CAPER is submitted prior to the deadline moving forward.

Assistance Listing Number, Federal Agency, and Program Name - 14.218, Department of Housing and Urban Development (HUD), CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants, COVID-19 CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants (CDBG-CV) Federal Award Identification Number and Year - B-16-UC-26-0003, B-17-UC-26-0003, B-18-UC-26-0003, B-19-UC-26-0003, B-20-UC-26-0003, B-21-UC-26-0003, B-22-UC-26-0003, and COVID-19-CDBG-CV Pass-through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - Per 24 CFR 91.520, a grantee's Consolidated Annual Performance and Evaluation Report (CAPER) is due 90 days after the close of a jurisdiction's program year. Condition - The County did not have adequate controls in place to submit the Consolidated Annual Performance and Evaluation Report for the program year ended June 30, 2023 within 90 days after the close of the program year. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - The County is required to file the CAPER annually, and the report is due to HUD within 90 days after the end of the program year. The CAPER for the program year ended June 30, 2023 was due to HUD on October 1, 2023, but the County filed the CAPER on October 6, 2023. Cause and Effect - The County was aware of the CAPER due date; however, certain clarifications were requested from HUD regarding certain portions of the CAPER, which caused a delay in filing the CAPER. Recommendation - We recommend the County build a timeline for preparation and completion of the CAPER to ensure timely filing. Views of Responsible Officials and Planned Corrective Actions - Management agrees with the finding. Prior to submitting the CAPER, it was brought to the attention of staff that the CDBG Financial Summary Report had to be completed and attached to the CAPER. Staff held discussions with HUD during an MSHDA conference in September 2022 to obtain assistance in completing the report. It was suggested that a meeting would be necessary to provide technical assistance for the report. Staff met with HUD on October 4 to discuss the report and provide further guidance. The CAPER was completed and submitted on October 6. The CDBG Financial Summary Report was completed as part of the CAPER. Management will ensure the CAPER is submitted prior to the deadline moving forward.

Assistance Listing Number, Federal Agency, and Program Name - 14.218, Department of Housing and Urban Development (HUD), CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants, COVID-19 CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants (CDBG-CV) Federal Award Identification Number and Year - B-16-UC-26-0003, B-17-UC-26-0003, B-18-UC-26-0003, B-19-UC-26-0003, B-20-UC-26-0003, B-21-UC-26-0003, B-22-UC-26-0003, and COVID-19-CDBG-CV Pass-through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - Per 24 CFR 91.520, a grantee's Consolidated Annual Performance and Evaluation Report (CAPER) is due 90 days after the close of a jurisdiction's program year. Condition - The County did not have adequate controls in place to submit the Consolidated Annual Performance and Evaluation Report for the program year ended June 30, 2023 within 90 days after the close of the program year. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - The County is required to file the CAPER annually, and the report is due to HUD within 90 days after the end of the program year. The CAPER for the program year ended June 30, 2023 was due to HUD on October 1, 2023, but the County filed the CAPER on October 6, 2023. Cause and Effect - The County was aware of the CAPER due date; however, certain clarifications were requested from HUD regarding certain portions of the CAPER, which caused a delay in filing the CAPER. Recommendation - We recommend the County build a timeline for preparation and completion of the CAPER to ensure timely filing. Views of Responsible Officials and Planned Corrective Actions - Management agrees with the finding. Prior to submitting the CAPER, it was brought to the attention of staff that the CDBG Financial Summary Report had to be completed and attached to the CAPER. Staff held discussions with HUD during an MSHDA conference in September 2022 to obtain assistance in completing the report. It was suggested that a meeting would be necessary to provide technical assistance for the report. Staff met with HUD on October 4 to discuss the report and provide further guidance. The CAPER was completed and submitted on October 6. The CDBG Financial Summary Report was completed as part of the CAPER. Management will ensure the CAPER is submitted prior to the deadline moving forward.

Assistance Listing Number, Federal Agency, and Program Name - 14.218, Department of Housing and Urban Development (HUD), CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants, COVID-19 CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants (CDBG-CV) Federal Award Identification Number and Year - B-16-UC-26-0003, B-17-UC-26-0003, B-18-UC-26-0003, B-19-UC-26-0003, B-20-UC-26-0003, B-21-UC-26-0003, B-22-UC-26-0003, and COVID-19-CDBG-CV Pass-through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - Per 24 CFR 91.520, a grantee's Consolidated Annual Performance and Evaluation Report (CAPER) is due 90 days after the close of a jurisdiction's program year. Condition - The County did not have adequate controls in place to submit the Consolidated Annual Performance and Evaluation Report for the program year ended June 30, 2023 within 90 days after the close of the program year. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - The County is required to file the CAPER annually, and the report is due to HUD within 90 days after the end of the program year. The CAPER for the program year ended June 30, 2023 was due to HUD on October 1, 2023, but the County filed the CAPER on October 6, 2023. Cause and Effect - The County was aware of the CAPER due date; however, certain clarifications were requested from HUD regarding certain portions of the CAPER, which caused a delay in filing the CAPER. Recommendation - We recommend the County build a timeline for preparation and completion of the CAPER to ensure timely filing. Views of Responsible Officials and Planned Corrective Actions - Management agrees with the finding. Prior to submitting the CAPER, it was brought to the attention of staff that the CDBG Financial Summary Report had to be completed and attached to the CAPER. Staff held discussions with HUD during an MSHDA conference in September 2022 to obtain assistance in completing the report. It was suggested that a meeting would be necessary to provide technical assistance for the report. Staff met with HUD on October 4 to discuss the report and provide further guidance. The CAPER was completed and submitted on October 6. The CDBG Financial Summary Report was completed as part of the CAPER. Management will ensure the CAPER is submitted prior to the deadline moving forward.

Assistance Listing Number, Federal Agency, and Program Name - 14.218, Department of Housing and Urban Development (HUD), CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants, COVID-19 CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants (CDBG-CV) Federal Award Identification Number and Year - B-16-UC-26-0003, B-17-UC-26-0003, B-18-UC-26-0003, B-19-UC-26-0003, B-20-UC-26-0003, B-21-UC-26-0003, B-22-UC-26-0003, and COVID-19-CDBG-CV Pass-through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - Per 24 CFR 91.520, a grantee's Consolidated Annual Performance and Evaluation Report (CAPER) is due 90 days after the close of a jurisdiction's program year. Condition - The County did not have adequate controls in place to submit the Consolidated Annual Performance and Evaluation Report for the program year ended June 30, 2023 within 90 days after the close of the program year. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - The County is required to file the CAPER annually, and the report is due to HUD within 90 days after the end of the program year. The CAPER for the program year ended June 30, 2023 was due to HUD on October 1, 2023, but the County filed the CAPER on October 6, 2023. Cause and Effect - The County was aware of the CAPER due date; however, certain clarifications were requested from HUD regarding certain portions of the CAPER, which caused a delay in filing the CAPER. Recommendation - We recommend the County build a timeline for preparation and completion of the CAPER to ensure timely filing. Views of Responsible Officials and Planned Corrective Actions - Management agrees with the finding. Prior to submitting the CAPER, it was brought to the attention of staff that the CDBG Financial Summary Report had to be completed and attached to the CAPER. Staff held discussions with HUD during an MSHDA conference in September 2022 to obtain assistance in completing the report. It was suggested that a meeting would be necessary to provide technical assistance for the report. Staff met with HUD on October 4 to discuss the report and provide further guidance. The CAPER was completed and submitted on October 6. The CDBG Financial Summary Report was completed as part of the CAPER. Management will ensure the CAPER is submitted prior to the deadline moving forward.

