Corrective Action Plans

The joint baord will adopt policy DAF

The audit finding was reviewed with the new assistant superintendent that oversees grants to ensure certifications are completed going forward. The SAU senior leadership team reorganized and moved the grant management responsibiltiies to a member of the senior leadership team.

Management has reviewed the finding above and concurs. A corrective action plan addressing the deficiencies will be completed and submitted within 60 days of the report.

Management has reviewed the finding above and concurs. A corrective action plan addressing the deficiencies will be completed and submitted within 60 days of the report.

The Finance Department Managemetn will implement policies to ensure timely financial reporting and esnure the timely completion of an audit. The city expects to have these issues addressed by June 30, 2026. The responsible party is Patrick Williams, Chief Accountant

CORRECTIVE ACTION PLANS Oversight Agency for Audit: U.S. Department of the Treasury The City of Haverhill, Massachusetts respectfully submits the following corrective action plans for the year ended June 30, 2024. Name and address of the independent public accounting firm: CBIZ CPAs P.C. 9 Executive Park Drive, Suite 100 Merrimack, NH 03054 Audit Period: July 1, 2023, through June 30, 2024 The findings from the June 30, 2024, schedule of findings and responses are discussed below. The findings are numbered consistently with the number assigned in the schedule. Finding 2024-005: Improve Controls and Documentation Over Allowability of Costs Federal Agency: U.S. Department of Education Award Name(s): Twenty-First Century Community Learning Centers Assistance Listing Number(s): 84.287, 84.287C Award Year: 2023, 2024 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Compliance Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement: Grantees must provide reasonable assurance that federal awards are expended only for allowable activities and that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles. Management of the City is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. The Code of Federal Regulations Section 200.403(g) states that for costs to be allowable under Federal awards, they must be adequately documented and there must be sufficient documentation. Condition and Context: A sample of payroll expenditures were tested in order to determine if costs were allowable and adequately approved. As a result of our testing, it was determined that one payroll transaction had no timesheet approval, and one payroll transaction was self-approved. Payroll expenditures charged to the programs are required to be supported with documentation substantiating that the employees are eligible to be charged to the grant and that the payroll charged relates to time spent accomplishing grant objectives. This supporting documentation should be standardized and should include all required elements in accordance with applicable cost principles. Cause: The City did not have adequate controls in place to provide sufficient documentation to demonstrate compliance with federal and state time and effort reporting requirements. Effect or Potential Effect: Due to the weakness in internal controls and compliance noted above, there is a risk that amounts charged to federal awards may not be allowable or in accordance with applicable cost principles. Questioned Costs: Due to the condition noted above, we were unable to determine if the costs charged to the applicable grants are allowable. AL Number(s) Name of Federal Program or Cluster Questioned Costs 84.287, 84.287C Twenty-First Century Community Learning Centers $5,450 Recommendation: Management should enhance procedures and controls in place over the time and effort reporting and documentation requirements that department heads must adhere with to ensure compliance with federal and state time and effort reporting requirements. Views of Responsible Official: The School Department recognizes the weaknesses identified in grants management, as well as in the approval and allocation of allowable costs. To address these issues, the School Department has recently hired a new Business Manager/Chief Financial Officer (CFO). This individual is responsible for implementing appropriate internal controls that align with Best Practices, particularly in key areas such as invoice approval, payroll approval, grants management, and procurement compliance. To ensure ongoing improvement, training will be provided continuously for all staff members responsible for managing federal grants. This training will include; • Procedures to reconcile internal records with federal and state reports. • Maintain a process to ensure that costs charged to grants are allowable, necessary and reasonable, and properly allocated, and that these determinations are made in a consistent manner. • Determine whether indirect costs will be allocated to grant programs, and if so, maintain an appropriate process to make the allocation. • Maintain a process to track information about local matching funds, including identification of the source of such funds. • Identify and segregate costs as necessary for the grant (e.g., separate allowable and unallowable costs, separate direct costs from indirect costs, and separate administrative costs. • Account for and track grant-funded capital items. • Document grant procedures. • Maintain a comprehensive list of reporting requirements and a reminder system for meeting the reporting deadlines. • Identify who is responsible for the various reporting requirements. • Establish methodologies for the preparation of specialized reports. • Establish processes for obtaining all of the information needed for the Schedule of Expenditures of Federal Awards (SEFA). • Develop and document an understanding of audit requirements specific to grants, including those in Generally Accepted Government Auditing Standards (GAGAS), Generally Accepted Auditing Standards (GAAS), and Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). • Develop and document an understanding of audit requirements for grant close-outs. • Report if any process or internal control issues identified were resolved.

