Audit 395830

Reference Number: 2025-001 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Department of Agriculture Federal Program: Child and Adult Care Food Program Assistance Listing Number: 10.558 Award Number and Year: 251NJ3014N2020 (10/1/2024 – 9/30/2025) 251NJ304N1099 (10/1/2024 – 9/30/2025) 251NJ314N1050 (10/1/2024 – 9/30/2026) 251NJ314N1150 (10/1/2024 – 9/30/2026) Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance – Per 2 CFR section 200.332(e) and (g), pass-through entities must monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. The pass-through entity is responsible for monitoring the overall performance of a subrecipient to ensure that the goals and objectives of the subaward are achieved. In monitoring a subrecipient, a pass-through entity must review financial and performance reports, ensure that the subrecipient takes corrective action on all significant developments that negatively affect the subaward, issue a management decision for audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity, resolve audit findings specifically related to the subaward, and verify that a subrecipient is audited as required by Subpart F. Per 7 CFR part 226(l), State agencies must provide technical and supervisory assistance to institutions and facilities to facilitate effective Program operations, monitor progress toward achieving Program goals, and ensure compliance with all requirements of title VI of the Civil Rights Act of 1964, title IX of the Education amendments of 1972, section 504 of the Rehabilitation Act of 1973, the Age Discrimination Act of 1975, and the Department's regulations concerning nondiscrimination (parts 15, 15a, and 15b of this title). The State agency must maintain documentation of supervisory assistance activities, including reviews conducted, corrective actions prescribed, and follow-up efforts. The New Jersey Department of Agriculture was granted a waiver by the USDA Food and Nutrition Service to extend the normal three-year review frequency requirement of 7 CFR 226.6(m)(i) to September 30, 2025. Control – Per 2 CFR section 200.303(a), a non-Federal entity 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 Department of Agriculture (Department) was unable to provide documentation that it performed subrecipient reviews. Context: For two of forty subrecipients selected for testing, the Department was unable to provide documentation that it monitored subrecipients per program requirements. Per the Department’s approved waiver, reviews should have been conducted by September 30, 2025, but the Department was unable to provide documentation that the reviews had been performed. Questioned costs: Undetermined. Cause: The Department indicated that the reviews were performed in 2023, but it was unable to provide the electronic files documenting the reviews. Therefore, auditors were unable to verify that the reviews had been performed in accordance with program requirements and the approved waiver. Effect: Untimely subrecipient monitoring may result in a failure of the Department to detect that subrecipients are not meeting compliance requirements or program goals. It may also result in a failure of these deficiencies to be corrected on a timely basis. Recommendation: The Department should review and enhance internal controls to ensure that it maintains documentation that subrecipient reviews are conducted timely in accordance with program requirements and any applicable approved extensions. We further recommend that documentation is readily available for audit. Views of responsible officials: At the time of the single audit records request, two out of the forty selected Department Child and Adult Care Food Program (CACFP) subrecipient monitoring review documentation files were identified by program staff as logged on the annual 2023 review logs and found to be saved in the Department network user folders. However, these files could not be opened or accessed by program staff. Department IT staff also made several attempts to retrieve these corrupt files but were unsuccessful. Screenshots on page 2 show network files dated for 2023, which were shared by email with the auditor to represent the two subrecipient monitoring reviews conducted in 2023 and saved in state network files. However, the documentation could not be shared with the auditor to verify that the Department conducted these reviews to ensure compliance had been met. As mentioned above, annual compliance tracking for Department CACFP subrecipient monitoring is tracked utilizing the following internal control documentation record reviews throughout the monitoring process: Frequent monthly updating and annual review of staff’s detailed administrative review logs. Management review of staff administrative and facility review forms from conducted reviews. Review of staff fiscal action (overclaim) assessments for subrecipient non-compliance. Updating CACFP management compliance review cycle oversight reports for the annual number of reviews. For background, since FFY 2020, or the first year of the 5-year review cycle waiver, CACFP subrecipient review documentation records have been maintained in the Department network user file folders as PDF fillable forms, labeled by agreement year. However, earlier in FFY 2025, program staff identified challenges with record retention and added the following internal control changes: new administrative staff, a new recordkeeping system, and retention methods. New internal control practices have been developed and implemented to ensure that the Department can detect that all sponsoring organizations are meeting compliance requirements and that identified deficiencies are being corrected on a timely basis. Additionally, the Department enhanced internal controls to ensure that it maintains documentation that sponsoring organization reviews are conducted timely in accordance with program requirements, to ensure documentation is readily available for audit. The following Department CACFP enhanced internal controls have been added or are continuing to ensure that the Department maintains CACFP record retention of subrecipient monitoring documentation: Updated staff administrative review procedures to include record retention requirements. Saving FFY 2026 Subrecipient Monitoring records in the Department CACFP Cares System – 1st Copy. Saving FFY 2026 Subrecipient Monitoring records in the Department CACFP Shared Staff files – 2nd Copy. Saving FFY 2026 Subrecipient Monitoring records in the Department CACFP Restricted files – 3rd Copy. Developing an online Subrecipient Monitoring Review system (SOARS) for maintaining documentation. Tracked by Assistant Coordinator, Staff, Administrative Staff, and Fiscal Office for assessed fiscal action. Conducting file inventory for review records from 2020 through the current date. Added new CACFP administrative staff with more experienced record management skills and greater awareness of federal program records retention needs, and structured logging practices for maintaining State Agency documentation internal control and data integrity to meet or exceed documentation compliance requirements.

