Audit 370531

Finding No.: 2022-008 Pass-Through Entity: Republic of the Marshall Islands Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social and Political Development of the Territories Federal Award No.: Compact of Free Association Program, As Amended Area: Activities Allowed or Unallowed Area: Allowable Costs/Cost Principles Questioned Costs: $8,764 Criteria: In accordance with the applicable activities allowed or unallowed requirements, institutions must demonstrate that costs incurred are allowable under the relevant program legislation, federal awarding agency regulations, and the terms and conditions of the award and consistent with the purpose of the grant. Federal program expenditures should be necessary and reasonable for the performance of the Federal award in accordance with allowable costs/cost principles requirements and be adequately documented. Furthermore, 2 CFR 200.303(a) states that the subrecipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the 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: For seven (or 15%) of forty-six items, aggregating $45,045 of $1,436,730 in total payroll expenditures, deficiencies were noted, as follows: Item # Check# Description Expense Amount Questioned Cost 1 55287 Salaries and wages and benefits $ 3,828 $2,549 2 49523 Benefits 12 12 3 51393 Salaries and wages and benefits 1,338 1,338 4 51616 Salaries and wages and benefits 1,171 1,171 5 49741 Salaries and wages and benefits 153 153 6 52930 Salaries and wages and benefits 154 154 7 55878 Salaries and wages and benefits 3,387 3,387 $10,043 $8,764 For item #s 1 through 4, there was no approved employment contract or other supporting documents on file to substantiate whether such expenditures were allowable costs of the underlying grants. For item #1, only $2,549 is included in the total questioned costs, which relates to the salaries - overload for which no approved overload contract was provided. Item #s 5 through 7 relates to salaries and wages and related fringe benefits (employer contributions for social security and health insurance) of employees whose designation do not appear to be related and consistent with the purpose of the related subgrant. Furthermore, such were not supported by adequate documentation to ascertain whether such expenditures are associated to underlying subgrant. Cause: The College lacks adequate internal controls over compliance with the applicable activities allowed or unallowed requirements. Effect: The College is not in compliance with the applicable activities allowed or unallowed requirements and allowable costs/cost principles requirements. Accordingly, questioned costs of $8,764 result because the projected questioned costs exceed the $25,000 threshold. Recommendation: College management should improve internal control policies and strengthen controls and procedures over compliance with the applicable federal regulations on activities allowed or unallowed. Views of Auditee and Planned Corrective Actions: The College agrees with the finding and provides details in its Corrective Action Plan.

Finding No.: 2022-009 Pass-Through Entity: Republic of the Marshall Islands Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social and Political Development of the Territories Federal Award No.: Compact of Free Association Program, As Amended Area: Allowable Costs/Cost Principles Questioned Costs: $7,277 Criteria: Federal program expenditures should be necessary and reasonable for the performance of the Federal award in accordance with allowable costs/cost principles requirements and be adequately documented. Furthermore, 2 CFR 200.303(a) states that the subrecipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the 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 COSO. Condition: For nine (or 20%) of forty-six items, aggregating $45,045 of $1,436,730 in total payroll expenditures, deficiencies were noted, as follows: Item # Check# Description Expense Amount Questioned Cost 1 53163 Salaries and wages and benefits $ 208 $ Undeterminable 2 54180 Salaries and wages and benefits 231 $ Undeterminable 3 54497 Salaries and wages and benefits 187 $ Undeterminable 4 54504 Salaries and wages and benefits 16 $ Undeterminable 5 50921 Salaries and wages and benefits 1,021 $ Undeterminable 6 55241 Salaries and wages and benefits 250 250 7 50097 Salaries and wages and benefits 2,509 2,509 8 51398 Salaries and wages 1,600 1,600 9 51386 Salaries and wages and benefits 2,918 2,918 $8,940 $ 7,277 Item #s 1 through 5 relate to employee’s salaries and wages and related fringe benefits (employer contributions for social security and health insurance) allocated and charged to federal grant for which we noted discrepancies in either a) the hours paid compared to the hours recorded on the approved timesheet or b) the rate paid compared to the rate per contract. For item # 6, we noted discrepancies in either a) the hours paid compared to the hours recorded on the approved timesheet or b) the rate paid compared to the rate per contract. Furthermore, a copy of the check payment to support the amount paid to the employee was not on file. Item #s 7 through 9 relate to salaries – overload or adjunct that were not supported by adequate documentation (i.e. instructor’s schedule) to ascertain whether service was received or expenditure was an allowable cost of the underlying grant. Cause: The College lacks adequate internal controls over compliance with the applicable federal regulations relating to allowable costs/cost principles, specifically, obtaining and retaining sufficient documentation to support all transactions. Effect: The College is not in compliance with the applicable allowable costs/cost principles requirements. Accordingly, questioned costs result of $7,277 as the projected questioned costs exceed the $25,000 threshold. For item #s 1 through 5, questioned costs related to federal expenditures that may result from discrepancies noted are not determinable. Identified as a Repeat Finding: 2021-006 Recommendation: College management should improve internal control policies and strengthen controls requiring obtaining and retaining sufficient documentation to support all transactions. Views of Auditee and Planned Corrective Actions: The College agrees with the finding and provides details in its Corrective Action Plan.

Finding No.: 2022-010 Pass-Through Entity: Republic of the Marshall Islands Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social and Political Development of the Territories Federal Award No.: Compact of Free Association Program, As Amended Area: Equipment and Real Property Management Questioned Costs: $ Undeterminable Criteria: Non-federal entities other than states must follow Sections 200.313(c) through (e) of the Uniform Guidance. Section 200.313(d) states that procedures for managing equipment, whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: a. Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property; b. A physical inventory of the property must be carried out and the results reconciled with the property records at least once every two years; c. A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated; d. Adequate maintenance procedures must be developed to keep the property in good condition; and e. If the non-Federal entity is authorized or required to sell the property, proper sales procedures must be established to ensure the highest possible return. Furthermore, 2 CFR 200.303(a) states that the subrecipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the 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 COSO. Condition: Capital assets records do not meet the criteria above and are not effectively maintained since updates to the records occur only once a year. Specifically, we noted the following deficiencies: 1. Certain information in the capital assets records are either incomplete or missing, such as the source of funding for the property (including the FAIN), who holds title, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property). 2. An inventory of capital assets has been performed on an annual basis; however, the result of the physical inventory was not completely reflected/reconciled with the property records. 3. As capital assets records are not effectively maintained, it does not appear that the College has effectively developed means to adequately safeguard capital assets from loss, damage, or theft, or to reasonably investigate such occurrences. 4. Long-lived assets are not routinely evaluated for possible impairment. Cause: The College lacks adequate internal control policies and procedures over compliance with the applicable federal property rules and regulations and lacks effective procedures governing property maintenance, as well as periodic assessment of asset impairment conditions. Moreover, internal control policies and procedures requiring periodic and timely performance and independent review of capital assets reconciliations and related general ledger accounts are not effectively implemented. Effect: The College is not in compliance with the applicable equipment and real property management requirements. Questioned costs, if any, that may result from inadequate property records, maintenance procedures, and the absence of timely reconciliations are not determinable. Capital outlays within the program for fiscal years are summarized as follows: Fiscal Year Capital Outlays 2022 $131,200 2021 $207,400 2020 $248,700 2019 $249,400 2018 $359,000 Identified as a Repeat Finding: 2021-007 Recommendation: College management should establish and strengthen internal control policies and procedures over compliance with the applicable federal regulations on equipment and real property management. Views of Auditee and Planned Corrective Actions: The College agrees with the finding and provides details in its Corrective Action Plan.