Assistance Listing Number, Federal Agency, and Program Name – 14.218, Department of Housing and Urban Development (HUD), CDBG – Entitlement Grants Cluster – Community Development Block Grants/Entitlement Grants Federal Award Identification Number and Year – B-22-UC-26-0003 Pass-through Entity – N/A Finding Type – Material noncompliance and significant deficiency Repeat Finding - No Criteria – The Federal Funding Accountability and Transparency Act as amended by section 6202 of Pub L. No. 110-252 (“Transparency Act”) requires recipients of Federal awards to report data using the FFATA Subaward Reporting System (FSRS) Tool. The report is required to be filed no later than the last day of the month following the month in which the subaward/subaward amendment obligation was made or the subcontract award/subcontract modification was made. Condition - The County filed the FFATA report seven months late. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable as there were no questioned costs identified. Context – During the fiscal year, the County was required to submit one FFATA report in July 2023 for an award of CDBG funds made in June 2023. The following table summarizes the transactions examined and the non-compliance identified: See the Notes to the SEFA for chart/table. Cause and Effect - The County tracks subaward obligation dates through the County’s contracting system on a monthly basis. FFATA reporting is completed when the subaward obligation is listed as fully approved in the contracting system. The subaward obligation was initially listed as ‘rejected’ and thus no action was taken by the County. The subaward obligation was later listed as ‘fully approved’ resulting in the County submitting the FFATA report in February 2024, subsequent to the due date of July 31, 2023. Recommendation - We recommend the County review its process for tracking subaward obligations to ensure that they are able to adhere to the FFATA filing requirement, i.e. no later than the last day of the month following the month in which the subaward/subaward amendment obligation was made. We also recommend that the County evaluate whether additional fields, notifications, etc. are necessary to timely identify when FFATA reporting is required within the contracting system. Views of Responsible Officials and Corrective Action Plan - Management agrees with this finding. The County will implement a notification process to include communication to the grants division once grant contracts are approved. Subsequent FFATA reports will be filed of notification of approval no later than the last day of the month following the month in which the subaward/subaward amendment obligation.

Assistance Listing Number, Federal Agency, and Program Name - 21.023, U.S. Department of the Treasury, COVID-19 - Emergency Rental Assistance Federal Award Identification Number and Year - ERA2-0476 Pass-through Entity - N/A - Direct funded Finding Type - Material weakness Repeat Finding - No Criteria - Per 2 CFR 200.303(a), nonfederal entities 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 statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the Internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition - The County’s controls over general ledger to schedule of expenditures of federal awards (SEFA) and beneficiary payment database reconciliation did not identify several adjustments that were needed to both the general ledger and the SEFA. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there are no questioned costs Context - The County’s controls to track and reconcile grant activities between the general ledger and SEFA were not adequate to identify all grant activity. As a result, the following adjustments were necessary for the year ended September 30, 2023: • Approximately $550,000 adjustment to record beneficiary payments on the SEFA • Approximately $160,000 adjustment to accrue for subrecipient activity in the general ledger Cause and Effect - The controls in place to ensure that the SEFA and beneficiary payment database reconciled to the general ledger were not effective. As a result, an audit adjustment was posted to the general ledger to record approximately $550,000 of beneficiary payments that was included in the SEFA and beneficiary payment database but not the general ledger. Additionally, the SEFA was initially understated by approximately $160,000 as a result of the County not accruing for its subrecipient activity through September 30, 2023. The SEFA was adjusted to include this amount. Recommendation - We recommend that the County review its processes and controls to ensure that grant activity is properly tracked, properly accounted for in the general ledger, and fully reconciled between the beneficiary database, general ledger, and SEFA to ensure completeness and accuracy of the SEFA. Views of Responsible Officials and Planned Corrective Actions - Management will update processes and controls to ensure completeness of grant activity is received for review and reconciliation.

Assistance Listing Number, Federal Agency, and Program Name - 21.023, U.S. Department of the Treasury, COVID-19 - Emergency Rental Assistance Federal Award Identification Number and Year - ERA2-0476 Pass-through Entity - N/A - Direct funded Finding Type - Significant deficiency Repeat Finding - No Criteria - The County has written procedures for subrecipient monitoring, including risk assessments. The County’s internal policy requires departments to perform a risk assessment on subrecipients prior to an executed agreement and establish a monitoring plan based on the assessed risk. Condition - Controls were not adequate to ensure risk assessments were performed in advance of the executing agreement with the County’s two subrecipients for the ERA program for the fiscal year ended September 30, 2023. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there are no questioned costs Context - By not performing risk assessments before entering into agreements with its two subrecipients, the County did not follow its policy related to timing of subrecipient risk analysis. Cause and Effect - The County’s controls were not adequate to ensure it followed its internal policies concerning subrecipient risk assessments. The lack of controls can result in the County not identifying risks timely. Recommendation - We recommend that the County evaluate whether its controls are adequate to ensure compliance with the Uniform Guidance and internal policies. Views of Responsible Officials and Planned Corrective Actions - Management has developed a new system of risk assessments that will be implemented to receive documentation prior to the execution of awards.

Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.

Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.

Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.

Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.

Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.

Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.

Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.

Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.

Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.

Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.

Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.

Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.

Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.

Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.1 defines ‘‘financial obligation’’ when referencing a recipient’s or subrecipient’s use of funds under a federal award as orders placed for property and services, contracts and subawards made, and similar transactions that require payment. The Treasury Interim Final Rule on “Obligation” further clarifies - This definition aligns with a plain language understanding of ‘‘incur’’ as meaning to become liable or subject to something. Subrecipient monitoring Section under Part 3 of the 2023 Compliance Supplement notes that transfers of federal awards to another component of the same auditee under 2 CFR 200, Subpart F, do not constitute a subrecipient or contractor relationship, and, therefore, funds are not considered obligated at the time they are transferred to a component unit of an auditee. Condition - The County did not have adequate controls in place to ensure funds transferred to a component unit were not reported to the Treasury until the component unit met the criteria for obligated the funds. As a result, the County reported to the Treasury $10,000,000 as obligated based on an agreement between the County and a discreetly presented component unit of the County prior to those funds meeting the definition of obligated. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - During the fiscal year ended September 30, 2023, the County awarded $10,000,000 of CSLFRF to a discreetly presented component unit and reported this as obligated to Treasury in its report for the quarter ended March 31, 2023. For the year ended September 30, 2023, the discreetly presented component unit incurred expenses of approximately $207,000. Cause and Effect - The County considered the executed agreement with its discreetly presented component unit to create an obligation. As such, the County reported the entire award, i.e., $10,000,000, as obligated for the year ended September 30, 2023. The County’s conclusion resulted in the SEFA being initially overstated by approximately $9.8 million, i.e., the difference between the award and the actual expenditures of approximately $207,000. The SEFA for the year ended September 30, 2023 was corrected for this error. Recommendation - We recommend the County correct its Treasury reporting and continue to evaluate the substance and form of its agreements to determine the impact on reporting to the Treasury. Views of Responsible Officials and Planned Corrective Actions - Management has updated the determination of the relationship with the Drains Commission, a separate legal entity, and subsequently adjusted the SEFA to report the current expenditures of the project. The Treasury report will be adjusted in the next reporting period.

Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.201(a), the federal awarding agency or pass-through entity must decide on the appropriate instrument for the federal award (i.e., grant agreement, cooperative agreement, or contract) in accordance with the Federal Grant and Cooperative Agreement Act (31 U.S.C. 631-08). Per guidance within Treasury FAQs, recipients’ use of revenue loss funds does not give rise to subrecipient relationships given that there is no federal program or purpose to carry out in the case of the revenue loss portion of the award. Condition - The County entered into intergovernmental agreements with local communities using the revenue loss provision of the County’s CSLFRF award. Those contracts contained subrecipient language/provisions. The County did not have adequate controls in place to ensure that the form and substance of these agreements were in compliance with the intended nature of the relationship and/or the requirements of the federal award. Questioned Costs - None Identification of How Questioned Costs Were Computed Not applicable, as there were no questioned costs identified Context - The County entered into agreements with local communities to fund various projects to benefit residents in these communities that amounted to approximately $71 million under the revenue loss provisions. During the fiscal year ended September 30, 2023, these communities spent and were reimbursed for approximately $6.7 million of costs under these agreements. The agreements included language that suggested Uniform Guidance applicability and that indicated the existence of a pass through/subrecipient relationship between the County and the local communities. Cause and Effect - The County provided funding to the communities via an intergovernmental agreement that included subrecipient language/provisions. Without further communication to the communities about the intended nature of the relationship, communities may improperly conclude they are subject to certain compliance requirements, including but not limited to incorrectly concluding that they are required to report expenditures incurred under the agreements on their schedule of expenditures of federal awards, which could further lead to those communities to incorrectly concluding that they are subject to the requirement to obtain a single audit and/or to incorrect major program determinations being made in conjunction with their single audit engagements. Recommendation - We recommend the County evaluate its controls to ensure the substance and form of each agreement. We further recommend the County evaluate whether additional guidance needs to be provided to recipients. Views of Responsible Officials and Planned Corrective Actions - Management does not agree with this finding. As noted in the Condition of this finding itself, the agreements in question are intergovernmental agreements , clearly labeled as such. They specifically state they are funding each project with SLFRF funds under the Revenue Replacement Category (Category 6.1). Section 4.01 states “Project Funds must be used for eligible activities for revenue replacement funds as described in the SLFRF final rules, regulations, and guidance.” As Management informed the auditor before auditor edited its preliminary finding to reflect this, “as described in the SLFRF final rules, regulations, and guidance” under 6.1 there are no subrecipients by definition as the County itself is the beneficiary. The County is being "made whole" for calculated revenue loss due to the pandemic under this category; therefore, once the funds are obligated and spent by the County the purpose has been satisfied. The entity receiving those funds would not have subrecipient obligations. FAQ 13.14 confirms this understanding. The communities enter into subrecipient agreements on an annual basis with the County and are very familiar with the format of such agreements. Those agreements always state clearly that they are subrecipient agreements in the title and the introductory paragraph. The communities also enter into intergovernmental agreements with the County on an annual basis. Therefore, they are aware that these two types of agreement are distinct. In this case the agreements are clearly labeled as intergovernmental agreements in the title and the introductory paragraph and there is no mention of subrecipient status in the body of the agreement. In fact, Section 4.05, Relationship of Parties, states “Relationship of the Community to the County is, and will continue to be, that of an independent contractor.” In the subrecipient agreements the County enters into with these communities on an annual basis this clause says the relationship is that of a subrecipient. Therefore, the agreement is clear on the relationship and the communities would know to consult the County if there is any question of compliance requirements. Any language requiring compliance with provisions applicable to subrecipients was paired with the qualifier "applicable." For example Article IX requires compliance with laws only “as applicable”. This is catch-all language and is good legal practice to include for contingencies. In this case, the program being a new federal program, the County intentionally included this catch-all language referencing compliance with 2 CFR 200 (Uniform Guidance) “as applicable” and required the community to “provide any disclosures required by law.” to allow itself the ability to enforce should the laws, rules, or regulations be interpreted in a certain manner to be applicable or even changed. This is based on experience with programs such as the Neighborhood Stabilization Program through HUD where such occurrences were noted. Consequently; the County believes it would actually be irresponsible not to include such language. As far as the recommendation of increased guidance to contracted communities, given the increased guidance available now the County has provided such guidance as needed. Auditor seems to indicate that the communities “may improperly conclude they are subject to certain compliance requirements, including but not limited to incorrectly concluding they are required to report expenditures incurred under the agreements on their schedule of expenditures of federal awards, which could further lead to those communities incorrectly concluding they are subject to the requirement to obtain a single audit and/or incorrect major program determinations being made in conjunction with their single audit engagements.” The finding is essentially noting that if these communities conclude that they have a subrecipient relationship and that the Uniform Guidance is applicable to them as subrecipients it is an improper conclusion. Given the wide availability of FAQs and guidance on this topic, Management agrees it would be an improper conclusion.

Assistance Listing Number, Federal Agency, and Program Name - 10.557, U.S. Department of Agriculture - WIC Special Supplemental Nutrition Program for Women, Infants, and Children Federal Award Identification Number and Year - E20233245-00 and E20234077-00 Pass-through Entity - Michigan Department of Health and Human Services Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes; 2022-011 Criteria - Per 2 CFR 200.501(g), federal award compliance requirements normally do not pass through to contractors. However, the grant recipient is responsible for ensuring compliance for procurement transactions, which are structured such that the contractor is responsible for program compliance or the contractor’s records must be reviewed to determine program compliance. Condition - Controls in place were not adequate to ensure the County maintained responsibility for compliance with eligibility standards when eligibility determinations are made by the contractor. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there are no questioned costs Context - During eligibility testing, we noted 31 out of 60 eligibility samples where employees of the contractor performed both the intake and the certification and review function, with no further review by a county representative. Cause and Effect - The County is subject to the MI-WIC Policy issued by the Michigan Department of Health and Human Services, which stresses the importance of maintaining appropriate separation of duties when performing the intake and certification of eligible program participants. While the County has designed its controls in conjunction with the MI-WIC Policy guidance, these controls are not adequate to ensure compliance with the Uniform Guidance, which requires the County have controls in place to ensure that a representative of the County performs a review of eligibility intake and certification performed by contractor employees. Recommendation - We recommend the County implement a process by which a county representative performs a review of contractor eligibility determinations. Views of Responsible Officials and Corrective Action Plan - Management has fully implemented a process, as of January 2024, by which a county representative performs a review of contractor eligibility determinations.

Assistance Listing Number, Federal Agency, and Program Name - 10.557, U.S. Department of Agriculture - WIC Special Supplemental Nutrition Program for Women, Infants, and Children Federal Award Identification Number and Year - E20233245-00 and E20234077-00 Pass-through Entity - Michigan Department of Health and Human Services Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes; 2022-011 Criteria - Per 2 CFR 200.501(g), federal award compliance requirements normally do not pass through to contractors. However, the grant recipient is responsible for ensuring compliance for procurement transactions, which are structured such that the contractor is responsible for program compliance or the contractor’s records must be reviewed to determine program compliance. Condition - Controls in place were not adequate to ensure the County maintained responsibility for compliance with eligibility standards when eligibility determinations are made by the contractor. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there are no questioned costs Context - During eligibility testing, we noted 31 out of 60 eligibility samples where employees of the contractor performed both the intake and the certification and review function, with no further review by a county representative. Cause and Effect - The County is subject to the MI-WIC Policy issued by the Michigan Department of Health and Human Services, which stresses the importance of maintaining appropriate separation of duties when performing the intake and certification of eligible program participants. While the County has designed its controls in conjunction with the MI-WIC Policy guidance, these controls are not adequate to ensure compliance with the Uniform Guidance, which requires the County have controls in place to ensure that a representative of the County performs a review of eligibility intake and certification performed by contractor employees. Recommendation - We recommend the County implement a process by which a county representative performs a review of contractor eligibility determinations. Views of Responsible Officials and Corrective Action Plan - Management has fully implemented a process, as of January 2024, by which a county representative performs a review of contractor eligibility determinations.

Assistance Listing Number, Federal Agency, and Program Name - 14.218 - U.S. Department of Housing and Urban Development (HUD) - CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants 93.563 - Title IV D, U.S. Department of Health and Human Service - Child Support Enforcement (CSE) 10.557, U.S. Department of Agriculture - WIC Special Supplemental Nutrition Program for Women, Infants, and Children Federal Award Identification Number and Year - CDBG - B-21-UC-26-0003 and B-22-UC-26-0003 CSE - CSCOM-17-82003 WIC - E20233245-00 and E20234077-00 Pass-through Entity - CDBG - N/A, direct funded CSE - Michigan Department of Health and Human Services WIC - Michigan Department of Health and Human Services Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes 2022-014 Criteria - 2 CFR Appendix V to Part 200 requires each major local government, defined as a local government that receives more than $100 million in direct federal awards, to submit annually to its federal cognizant agency a cost allocation plan whereby central service costs can be identified and assigned to benefited activities on a reasonable and consistent basis. Condition - Controls in place were not adequate to ensure compliance with 2 CFR 200 Appendix V submission requirements for the County’s self-insurance cost allocation process and annual chargeback plan. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs Context - During our review of the County’s process for allocating self insurance costs across the various departments and the annual chargeback plan, we noted the County did not submit its plan for self insurance costs or its annual chargeback plan used to allocate expenditures to the federal grants identified above for the fiscal year ended September 30, 2023 prior to the allocation of these costs. The underlying costs and the allocation methodology were allowable and reasonable, as supported by documentation, thus creating no questioned costs. Beginning in 2020 with the influx of COVID-19 funding, the County received direct funded awards in excess of $100 million, therefore becoming a major local government. Prior to 2020, the County was only required to develop a cost allocation plan in accordance with 2 CFR 200 and maintain the plan and related supporting documentation for audit. Cause and Effect - Procedures and controls in place were not adequate to identify that the County became a major local government, requiring different documentation and submission requirements for self insurance cost allocation process and annual chargeback plan. As a result, no plans were submitted to the cognizant agency for approval. Recommendation - We recommend the County review 2 CFR 200, including the applicable appendixes, to assess the submission and documentation requirements for all cost allocation methodologies. Additionally, we recommend that the County document its methodology for allocating self insurance costs and annual chargeback costs across the various departments, including formalizing its documentation surrounding procedures and controls. Further, we recommend the County implement a process for ensuring these plans are submitted to a federal cognizant agency for approval. Views of Responsible Officials and Planned Corrective Actions - Management communicated with the cognizant agency which confirmed in November 2021, OMB issued guidance relating to CARES Act funding and its effect on indirect cost. Part of this guidance stated that “CARES Act funding should not be included toward the threshold amount for indirect cost submission required in 2 C.F.R. part 200, Appendix VII, paragraph D.1.b”. Therefore, County governments that met the $100 million threshold as a result of CARES Act funding are not required to submit their Central Service Cost Allocation Plan for approval. The CARES Act funding would have increased the County’s funding in excess of $100 million, which should not have been a part of the determination for the original finding. However, since CSLFRF funds were also received increasing the County’s funding in excess of $100 million the annual chargeback plans were submitted to the cognizant agency and U.S. Treasury in 2023 for implementation in FY 24 and will continue to submit subsequent plans to federal cognizant agency, as required by 2 CFR 200 Appendix V.