CORRECTIVE ACTION PLANS Oversight Agency for Audit: U.S. Department of the Treasury The City of Haverhill, Massachusetts respectfully submits the following corrective action plans for the year ended June 30, 2024. Name and address of the independent public accounting firm: CBIZ CPAs P.C. 9 Executive Park Drive, Suite 100 Merrimack, NH 03054 Audit Period: July 1, 2023, through June 30, 2024 The findings from the June 30, 2024, schedule of findings and responses are discussed below. The findings are numbered consistently with the number assigned in the schedule. Finding 2024-004: Improve Controls and Documentation Over Allowability of Costs Federal Program Information Federal Agency: U.S. Department of Education Award Name(s): Title I Grants to Local Educational Agencies Assistance Listing Number(s): 84.010 Award Year: 2023, 2024 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Award Name(s): COVID-19 – Education Stabilization Fund Assistance Listing Number(s): 84.425 Award Year: 2022 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Award Name(s): Twenty-First Century Community Learning Centers Assistance Listing Number(s): 84.287, 84.287C Award Year: 2023, 2024 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Award Name(s): Special Education Cluster Assistance Listing Number(s): 84.027, 84.173 Award Year: 2023 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Compliance Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement: Grantees must provide reasonable assurance that federal awards are expended only for allowable activities and that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles. Management of the City is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. The Code of Federal Regulations Section 200.403(g) states that for costs to be allowable under Federal awards, they must be adequately documented and there must be sufficient documentation. Condition and Context: A sample of invoices were tested in order to determine if costs were allowable and adequately approved. As a result of our testing, it was determined that invoices were not approved for two transactions in the Title I Grants to Local Educational Agencies program and three invoices in the COVID-19 Education Stabilization Fund program. In addition, invoices were not able to be provided for three invoices in the COVID-19 Education Stabilization Fund program, one invoice in the Twenty-First Century Community Learning Centers program, and one invoice in the Special Education Cluster. Cause: The City did not have adequate controls in place to ensure invoices were properly approved and retained. Effect or Potential Effect: Due to the weakness in internal controls and compliance noted above, there is a risk that amounts charged to federal awards may not be allowable or in accordance with applicable cost principles. Questioned Costs: Due to the condition noted above, we were unable to determine if the costs charged to the applicable grants are allowable. AL Number(s) Name of Federal Program or Cluster Questioned Costs 84.010 Title I Grants to Local Educational Agencies $82,488 84.425 COVID-19 Education Stabilization Fund $136,876 84.287, 84.287C Twenty-First Century Community Learning Centers $1,305 84.027/84.173 Special Education Cluster $1,945 Recommendation: The City should enhance internal controls over the invoice approval and retention process in order to provide reasonable assurance that federal award transactions are allowable and in accordance with the applicable cost principles. Views of Responsible Official: The School Department recognizes the weaknesses identified in grants management, as well as in the approval and allocation of allowable costs. To address these issues, the School Department has recently hired a new Business Manager/Chief Financial Officer (CFO). This individual is responsible for implementing appropriate internal controls that align with Best Practices, particularly in key areas such as invoice approval, payroll approval, grants management, and procurement compliance. To ensure ongoing improvement, training will be provided continuously for all staff members responsible for managing federal grants. This training will include; • Procedures to reconcile internal records with federal and state reports. • Maintain a process to ensure that costs charged to grants are allowable, necessary and reasonable, and properly allocated, and that these determinations are made in a consistent manner. • Determine whether indirect costs will be allocated to grant programs, and if so, maintain an appropriate process to make the allocation. • Maintain a process to track information about local matching funds, including identification of the source of such funds. • Identify and segregate costs as necessary for the grant (e.g., separate allowable and unallowable costs, separate direct costs from indirect costs, and separate administrative costs. • Account for and track grant-funded capital items. • Document grant procedures. • Maintain a comprehensive list of reporting requirements and a reminder system for meeting the reporting deadlines. • Identify who is responsible for the various reporting requirements. • Establish methodologies for the preparation of specialized reports. • Establish processes for obtaining all of the information needed for the Schedule of Expenditures of Federal Awards (SEFA). • Develop and document an understanding of audit requirements specific to grants, including those in Generally Accepted Government Auditing Standards (GAGAS), Generally Accepted Auditing Standards (GAAS), and Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). • Develop and document an understanding of audit requirements for grant close-outs. • Report if any process or internal control issues identified were resolved.