Finding No.: 2022-011 Pass-Through Entity: Republic of the Marshall Islands Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social and Political Development of the Territories Federal Award No.: Compact of Free Association Program, As Amended Area: Period of Performance Questioned Costs: $6,443 Criteria: The terms of the sub-awards administered by RepMar under the Compact of Free Association grant awards stipulate the period of performance during which time only costs resulting from obligations of the funding period may be charged. Furthermore, 2 CFR 200.303(a) states that the subrecipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the 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 COSO. Condition: For thirty-five (or 61%) of fifty-seven items, aggregating $20,314 of $418,739 in total payroll expenditures, the following costs of salaries charged to the program were incurred prior to the funding period stipulated in the grant awards: Item # Check # Check Date Description Expense Amount Questioned Cost 1 49423 10/08/21 Salaries $ 148 $ 148 2 49424 10/08/21 Salaries 29 29 3 49671 10/08/21 Salaries 30 30 4 49662 10/08/21 Social Security Tax 10 10 5 49664 10/08/21 Social Security Health Fund 19 19 6 49600 10/08/21 Salaries 1,128 1,128 7 49536 10/08/21 Salaries 752 752 8 49544 10/08/21 Social Security Tax 68 68 9 49543 10/08/21 Social Security Health Fund 19 19 10 49989 10/22/21 Salaries 171 68 11 49992 10/22/21 Social Security Tax 10 4 12 49967 10/22/21 Social Security Health Fund 5 2 13 49975 10/22/21 Social Security Health Fund 6 2 14 49936 10/22/21 Salaries 1,262 505 15 49918 10/22/21 Salaries 1,235 494 16 49954 10/22/21 Salaries 833 333 17 49940 10/22/21 Social Security Tax 86 34 18 49929 10/22/21 Social Security Health Fund 41 17 19 49816 10/22/21 Social Security Health Fund 3 1 20 49839 10/22/21 Social Security Health Fund 2 1 21 49881 10/22/21 Social Security Health Fund 30 12 22 50099 10/22/21 Salaries 2,100 840 23 50077 10/22/21 Salaries 800 320 24 50084 10/22/21 Salaries 2,100 840 25 50085 10/22/21 Social Security Tax 150 60 26 50087 10/22/21 Social Security Tax 180 72 27 50069 10/22/21 Social Security Tax 90 36 28 50073 10/22/21 Social Security Tax 180 72 29 50081 10/22/21 Social Security Tax 210 84 30 50069 10/22/21 Social Security Tax 60 24 31 50047 10/22/21 Social Security Tax 84 34 32 50101 10/22/21 Social Security Tax 324 130 33 49862 10/22/21 Salaries 502 201 34 49866 10/22/21 Social Security Health Fund 27 11 35 50050 10/22/21 Social Security Health Fund 106 43 $12,800 $6,443 Cause: The College lacks adequate internal controls over compliance with the applicable federal regulations relating to period of performance. Effect: The College is not in compliance with the applicable period of performance requirements. Accordingly, questioned costs of $6,443 result because the projected questioned costs exceed the $25,000 threshold. For item #s 10 through 25, only $4,240 is included in the total questioned costs, which relates to costs incurred prior to the funding period stipulated in the grant awards. Identified as a Repeat Finding: 2021-008 Recommendation: College management should improve internal control policies and strengthen controls to comply with the applicable period of performance requirements. Specifically, review should be made to ensure all costs charged to the program are within the funding period stipulated in the grant awards. Views of Auditee and Planned Corrective Actions: The College agrees with the finding and provides details in its Corrective Action Plan.

Finding No.: 2022-012 Pass-Through Entity: Republic of the Marshall Islands Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social and Political Development of the Territories Federal Award No.: Compact of Free Association Program, As Amended Area: Procurement and Suspension and Debarment Questioned Costs: $112,538 Criteria: Under the terms of the sub-awards administered by RepMar under the Compact of Free Association grant awards, RepMar authorizes the College to use its own procedures for procurement provided they meet the RepMar Procurement Code. RepMar’s Procurement Code states the following: (a) Section 126.7 - Award shall be made to the responsible offeror whose proposal is determined in writing to be the most advantageous to the Government taking into consideration price and the evaluation factors set forth in the Request for Proposals. No other factors or criteria shall be used in the evaluation. The contract file shall contain the basis on which the award is made. (b) Section 127 - Procurement of goods and services not exceeding $25,000 may be made in accordance with small purchase procedures promulgated by RepMar’s Policy Office. Small purchase procedures are those relatively simple and informal methods for securing services, supplies, or other property that do not cost more than $25,000. RepMar’s Ministry of Finance has previously declared that if small purchase procedures are used, price or rate quotations shall be obtained from an adequate number of qualified sources. (c) Section 128 - a contract may be awarded for supply, service, or construction item without competition when it is determined in writing that there is only one source for the required supply, service, or construction item. (d) Section 129 - Notwithstanding any other provision of this Chapter, the Chief Procurement Officer, the head of a Purchasing Agency, or a designee of either officer may make or authorize others to make emergency procurement when there exists a threat to public health, welfare, or safety under emergency conditions as defined in regulations promulgated by the Policy Office; provided, that such emergency procurement shall be made with such competition as is practicable under the circumstances. 2 CFR 200.318(h) states that the recipient or subrecipient must award contracts only to responsible contractors that possess the ability to perform successfully under the terms and conditions of a proposed contract. The recipient or subrecipient must consider contractor integrity, public policy compliance, proper classification of employees, past performance record, and financial and technical resources when conducting a procurement transaction. 2 CFR 200.214 states that recipients and subrecipients are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, as well as 2 CFR part 180. The regulations in 2 CFR part 180 restrict making Federal awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in Federal awards. 2 CFR 180.300 states that when an entity enters into a covered transaction with another person at the next lower tier, the entity must verify that the person with whom the entity intends to do business is not excluded or disqualified by doing the following: (a) Checking SAM.gov Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. 2 CFR 200.320 states that for micro-purchases, to the extent practicable, the recipient or subrecipient should distribute micro-purchases equitably among qualified suppliers. Per OMB Compliance Supplement April 2022, a non-federal entity must perform a cost or price analysis in connection with every procurement action more than the simplified acquisition threshold, including contract modifications, and that analysis supported the procurement action (2 CFR section 200.323 and 48 CFR section 15.404-3). 48 CFR section 15.404-3 states that: (a) The contracting officer is responsible for the determination of a fair and reasonable price for the prime contract, including subcontracting costs. The contracting officer should consider whether a contractor or subcontractor has an approved purchasing system, has performed cost or price analysis of proposed subcontractor prices, or has negotiated the subcontract prices before negotiation of the prime contract, in determining the reasonableness of the prime contract price. This does not relieve the contracting officer from the responsibility to analyze the contractor's submission, including subcontractor's certified cost or pricing data. (b) The prime contractor or subcontractor shall: (1) conduct appropriate cost or price analyses to establish the reasonableness of proposed subcontract prices; (2) include the results of these analyses in the price proposal; and (3) when required by paragraph (c) of this subsection, submit subcontractor certified cost or pricing data to the Government as part of its own certified cost or pricing data. 2 CFR 200.303(a) states that the subrecipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the 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 COSO. Condition: For six (or 75%) of eight items, aggregating $121,524 in total non-payroll expenditures, supporting procurement documentation was not sufficient to substantiate compliance with the procurement method, as follows: Item # PO # PO Amount Description FY 2022 Expenditures Questioned Costs 1 21-PO-1165 $6,781 Materials and supplies $ 6,781 $ 6,781 2 22-PO-2494 $3,717 Representation and entertainment 3,717 3,717 3 , 4 22-PO-2949/ 22-PO-3402 $73,063 Minor repairs and maintenance 73,063 73,063 5 22-PO-3458 $24,750 Repair – vehicles or equipment 24,750 24,750 6 22-PO-2166 $10,000 Repair – vehicles or equipment 4,227 4,227 $112,538 $112,538 For item # 1, there was no vendor quotations on file. For item #s 2, 5 and 6, there were no adequate vendor quotations on file. were no documentation on file to support compliance with 48 CFR section 15.404-3. Moreover, the College has no internal control policies and procedures over verification that an entity with which the College plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Cause: The College did not follow internal control policies and procedures over documentation of the procurement process to satisfy compliance with the applicable procurement requirements. Furthermore, the College lacks internal control policies and procedures over 1) verification that an entity with which the College plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded; 2) distribution of micro-purchases equitably among qualified suppliers; 3) compliance with 48 CFR section 15.404-3. Effect: The College is not in compliance with the applicable procurement requirements. The total questioned cost is $112,538. Identified as a Repeat Finding: 2021-009 Recommendation: Responsible personnel should ensure that documentation is adequate to comply with the applicable procurement requirements. Specifically, documentation should indicate the history of procurement, including the solicitation process and rationale for contractors or vendor selection. Furthermore, the College should establish internal control policies and procedures over 1) verification that an entity with which the College plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded; 2) distribution of micro-purchases equitably among qualified suppliers; 3) compliance with 48 CFR section 15.404-3. Views of Auditee and Planned Corrective Actions: The College agrees with the finding and provides details in its Corrective Action Plan.