Assistance Listing Number, Federal Agency, and Program Name - 14.218 - U.S. Department of Housing and Urban Development (HUD) - CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants 93.563 - Title IV D, U.S. Department of Health and Human Service - Child Support Enforcement (CSE) 10.557, U.S. Department of Agriculture - WIC Special Supplemental Nutrition Program for Women, Infants, and Children Federal Award Identification Number and Year - CDBG - B-21-UC-26-0003 and B-22-UC-26-0003 CSE - CSCOM-17-82003 WIC - E20233245-00 and E20234077-00 Pass-through Entity - CDBG - N/A, direct funded CSE - Michigan Department of Health and Human Services WIC - Michigan Department of Health and Human Services Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes 2022-014 Criteria - 2 CFR Appendix V to Part 200 requires each major local government, defined as a local government that receives more than $100 million in direct federal awards, to submit annually to its federal cognizant agency a cost allocation plan whereby central service costs can be identified and assigned to benefited activities on a reasonable and consistent basis. Condition - Controls in place were not adequate to ensure compliance with 2 CFR 200 Appendix V submission requirements for the County’s self-insurance cost allocation process and annual chargeback plan. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs Context - During our review of the County’s process for allocating self insurance costs across the various departments and the annual chargeback plan, we noted the County did not submit its plan for self insurance costs or its annual chargeback plan used to allocate expenditures to the federal grants identified above for the fiscal year ended September 30, 2023 prior to the allocation of these costs. The underlying costs and the allocation methodology were allowable and reasonable, as supported by documentation, thus creating no questioned costs. Beginning in 2020 with the influx of COVID-19 funding, the County received direct funded awards in excess of $100 million, therefore becoming a major local government. Prior to 2020, the County was only required to develop a cost allocation plan in accordance with 2 CFR 200 and maintain the plan and related supporting documentation for audit. Cause and Effect - Procedures and controls in place were not adequate to identify that the County became a major local government, requiring different documentation and submission requirements for self insurance cost allocation process and annual chargeback plan. As a result, no plans were submitted to the cognizant agency for approval. Recommendation - We recommend the County review 2 CFR 200, including the applicable appendixes, to assess the submission and documentation requirements for all cost allocation methodologies. Additionally, we recommend that the County document its methodology for allocating self insurance costs and annual chargeback costs across the various departments, including formalizing its documentation surrounding procedures and controls. Further, we recommend the County implement a process for ensuring these plans are submitted to a federal cognizant agency for approval. Views of Responsible Officials and Planned Corrective Actions - Management communicated with the cognizant agency which confirmed in November 2021, OMB issued guidance relating to CARES Act funding and its effect on indirect cost. Part of this guidance stated that “CARES Act funding should not be included toward the threshold amount for indirect cost submission required in 2 C.F.R. part 200, Appendix VII, paragraph D.1.b”. Therefore, County governments that met the $100 million threshold as a result of CARES Act funding are not required to submit their Central Service Cost Allocation Plan for approval. The CARES Act funding would have increased the County’s funding in excess of $100 million, which should not have been a part of the determination for the original finding. However, since CSLFRF funds were also received increasing the County’s funding in excess of $100 million the annual chargeback plans were submitted to the cognizant agency and U.S. Treasury in 2023 for implementation in FY 24 and will continue to submit subsequent plans to federal cognizant agency, as required by 2 CFR 200 Appendix V.

Assistance Listing Number, Federal Agency, and Program Name - 14.218 - U.S. Department of Housing and Urban Development (HUD) - CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants 93.563 - Title IV D, U.S. Department of Health and Human Service - Child Support Enforcement (CSE) 10.557, U.S. Department of Agriculture - WIC Special Supplemental Nutrition Program for Women, Infants, and Children Federal Award Identification Number and Year - CDBG - B-21-UC-26-0003 and B-22-UC-26-0003 CSE - CSCOM-17-82003 WIC - E20233245-00 and E20234077-00 Pass-through Entity - CDBG - N/A, direct funded CSE - Michigan Department of Health and Human Services WIC - Michigan Department of Health and Human Services Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes 2022-014 Criteria - 2 CFR Appendix V to Part 200 requires each major local government, defined as a local government that receives more than $100 million in direct federal awards, to submit annually to its federal cognizant agency a cost allocation plan whereby central service costs can be identified and assigned to benefited activities on a reasonable and consistent basis. Condition - Controls in place were not adequate to ensure compliance with 2 CFR 200 Appendix V submission requirements for the County’s self-insurance cost allocation process and annual chargeback plan. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs Context - During our review of the County’s process for allocating self insurance costs across the various departments and the annual chargeback plan, we noted the County did not submit its plan for self insurance costs or its annual chargeback plan used to allocate expenditures to the federal grants identified above for the fiscal year ended September 30, 2023 prior to the allocation of these costs. The underlying costs and the allocation methodology were allowable and reasonable, as supported by documentation, thus creating no questioned costs. Beginning in 2020 with the influx of COVID-19 funding, the County received direct funded awards in excess of $100 million, therefore becoming a major local government. Prior to 2020, the County was only required to develop a cost allocation plan in accordance with 2 CFR 200 and maintain the plan and related supporting documentation for audit. Cause and Effect - Procedures and controls in place were not adequate to identify that the County became a major local government, requiring different documentation and submission requirements for self insurance cost allocation process and annual chargeback plan. As a result, no plans were submitted to the cognizant agency for approval. Recommendation - We recommend the County review 2 CFR 200, including the applicable appendixes, to assess the submission and documentation requirements for all cost allocation methodologies. Additionally, we recommend that the County document its methodology for allocating self insurance costs and annual chargeback costs across the various departments, including formalizing its documentation surrounding procedures and controls. Further, we recommend the County implement a process for ensuring these plans are submitted to a federal cognizant agency for approval. Views of Responsible Officials and Planned Corrective Actions - Management communicated with the cognizant agency which confirmed in November 2021, OMB issued guidance relating to CARES Act funding and its effect on indirect cost. Part of this guidance stated that “CARES Act funding should not be included toward the threshold amount for indirect cost submission required in 2 C.F.R. part 200, Appendix VII, paragraph D.1.b”. Therefore, County governments that met the $100 million threshold as a result of CARES Act funding are not required to submit their Central Service Cost Allocation Plan for approval. The CARES Act funding would have increased the County’s funding in excess of $100 million, which should not have been a part of the determination for the original finding. However, since CSLFRF funds were also received increasing the County’s funding in excess of $100 million the annual chargeback plans were submitted to the cognizant agency and U.S. Treasury in 2023 for implementation in FY 24 and will continue to submit subsequent plans to federal cognizant agency, as required by 2 CFR 200 Appendix V.