Management agrees and will develop review procedures to respond to the findings.

Management agrees with the finding and will work with the City of San Antonio to correct the issue, and develop review procedures to respond to the finding.

Management agrees and will develop review procedures to respond to the findings.

Finding 2024-03 Insufficient Documentation Supporting Payroll Activity Condition: During testing of payroll claims, we noted that the Organization did not consistently maintain documentation of approved pay rates. Some employees had offer letters on file, while others did not. In certain cases, the offer letters on file contained pay rates that did not match the actual pay rates being paid. Although our procedures and inquiries confirmed that employees were paid the correct amounts in accordance with approved procedures, the approved documentation was not consistently retained. In addition, we noted that the Organization did not maintain properly completed and approved I-9 forms for all employees during the year. Corrective Actions Taken or Planned: The organization recognizes the importance of maintaining complete and accurate payroll documentation and acknowledges the deficiencies identified during the audit. While payroll payments were made accurately, we recognize that inconsistent retention of supporting documentation created a compliance risk. Certain documentation had been maintained in digital form by a former staff member. Due to staff turnover, these records were not readily accessible or able to be located during the audit period. Management has since initiated a process to update all employee files with current, complete, and properly executed documentation to ensure compliance and improve recordkeeping practices. Management and leadership remain committed to strengthening personnel file management, maintaining all required documentation in accordance with applicable regulations, and reinforcing oversight to prevent recurrence in future audit periods. The Organization plans to execute the following: 1. Standardization of Employee Files - The Organization has implemented a standardized checklist for all employee personnel files to ensure the presence of: + Signed offer letters with approved pay rates + Completed and verified I-9 forms + Any subsequent pay rate change approvals - Co-Executive Directors will be required to complete and sign the checklist for each employee file upon hire, and again during annual compliance reviews. 2. Offer Letter and Pay Rate Documentation - Effective immediately, all employees (existing and new) will have a signed offer letter or addendum on file reflecting their current pay rate. - For employees where discrepancies exist between historical offer letters and current pay, updated pay rate addendums will be drafted, signed by both employee and management, and placed in their personnel files. 3. I-9 Form Compliance - The organization will perform a full review of all current employee I-9 documentation to identify and correct any missing or incomplete forms. - Going forward, I-9 forms will be completed and verified on or before the employee’s first day of work, in accordance with federal requirements. - An annual HR compliance audit will be conducted to ensure all I-9’s are up to date and retained properly. 4. Training & Accountability - Administrative staff will receive refresher training on employment documentation requirements, including I-9 compliance and payroll authorization documentation. - The Co-Executive Directors will review a sample of personnel files quarterly to verify compliance and hold Co-Executive Directors accountable for maintaining accurate documentation. To ensure continued compliance, the Organization will maintain a centralized file tracking system, updated quarterly, and report results to the Board. Corrective actions will be taken immediately if gaps are identified.