Finding No.: 2022-013 Pass-Through Entity: Republic of the Marshall Islands Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social and Political Development of the Territories Federal Award No.: Compact of Free Association Program, As Amended Area: Reporting Questioned Costs: $0 Criteria: Under the terms of the sub-awards administered by RepMar under the Compact of Free Association grant awards, the College is required to submit: 1. As supporting report for the initial payment request, a duly accomplished standard Form SG1- Subgrant Objectives and Budget Proposal, accompanied by an expenditure budget breakdown; 2. As supporting report for subsequent payment requests, a duly accomplished standard Form SG2-Performance and Financial Evaluation quarterly report; 3. Duly accomplished Form SG2-Performance and Financial Evaluation final report within 30 calendar days after the end of the MOA’s term. If the organization is receiving subsidy or subgrant in the new fiscal year or new funding period, the prior year’s or prior funding period’s SG2 final report is required to be submitted together with the SG1 report, before the initial payment can be released under the new subsidy or subgrant MOA. Further, the College shall maintain an acceptable financial management system during the term of the sub-award agreement including an accurate, current and complete disclosure of financial activity of Company funds and consistency with all financial administration, program monitoring, performance reporting and enforcement provisions of the Financial Management Act. Furthermore, 2 CFR 200.303(a) states that the subrecipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the 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 COSO. Conditions: 1. The expenditure budget breakdown that accompanies the Form SG1-Subgrant Objectives and Budget Proposal for the U.S. Compact Funding subaward for the Supplemental Education Grant could not be provided. 2. The College did not provide the required Form SG2- Performance and Financial Evaluation quarterly report for the quarter ended September 30, 2022 for the U.S. Compact Funding subaward for the Education Sector Grant. 3. The College did not provide the required Form SG2-Performance and Financial Evaluation final report for the U.S. Compact Funding subaward for the Education Sector, Ebeye Special Needs Adult Education, Compact Capital Fund and Supplemental Education Grant. 4. The underlying quarterly expenditures report for the following U.S. Compact Funding subaward sectors and related quarters could not be provided: Sector Quarter Supplemental Education Grant 1st Quarter ended December 31, 2021 Ebeye Special Needs Adult Education 1st Quarter ended December 31, 2021 Compact Capital Fund 2nd Quarter ended March 31, 2022 Ebeye Special Needs Adult Education 2nd Quarter ended March 31, 2022 Compact Capital Fund 3rd Quarter ended June 30, 2022 Ebeye Special Needs Adult Education 3rd Quarter ended June 30, 2022 5. Expenditures reported per the Form SG2-Performance and Financial Evaluation quarterly report did not agree to the quarterly expenditures reported in SEFA as follows: a. 1st Quarter ended December 31, 2021 Sector Amount per Form SG2- Performance and Financial Evaluation quarterly report Amount as reported in SEFA Variance Supplemental Educational Grant $339,289 $338,325 $ 964 Ebeye Special Needs – Adult Education $127,692 $125,000 $2,692 b. 2nd Quarter ended March 31, 2022 Sector Amount per Form SG2- Performance and Financial Evaluation quarterly report Amount as reported in SEFA Variance Compact Capital Fund $155,124 $60,035 $95,089 Ebeye Special Needs – Adult Education $ 37,752 $38,265 $( 513) c. 3rd Quarter ended June 30, 2022 Sector Amount per Form SG2- Performance and Financial Evaluation quarterly report Amount as reported in SEFA Variance Compact Capital Fund $448,795 $349,750 $ 95,045 Ebeye Special Needs – Adult Education $ 62,555 $ 66,536 $( 3,981) No reconciliation was provided to reconcile the quarterly expenditures reported in SEFA against the expenditures reported per the Form SG2- Performance and Financial Evaluation quarterly report. Cause: The College lacks adequate internal controls over the accurate preparation and review of required reports as stipulated in the sub-award agreements. Furthermore, the College lacks adequate internal controls regarding retaining sufficient documentation to support all reported transactions. Effect: The College appears to be in noncompliance with the applicable reporting requirements. No questioned costs are presented as the total expenditures per SEFA for the fiscal year were reconciled with the federal awards received from the RMI Government. Identified as a Repeat Finding: 2021-010 Recommendation: College management should strengthen controls so that required reports are accurately prepared and reviewed to provide evidence of compliance with the applicable reporting requirements and retain sufficient documentation to support all reported transactions. Views of Auditee and Planned Corrective Actions: The College agrees with the finding and provides details in its Corrective Action Plan.

Finding No.: 2022-014 Federal Agency: U.S. Department of Education AL Program: 84.047A TRIO Upward Bound Federal Award No.: P047A171556-21 Area: Activities Allowed or Unallowed Area: Allowable Costs/Cost Principles Questioned Costs: $440 Criteria: In accordance with the applicable activities allowed or unallowed requirements, institutions must demonstrate that costs incurred are allowable under the relevant program legislation, federal awarding agency regulations, and the terms and conditions of the award and consistent with the purpose of the Upward Bound program. Federal program expenditures should be necessary and reasonable for the performance of the Federal award in accordance with allowable costs/cost principles requirements and be adequately documented. Furthermore, 2 CFR 200.303(a) states that the subrecipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the 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 COSO. Conditions: 1. For fourteen (or 74%) of nineteen items, aggregating $1,599 of $82,998 in total non-payroll expenditures, deficiencies were noted, as follows: Item # Check# Description Expense Amount Questioned Cost 1 1034572 Stipends $ 20 $ 20 2 1034794 Stipends 35 35 3 1034826 Stipends 40 40 4 1035264 Stipends 40 40 5 1035279 Stipends 40 40 6 1035478 Stipends 40 40 7 1035755 Stipends 35 35 8 1036213 Stipends 15 15 9 1036214 Stipends 40 40 10 1036236 Stipends 40 40 11 1036566 Stipends 25 25 12 1036692 Stipends 30 30 13 1036948 Stipends 30 30 14 1038344 Stipends 55 55 $485 $485 There was no supporting documentation provided to ascertain whether such expenditures were allowable costs of the underlying grants. Only $245 questioned costs are reported at this finding as $240 questioned costs are included and reported at finding # 2022-016. 2. For three (or 7%) of forty-one items, aggregating $24,427 of $186,116 in total payroll expenditures, deficiencies were noted, as follows: Item # Check# Description Expense Amount Questioned Cost 1 49803 Salaries and wages and benefits $ 40 $ 40 2 50150 Salaries and wages and benefits 43 43 3 51131 Salaries and wages and benefits 112 112 $195 $195 There was no approved employment contract or other supporting documents on file to substantiate whether such expenditures were allowable costs of the underlying grants. Cause: The College lacks adequate internal controls over compliance with the applicable federal regulations relating to activities allowed or unallowed, specifically, obtaining and retaining sufficient documentation to support all transactions. Effect: The College is not in compliance with the applicable activities allowed or unallowed and allowable costs/cost principles requirements. Accordingly, total questioned costs of $680, of which $240 is reported at finding # 2022-016, result because the projected questioned costs exceed the $25,000 threshold. Recommendation: College management should improve internal control policies and strengthen controls requiring obtaining and retaining sufficient documentation to support all transactions. Views of Auditee and Planned Corrective Actions: The College agrees with the finding and provides details in its Corrective Action Plan.