Reference Number: 2025-002 Prior Year Finding: 2024-001 Federal Agency: U.S. Department of Housing and Urban Development State Agency: Department of Community Affairs Federal Program: Community Development Block Grants Disaster Recovery (CDBG-DR) Cluster Assistance Listing Number: 14.269, 14.272 Award Number and Year: B-13-DS-34-0001 (10/30/2012 – 9/30/2029) B-13-DS-34002 (1/21/2016 – 9/30/2029) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. On March 8, 2025, FSRS.gov was retired, and all subaward reporting data and functionality transitioned to SAM.gov after that date. The following key data elements must be reported: Subawardee Name and Unique Entity Identifier (UEI) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity 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 comply 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 Department of Community Affairs (Department) did not report subaward information timely in accordance with FFATA requirements. Context: Five of five subawards selected for testing, issued from 2014 to 2020, were not reported timely in accordance with FFATA reporting requirements. Three subawards were reported approximately 5 years late, one subaward was reported 9 months late, and one subaward was reported 15 days late. All subawards were reported prior to FY 2025. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: At the time of subaward issuance, the Department did not have sufficient procedures or controls to ensure that subaward information was reported timely. Effect: Subawards were not reported timely in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the Department review its procedures and controls to ensure that all required subawards are reported to SAM.gov no later than the end of the month following the month of issuance or modification. Views of responsible officials: The Department of Community Affairs (DCA) acknowledges prior instances of delayed reporting for subawards under the Federal Funding Accountability and Transparency Act (FFATA). The most recent subaward reviewed under the FY 2025 single audit for compliance occurred in November 2021. Subsequent to this audit, DCA has undertaken and completed a thorough revision of its policies and procedures to enhance both accountability and transparency. Following these updates, DCA is currently in full compliance with all aspects of FFATA, including those related to timeliness. Additionally, DCA is committed to the continuous review and enhancement of its processes to maintain alignment with all federal requirements, thereby reinforcing its dedication to upholding the highest standards of compliance and reporting accuracy.

Reference Number: 2025-003 Prior Year Finding: 2024-005 Federal Agency: U.S. Department of Labor State Agency: Department of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-34783-20-55-A-34 (7/1/2021 – 6/30/2024) AA-36334-21-55-A-34 (7/1/2021 – 6/30/2024) AA-38544-22-55-A-34 (7/1/2022 – 6/30/2025) 23A55AY000022 (7/1/2023 – 6/30/2026) 23A55AT000047 (7/1/2023 – 6/30/2026) 23A55AW000045 (7/1/2023 – 6/30/2026) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Non-compliance Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. On March 8, 2025, FSRS.gov was retired, and all subaward reporting data and functionality transitioned to SAM.gov after that date. The following key data elements must be reported: Subawardee Name and Unique Entity ID (UEI) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity 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 comply 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 Department of Labor and Workforce Development (Department) did not report subaward information timely in accordance with FFATA requirements and reported an incorrect subaward amount. Context: Eight subawards were selected for testing and we noted the following exceptions: • 2 of 8 subawards selected for testing were not reported. The subawards were issued in June and August 2024 and they were not reported to SAM.gov as of the date of audit test work. • 1 of 8 subawards selected for testing reported an incorrect subaward amount. The subaward amount was $1,439,026 but the amount reported was $1,558,312, for a variance of $119,286 overreported. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department’s internal controls were not sufficient to ensure that subawards were reported timely nor that subawards were reported accurately. The Department ha not fully implemented its corrective action plan from the prior year. Effect: Subawards were not reported in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the Department complete implementation of its prior year corrective action plan. It should develop internal controls and procedures to ensure that all required subawards are reported timely and accurately no later than the end of the month following the month of issuance in accordance with FFATA reporting requirements. Views of responsible officials: The New Jersey Department of Labor and Workforce Development (DLWD) has transitioned from a manual contract agreement process to a web-based grant administration system using the System for Administering Grants Electronically (SAGE) and IntelliGrants (IGX) applications. The DLWD FFATA Reporting Unit accesses these automated systems and monitors them monthly to identify new Subaward contracts/agreements for timely reporting in the FFATA system. Additionally, the DLWD Fiscal & Accounting Division will complete the full implementation of this transition by developing stronger internal controls and procedures to ensure that all required subawards are reported no later than the end of the month following issuance, in accordance with FFATA reporting requirements.