Assistance Listing Number, Federal Agency, and Program Name - 14.218 - U.S. Department of Housing and Urban Development (HUD) - CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants 93.563 - Title IV D, U.S. Department of Health and Human Service - Child Support Enforcement (CSE) 10.557, U.S. Department of Agriculture - WIC Special Supplemental Nutrition Program for Women, Infants, and Children Federal Award Identification Number and Year - CDBG - B-21-UC-26-0003 and B-22-UC-26-0003 CSE - CSCOM-17-82003 WIC - E20233245-00 and E20234077-00 Pass-through Entity - CDBG - N/A, direct funded CSE - Michigan Department of Health and Human Services WIC - Michigan Department of Health and Human Services Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes 2022-014 Criteria - 2 CFR Appendix V to Part 200 requires each major local government, defined as a local government that receives more than $100 million in direct federal awards, to submit annually to its federal cognizant agency a cost allocation plan whereby central service costs can be identified and assigned to benefited activities on a reasonable and consistent basis. Condition - Controls in place were not adequate to ensure compliance with 2 CFR 200 Appendix V submission requirements for the County’s self-insurance cost allocation process and annual chargeback plan. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs Context - During our review of the County’s process for allocating self insurance costs across the various departments and the annual chargeback plan, we noted the County did not submit its plan for self insurance costs or its annual chargeback plan used to allocate expenditures to the federal grants identified above for the fiscal year ended September 30, 2023 prior to the allocation of these costs. The underlying costs and the allocation methodology were allowable and reasonable, as supported by documentation, thus creating no questioned costs. Beginning in 2020 with the influx of COVID-19 funding, the County received direct funded awards in excess of $100 million, therefore becoming a major local government. Prior to 2020, the County was only required to develop a cost allocation plan in accordance with 2 CFR 200 and maintain the plan and related supporting documentation for audit. Cause and Effect - Procedures and controls in place were not adequate to identify that the County became a major local government, requiring different documentation and submission requirements for self insurance cost allocation process and annual chargeback plan. As a result, no plans were submitted to the cognizant agency for approval. Recommendation - We recommend the County review 2 CFR 200, including the applicable appendixes, to assess the submission and documentation requirements for all cost allocation methodologies. Additionally, we recommend that the County document its methodology for allocating self insurance costs and annual chargeback costs across the various departments, including formalizing its documentation surrounding procedures and controls. Further, we recommend the County implement a process for ensuring these plans are submitted to a federal cognizant agency for approval. Views of Responsible Officials and Planned Corrective Actions - Management communicated with the cognizant agency which confirmed in November 2021, OMB issued guidance relating to CARES Act funding and its effect on indirect cost. Part of this guidance stated that “CARES Act funding should not be included toward the threshold amount for indirect cost submission required in 2 C.F.R. part 200, Appendix VII, paragraph D.1.b”. Therefore, County governments that met the $100 million threshold as a result of CARES Act funding are not required to submit their Central Service Cost Allocation Plan for approval. The CARES Act funding would have increased the County’s funding in excess of $100 million, which should not have been a part of the determination for the original finding. However, since CSLFRF funds were also received increasing the County’s funding in excess of $100 million the annual chargeback plans were submitted to the cognizant agency and U.S. Treasury in 2023 for implementation in FY 24 and will continue to submit subsequent plans to federal cognizant agency, as required by 2 CFR 200 Appendix V.

Assistance Listing Number, Federal Agency, and Program Name - 14.218 - U.S. Department of Housing and Urban Development (HUD) - CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants 93.563 - Title IV D, U.S. Department of Health and Human Service - Child Support Enforcement (CSE) 10.557, U.S. Department of Agriculture - WIC Special Supplemental Nutrition Program for Women, Infants, and Children Federal Award Identification Number and Year - CDBG - B-21-UC-26-0003 and B-22-UC-26-0003 CSE - CSCOM-17-82003 WIC - E20233245-00 and E20234077-00 Pass-through Entity - CDBG - N/A, direct funded CSE - Michigan Department of Health and Human Services WIC - Michigan Department of Health and Human Services Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes 2022-014 Criteria - 2 CFR Appendix V to Part 200 requires each major local government, defined as a local government that receives more than $100 million in direct federal awards, to submit annually to its federal cognizant agency a cost allocation plan whereby central service costs can be identified and assigned to benefited activities on a reasonable and consistent basis. Condition - Controls in place were not adequate to ensure compliance with 2 CFR 200 Appendix V submission requirements for the County’s self-insurance cost allocation process and annual chargeback plan. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs Context - During our review of the County’s process for allocating self insurance costs across the various departments and the annual chargeback plan, we noted the County did not submit its plan for self insurance costs or its annual chargeback plan used to allocate expenditures to the federal grants identified above for the fiscal year ended September 30, 2023 prior to the allocation of these costs. The underlying costs and the allocation methodology were allowable and reasonable, as supported by documentation, thus creating no questioned costs. Beginning in 2020 with the influx of COVID-19 funding, the County received direct funded awards in excess of $100 million, therefore becoming a major local government. Prior to 2020, the County was only required to develop a cost allocation plan in accordance with 2 CFR 200 and maintain the plan and related supporting documentation for audit. Cause and Effect - Procedures and controls in place were not adequate to identify that the County became a major local government, requiring different documentation and submission requirements for self insurance cost allocation process and annual chargeback plan. As a result, no plans were submitted to the cognizant agency for approval. Recommendation - We recommend the County review 2 CFR 200, including the applicable appendixes, to assess the submission and documentation requirements for all cost allocation methodologies. Additionally, we recommend that the County document its methodology for allocating self insurance costs and annual chargeback costs across the various departments, including formalizing its documentation surrounding procedures and controls. Further, we recommend the County implement a process for ensuring these plans are submitted to a federal cognizant agency for approval. Views of Responsible Officials and Planned Corrective Actions - Management communicated with the cognizant agency which confirmed in November 2021, OMB issued guidance relating to CARES Act funding and its effect on indirect cost. Part of this guidance stated that “CARES Act funding should not be included toward the threshold amount for indirect cost submission required in 2 C.F.R. part 200, Appendix VII, paragraph D.1.b”. Therefore, County governments that met the $100 million threshold as a result of CARES Act funding are not required to submit their Central Service Cost Allocation Plan for approval. The CARES Act funding would have increased the County’s funding in excess of $100 million, which should not have been a part of the determination for the original finding. However, since CSLFRF funds were also received increasing the County’s funding in excess of $100 million the annual chargeback plans were submitted to the cognizant agency and U.S. Treasury in 2023 for implementation in FY 24 and will continue to submit subsequent plans to federal cognizant agency, as required by 2 CFR 200 Appendix V.

Assistance Listing Number, Federal Agency, and Program Name - 14.218 - U.S. Department of Housing and Urban Development (HUD) - CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants 93.563 - Title IV D, U.S. Department of Health and Human Service - Child Support Enforcement (CSE) 10.557, U.S. Department of Agriculture - WIC Special Supplemental Nutrition Program for Women, Infants, and Children Federal Award Identification Number and Year - CDBG - B-21-UC-26-0003 and B-22-UC-26-0003 CSE - CSCOM-17-82003 WIC - E20233245-00 and E20234077-00 Pass-through Entity - CDBG - N/A, direct funded CSE - Michigan Department of Health and Human Services WIC - Michigan Department of Health and Human Services Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes 2022-014 Criteria - 2 CFR Appendix V to Part 200 requires each major local government, defined as a local government that receives more than $100 million in direct federal awards, to submit annually to its federal cognizant agency a cost allocation plan whereby central service costs can be identified and assigned to benefited activities on a reasonable and consistent basis. Condition - Controls in place were not adequate to ensure compliance with 2 CFR 200 Appendix V submission requirements for the County’s self-insurance cost allocation process and annual chargeback plan. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs Context - During our review of the County’s process for allocating self insurance costs across the various departments and the annual chargeback plan, we noted the County did not submit its plan for self insurance costs or its annual chargeback plan used to allocate expenditures to the federal grants identified above for the fiscal year ended September 30, 2023 prior to the allocation of these costs. The underlying costs and the allocation methodology were allowable and reasonable, as supported by documentation, thus creating no questioned costs. Beginning in 2020 with the influx of COVID-19 funding, the County received direct funded awards in excess of $100 million, therefore becoming a major local government. Prior to 2020, the County was only required to develop a cost allocation plan in accordance with 2 CFR 200 and maintain the plan and related supporting documentation for audit. Cause and Effect - Procedures and controls in place were not adequate to identify that the County became a major local government, requiring different documentation and submission requirements for self insurance cost allocation process and annual chargeback plan. As a result, no plans were submitted to the cognizant agency for approval. Recommendation - We recommend the County review 2 CFR 200, including the applicable appendixes, to assess the submission and documentation requirements for all cost allocation methodologies. Additionally, we recommend that the County document its methodology for allocating self insurance costs and annual chargeback costs across the various departments, including formalizing its documentation surrounding procedures and controls. Further, we recommend the County implement a process for ensuring these plans are submitted to a federal cognizant agency for approval. Views of Responsible Officials and Planned Corrective Actions - Management communicated with the cognizant agency which confirmed in November 2021, OMB issued guidance relating to CARES Act funding and its effect on indirect cost. Part of this guidance stated that “CARES Act funding should not be included toward the threshold amount for indirect cost submission required in 2 C.F.R. part 200, Appendix VII, paragraph D.1.b”. Therefore, County governments that met the $100 million threshold as a result of CARES Act funding are not required to submit their Central Service Cost Allocation Plan for approval. The CARES Act funding would have increased the County’s funding in excess of $100 million, which should not have been a part of the determination for the original finding. However, since CSLFRF funds were also received increasing the County’s funding in excess of $100 million the annual chargeback plans were submitted to the cognizant agency and U.S. Treasury in 2023 for implementation in FY 24 and will continue to submit subsequent plans to federal cognizant agency, as required by 2 CFR 200 Appendix V.