Finding 2024-02 Failure to Follow Procurement Policy Condition: The Organization maintains a procurement policy that establishes spending thresholds and outlines the requirements for obtaining rate quotations at each of these levels. During audit procedures, it was noted that the Organization did not follow the policy’s requirements for obtaining and documenting rate quotations for two of the transactions reviewed. The Organization explained that the vendor was considered a unique partner, and competition was intentionally limited based on the specialized nature of the services provided. However, no documentation was retained to justify this decision to limit competition, as required by federal procurement standards. The absence of such documentation resulted in questioned costs for these transactions. Corrective Actions Taken or Planned: Prior to the award of ARPA grant funding in 2023, The Organization did not have a formal procurement policy in place. Implementation of such a policy was required to receive the award. At the time of implementation, however, partnerships had already been established and were identified in the original grant proposal. With respect to legal services, the Organization engaged the two primary organizations in Indianapolis that provide expungement assistance. Indiana Legal Services (“ILS”) was the first entity contacted, but after multiple attempts, no response was received from the designated point of contact. Subsequently, the Organization engaged another nonprofit organization, which responded promptly and agreed to serve as a partner under the grant. For grant compliance services, the Organization engaged a third party. This decision was based on recommendations from community partners, as well as her demonstrated work quality, professional reliability, and commitment to serving the target population. The Organization plans to execute the following: 1. Immediate Remediation - For the two transactions in question, the Organization will prepare and retain retroactive documentation outlining the rationale for limiting competition, citing the vendor’s unique qualifications and specialized services. This documentation will be added to the procurement files to ensure transparency and compliance. 2. Procurement Policy Enforcement - The Organization will reinforce its procurement policy with staff responsible for purchasing, emphasizing the following requirements: - Obtain and document at least three rate quotations when required. - When limiting competition, prepare a written justification memo explaining the rationale (e.g., sole source, specialized expertise, emergency procurement). - Retain all procurement documentation in a centralized file accessible for future audits. 3. Documentation Standardization - A Procurement Justification Form will be developed for instances where competition is intentionally limited. This form will include: + Vendor name and description of services + Reason competition is limited (sole source, unique expertise, etc.) + Approval signatures from both the requesting program lead and the Co-Executive Director - This form will be required for all procurements exceeding the competitive threshold where quotations are not obtained. 4. Staff Training - The Organization will provide refresher training to all staff involved in procurement to ensure they fully understand documentation requirements under both organizational policy and federal standards. - Training will specifically address scenarios involving sole source or unique vendor selections. 5. Oversight & Monitoring - All procurements exceeding $5,000 will require review and approval by the Board. - Quarterly internal audits will be performed by the Finance Manager to ensure procurement files include proper quotations or justification forms. The Board will receive quarterly procurement compliance reports from the Finance Manager. Any deviations will be documented and addressed immediately. Progress will be tracked as part of the Organization’s annual internal control review.

Management’s Response/Corrective Action Plan (Unaudited): The City acknowledges the finding and is committed to strengthening internal controls over compliance for the review and approval of grant-related expenditures. Effective immediately, the City implemented the following corrective measures: 1. Formalized Invoice Review and Approval Process o All grant-related invoices to undergo documented review and approval before the preparation and disbursement of funds. o The procedure will require reviewers to sign and date each invoice (either physically or electronically) to provide a verifiable audit trail. 2. Assignment of Review Responsibility o Designate a primary reviewer and a backup reviewer within the Finance Department to ensure continuity of compliance in the event of staffing turnover. o Review responsibility will be incorporated into the official job descriptions of these positions. 3. Training and Staff Development o Conduct mandatory training for all finance and grant administration personnel on the disbursement review process, compliance requirements under 2 CFR 200.303, and documentation retention protocols. o Training will be provided within 30 days of hire for all new staff assigned to the process. 4. Periodic Monitoring and Quality Checks o Implement quarterly internal reviews by the Finance Director (or designee) to verify adherence to the review and approval process. o Findings from these internal reviews will be documented and corrective steps taken promptly if deficiencies are noted. Planned Completion Date: Implementation and training of this plan is complete. Contact Person Responsible for Correction Action: Finance Director