Reference Number: 2025-004 Prior Year Finding: No Federal Agency: U.S. Department of Labor State Agency: Department of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-34783-20-55-A-34 (7/1/2021 – 6/30/2024) AA-36334-21-55-A-34 (7/1/2021 – 6/30/2024) AA-38544-22-55-A-34 (7/1/2022 – 6/30/2025) 23A55AY000022 (7/1/2023 – 6/30/2026) 23A55AT000047 (7/1/2023 – 6/30/2026) 23A55AW000045 (7/1/2023 – 6/30/2026) Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 2 CFR section 200.332(a) - Requirements for Pass-Through Entities states, in part, that all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Per 2 CFR section 200.332(e) and (g), pass-through entities must monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. The pass-through entity is responsible for monitoring the overall performance of a subrecipient to ensure that the goals and objectives of the subaward are achieved. In monitoring a subrecipient, a pass-through entity must review financial and performance reports, ensure that the subrecipient takes corrective action on all significant developments that negatively affect the subaward, issue a management decision for audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity, resolve audit findings specifically related to the subaward, and verify that a subrecipient is audited as required by Subpart F. Control: Per 2 CFR section 200.303(a), a non-Federal entity 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 comply 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 Department of Labor and Workforce Development (Department) omitted required federal award information from subawards and did not ensure that subrecipients were audited as required by Subpart F. Context: For eight of eight subawards selected for testing, the subaward agreement did not include all required federal award information. Specifically, we noted the following: • 8 or 8 subawards were missing identification of whether the award was research and development • 7 or 8 subawards were missing the federal award identification number (FAIN) • 4 of 8 subawards were missing the federal award date for when the Federal agency awarded the funds to the prime recipient For one of eight subrecipients selected for testing, the Department did not ensure the subrecipient was audited as required by Subpart F. Cause: The Department’s procedures and internal controls were not sufficient to ensure that subawards included all required information in accordance with 2 CFR section 200.332, nor that subrecipients were audited as required by Subpart F. Effect: Excluding required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program information and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Failure to perform subrecipient monitoring and ensure that subrecipients are audited as required by Subpart F may result in a failure of the Department to detect that subrecipients are not meeting compliance requirements or program goals. It may also result in these deficiencies to not be corrected on a timely basis. Questioned costs: Undetermined. Recommendation: We recommend the Department review and enhance internal controls and procedures to ensure that required federal award information is included in its subawards and that subrecipients are monitored and audited as required by Subpart F. Views of Responsible Officials: The New Jersey Department of Labor and Workforce Development’s (DLWD) Workforce Division will review and enhance internal controls and procedures in accordance with 2CFR 200.303 to ensure that all required federal award information is included in its subawards. Additionally, DLWD will monitor all subrecipients to verify they are audited as required under Subpart F of the Uniform Guidance.