Finding No.: 2022-015 Federal Agency: U.S. Department of Education AL Program: 84.047A TRIO Upward Bound Federal Award No.: P047A171556-21 Area: Allowable Costs/Cost Principles Questioned Costs: $8,842 Criteria: Federal program expenditures should be necessary and reasonable for the performance of the Federal award in accordance with allowable costs/cost principles requirements and be adequately documented. Furthermore, 2 CFR 200.303(a) states that the subrecipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the 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 COSO. Conditions: 1. For four (or 21%) of nineteen items, aggregating $1,599 of $82,998 in total non-payroll expenditures, deficiencies were noted, as follows: Item # Check/ Invoice # Description Expense Amount Questioned Cost 1 22-5005 Student Housing Expenses $ 268 $ 26 2 22-5206 Student Housing Expenses 268 26 3 22-6090 Student Housing Expenses 268 26 4 22-6028 Student Housing Expenses 268 26 $1,072 $104 For item #s 1 through 4, these pertain to cost of meals provided to 61 students for Summer 2022 semester for which no supporting listing of students was on file. Based on our examination, it appears that there are only 55 students for Summer 2022. Only $104 is included in the total questioned costs, which relates to the equivalent cost of 5 excess meals. 2. For twenty-three (or 56%) of forty-one items, aggregating $24,427 of $186,116 in total payroll expenditures, deficiencies were noted, as follows: Item # Check# Description Expense Amount Questioned Cost 1 51241 Salaries and wages $ 375 $ 375 2 54717 Salaries and wages and benefits 418 418 3 54807 Salaries and wages and benefits 418 418 4 54909 Salaries and wages and benefits 418 418 5 54912 Salaries and wages and benefits 418 418 6 51955 Salaries and wages and benefits 682 682 7 51957 Salaries and wages and benefits 1,991 996 8 57284 Salaries and wages and benefits 1,010 14 9 50165 Salaries and wages and benefits 223 56 10 51956 Salaries and wages and benefits 1,411 83 11 52567 Salaries and wages and benefits 1,411 83 12 53885 Salaries and wages and benefits 1,411 83 13 55824 Salaries and wages and benefits 184 74 14 55825 Salaries and wages and benefits 181 1 15 56108 Salaries and wages and benefits 1,037 118 16 56181 Salaries and wages and benefits 413 112 17 56191 Salaries and wages and benefits 407 123 18 53553 Salaries and wages and benefits 648 341 19 56107 Salaries and wages and benefits 523 163 20 52228 Salaries and wages and benefits 1,021 1,021 21 56789 Salaries and wages and benefits 1,429 1,429 22 56791 Salaries and wages and benefits 1,037 1,037 23 54234 Salaries and wages and benefits 640 275 $17,706 $8,738 For item #s 1 through 5, there was no approved employment contract to substantiate the amount paid to employees. For item # 6, there were no hours worked per approved timesheet. For item #s 7 through 8, approval of the amount paid to employees relating to incentive or bonus was not on file. Only $1,010 is included in the total questioned costs, which relates to the amount paid to the employee for incentive or bonus, and related fringe benefits (employer contributions for social security and health insurance). For item #s 9 through 19 and 23, we noted discrepancies in either a) the hours paid compared to the hours recorded on the approved timesheet or b) the rate paid compared to the rate per contract. Only $1,512 is included in the total questioned costs, which relates to the variance between the amount paid to the employee against the recalculated amount based on provided supporting documentation. For item #s 18 through 23, approval of the amount paid to employees relating to leave was not on file. For item # 23, the copy of the check payment to support the amount paid to employee was not on file. Cause: The College lacks adequate internal controls over compliance with the applicable federal regulations relating to allowable costs/cost principles, specifically, obtaining and retaining sufficient documentation to support all transactions. Effect: The College is not in compliance with the applicable allowable costs/cost principles requirements. Accordingly, questioned costs of $8,842 result because the projected questioned costs exceed the $25,000 threshold. Identified as a Repeat Finding: 2021-011 Recommendation: College management should improve internal control policies and strengthen controls requiring obtaining and retaining sufficient documentation to support all transactions.

Finding No.: 2022-016 Federal Agency: U.S. Department of Education AL Program: 84.047A TRIO Upward Bound Federal Award No.: P047A171556-21 Area: Cash Management Questioned Costs: $ Undeterminable Criteria: Per OMB Compliance Supplement April 2022, non-federal entities must establish written procedures to implement the requirements of 2 CFR section 200.305. Specifically, 2 CFR section 200.305(b) states that for recipients other than States, payment methods must minimize the time elapsing between the transfer of funds from the Federal agency and the disbursement of funds by the recipient. Furthermore, 2 CFR 200.303(a) states that the subrecipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the 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 COSO. Condition: The College does not have written procedures to implement the requirements set in the criteria above. Furthermore, no detailed listing of expenditures supporting the following drawdowns during the year was on file to ascertain whether the expenditures were incurred prior to the date of the reimbursement request: Drawdown Amount $ 31,928 $ 31,929 $ 44,991 $ 41,652 $112,832 Cause: The College lacks written policies and procedures over cash management, including retaining documentation supporting cash drawdowns. Effect: The College is not in compliance with the applicable cash management requirements. Questioned costs, if any, that may result from inadequate records are not determinable. Recommendation: College management should establish written internal control policies and procedures, including retaining documentation supporting cash drawdowns. Views of Auditee and Planned Corrective Actions: The College agrees with the finding and provides details in its Corrective Action Plan.