Recommendation: We recommend the Organization establish policies and procedures to ensure adequate internal controls over the drawdown process of federal awards. Prior to submission of drawdown, supporting schedules and reports are reviewed by the Executive Director or appropriate management personnel. Plan: All federal draw down requests will be preceded by a revenues and expenses report provided to the Executive Director and the program manager for their review prior to draw down of the funds through any related portals. Person Responsible: Program Manager and Executive Director Plan Implementation: 9/30/2025 Status: Implemented

The Organization will implement the following corrective actions for the fiscal year ending June 30, 2024 to remediate the finding and address the cause of the finding. The Organization has hired staff with higher technical accounting skills than the previous staff. The following staff have been hired full-time or will be hired soon: Payroll and Benefits Specialist, Grant Accountant, Senior Staff Accountant, Accounts Payables and Receivables Specialist, and a Purchasing Specialist. • The Organization’s Human Resources has implemented quarterly audits on all new staff to verify each new staff member hired within the last year has a signed employee offer and appropriate backup support to support each employee’s annual salary. • The Organization has implemented a new accounting system – Sage Intacct. Additionally, we have implemented a grants project tracking module to better help with grants and contracts reporting and compliance. • The Organization has implemented a new payroll and human resources IT solution – UKG. All manual and onboarding processes have been implemented within the system for tracking and auditing purposes. • The Organization will implement an established month-end checklist for all monthly entries to be completed by assigned finance staff. We will ensure that all staff are trained adequately to handle any assigned task. All monthly entries are required to be reviewed and approved by the Chief Financial Officer prior to posting to the general ledger within our new Accounting Software. All appropriate backup documentation will be saved and stored within the accounting software. • All grant related year-end audit procedures has been transitioned to the Grant Accountant who has experience with audits, compliance, and reporting for City, State, and Federal grants. • The Organization has documented accounting policies and procedures to reflect the new month-end processes and provide training to staff on current and future policies. • The Organization will ensure that Finance personnel receive a minimum of twenty-five (25) hours of training annually of relevant accounting topics including updates to generally accepted accounting principles, generally accepted government accounting principles, nonprofit and governmental financial reporting, and other related accounting trainings. • The Organization will ensure that any personnel involved in financial reporting have the technical expertise to help with the preparation, review, and analysis of the financial statements and supplementary information. The target date for implementation is April 2025. The responsible party for the planned resources will be Raheel Shahzad, Chief Financial Officer (708) 288-7897. Our address is 340 E. 51st St., Chicago, IL 60615.

The City agrees with this finding. Having recognized this deficiency prior to commencement of this audit, the City implemented additional internal review requirements during FY25.

Strengthen compliance efforts and mitigate risk, staff will consult a qualified third-party professional before executing any transaction that may be unallowable, ensuring adherence to funding. If unallowable expenses are identified, staff will quickly coordinate with the appropriate state agency to resolve issue.

Corrective action the auditee plans to take in response to the finding: The City will take the following corrective actions: 1. Enforce Policy 2021-05 – Staff will be required to follow existing procurement policy provisions for federally funded contracts. 2. Verification Procedures – For all federally funded contracts of $25,000 or more, the City will verify and document contractor status through: o Written contractor certifications, and/or o Inclusion of suspension/debarment clauses in contracts, and/or o Review of contractor status in SAM.gov before award. 3. Recordkeeping – The Clerk/Treasurer’s office will maintain centralized records of all verification documentation. 4. Staff Training – Finance and Public Works staff will receive refresher training on Policy 2021-05 and federal procurement requirements. 5. Oversight – The City Administrator will conduct quarterly reviews of procurement files to confirm compliance. Anticipated date to complete the corrective action: • Centralized documentation – Implemented immediately for all new federally funded contracts. • Staff training – To be completed by December 31, 2025 • Quarterly oversight reviews – Beginning Q1 2026.