Reference Number: 2025-005 Prior Year Finding: 2024-007 Federal Agency: U.S. Department of the Treasury State Agency: Department of Community Affairs Federal Program: COVID-19 – Coronavirus Capital Projects Fund Assistance Listing Number: 21.029 Award Number and Year: CPFFN0185 (2021) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. On March 8, 2025, FSRS.gov was retired, and all subaward reporting data and functionality transitioned to SAM.gov after that date. The following key data elements must be reported: Subawardee Name and Unique Entity ID (UEI) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity 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 comply 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 Department of Community Affairs (Department) did not report subaward information timely in accordance with FFATA requirements. Context: Two of three subawards selected for testing were not reported timely. The subawards were issued in February and July 2024 but were not reported until December 2024. The subawards were reported as part of the implementation of the Department’s corrective action plan from the prior audit year. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department had not completed implementation of its corrective action plan from the prior audit year. Effect: Subawards were not reported timely in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the Department complete implementation of its corrective action plan from the prior audit year. It should review procedures and internal controls to ensure that all required subawards are reported timely to SAM.gov no later than the end of the month following the month of issuance or modification. Views of responsible officials: The Department of Community Affairs (DCA) has effectively executed a comprehensive corrective action plan to address and rectify findings related to the Federal Funding Accountability and Transparency Act (FFATA). The issue of late FFATA submissions was originally identified in the Single Audit for fiscal year 2024. In recognition of the overlap, DCA undertook all necessary updates and enhancements to its reporting processes prior to the fiscal year 2025 audit. The findings persisted into fiscal year 2025 due to the inability to make retroactive changes in SAM.gov for past updates. To mitigate this, the department has implemented robust protocols and systems designed to ensure the accuracy and timeliness of future financial disclosures, thereby preventing the recurrence of similar issues.

Reference Number: 2025-006 Prior Year Finding: 2024-009 Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Human Services Federal Program: Temporary Assistance for Needy Families Assistance Listing Number: 93.558 Award Number and Year: 250INJTANF (10/1/2024 – 9/30/2025) 240INJTANF (10/1/2023 – 9/30/2024) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Non-compliance Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. On March 8, 2025, FSRS.gov was retired, and all subaward reporting data and functionality transitioned to SAM.gov after that date. The following key data elements must be reported: Subawardee Name and Unique Entity Identified (UEI); Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity 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 comply 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 Department of Human Services (Department) did not report subaward information as required by FFATA requirements. Context: None of the fourteen subawards selected for testing were reported. The subawards were all issued on 1/1/2025 and they have not been reported as of the time of audit test work. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department did not have procedures or controls in place to ensure that subaward information was reported as required by FFATA requirements. Effect: Subawards were not reported in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the Department develop controls and procedures to ensure that all required subawards are reported accurately and timely to SAM.gov no later than the end of the month following the month of issuance. Views of responsible officials: The New Jersey Department of Human Services’ Division of Family Development (DHD/DFD) has taken significant steps to ensure the effective management of FFATA (Federal Funding Accountability and Transparency Act) data. DHD/DFD has appointed qualified personnel dedicated to the accurate reporting of FFATA information. All appointed personnel have undergone comprehensive training programs designed to equip them with the knowledge and skills required for the accurate entry and maintenance of FFATA data.

Reference Number: 2025-007 Prior Year Finding: 2024-011 Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Human Services Federal Program: CCDF Cluster Assistance Listing Number: 93.575, 93.596 Award Number and Year: G2301NJCCDF (10/1/2022 – 9/30/2025) G2301NJCCDD (10/1/2022 – 9/30/2025) 2401NJCCDD (10/1/2023 – 9/30/2026) 2401NJCCDF (10/1/2023 – 9/30/2026) 2401NJCCDM (10/1/2023 – 9/30/2025) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Non-compliance Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. On March 8, 2025, FSRS.gov was retired, and all subaward reporting data and functionality transitioned to SAM.gov after that date. The following key data elements must be reported: Subawardee Name and Unique Entity Identified (UEI); Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity 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 comply 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 Department of Human Services (Department) did not report subaward information in accordance with FFATA requirements. Context: None of the seven subawards selected for testing were reported. The Department informed auditors that it did not report subawards during FY 2025. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department does not have procedures and controls to ensure that FFATA reporting requirements are met. Effect: Subawards were not reported in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the Department develop internal controls and procedures to ensure that FFATA reporting requirements are met. We further recommend the Department develop controls and procedures to ensure that all required subawards are reported accurately and timely no later than the end of the month following the month of issuance. Views of responsible officials: The New Jersey Department of Human Services’ Division of Family Development (DHD/DFD) has taken significant steps to ensure the effective management of FFATA (Federal Funding Accountability and Transparency Act) data. DHD/DFD has appointed qualified personnel dedicated to the accurate reporting of FFATA information. All appointed personnel have undergone comprehensive training programs designed to equip them with the knowledge and skills required for accurate entry and maintenance of FFATA data. DHD/DFD and its internal units will work in close coordination to manage, review, and validate FFATA submissions.