Finding No.: 2022-017 Federal Agency: U.S. Department of Education AL Program: 84.047A TRIO Upward Bound Federal Award No.: P047A171556-21 Area: Eligibility Questioned Costs: $54,380 Criteria: Per OMB Compliance Supplement April 2022, an individual is eligible to participate in a Regular Upward Bound project if the individual meets all of the following requirements: (a) is a citizen, national, or permanent resident of the United States, or is in the United States for other than a temporary purpose; (b) is a potential first-generation college student, a low-income individual, or an individual who has a high risk for academic failure; (c) has a need for academic support in order to pursue successfully a program of education beyond high school; and (d) at the time of initial selection has completed the 8th grade but has not entered the 12th grade and is at least 13 years old but not older than 19. A veteran, regardless of age, who meets all other criteria is eligible to participate. A citizen, national, or permanent resident of the United States, includes a permanent resident of Guam, the Northern Mariana Islands, the Trust Territory of the Pacific Islands (Palau), or resident of one of the Freely Associated States - the Federated States of Micronesia or the Republic of the Marshall Islands. Moreover, 34 CFR Part 645.6(b) defines “Individual who has a high risk for academic failure” as an individual who: (a) Has not achieved at the proficient level on State assessments in reading or language arts; (b) Has not achieved at the proficient level on State assessments in math; (c) Has not successfully completed pre-algebra or algebra by the beginning of the tenth grade; or (d) Has a grade point average of 2.5 or less (on a 4.0 scale) for the most recent school year for which grade point averages are available. Furthermore, to be eligible for a stipend, participants must show evidence of satisfactory participation in project activities, including regular attendance and performance in accordance with the number of sessions in which a student participated. Stipends for regular projects may not exceed $40 per month from September to May of the academic year and $60 for each of the summer months (June, July, and August). 34 CFR Part 645.43(c) states that for each participant, a grantee must maintain a record of the basis for the grantee’s determination that the participant is eligible to participate in the project and the basis for the grantee’s determination that the participant has a need for academic support in order to pursue successfully a program of education beyond secondary school. 2 CFR 200.303(a) states that the subrecipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the 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 COSO. Conditions: Of 17 students tested, aggregating $54,380 of $208,665 in total participant benefits, we noted noncompliance, as follows: 1. For 1 student (Student Case Number C000421743), no documentation was on file to support whether the individual is a citizen, national, or permanent resident of the United States (including a permanent resident of Guam, the Northern Mariana Islands, the Trust Territory of the Pacific Islands (Palau), or resident of one of the Freely Associated States - the Federated States of Micronesia or the Republic of the Marshall Islands), or is in the United States for other than a temporary purpose. 2. For the 17 students listed below, no documentation on file to support the basis for the grantee’s determination that the participant has a need for academic support to successfully pursue a program of education beyond secondary school. Item # Student Case Number 1 C000303202 2 C000374298 3 C000421743 4 C000421735 5 C000374297 6 C000374309 7 C000374311 8 C000421736 9 C000374317 10 C000303229 11 C000374318 12 C000374321 13 C000421746 14 C000421747 15 C000401854 16 C000374325 17 C000303220 3. For the 4 students listed below, no documentation was on file to support whether the individual at the time of initial selection has completed the 8th grade but has not entered the 12th grade and is at least 13 years old but not older than 19. Item # Student Case Number 1 C000374298 2 C000421743 3 C000374317 4 C000374321 4. For the 2 students listed below, no documentation was on file to support whether the individual is a potential first- generation college student, a low-income individual, or an individual who has a high risk for academic failure. Item # Student Case Number 1 C000374298 2 C000374297 Cause: The College lacks adequate internal control policies and procedures over eligibility determinations, including obtaining required documentation and verification to support the College’s determination that the participant is eligible to participate in the project. Effect: The College is not in compliance with the applicable eligibility requirements. The total questioned cost is $54,380. Identified as a Repeat Finding: 2021-012 Recommendation: College management should improve internal control policies and strengthen controls so that eligibility determinations, including obtaining required documentation and verification, are performed in accordance with the applicable eligibility requirements. Views of Auditee and Planned Corrective Actions: The College agrees with the finding and provides details in its Corrective Action Plan.

Finding No.: 2022-018 Federal Agency: U.S. Department of Education AL Program: 84.047A TRIO Upward Bound Federal Award No.: P047A171556-21 Area: Reporting Questioned Costs: $0 Criteria: Performance Reporting - Per OMB Compliance Supplement Addendum April 2022, grantees must submit an annual performance report to ED each year of the project period. The following line items contain critical information: Section II, Record Structure for Participant List for Upward Bound and Upward Bound Math- Science Projects, fields: 16 Eligibility (at time of initial selection) 17 At Risk: Reading Language Arts or Math Proficiency Not Achieved (at time of initial selection) 18 At Risk: Low Grade Point Average (at time of initial selection) 19 At Risk: Pre-Algebra or Algebra Course Not Successfully Completed by Beginning of 10th Grade (at time of initial selection) 20 Limited English Proficiency (at time of initial selection) 24 Date of First Project Service 25 Grade Level at First Service 27 Participant Status for reporting year 28 Participation Level for reporting year 29 Served by Another Federally Funded College Access Program for reporting year 30 Grade Level at the beginning of academic year being reported 37 Secondary School Retention and Graduation Objective – Numerator, for reporting year 45 Date of Last Project Service In addition, under the terms of the grant award, all recipients are required to submit a final performance report within 120 days after the expiration or termination of grant support. Furthermore, 2 CFR 200.303(a) states that the subrecipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the 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 COSO. Conditions: 1. Section II of the Annual Performance Report which pertains to source data file could not be provided during the audit. 2. Final Performance Report could not be provided during the audit. Cause: The College lacks adequate internal controls over compliance with the applicable federal regulations relating to reporting, specifically, retaining sufficient documentation to support reported information. Effect: The College appears to be in noncompliance with the applicable reporting requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. Recommendation: College management should strengthen controls so that required reports and supporting records are retained to evidence compliance with the applicable reporting requirements. Views of Auditee and Planned Corrective Actions: The College agrees with the finding and provides details in its Corrective Action Plan.