Finding 2024-004: Name of Contact Person: Meagan O’Neal Management Response: The new Finance Director, hired in October 2023, immediately began reviewing staff assignments to analyze for improvements in efficiency while keeping separation of duties secure, while also completing the FY23 audit. This review allowed restructuring tasks to improve efficiency and the ability to set up new processes. The finance director has utilized help from NC Association of County Commissioner staff as well as UNC School of Government courses to continue to update processes and improve upon the quality of data provided. The occurrence of Hurricane Helene and the Spring wildfires in Transylvania County impacted staff capacity to complete the FY24 audit however now that it is complete we will be diligently working to have FY25 information submitted quickly. Notes have been added to the process documents to ensure all steps are taken when submitting the data collection form to the Federal Audit Clearinghouse once future audits are completed by the firm. Proposed Completion Date: Immediately.

Corrective action planned: In reviewing audit finding 2024-001, it was determined that the primary cause for the misapplication of the sliding fee was the need for increased training and oversight. One Health has since taken steps to enhance sliding fee policy and procedure training for all staff, with a focus on Intake and Patient Financial Services staff. One Health also intends to review individual performance of staff by implementing peer and supervisory audits of sliding fee scale applications and data entry. Identification of consistent errors has led to enacting accountability measures to allow for additional coaching and follow-up. Additionally, One Health has reviewed EMR processes and functionality to ensure ease and clarity of data entry to eliminate opportunities for human error. Anticipated completion date: December 31, 2025 Contact person responsible for corrective action: Emily Faricy Associate Vice President - Finance

Management’s Response/Corrective Action Plan (Unaudited): Management acknowledges the finding. For the transaction tested, the original contract was approved in 2021, and we initially intended to use the general fund as a source of payment. The City has reviewed and updated its procedures to require that documentation behind the analysis of the type of procurement steps be saved in the contract file. Staff will be retrained on these requirements to ensure documentation is consistently maintained for all covered transactions in accordance with federal guidelines. Planned Completion Date: These modifications are being implemented immediately. Contact Person Responsible for Correction Action: Finance Director

The Town of Jonesboro acknowledges this audit finding and concurs with the conclusion that a duplicate payment occurred in connection with the use of $53,786 in funds from the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program. The duplicate payment resulted from the same expenditure being reimbursed by a second federal program that was not designated as a major program. While this incident was unintentional and due to a lack of centralized grant tracking at the time, the Town has taken corrective action to prevent such issues from occurring in the future. Specifically: 1. Implementation of a Grant Award Management System: The Town is currently deploying a formal grant tracking and reconciliation system that will provide centralized oversight of all grant awards, expenditures, and reimbursements. This system is designed to prevent overlapping or duplicative claims across funding sources and will be supported by enhanced documentation and review protocols. 2. Internal Controls and Policy Enhancements: In response to this finding, the Town has updated its grant management policies and internal accounting procedures to include specific verification steps prior to submitting reimbursement requests. These policies now require: o Cross-checking all grant reimbursements against prior or pending claims, o Documenting funding source allocation for each expenditure, o Requiring dual review by finance and grants administration staff. 3. Staff Training and Grant Oversight: Personnel involved in grant administration and finance have received and will continue to receive training on federal allowable cost principles under 2 CFR Part 200, Subpart E. The Town is committed to maintaining compliance with all federal funding requirements and is actively working to reinforce accountability and transparency in its use of public funds. The Town will coordinate with the appropriate federal and state authorities to resolve any remaining discrepancies and, if necessary, return funds that have been deemed ineligible or duplicated.