Reference Number: 2025-008 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Children and Families Federal Program: Social Services Block Grant Assistance Listing Number: 93.667 Award Number and Year: 2300NJSOSR (10/1/2022 – 9/30/2024) 2400NJSOSR (10/1/2023 – 9/30/2025) 2500NJSOSR (10/1/2024 – 9/30/2026) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. On March 8, 2025, FSRS.gov was retired, and all subaward reporting data and functionality transitioned to SAM.gov after that date. The following key data elements must be reported: Subawardee Name and Unique Entity ID (UEI) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity 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 comply 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 Department of Children and Families (Department) did not report subaward information timely in accordance with FFATA requirements. Context: The Department had one subaward subject to FFATA reporting requirements and it was not reported timely. The subaward was issued on 10/1/2023 and it was reported on 6/28/2024, or 211 days late. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: At the time of subaward issuance, the Department’s procedures and controls were not sufficient to ensure that subawards were reported timely in accordance with FFATA requirements. Effect: The subaward was not reported timely. Questioned costs: None noted. Recommendation: We recommend that the Department review procedures and internal controls to ensure that all required subawards are reported timely to SAM.gov no later than the end of the month following the month of issuance or modification. Views of responsible officials: The Department of Children and Families (DCF) will conduct a thorough review of its current procedures to ensure that all required subawards are reported in a timely manner to SAM.gov (System for Award Management). Specifically, DCF will verify that each subaward is reported no later than the end of the month following the month in which the award is issued or upon the allocation of funding to subrecipients. This review will include evaluating existing protocols for subaward reporting to identify any gaps or areas for improvement and implementing regular monitoring and compliance checks to verify that subawards are being reported accurately and timely.

Reference Number: 2025-009 Prior Year Finding: 2024-015 Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Human Services Federal Program: Block Grants for Prevention and Treatment of Substance Abuse, COVID-19 – Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Award Number and Year: 6B08TI085822 (10/1/2022 – 9/30/2024) 1B08TI087054 (10/1/2023 – 9/30/2025) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. On March 8, 2025, FSRS.gov was retired, and all subaward reporting data and functionality transitioned to SAM.gov after that date. The following key data elements must be reported: Subawardee Name and Unique Entity ID (UEI) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity 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 comply 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 Department of Health (Department) did not report subaward information timely in accordance with FFATA requirements. Context: Three of thirteen subaward transactions selected for testing were not reported timely. The subawards were reported to SAM.gov one week to four months late. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department did not establish effective procedures and controls to ensure that subawards were reported timely. Effect: Subawards were not reported timely in accordance with FFATA requirements. Questioned costs: Undetermined. Recommendation: We recommend that the Department review its procedures and controls to ensure that all required subawards are reported to SAM.gov no later than the end of the month following the month of issuance or modification. Views of responsible officials: The Department of Human Services, Division of Mental Health and Addiction Services (DMHAS) does not dispute the FFATA upload dates for three (3) of the thirteen (13) subawards tested, but it disputes that such uploads were untimely. One subaward was uploaded only seven (7) days late. DMHAS submits that it substantially complied, no finding should issue and no corrective action is required in that instance. The two (2) remaining awards at issue were funded with the ARPA Block Grant. On March 24, 2025, U.S. DHHS took unprecedented action and issued a notice of early termination of ARPA funding, purportedly for cause because the Covid-19 health emergency had ended. The notice of early termination and subsequent, revised Notice of Award (NOA), required DMHAS to cease all activities. It also sought to revise the original grant terms, retroactive to the original September 1, 2021 project start date. By way of example, the revised NOA also includes new conditions and certifications required to draw down federal funds. DMHAS complied with the notice of early termination and immediately ceased all activities; it stopped issuing subaward letters, it ceased all subaward uploads into its Contract Information Management System, it stopped all reimbursements, and it stopped all FFATA uploads pending or in process. Also in response to the abrupt early termination of funding, DMHAS issued “stop work” orders to all impacted agencies and advised that there was no assurance of reimbursement as of the effective date of notice. Shortly thereafter, DMHAS joined numerous other State authorities and filed a formal complaint in federal district court, alleging that the early termination was unlawful and caused