Assistance Listing Number, Federal Agency, and Program Name - 14.218 - U.S. Department of Housing and Urban Development (HUD) - CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants 93.563 - Title IV D, U.S. Department of Health and Human Service - Child Support Enforcement (CSE) 10.557, U.S. Department of Agriculture - WIC Special Supplemental Nutrition Program for Women, Infants, and Children Federal Award Identification Number and Year - CDBG - B-21-UC-26-0003 and B-22-UC-26-0003 CSE - CSCOM-17-82003 WIC - E20233245-00 and E20234077-00 Pass-through Entity - CDBG - N/A, direct funded CSE - Michigan Department of Health and Human Services WIC - Michigan Department of Health and Human Services Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes 2022-014 Criteria - 2 CFR Appendix V to Part 200 requires each major local government, defined as a local government that receives more than $100 million in direct federal awards, to submit annually to its federal cognizant agency a cost allocation plan whereby central service costs can be identified and assigned to benefited activities on a reasonable and consistent basis. Condition - Controls in place were not adequate to ensure compliance with 2 CFR 200 Appendix V submission requirements for the County’s self-insurance cost allocation process and annual chargeback plan. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs Context - During our review of the County’s process for allocating self insurance costs across the various departments and the annual chargeback plan, we noted the County did not submit its plan for self insurance costs or its annual chargeback plan used to allocate expenditures to the federal grants identified above for the fiscal year ended September 30, 2023 prior to the allocation of these costs. The underlying costs and the allocation methodology were allowable and reasonable, as supported by documentation, thus creating no questioned costs. Beginning in 2020 with the influx of COVID-19 funding, the County received direct funded awards in excess of $100 million, therefore becoming a major local government. Prior to 2020, the County was only required to develop a cost allocation plan in accordance with 2 CFR 200 and maintain the plan and related supporting documentation for audit. Cause and Effect - Procedures and controls in place were not adequate to identify that the County became a major local government, requiring different documentation and submission requirements for self insurance cost allocation process and annual chargeback plan. As a result, no plans were submitted to the cognizant agency for approval. Recommendation - We recommend the County review 2 CFR 200, including the applicable appendixes, to assess the submission and documentation requirements for all cost allocation methodologies. Additionally, we recommend that the County document its methodology for allocating self insurance costs and annual chargeback costs across the various departments, including formalizing its documentation surrounding procedures and controls. Further, we recommend the County implement a process for ensuring these plans are submitted to a federal cognizant agency for approval. Views of Responsible Officials and Planned Corrective Actions - Management communicated with the cognizant agency which confirmed in November 2021, OMB issued guidance relating to CARES Act funding and its effect on indirect cost. Part of this guidance stated that “CARES Act funding should not be included toward the threshold amount for indirect cost submission required in 2 C.F.R. part 200, Appendix VII, paragraph D.1.b”. Therefore, County governments that met the $100 million threshold as a result of CARES Act funding are not required to submit their Central Service Cost Allocation Plan for approval. The CARES Act funding would have increased the County’s funding in excess of $100 million, which should not have been a part of the determination for the original finding. However, since CSLFRF funds were also received increasing the County’s funding in excess of $100 million the annual chargeback plans were submitted to the cognizant agency and U.S. Treasury in 2023 for implementation in FY 24 and will continue to submit subsequent plans to federal cognizant agency, as required by 2 CFR 200 Appendix V.

Assistance Listing Number, Federal Agency, and Program Name - 14.218 - U.S. Department of Housing and Urban Development (HUD) - CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants 93.563 - Title IV D, U.S. Department of Health and Human Service - Child Support Enforcement (CSE) 10.557, U.S. Department of Agriculture - WIC Special Supplemental Nutrition Program for Women, Infants, and Children Federal Award Identification Number and Year - CDBG - B-21-UC-26-0003 and B-22-UC-26-0003 CSE - CSCOM-17-82003 WIC - E20233245-00 and E20234077-00 Pass-through Entity - CDBG - N/A, direct funded CSE - Michigan Department of Health and Human Services WIC - Michigan Department of Health and Human Services Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes 2022-014 Criteria - 2 CFR Appendix V to Part 200 requires each major local government, defined as a local government that receives more than $100 million in direct federal awards, to submit annually to its federal cognizant agency a cost allocation plan whereby central service costs can be identified and assigned to benefited activities on a reasonable and consistent basis. Condition - Controls in place were not adequate to ensure compliance with 2 CFR 200 Appendix V submission requirements for the County’s self-insurance cost allocation process and annual chargeback plan. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs Context - During our review of the County’s process for allocating self insurance costs across the various departments and the annual chargeback plan, we noted the County did not submit its plan for self insurance costs or its annual chargeback plan used to allocate expenditures to the federal grants identified above for the fiscal year ended September 30, 2023 prior to the allocation of these costs. The underlying costs and the allocation methodology were allowable and reasonable, as supported by documentation, thus creating no questioned costs. Beginning in 2020 with the influx of COVID-19 funding, the County received direct funded awards in excess of $100 million, therefore becoming a major local government. Prior to 2020, the County was only required to develop a cost allocation plan in accordance with 2 CFR 200 and maintain the plan and related supporting documentation for audit. Cause and Effect - Procedures and controls in place were not adequate to identify that the County became a major local government, requiring different documentation and submission requirements for self insurance cost allocation process and annual chargeback plan. As a result, no plans were submitted to the cognizant agency for approval. Recommendation - We recommend the County review 2 CFR 200, including the applicable appendixes, to assess the submission and documentation requirements for all cost allocation methodologies. Additionally, we recommend that the County document its methodology for allocating self insurance costs and annual chargeback costs across the various departments, including formalizing its documentation surrounding procedures and controls. Further, we recommend the County implement a process for ensuring these plans are submitted to a federal cognizant agency for approval. Views of Responsible Officials and Planned Corrective Actions - Management communicated with the cognizant agency which confirmed in November 2021, OMB issued guidance relating to CARES Act funding and its effect on indirect cost. Part of this guidance stated that “CARES Act funding should not be included toward the threshold amount for indirect cost submission required in 2 C.F.R. part 200, Appendix VII, paragraph D.1.b”. Therefore, County governments that met the $100 million threshold as a result of CARES Act funding are not required to submit their Central Service Cost Allocation Plan for approval. The CARES Act funding would have increased the County’s funding in excess of $100 million, which should not have been a part of the determination for the original finding. However, since CSLFRF funds were also received increasing the County’s funding in excess of $100 million the annual chargeback plans were submitted to the cognizant agency and U.S. Treasury in 2023 for implementation in FY 24 and will continue to submit subsequent plans to federal cognizant agency, as required by 2 CFR 200 Appendix V.

