Audit 322841

2023-001 – SIGNIFICANT DEFICIENCY – Internal Controls Over Allowable Activities/Costs and Period of Performance (Originated in 2022) U.S. Department of Treasury – Passed through the State of Alabama Department of Treasury – COVID 19 Coronavirus State and Local Fiscal Recovery Fund – ALN #21.027 – Program Year 2023 Criteria – Per 2 CFR Subpart D - 200.203(b)(3), non-federal entities are required to maintain records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. In addition, per CFR 200.303(a), non-federal entities are required to establish and maintain effective internal controls over federal awards. Condition – For all 60 disbursements sampled, the Foundation relied solely on certifications received (with or without supporting documentation submitted) in order to disburse funds under the federal award program. Cause – Based on guidance received from the grantor, the Foundation relied solely on certifications received (with or without supporting documentation submitted) in order to disburse funds under the federal award program. Effect – Potential disbursements of federal awards for un-allowed costs/activities or in an improper period of availability. Questioned costs – Unknown Auditor’s recommendation – Policies and procedures should be designed, implemented, and monitored to ensure that detailed supporting documentation is obtained and reviewed for all disbursements in accordance with federal award requirements. Management response and current status – See management corrective action plan

2023-002 – SIGNIFICANT DEFICIENCY – Claims Payments Made Based on Incorrect Calculations of Amounts to be Reimbursed (Originated in 2022) U.S. Department of Treasury – Passed through the State of Alabama Department of Treasury – COVID 19 Coronavirus State and Local Fiscal Recovery Fund – ALN #21.027 – Program Year 2023 Criteria – Per 2 CFR Subpart E - 200.403(a) and (b), allowable costs under federal award programs must be necessary and reasonable for the performance of the federal award and must conform to any limitations or exclusions set forth in the federal award as to types or amounts of cost items. In addition, per 2 CFR Subpart E – 200.405(a), a cost is allocable to a particular federal award if the goods or services involved are chargeable or assignable to that federal award in accordance with relative benefits received. Finally, per CFR 200.303(a), non-federal entities are required to establish and maintain effective internal controls over federal awards. Condition – For 1 of 60 disbursements sampled, reimbursed claims amounts included un-allowable costs due to the reimbursement calculations being performed incorrectly in the determination of the appropriate reimbursement amount. Cause – As a result of the Foundation’s reliance solely on certifications received, amounts were not appropriately disbursed under the federal award program. Effect – Claims payments included amounts that were not chargeable or assignable to the federal award in accordance with relative benefits received. Questioned Costs – $95,663 known questioned costs (total amounts paid based on incorrect reimbursement calculations), $529,835 likely questioned costs – amount extrapolated to entire population based on % of known questioned costs. Auditor’s Recommendation – Policies and procedures should be designed, implemented, and monitored which ensure that detailed supporting documentation is obtained and reviewed for all disbursements in accordance with federal award requirements. In addition, all calculations of amounts to be reimbursed should be appropriately recalculated to ensure the proper amount is included in the claims payments. Management response and current status – See management corrective action plan

2023-001 – SIGNIFICANT DEFICIENCY – Internal Controls Over Allowable Activities/Costs and Period of Performance (Originated in 2022) U.S. Department of Treasury – Passed through the State of Alabama Department of Treasury – COVID 19 Coronavirus State and Local Fiscal Recovery Fund – ALN #21.027 – Program Year 2023 Criteria – Per 2 CFR Subpart D - 200.203(b)(3), non-federal entities are required to maintain records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. In addition, per CFR 200.303(a), non-federal entities are required to establish and maintain effective internal controls over federal awards. Condition – For all 60 disbursements sampled, the Foundation relied solely on certifications received (with or without supporting documentation submitted) in order to disburse funds under the federal award program. Cause – Based on guidance received from the grantor, the Foundation relied solely on certifications received (with or without supporting documentation submitted) in order to disburse funds under the federal award program. Effect – Potential disbursements of federal awards for un-allowed costs/activities or in an improper period of availability. Questioned costs – Unknown Auditor’s recommendation – Policies and procedures should be designed, implemented, and monitored to ensure that detailed supporting documentation is obtained and reviewed for all disbursements in accordance with federal award requirements. Management response and current status – See management corrective action plan

2023-002 – SIGNIFICANT DEFICIENCY – Claims Payments Made Based on Incorrect Calculations of Amounts to be Reimbursed (Originated in 2022) U.S. Department of Treasury – Passed through the State of Alabama Department of Treasury – COVID 19 Coronavirus State and Local Fiscal Recovery Fund – ALN #21.027 – Program Year 2023 Criteria – Per 2 CFR Subpart E - 200.403(a) and (b), allowable costs under federal award programs must be necessary and reasonable for the performance of the federal award and must conform to any limitations or exclusions set forth in the federal award as to types or amounts of cost items. In addition, per 2 CFR Subpart E – 200.405(a), a cost is allocable to a particular federal award if the goods or services involved are chargeable or assignable to that federal award in accordance with relative benefits received. Finally, per CFR 200.303(a), non-federal entities are required to establish and maintain effective internal controls over federal awards. Condition – For 1 of 60 disbursements sampled, reimbursed claims amounts included un-allowable costs due to the reimbursement calculations being performed incorrectly in the determination of the appropriate reimbursement amount. Cause – As a result of the Foundation’s reliance solely on certifications received, amounts were not appropriately disbursed under the federal award program. Effect – Claims payments included amounts that were not chargeable or assignable to the federal award in accordance with relative benefits received. Questioned Costs – $95,663 known questioned costs (total amounts paid based on incorrect reimbursement calculations), $529,835 likely questioned costs – amount extrapolated to entire population based on % of known questioned costs. Auditor’s Recommendation – Policies and procedures should be designed, implemented, and monitored which ensure that detailed supporting documentation is obtained and reviewed for all disbursements in accordance with federal award requirements. In addition, all calculations of amounts to be reimbursed should be appropriately recalculated to ensure the proper amount is included in the claims payments. Management response and current status – See management corrective action plan