the States irreparable harm. On April 5, 2025, the court entered a temporary injunction and scheduled a hearing for preliminary injunctive relief. U.S. DHHS moved for reconsideration. Several weeks later, the Court entered a preliminary injunction enjoining the enforcement of the early termination of ARPA until further order of the Court. The cessation of FFATA uploads from the March termination to the receipt of injunctive relief was necessary to: 1. Maintain strict compliance with the revised NOA terms and conditions, including the written obligation to cease all activities; 2. Maintain strict compliance with the revised NOA terms and conditions, by issuing “stop work” orders; 3. Ensuring DMHAS’s “stop work” orders were not superseded by FFATA uploads or USA.Spending publications while the request for injunctive relief was pending, so no individual or entity (including the US Office of the Attorney General, US DHHS, or subawardee) could construe the upload as renewed authority to continue to expend funds through subaward end date; 4. Fully protect the prosecution of DMHAS’s claims in the pending, federal litigation, as well as DMHAS’s defenses; and 5. Mitigate DMHAS and subawardee damages in the underlying litigation. Based on the unprecedented early termination of block grant funding and ensuing litigation, DMHAS submits that the timeline to complete FFATA uploads was stayed. Such determination is consistent with the Court’s preliminary injunction, which makes clear that U.S. DHHS immediately treat any actions taken to implement or enforce the early funding terminations, as null and void and rescinded. Therefore, DMHAS should not be issued a FFATA finding that relates directly to the revised NOAs or the direction to cease all activities, and under these extraordinary circumstances, the uploads in question should be classified as non-reportable and immaterial, with no corrective action required. Auditor Rejoinder: Annually, the Office of Management and Budget issues a Compliance Supplement which is based on the requirements of 31 USC Chapter 75 and 2 CFR Part 200, Subpart F. The Supplement is a document that identifies existing compliance requirements that the federal government expects to be considered as part of an audit required by the 1996 Amendments to the Single Audit Act. The Supplement provides information for auditors to understand Federal program’s objectives, procedures, and requirements subject to the audit. The 2025 Supplement identifies FFATA reporting as applicable to ALN 93.959 – Block Grants for Prevention and Treatment of Substance Abuse. Among the FFATA requirements included in the Supplement, auditors must verify that subawards were reported to SAM.gov 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. It does not include an exception to FFATA reporting deadlines for ALN 93.959. For the three exceptions noted, the subawards were not reported to SAM.gov by the required deadline, resulting in an audit finding.

Reference Number: 2025-010 Prior Year Finding: 2024-016 Federal Agency: U.S. Department of Homeland Security State Agency: Department of Law and Public Safety Federal Program: Disaster Grants - Public Assistance (Presidentially Declared Disasters) Assistance Listing Number: 97.036 Award Number and Year: 066224614PA: 9/5/2021; 066214574PA: 12/11/2020; 066204488PA: 3/13/2020; 066134086PA: 10/30/2012 Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. On March 8, 2025, FSRS.gov was retired, and all subaward reporting data and functionality transitioned to SAM.gov after that date. The following key data elements must be reported: Subawardee Name and Unique Entity ID (UEI) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity 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 comply 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 Department of Law and Public Safety (Department) did not report subaward information timely in accordance with FFATA reporting requirements. Context: Sixteen subawards were selected for testing and the following exceptions were noted: • 1 of 16 subawards selected for testing was not reported until after it was selected for testing by auditors. The subaward was issued in December 2024 but was not reported to SAM.gov until February 2026. • 3 of 16 subawards selected for testing were issued from 2013 through 2023 but were not reported until September and November 2024. • 1 of 16 subawards selected for testing was issued in May 2022 but it was not reported until May 2025. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: In its corrective action plan from the 2024 audit, the Department indicated that it was in full compliance with FFATA reporting requirements as of August 2024, however, the reporting exceptions noted above indicate that the corrective action plan has not been fully implemented. Effect: Subawards were not reported timely in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the Department complete implementation of its corrective action plan from the prior audit and ensure all subawards are reported to SAM.gov. It should review procedures and internal controls to ensure that all required subawards are reported no later than the end of the month following the month of issuance or modification. Views of responsible officials: The Department of Law and Public Safety (DLPS) acknowledges that certain FFATA reports for awards obligated in prior fiscal years were not submitted on time due to technical issues with the FEMA system, which prevented timely reporting. These technical issues have since been resolved. The DLPS has been in full compliance with FFATA reporting requirements since August 2024.