Assistance Listing Number, Federal Agency, and Program Name - 14.218, Department of Housing and Urban Development (HUD), CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants, COVID-19 CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants (CDBG-CV) Federal Award Identification Number and Year - B-16-UC-26-0003, B-17-UC-26-0003, B-18-UC-26-0003, B-19-UC-26-0003, B-20-UC-26-0003, B-21-UC-26-0003, B-22-UC-26-0003, and COVID-19-CDBG-CV Pass-through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - Per 24 CFR 91.520, a grantee's Consolidated Annual Performance and Evaluation Report (CAPER) is due 90 days after the close of a jurisdiction's program year. Condition - The County did not have adequate controls in place to submit the Consolidated Annual Performance and Evaluation Report for the program year ended June 30, 2023 within 90 days after the close of the program year. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - The County is required to file the CAPER annually, and the report is due to HUD within 90 days after the end of the program year. The CAPER for the program year ended June 30, 2023 was due to HUD on October 1, 2023, but the County filed the CAPER on October 6, 2023. Cause and Effect - The County was aware of the CAPER due date; however, certain clarifications were requested from HUD regarding certain portions of the CAPER, which caused a delay in filing the CAPER. Recommendation - We recommend the County build a timeline for preparation and completion of the CAPER to ensure timely filing. Views of Responsible Officials and Planned Corrective Actions - Management agrees with the finding. Prior to submitting the CAPER, it was brought to the attention of staff that the CDBG Financial Summary Report had to be completed and attached to the CAPER. Staff held discussions with HUD during an MSHDA conference in September 2022 to obtain assistance in completing the report. It was suggested that a meeting would be necessary to provide technical assistance for the report. Staff met with HUD on October 4 to discuss the report and provide further guidance. The CAPER was completed and submitted on October 6. The CDBG Financial Summary Report was completed as part of the CAPER. Management will ensure the CAPER is submitted prior to the deadline moving forward.

Assistance Listing Number, Federal Agency, and Program Name - 14.218, Department of Housing and Urban Development (HUD), CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants, COVID-19 CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants (CDBG-CV) Federal Award Identification Number and Year - B-16-UC-26-0003, B-17-UC-26-0003, B-18-UC-26-0003, B-19-UC-26-0003, B-20-UC-26-0003, B-21-UC-26-0003, B-22-UC-26-0003, and COVID-19-CDBG-CV Pass-through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - Per 24 CFR 91.520, a grantee's Consolidated Annual Performance and Evaluation Report (CAPER) is due 90 days after the close of a jurisdiction's program year. Condition - The County did not have adequate controls in place to submit the Consolidated Annual Performance and Evaluation Report for the program year ended June 30, 2023 within 90 days after the close of the program year. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - The County is required to file the CAPER annually, and the report is due to HUD within 90 days after the end of the program year. The CAPER for the program year ended June 30, 2023 was due to HUD on October 1, 2023, but the County filed the CAPER on October 6, 2023. Cause and Effect - The County was aware of the CAPER due date; however, certain clarifications were requested from HUD regarding certain portions of the CAPER, which caused a delay in filing the CAPER. Recommendation - We recommend the County build a timeline for preparation and completion of the CAPER to ensure timely filing. Views of Responsible Officials and Planned Corrective Actions - Management agrees with the finding. Prior to submitting the CAPER, it was brought to the attention of staff that the CDBG Financial Summary Report had to be completed and attached to the CAPER. Staff held discussions with HUD during an MSHDA conference in September 2022 to obtain assistance in completing the report. It was suggested that a meeting would be necessary to provide technical assistance for the report. Staff met with HUD on October 4 to discuss the report and provide further guidance. The CAPER was completed and submitted on October 6. The CDBG Financial Summary Report was completed as part of the CAPER. Management will ensure the CAPER is submitted prior to the deadline moving forward.

Assistance Listing Number, Federal Agency, and Program Name - 14.218, Department of Housing and Urban Development (HUD), CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants, COVID-19 CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants (CDBG-CV) Federal Award Identification Number and Year - B-16-UC-26-0003, B-17-UC-26-0003, B-18-UC-26-0003, B-19-UC-26-0003, B-20-UC-26-0003, B-21-UC-26-0003, B-22-UC-26-0003, and COVID-19-CDBG-CV Pass-through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - Per 24 CFR 91.520, a grantee's Consolidated Annual Performance and Evaluation Report (CAPER) is due 90 days after the close of a jurisdiction's program year. Condition - The County did not have adequate controls in place to submit the Consolidated Annual Performance and Evaluation Report for the program year ended June 30, 2023 within 90 days after the close of the program year. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - The County is required to file the CAPER annually, and the report is due to HUD within 90 days after the end of the program year. The CAPER for the program year ended June 30, 2023 was due to HUD on October 1, 2023, but the County filed the CAPER on October 6, 2023. Cause and Effect - The County was aware of the CAPER due date; however, certain clarifications were requested from HUD regarding certain portions of the CAPER, which caused a delay in filing the CAPER. Recommendation - We recommend the County build a timeline for preparation and completion of the CAPER to ensure timely filing. Views of Responsible Officials and Planned Corrective Actions - Management agrees with the finding. Prior to submitting the CAPER, it was brought to the attention of staff that the CDBG Financial Summary Report had to be completed and attached to the CAPER. Staff held discussions with HUD during an MSHDA conference in September 2022 to obtain assistance in completing the report. It was suggested that a meeting would be necessary to provide technical assistance for the report. Staff met with HUD on October 4 to discuss the report and provide further guidance. The CAPER was completed and submitted on October 6. The CDBG Financial Summary Report was completed as part of the CAPER. Management will ensure the CAPER is submitted prior to the deadline moving forward.

Assistance Listing Number, Federal Agency, and Program Name - 14.218, Department of Housing and Urban Development (HUD), CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants, COVID-19 CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants (CDBG-CV) Federal Award Identification Number and Year - B-16-UC-26-0003, B-17-UC-26-0003, B-18-UC-26-0003, B-19-UC-26-0003, B-20-UC-26-0003, B-21-UC-26-0003, B-22-UC-26-0003, and COVID-19-CDBG-CV Pass-through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - Per 24 CFR 91.520, a grantee's Consolidated Annual Performance and Evaluation Report (CAPER) is due 90 days after the close of a jurisdiction's program year. Condition - The County did not have adequate controls in place to submit the Consolidated Annual Performance and Evaluation Report for the program year ended June 30, 2023 within 90 days after the close of the program year. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - The County is required to file the CAPER annually, and the report is due to HUD within 90 days after the end of the program year. The CAPER for the program year ended June 30, 2023 was due to HUD on October 1, 2023, but the County filed the CAPER on October 6, 2023. Cause and Effect - The County was aware of the CAPER due date; however, certain clarifications were requested from HUD regarding certain portions of the CAPER, which caused a delay in filing the CAPER. Recommendation - We recommend the County build a timeline for preparation and completion of the CAPER to ensure timely filing. Views of Responsible Officials and Planned Corrective Actions - Management agrees with the finding. Prior to submitting the CAPER, it was brought to the attention of staff that the CDBG Financial Summary Report had to be completed and attached to the CAPER. Staff held discussions with HUD during an MSHDA conference in September 2022 to obtain assistance in completing the report. It was suggested that a meeting would be necessary to provide technical assistance for the report. Staff met with HUD on October 4 to discuss the report and provide further guidance. The CAPER was completed and submitted on October 6. The CDBG Financial Summary Report was completed as part of the CAPER. Management will ensure the CAPER is submitted prior to the deadline moving forward.

Assistance Listing Number, Federal Agency, and Program Name - 14.218, Department of Housing and Urban Development (HUD), CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants, COVID-19 CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants (CDBG-CV) Federal Award Identification Number and Year - B-16-UC-26-0003, B-17-UC-26-0003, B-18-UC-26-0003, B-19-UC-26-0003, B-20-UC-26-0003, B-21-UC-26-0003, B-22-UC-26-0003, and COVID-19-CDBG-CV Pass-through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - Per 24 CFR 91.520, a grantee's Consolidated Annual Performance and Evaluation Report (CAPER) is due 90 days after the close of a jurisdiction's program year. Condition - The County did not have adequate controls in place to submit the Consolidated Annual Performance and Evaluation Report for the program year ended June 30, 2023 within 90 days after the close of the program year. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - The County is required to file the CAPER annually, and the report is due to HUD within 90 days after the end of the program year. The CAPER for the program year ended June 30, 2023 was due to HUD on October 1, 2023, but the County filed the CAPER on October 6, 2023. Cause and Effect - The County was aware of the CAPER due date; however, certain clarifications were requested from HUD regarding certain portions of the CAPER, which caused a delay in filing the CAPER. Recommendation - We recommend the County build a timeline for preparation and completion of the CAPER to ensure timely filing. Views of Responsible Officials and Planned Corrective Actions - Management agrees with the finding. Prior to submitting the CAPER, it was brought to the attention of staff that the CDBG Financial Summary Report had to be completed and attached to the CAPER. Staff held discussions with HUD during an MSHDA conference in September 2022 to obtain assistance in completing the report. It was suggested that a meeting would be necessary to provide technical assistance for the report. Staff met with HUD on October 4 to discuss the report and provide further guidance. The CAPER was completed and submitted on October 6. The CDBG Financial Summary Report was completed as part of the CAPER. Management will ensure the CAPER is submitted prior to the deadline moving forward.