2024-002 Improve Controls and Documentation Over Reporting (Material Weakness – Compliance, Internal Control over Compliance) “During our testing of a sample of two of the quarterly expenditure reports utilizing the Governor’s Office for Emergency Relief and Recovery (GOFERR) funding, we noted the following issues: • The Q1 report included $2,534,152 of expenditures that were attributable to a subsequent period as well as a typographical error in the cumulative total expenditure amount; • The Q2 report included $8,636,710 in duplicative expenditures that were also reported in Q1 as well as a typographical error in the cumulative total expenditure amount; and • Formula discrepancies were noted in both Q1 and Q2 reports, resulting in inaccurate calculations. During our testing of the annual project and expenditure report under the direct portion of ARPA funding we noted a material discrepancy between cumulative expenditures per the general ledger and the amount reported of $94,749. The County attributed these discrepancies to a transition to a new summary process designed to increase reporting efficiency. All reported expenditures were valid and appropriately documented based on testing over allowable costs.” Manager’s Statement of Concurrence or Nonconcurrence: The County recognizes there was discrepancy identified between the GOFERR reporting for the ARPA funding and the County’s general ledger. The discrepancy was a result of changes in reporting requirements and data entry errors that did not reflect an actual discrepancy of project costs or missing funds. The issue was used as an opportunity to improve the County’s internal financial tracking by having the Finance Department support the Facilities and Operations Department with an added reconciliation process to verify the reporting is accurate. The reporting requirements have been better clarified since the inception of the reporting model and seems more stabilized. Corrective Action: The worksheet used to track and calculate the data has been updated. Where possible, formulas have been simplified and streamlined to better match the reporting requirements and use corrected timeframes. The remnant data from earlier iterations that catered to earlier requirements, or understanding of those requirements has been removed. When general ledger data entry requests are delivered to the Finance Department they will be accompanied by the worksheet as supporting documentation so that an added reconciliation may be performed.

Finding ref number: 2024-001 Finding caption: The District did not have adequate internal controls and did not comply with federal requirements for allowable activities. Name, address, and telephone of District contact person: Jennifer Larson, Executive Director of Finance 124 E. Lawrence Street Mount Vernon, WA 98273 360-428-6110 Corrective action the auditee plans to take in response to the finding: The district concurs with the finding and has taken corrective action. The employee referenced in the findings is no longer employed by the district. Throughout the months-long investigation performed by OSPI, the district worked to implement changes in our internal controls to ensure strong oversight of Migrant Education Program (MEP) grant compliance, including the eligibility determination process. Changes to internal controls include: • A monthly audit of the families who were visited that month. • A trained program recruiter will conduct the eligibility interviews and home visits. • Recruiter will work with regional trained recruiter for support. • A spot check audit of students determined to be eligible district program director. • Monthly logs from staff identifying students they worked with and services provided. • Monthly meetings between MEP district director and MEP regional program manager to ensure ongoing grant compliance. • Monthly meetings with MEP Parent Advisory Committee for ongoing feedback of services provided. • Appropriate staff including the program director are required to attend Migrant grant training provided by OSPI. We thank OSPI and the Washington State Auditor’s Office for their work and collaboration. We will continue regular monitoring of the Migrant Education Program in the Mount Vernon School district to ensure compliance with all program requirements and only eligible students are being served. Anticipated date to complete the corrective action: August 31, 2025

Finding Number: 2024‐001 Federal Program Name: Federal Transit Cluster Assistance Listing Numbers: 20.507, 20.526 State Program Names: State Urbanized Area Formula Program; State Formula Grants for Rural Areas Contact Person: Ted Ross, Executive Director Updated Corrective Action Plan: The District continues to strengthen its grant management framework through policy development and improved procedures. Actions to include: Improved documentation of grant expense allocation Updated purchasing procedures consistent with federal and state compliance expectations Enhanced tracking of expenditures to specific programs and funding streams These measures have been incorporated into the district’s comprehensive Finance and Administration Policy, with staff training to be ongoing. Certification The Gulf Coast Transit District affirms that all corrective actions noted above are actively corrected or are being addressed. Additional documentation or clarification will be provided to auditors upon request.