Finding No.: 2022-019 Federal Agency: U.S. Department of Education AL Program: 84.425 Education Stabilization Fund AL Sub-Program: 84.425F HEERF - Institutional Portion Federal Award No.: COVID-19 P425F202732 AL Sub-Program: 84.425L HEERF - Minority Serving Institution Federal Award No.: COVID-19 P425L200219 Area: Activities Allowed or Unallowed Area: Allowable Costs/Cost Principles Questioned Costs: $1,138,362 Criteria: In accordance with the applicable activities allowed or unallowed requirements, institutions must demonstrate that costs incurred are allowable under the relevant statutory provisions and consistent with the purpose of the ESF “to prevent, prepare for, and respond to coronavirus”. Allowable expenditures incurred and liquidated prior to December 27, 2020 must have been “to cover any costs associated with significant changes to the delivery of instruction due to the coronavirus”. Further, beginning December 27, 2020, any unused HEERF I Institutional Portion funds, new HEERF II Institutional Portion funds and HEERF III Institutional Portion Funds, may be used to defray expenses associated with coronavirus (including lost revenue, reimbursement for expenses already incurred, technology costs associated with a transition to distance education, faculty and staff trainings, and payroll) and to make additional financial grants to students. HEERF I and HEERF II funds may also have been used to carry out student support activities authorized by the Higher Education Act (HEA) that address needs related to coronavirus. HEERF Frequently Asked Questions (FAQ) Rollup Document dated October 14, 2020 states that:  Question #38: Institutions can use CARES Act funds under Section 18004(a)(2) to make scholarships to students. Section 18004(a)(2) of the CARES Act state that institutions may use funds specifically “for grants to students for any component of the student’s cost of attendance (as defined under section 472 of the HEA), including food, housing, course materials, technology, health care, and child care”.  Question #47: Institution may use funds from the Institutional Portion of its section 18004(a)(1) allocation to purchase equipment or software, pay for online licensing fees, or pay for internet service to enable students to transition to distance learning as such costs are associated with a significant change in the delivery of instruction due to the coronavirus. An institution may also use Institutional Portion funds for any other costs for computer system upgrades that are reasonably related to “significant changes to the delivery of instruction due to the coronavirus.” This would not include, for example, previously planned upgrades to computer systems. Per HEERF I, II, and III Lost Revenue FAQ published March 19, 2021, sources of lost revenue that are not reimbursable under the HEERF grant programs include the following:  Capital outlays associated with facilities related to athletics (including fees assessed for capital athletic facility construction);  Acquisition of real property (including bond revenue);  Contributions or donations to the institution;  Marketing or recruitment activities;  Revenue related to sectarian instruction or religious worship;  Alcohol sales; and  Investment income (including endowment and quasi-endowment revenue). Federal program expenditures should be necessary and reasonable for the performance of the Federal award in accordance with allowable costs/cost principles requirements and be adequately documented. Furthermore, 2 CFR 200.303(a) states that the subrecipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the 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 COSO. Condition: For fifty items (or 66%) of seventy-six items, aggregating $4,539,770 of $10,127,277 in total non-payroll expenditures, deficiencies were noted as follows: Item # Check/ PO# Description Expense Amount Questioned Cost 1 1034969 Small tools $1,115,378 $1,115,378 2 1035648 Vehicles 101,250 337,500 3 1035874 Vehicles 67,500 --- 4 1038536 Small tools 540 540 5 1038150 Others 645,544 645,544 6 22-PO-2880 Small tools 4,796 8,191 7 22-PO-3676 Subscriptions/ periodicals 22,984 22,984 8 236-003 Scholarships and grants 2,048 2,048 9 236-005 Scholarships and grants 587 587 10 236-027 Scholarships and grants 715 715 11 236-028 Scholarships and grants 116 116 12 236-038 Scholarships and grants 419 419 13 236-039 Scholarships and grants 1,269 1,269 14 236-041 Scholarships and grants 1,623 1,623 15 236-043 Scholarships and grants 1,202 1,202 16 236-051 Scholarships and grants 874 874 17 236-070 Scholarships and grants 83 83 18 236-096 Scholarships and grants 573 573 19 236-098 Scholarships and grants 203 203 20 236-101 Scholarships and grants 721 721 21 236-112 Scholarships and grants 2,655 2,655 22 236-117 Scholarships and grants 1,080 1,080 23 236-119 Scholarships and grants 855 855 24 236-150 Scholarships and grants 183 183 25 236-156 Scholarships and grants 3,885 3,885 26 236-173 Scholarships and grants 989 989 27 236-191 Scholarships and grants 1,108 1,108 28 236-202 Scholarships and grants 1,205 1,205 29 236-210 Scholarships and grants 1,895 1,895 30 236-213 Scholarships and grants 444 444 31 236-224 Scholarships and grants 105 105 32 236-243 Scholarships and grants 182 182 33 236-256 Scholarships and grants 872 872 34 236-270 Scholarships and grants 1,459 1,459 35 236-274 Scholarships and grants 158 158 36 236-278 Scholarships and grants 2,889 2,889 37 236-301 Scholarships and grants 381 381 38 236-321 Scholarships and grants 112 112 39 236-329 Scholarships and grants 699 699 40 236-346 Scholarships and grants 736 736 41 236-350 Scholarships and grants 1,647 1,647 42 236-388 Scholarships and grants 2,432 2,432 43 236-412 Scholarships and grants 3,675 3,675 44 236-425 Scholarships and grants 1,202 1,202 45 236-446 Scholarships and grants 539 539 46 236-458 Scholarships and grants 1,607 1,607 47 236-467 Scholarships and grants 58 58 48 236-481 Scholarships and grants 1,421 1,421 49 236-494 Scholarships and grants 1,513 1,513 50 236-519 Scholarships and grants 923 923 $2,005,334 $2,177,479 Item # 1 was not supported by adequate documentation (i.e. justification of the purpose prior to purchase and receiving reports) to ascertain whether such expenditure is associated to distance learning due to coronavirus. There is no evidence of communication or consultation with the grantor agency that this expenditure is allowable. No questioned cost is reported at this finding as questioned cost is reported and included at finding # 2022-022. For item #s 2 and 3, justification for the expenditures indicated on the file is to accommodate the increasing number of students, which appears to be inconsistent and not directly associated with significant changes to the delivery of instructions due to the coronavirus. There is no evidence of communication or consultation with the grantor agency that these expenditures are allowable. The $337,500 questioned cost is reported at this finding, which pertains to the total contract price charged against the grant related to these transactions. Item # 4 was not supported by adequate documentation (i.e. vendor invoice and receiving report) to ascertain whether such expenditure is an allowable cost of the underlying grant. Item # 5 relates to lost revenue from decreased appropriation (contribution) to the College, which is not reimbursable under the HEERF grant program. Item # 6 is standard cost and not associated with coronavirus. Specifically, expenditure relates to purchase of hardware device as part of the College’s firewall system for its new centers and locations. There is no evidence of communication or consultation with the grantor agency that this expenditure is allowable. $8,191 questioned cost is reported at this finding which pertains to the total invoice price charged against the grant related to this transaction. Item # 7 is standard recurring cost and not associated with coronavirus. Specifically, expenditure relates to annual software subscription of the College. There is no evidence of communication or consultation with the grantor agency that this expenditure is allowable. No questioned cost is reported at this finding as questioned cost is reported and included at finding # 2022-022. Item #s 8 through 50 pertain to relinquishment of student’s outstanding debt with the College, whereas the College directly credited student’s accounts and got reimbursement from the CARES Act funds under Section 18004(a)(2). These are not associated with coronavirus. There is no evidence of communication or consultation with the grantor agency that these expenditures are allowable. Cause: The College lacks adequate internal controls over compliance with the applicable activities allowed or unallowed requirements. Effect: The College is not in compliance with the applicable activities allowed or unallowed requirements and allowable costs/cost principles requirements. Only $1,039,117 questioned cost is reported at this finding as $1,138,362 is reported and included at finding # 2022-022. Identified as a Repeat Finding: 2021-014 Recommendation: College management should improve internal control policies and strengthen controls and procedures over compliance with the applicable federal regulations on activities allowed or unallowed. Views of Auditee and Planned Corrective Actions: The College agrees with the finding and provides details in its Corrective Action Plan.

Finding No.: 2022-020 Federal Agency: U.S. Department of Education AL Program: 84.425 Education Stabilization Fund AL Sub-Program: 84.425F HEERF - Institutional Portion Federal Award No.: COVID-19 P425F202732 Area: Allowable Costs/Cost Principles Questioned Costs: $0 Criteria: Federal program expenditures should be necessary and reasonable for the performance of the Federal award in accordance with allowable costs/cost principles requirements and be adequately documented. Furthermore, 2 CFR 200.303(a) states that the subrecipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the 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 COSO. Condition: : For two items (or 3%) of seventy-six items, aggregating $4,539,770 of $10,127,277 in total non-payroll expenditures, deficiencies were noted as follows: Item # PO# Description Expense Amount Questioned Cost 1 21-PO-2102 Small tools $311,212 $311,212 2 21-PO-2102 Small tools 311,211 311,211 $622,423 $622,423 Item #s 1 and 2 pertain to purchase of 750 units of laptop, however, there was no student distribution log to support distribution made to students. Cause: The College lacks adequate internal controls over compliance with the applicable federal regulations relating to allowable costs/cost principles, specifically, obtaining and retaining sufficient documentation to support all transactions. Effect: The College is not in compliance with the applicable allowable costs/cost principles requirements. No questioned costs are reported at this finding as questioned costs are reported at finding # 2022-022. Identified as a Repeat Finding: 2021-015 Recommendation: College management should improve internal control policies and strengthen controls requiring obtaining and retaining sufficient documentation to support all transactions. Views of Auditee and Planned Corrective Actions: The College agrees with the finding and provides details in its Corrective Action Plan.