Assistance Listing Number, Federal Agency, and Program Name - 14.218, Department of Housing and Urban Development (HUD), CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants, COVID-19 CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants (CDBG-CV) Federal Award Identification Number and Year - B-16-UC-26-0003, B-17-UC-26-0003, B-18-UC-26-0003, B-19-UC-26-0003, B-20-UC-26-0003, B-21-UC-26-0003, B-22-UC-26-0003, and COVID-19-CDBG-CV Pass-through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - Per 24 CFR 91.520, a grantee's Consolidated Annual Performance and Evaluation Report (CAPER) is due 90 days after the close of a jurisdiction's program year. Condition - The County did not have adequate controls in place to submit the Consolidated Annual Performance and Evaluation Report for the program year ended June 30, 2023 within 90 days after the close of the program year. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - The County is required to file the CAPER annually, and the report is due to HUD within 90 days after the end of the program year. The CAPER for the program year ended June 30, 2023 was due to HUD on October 1, 2023, but the County filed the CAPER on October 6, 2023. Cause and Effect - The County was aware of the CAPER due date; however, certain clarifications were requested from HUD regarding certain portions of the CAPER, which caused a delay in filing the CAPER. Recommendation - We recommend the County build a timeline for preparation and completion of the CAPER to ensure timely filing. Views of Responsible Officials and Planned Corrective Actions - Management agrees with the finding. Prior to submitting the CAPER, it was brought to the attention of staff that the CDBG Financial Summary Report had to be completed and attached to the CAPER. Staff held discussions with HUD during an MSHDA conference in September 2022 to obtain assistance in completing the report. It was suggested that a meeting would be necessary to provide technical assistance for the report. Staff met with HUD on October 4 to discuss the report and provide further guidance. The CAPER was completed and submitted on October 6. The CDBG Financial Summary Report was completed as part of the CAPER. Management will ensure the CAPER is submitted prior to the deadline moving forward.

Assistance Listing Number, Federal Agency, and Program Name - 14.218, Department of Housing and Urban Development (HUD), CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants, COVID-19 CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants (CDBG-CV) Federal Award Identification Number and Year - B-16-UC-26-0003, B-17-UC-26-0003, B-18-UC-26-0003, B-19-UC-26-0003, B-20-UC-26-0003, B-21-UC-26-0003, B-22-UC-26-0003, and COVID-19-CDBG-CV Pass-through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - Per 24 CFR 91.520, a grantee's Consolidated Annual Performance and Evaluation Report (CAPER) is due 90 days after the close of a jurisdiction's program year. Condition - The County did not have adequate controls in place to submit the Consolidated Annual Performance and Evaluation Report for the program year ended June 30, 2023 within 90 days after the close of the program year. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - The County is required to file the CAPER annually, and the report is due to HUD within 90 days after the end of the program year. The CAPER for the program year ended June 30, 2023 was due to HUD on October 1, 2023, but the County filed the CAPER on October 6, 2023. Cause and Effect - The County was aware of the CAPER due date; however, certain clarifications were requested from HUD regarding certain portions of the CAPER, which caused a delay in filing the CAPER. Recommendation - We recommend the County build a timeline for preparation and completion of the CAPER to ensure timely filing. Views of Responsible Officials and Planned Corrective Actions - Management agrees with the finding. Prior to submitting the CAPER, it was brought to the attention of staff that the CDBG Financial Summary Report had to be completed and attached to the CAPER. Staff held discussions with HUD during an MSHDA conference in September 2022 to obtain assistance in completing the report. It was suggested that a meeting would be necessary to provide technical assistance for the report. Staff met with HUD on October 4 to discuss the report and provide further guidance. The CAPER was completed and submitted on October 6. The CDBG Financial Summary Report was completed as part of the CAPER. Management will ensure the CAPER is submitted prior to the deadline moving forward.

Assistance Listing Number, Federal Agency, and Program Name - 14.218, Department of Housing and Urban Development (HUD), CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants, COVID-19 CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants (CDBG-CV) Federal Award Identification Number and Year - B-16-UC-26-0003, B-17-UC-26-0003, B-18-UC-26-0003, B-19-UC-26-0003, B-20-UC-26-0003, B-21-UC-26-0003, B-22-UC-26-0003, and COVID-19-CDBG-CV Pass-through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - Per 24 CFR 91.520, a grantee's Consolidated Annual Performance and Evaluation Report (CAPER) is due 90 days after the close of a jurisdiction's program year. Condition - The County did not have adequate controls in place to submit the Consolidated Annual Performance and Evaluation Report for the program year ended June 30, 2023 within 90 days after the close of the program year. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as there were no questioned costs identified Context - The County is required to file the CAPER annually, and the report is due to HUD within 90 days after the end of the program year. The CAPER for the program year ended June 30, 2023 was due to HUD on October 1, 2023, but the County filed the CAPER on October 6, 2023. Cause and Effect - The County was aware of the CAPER due date; however, certain clarifications were requested from HUD regarding certain portions of the CAPER, which caused a delay in filing the CAPER. Recommendation - We recommend the County build a timeline for preparation and completion of the CAPER to ensure timely filing. Views of Responsible Officials and Planned Corrective Actions - Management agrees with the finding. Prior to submitting the CAPER, it was brought to the attention of staff that the CDBG Financial Summary Report had to be completed and attached to the CAPER. Staff held discussions with HUD during an MSHDA conference in September 2022 to obtain assistance in completing the report. It was suggested that a meeting would be necessary to provide technical assistance for the report. Staff met with HUD on October 4 to discuss the report and provide further guidance. The CAPER was completed and submitted on October 6. The CDBG Financial Summary Report was completed as part of the CAPER. Management will ensure the CAPER is submitted prior to the deadline moving forward.

Assistance Listing Number, Federal Agency, and Program Name – 14.218, Department of Housing and Urban Development (HUD), CDBG – Entitlement Grants Cluster – Community Development Block Grants/Entitlement Grants Federal Award Identification Number and Year – B-22-UC-26-0003 Pass-through Entity – N/A Finding Type – Material noncompliance and significant deficiency Repeat Finding - No Criteria – The Federal Funding Accountability and Transparency Act as amended by section 6202 of Pub L. No. 110-252 (“Transparency Act”) requires recipients of Federal awards to report data using the FFATA Subaward Reporting System (FSRS) Tool. The report is required to be filed no later than the last day of the month following the month in which the subaward/subaward amendment obligation was made or the subcontract award/subcontract modification was made. Condition - The County filed the FFATA report seven months late. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable as there were no questioned costs identified. Context – During the fiscal year, the County was required to submit one FFATA report in July 2023 for an award of CDBG funds made in June 2023. The following table summarizes the transactions examined and the non-compliance identified: See the Notes to the SEFA for chart/table. Cause and Effect - The County tracks subaward obligation dates through the County’s contracting system on a monthly basis. FFATA reporting is completed when the subaward obligation is listed as fully approved in the contracting system. The subaward obligation was initially listed as ‘rejected’ and thus no action was taken by the County. The subaward obligation was later listed as ‘fully approved’ resulting in the County submitting the FFATA report in February 2024, subsequent to the due date of July 31, 2023. Recommendation - We recommend the County review its process for tracking subaward obligations to ensure that they are able to adhere to the FFATA filing requirement, i.e. no later than the last day of the month following the month in which the subaward/subaward amendment obligation was made. We also recommend that the County evaluate whether additional fields, notifications, etc. are necessary to timely identify when FFATA reporting is required within the contracting system. Views of Responsible Officials and Corrective Action Plan - Management agrees with this finding. The County will implement a notification process to include communication to the grants division once grant contracts are approved. Subsequent FFATA reports will be filed of notification of approval no later than the last day of the month following the month in which the subaward/subaward amendment obligation.