Finding No.: 2022-021 Federal Agency: U.S. Department of Education AL Program: 84.425 Education Stabilization Fund AL Sub-Program: 84.425E Higher Education Emergency Relief Fund (HEERF) - Student Aid Portion Federal Award No.: COVID-19 P425E204126 AL Sub-Program: 84.425F HEERF - Institutional Portion Federal Award No.: COVID-19 P425F202732 AL Sub-Program: 84.425L HEERF - Minority Serving Institution Federal Award No.: COVID-19 P425L200219 Area: Cash Management Questioned Costs: $ Undeterminable Criteria: Per OMB Compliance Supplement April 2022, non-federal entities must establish written procedures to implement the requirements of 2 CFR section 200.305. Specifically, 2 CFR section 200.305(b) states that for recipients other than States, payment methods must minimize the time elapsing between the transfer of funds from the Federal agency and the disbursement of funds by the recipient. Furthermore, per OMB Compliance Supplement April 2022, for CRRSAA HEERF II and ARP HEERF III, the Certification and Agreements and/or Supplemental Agreements requires that Student Aid Portion (ALN 84.425E) should be disbursed within 15 calendar days of the drawdown from ED’s G5 grants system and Institutional Aid Portion, (a)(2), and (a)(3) funds (all other ALNs) should be disbursed within 3 calendar days of the drawdown from G5. Furthermore, 2 CFR 200.303(a) states that the subrecipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the 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 COSO. Condition: The College does not have written procedures to implement the requirements set in the criteria above. Furthermore, monitoring of actual disbursements of the following drawdowns during the year was not performed: AL Sub-Program Drawdown Amount 84.425E $750,000 84.425E $250,000 84.425E $650,000 84.425F $350,000 84.425F $552,500 84.425F $900,000 84.425F $550,000 84.425F $351,000 84.425F $350,000 84.425F $450,000 84.425F $820,000 84.425F $250,000 84.425F $350,000 84.425F $292,650 84.425F $150,000 84.425F $150,000 84.425L $750,000 84.425L $360,589 84.425L $1,150,000 84.425L $350,000 84.425L $150,000 Cause: The College lacks written policies and procedures over cash management, including monitoring of actual disbursements of drawdowns. Effect: The College is not in compliance with the applicable cash management requirements. Questioned costs, if any, that may result from non-monitoring of actual disbursements are not determinable. Recommendation: College management should establish written policies and procedures over cash management, including monitoring of actual disbursements of drawdowns. Views of Auditee and Planned Corrective Actions: The College agrees with the finding and provides details in its Corrective Action Plan.

Finding No.: 2022-022 Federal Agency: U.S. Department of Education Federal Award No.: COVID-19 P425E204126 AL Sub-Program: 84.425F HEERF - Institutional Portion Federal Award No.: COVID-19 P425F202732 AL Sub-Program: 84.425L HEERF - Minority Serving Institution Federal Award No.: COVID-19 P425L200219 Area: Procurement and Suspension and Debarment Questioned Costs: $3,318,665 Criteria: Under the terms of the sub-awards administered by RepMar under the Compact of Free Association grant awards, RepMar authorizes the College to use its own procedures for procurement provided they meet the RepMar Procurement Code. RepMar’s Procurement Code states the following: (a) Section 126.7 - Award shall be made to the responsible offeror whose proposal is determined in writing to be the most advantageous to the Government taking into consideration price and the evaluation factors set forth in the Request for Proposals. No other factors or criteria shall be used in the evaluation. The contract file shall contain the basis on which the award is made. (b) Section 127 - Procurement of goods and services not exceeding $25,000 may be made in accordance with small purchase procedures promulgated by RepMar’s Policy Office. Small purchase procedures are those relatively simple and informal methods for securing services, supplies, or other property that do not cost more than $25,000. RepMar’s Ministry of Finance has previously declared that if small purchase procedures are used, price or rate quotations shall be obtained from an adequate number of qualified sources. (c) Section 128 - a contract may be awarded for supply, service, or construction item without competition when it is determined in writing that there is only one source for the required supply, service, or construction item. (d) Section 129 - Notwithstanding any other provision of this Chapter, the Chief Procurement Officer, the head of a Purchasing Agency, or a designee of either officer may make or authorize others to make emergency procurement when there exists a threat to public health, welfare, or safety under emergency conditions as defined in regulations promulgated by the Policy Office; provided, that such emergency procurement shall be made with such competition as is practicable under the circumstances. 2 CFR 200.318(h) states that the recipient or subrecipient must award contracts only to responsible contractors that possess the ability to perform successfully under the terms and conditions of a proposed contract. The recipient or subrecipient must consider contractor integrity, public policy compliance, proper classification of employees, past performance record, and financial and technical resources when conducting a procurement transaction. 2 CFR 200.214 states that recipients and subrecipients are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, as well as 2 CFR part 180. The regulations in 2 CFR part 180 restrict making Federal awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in Federal awards. 2 CFR 180.300 states that when an entity enters into a covered transaction with another person at the next lower tier, the entity must verify that the person with whom the entity intends to do business is not excluded or disqualified by doing the following: (a) Checking SAM.gov Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. 2 CFR 200.319 states that: (a) All procurement transactions under the Federal award must be conducted in a manner that provides full and open competition and is consistent with the standards of this section and § 200.320. (c) (6) Examples of situations that may restrict competition include specifying only a “brand name” product instead of allowing “an equal” product to be offered and describing the performance or other relevant requirements of the procurement. (d) (2) The recipient or subrecipient must have written procedures for procurement transactions. These procedures must ensure that all solicitations incorporate a clear and accurate description of the technical requirements for the property, equipment, or service being procured. The description may include a statement of the qualitative nature of the property, equipment, or service to be procured. When necessary, the description must provide minimum essential characteristics and standards to which the property, equipment, or service must conform. Detailed product specifications should be avoided if at all possible. When it is impractical or uneconomical to clearly and accurately describe the technical requirements, a “brand name or equivalent” description of features may be used to provide procurement requirements. The specific features of the named brand must be clearly stated. 2 CFR 200.320 states that there are specific circumstances in which the recipient or subrecipient may use a noncompetitive procurement method. The noncompetitive procurement method may only be used if one of the following circumstances applies: (1) The aggregate amount of the procurement transaction does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); (2) The procurement transaction can only be fulfilled by a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from providing public notice of a competitive solicitation; (4) The recipient or subrecipient requests in writing to use a noncompetitive procurement method, and the Federal agency or pass-through entity provides written approval; or (5) After soliciting several sources, competition is determined inadequate. 2 CFR 200.320 states that for micro-purchases, to the extent practicable, the recipient or subrecipient should distribute micro-purchases equitably among qualified suppliers. Per OMB Compliance Supplement April 2022, a non-federal entity must perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications, and that analysis supported the procurement action (2 CFR section 200.323 and 48 CFR section 15.404-3). 48 CFR section 15.404-3 states that: (a) The contracting officer is responsible for the determination of a fair and reasonable price for the prime contract, including subcontracting costs. The contracting officer should consider whether a contractor or subcontractor has an approved purchasing system, has performed cost or price analysis of proposed subcontractor prices, or has negotiated the subcontract prices before negotiation of the prime contract, in determining the reasonableness of the prime contract price. This does not relieve the contracting officer from the responsibility to analyze the contractor's submission, including subcontractor's certified cost or pricing data. (b) The prime contractor or subcontractor shall: (1) conduct appropriate cost or price analyses to establish the reasonableness of proposed subcontract prices; (2) include the results of these analyses in the price proposal; and (3) when required by paragraph (c) of this subsection, submit subcontractor certified cost or pricing data to the Government as part of its own certified cost or pricing data. 2 CFR 200.303(a) states that the subrecipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the 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 COSO. Conditions: Of twenty-one items, aggregating $3,218,880 of $10,113,117 in total non-payroll expenditures, deficiencies were noted, as follows: 1. For 1 item (or 5%), procurement did not provide full and open competition in the solicitation process. The invitation to bid (ITB) specified particular models, including a requirement for a specific “brand name” product instead of allowing “an equal” product to be offered. Furthermore, for solicitation with brand name indicated, solicitation did not include “brand name or equivalent” description in the ITB. Furthermore, there was no documentation on file to support compliance with 48 CFR section 15.404-3. Item # PO # Contract Amount Description FY 2022 Expenditures Questioned Cost 1 No PO $1,593,397 Small tools $1,115,378 $1,115,378 2. For 1 item (or 5%), procurement was sole sourced with written justification but does not appear to be justified. Furthermore, there was no documentation on file to support compliance with 48 CFR section 15.404-3. Item # PO # PO Amount Description FY 2022 Expenditures Questioned Cost 2 21-PO-2102 $622,423 Small tools $622,423 $622,423 3. For 13 items (or 62%), supporting procurement documentation was not sufficient to substantiate compliance with procurement method: Item # PO # PO Amount Description FY 2022 Expenditures Questioned Cost 3 No PO No PO Charter $ 14,174 $ 14,174 4 21-PO-1866 $19,422 Small Tools 19,422 19,422 5 22-PO-3676 $22,984 Subscriptions/Periodicals 22,984 22,984 6 22-PO-3677 $22,440 Subscriptions/Periodicals 22,440 22,440 7 22-PO-3366 $7,390 Subscriptions/Periodicals 7,390 7,390 8 22-PO-3321 $46,179 Subscriptions/Periodicals 46,179 46,179 9 21-PO-897 $101,663 Subscriptions/Periodicals 13,175 13,175 10 22-PO-3309 $4,225 Subscriptions/Periodicals 4,225 4,225 11 22-PO-3241 $14,000 Subscriptions/Periodicals 14,000 14,000 12 22-PO-3488 $7,631 Subscriptions/Periodicals 7,631 7,631 13 22-PO-3549 $12,200 Subscriptions/Periodicals 12,200 12,200 14 22-PO-3777 $4,550 Subscriptions/Periodicals 4,550 4,550 15 22-PO-2461 $3,779 Small Tools 3,779 3,779 $192,149 $192,149 For item #s 3, 5 through 6, and 8 through 14, there were no vendor quotations on file. For item #s 7 and 15, vendor solicitation is inadequate. For item #4, selected vendor is not the lowest bidder, and no justification of vendor selection was on file. For item #8, there was no documentation on file to support compliance with 48 CFR section 15.404-3. 4. For an additional 3 items (or 14%), there was no documentation on file to support compliance with 48 CFR section 15.404-3: Item # Contract Amount Description FY 2022 Expenditures Questioned Cost 17 $958,368 Room and board $958,368 $958,368 18 $474,870 Room and board 430,347 430,347 19 $337,500 Vehicles 337,500 337,500 $1,726,215 $1,726,215 For item # 19, no questioned cost is reported at this finding as questioned cost is reported and included at finding # 2022-019. Moreover, the College has no internal control policies and procedures over verification that an entity with which the College plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Cause: The College did not follow internal control policies and procedures over documentation of the procurement process to satisfy compliance with the applicable procurement requirements. Furthermore, the College lacks internal control policies and procedures over 1) verification that an entity with which the College plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded; 2) distribution of micro-purchases equitably among qualified suppliers; 3) compliance with 48 CFR section 15.404-3. Effect: The College is not in compliance with the applicable procurement requirements. The total questioned cost is $3,318,665. Identified as a Repeat Finding: 2021-016 Recommendation: Responsible personnel should ensure that documentation is adequate to comply with the applicable procurement requirements. Specifically, documentation should indicate the history of procurement, including the solicitation process and rationale for contractors or vendor selection. Furthermore, the College should establish internal control policies and procedures over 1) verification that an entity with which the College plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded; 2) distribution of micro-purchases equitably among qualified suppliers; 3) compliance with 48 CFR section 15.404-3. Views of Auditee and Planned Corrective Actions: The College agrees with the finding and provides details in its Corrective Action Plan.

Finding No.: 2022-023 Federal Agency: U.S. Department of Education AL Program: 84.425 Education Stabilization Fund AL Sub-Program: 84.425E Higher Education Emergency Relief Fund (HEERF) - Student Aid Portion Federal Award No.: COVID-19 P425E204126 AL Sub-Program: 84.425F HEERF - Institutional Portion Federal Award No.: COVID-19 P425F202732 AL Sub-Program: 84.425L HEERF - Minority Serving Institution Federal Award No.: COVID-19 P425L200219 Area: Reporting Questioned Costs: $0 Criteria: Annual Reporting - Per OMB Compliance Supplement Addendum April 2022, ED will be collecting an annual report for HEERF grantees in April 2022. ED will require institutions to report on their uses of HEERF I CARES Act funds, HEERF II CRRSAA funds, and HEERF III ARP funds in advance of the ARP annual reporting deadline. Quarterly Public Reporting for (a)(1) Student Aid Portion - Per OMB Compliance Supplement Addendum April 2022, institutions that received a HEERF 18004(a)(1) Student Aid Portion award are required to publicly post certain information on their website no later than 30 days after award and update that information every 45 days thereafter. On August 31, 2020, the frequency of reporting after the initial 30-day period decreased from every 45 days thereafter to every calendar quarter. On May 13, 2021, ED published an additional notice for student aid public reporting under CRRSAA and ARP, which requires that institution publicly post certain information on their website. Institutions must publicly post their report as soon as possible, but no later than 30 days after the publication of the notice or 30 days after the date ED first obligated funds under HEERF I, II, or III to the institution for Emergency Financial Aid Grants to Students, whichever comes later. The report must be updated no later than 10 days after the end of each calendar quarter. Quarterly Public Reporting for (a)(1) Institutional Portion and (a)(2), and (a)(3) funds - Per OMB Compliance Supplement Addendum April 2022, Quarterly Budget and Expenditure form must be conspicuously posted on the institution’s primary website on the same page the reports of the IHE’s activities as to the emergency financial aid grants to students (Student Aid Portion) are posted. The form must be posted covering each quarterly reporting period no later than 10 days after the end of each calendar quarter. Any changes or updates after initial posting must be conspicuously noted after initial posting and the date of the change must be noted in the “Date of Report” line. Furthermore, as required by 2 CFR 200.334, regardless of the need to submit an audit, all financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a federal award must be retained for a period of three years from the date of submission of the last HEERF grant’s final expenditure report. Furthermore, 2 CFR 200.303(a) states that the subrecipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the 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 COSO. Conditions: 1. Total annual expenditures per the Annual Report Data Collection System differ from cumulative expenditures from 01/01/21 through 12/31/21 per underlying accounting records, as follows: Annual Expenditures Student Portion Institution Portion Minority Serving Institution Annual Data Collection System $2,628,200 $2,223,328 $ --- Underlying accounting records 2,554,416 1,917,546 338,297 Over (under) reporting $ 73,784 $ 305,782 $(338,297) 2. ALN 84.425E COVID-19 HEERF-Student Aid Portion A. Quarterly reports for quarters ended 12/31/2021 and 03/31/2022 that were publicly posted in the website, along with relevant documentation evidencing compliance (i.e., webmaster logs, or other relevant documentation establishing good-faith indication that the institution posted the required information at approximately timelines established by the public reporting requirements) on whether the College was timely in publicly posting its quarterly report could not be provided. B. Relevant documentation evidencing compliance (i.e., webmaster logs, or other relevant documentation establishing good-faith indication that the institution posted the required information at approximately timelines established by the public reporting requirements) on whether the College was timely in publicly posting its quarterly report for quarters ended 06/30/2022 and 09/30/2022, could not be provided. 3. 84.425F COVID-19 HEERF-Institutional Portion 84.425L COVID-19 HEERF-Minority Serving Institution A. Relevant documentation evidencing compliance (i.e., webmaster logs, or other relevant documentation establishing good-faith indication that the institution posted the required information at approximately timelines established by the public reporting requirements) on whether the College was timely in publicly posting its quarterly report for quarters ended 12/31/2021, 03/31/2022, 06/30/2022 and 09/30/2022, could not be provided. Cause: The College lacks adequate internal controls over the timely and accurate preparation and review of required reports as stipulated in the Compliance Supplement. Furthermore, the College lacks adequate internal controls regarding retaining sufficient documentation to support all reported transactions. Effect: The College is not in compliance with the applicable reporting requirements. No questioned costs are presented as the identified reporting differences do not represent overpayments, and we are unable to quantify the impact of late reporting on the program. Identified as a Repeat Finding: 2021-017 Recommendation: College management should strengthen controls so that required reports are timely and accurately prepared and reviewed and submitted within the specified timeframes to evidence compliance with the applicable reporting requirements and retain sufficient documentation to support all reported transactions. Views of Auditee and Planned Corrective Actions: The College agrees with the finding and provides details in its Corrective Action Plan.