Corrective Action Plans

Finding 1205191 (2025-004)

Material Weakness 2025

VA

Procurement, Suspension & Debarment Allowable Costs / Cost Principles

March 19, 2026 Greg Lunsford, Town Manager, respectfully submits the following corrective action plan for the year ended June 30, 2025. Name and address of independent public accounting firm: Brown, Edwards & Company, L.L.P. 1909 Financial Drive Harrisonburg, VA 22801 Audit period: June 30, 2025 The...

March 19, 2026 Greg Lunsford, Town Manager, respectfully submits the following corrective action plan for the year ended June 30, 2025. Name and address of independent public accounting firm: Brown, Edwards & Company, L.L.P. 1909 Financial Drive Harrisonburg, VA 22801 Audit period: June 30, 2025 The findings from the June 30, 2025 Schedule of Findings and Questioned Costs (the "Schedule") are discussed below. The findings are numbered consistently with the number assigned in the Schedule. Findings - Financial Statement Audit 2025-001: Material Audit Adjustments (Material Weakness) Condition During the audit, we detected material misstatements in the trial balance. Generally accepted auditing standards dictate that detection of errors in an audit is a strong indicator of a significant deficiency or material weakness. Accordingly, we are required to communicate this finding as such. Criteria The financial statements must be presented fairly, in all material respects. Cause The Town does not have a formal process for annual and monthly entries. Effect The financial information presented to us for the audit was missing or inaccurate. Recommendation We recommend that management implement processes to ensure accuracy of accounts. View of The Treasurer has drafted a Monthly Close Process and has been following it each month Responsible without fail. This has provided the opportunity to find errors and get them corrected in a Officials timely manner, which alleviates issues during the audit review. 2025-002: Segregation of Duties {Material Weakness) Condition Multiple duties in a transaction cycle are performed by the same individual. Consequently, errors or irregularities may occur and not be detected. Criteria Ideally, no individual would perform more than one duty in connection with any transaction or series of transactions. In particular, no one individual should have access to both physical assets and the related accounting records. Cause Incompatible duties and the limited number of staff. Effect A lack of separation of duties could allow error or fraud to go undetected. Recommendation While we understand that limited staff can make this difficult, controls should be in place to mitigate the risk. We have suggested specific controls in a separate communication. View of This continues to be a work in progress. The Treasurer has divided up the duties among her Responsible employees. Now one employee is processing the utility bills and two other employees are Officials collecting/inputting payments. 2025-003: Annual and Monthly Close Process (Material Weakness) Condition The Town does not have a complete monthly or annual close process in place that accurately reflects all needed adjustments. Criteria Each period should be closed to properly reflect accruals or other transactions not previously recorded to ensure the period reporting is materially correct. Cause The annual and monthly close process does not currently capture adjustments needed for all accruals. Effect Material audit adjustments were required. Recommendation We recommend the Town improve a monthly and annual close process to ensure financial records are accurate and complete. View of The Treasurer has drafted a Monthly Close Process and has been following it each month Resp onsi ble without fail. This has provided the opportunity to find errors and get them corrected in a Officials timely manner, which alleviates issues during the audit review. The Treasurer is also drafting an Annual Close Process that will assist with collecting information for review by the auditing firm. Findings and Questioned Costs - Major Federal Award Programs Audit 2025-004: Federal Procurement Policies Condition The policy created in 2024 specific to the federal awards cost principle requirements under Uniform Grant Guidance is not compliant. Criteria Federal award recipients must have written policies, procedures, and standards of conduct as required by 2 CFR 200, Subparts D and E. Cause Certain required policies under 2 CFR 200, Subparts D and E are not present. Effect Lack of compliant policies may create noncompliance with regulations as stated requirements may not be followed. Recommendation Develop compliant procurement policy that meets federal st an dards . View of The Treasurer will review the Policy and submit recommended edits to the Town Council for Responsible review and approval. Officials If the Federal Audit Clearinghouse has questions regarding this plan, please call Donna Curry, Treasurer at 540-298-1951.

View Audit 396850

Finding 1205150 (2025-032)

Material Weakness 2025

State of Arkansas

AR

Allowable Costs / Cost Principles Eligibility Special Tests & Provisions

Views of Responsible Officials and Planned Corrective Action: Views of Responsible Officials and Planned Corrective Action: DHS concurs with this finding. For Sample Items 3, 5, 30, 37, and 40, DMS is currently developing system upgrades that will establish a revalidation date that is 60 days prior ...

Views of Responsible Officials and Planned Corrective Action: Views of Responsible Officials and Planned Corrective Action: DHS concurs with this finding. For Sample Items 3, 5, 30, 37, and 40, DMS is currently developing system upgrades that will establish a revalidation date that is 60 days prior to the revalidation expiration date and auto-terminate providers at the time of their revalidation expiration date if they have not successfully completed the revalidation process. For Sample Item 24, DMS is currently developing a system change to reinstitute revalidation requirements for Early Intervention Day Treatment and Adult Developmental Day Treatment providers. Anticipated Completion Date: 6/30/2026 Contact Person: Name: Elizabeth Pitman Title: Director, Division of Medical Services Agency: Department of Human Services Address: 700 Main Street City, State, Zip: Little Rock, AR 72201 Phone Number: 501-244-3944 Email Address: Elizabeth.Pitman@dhs.arkansas.gov

View Audit 396807

Finding 1205145 (2025-027)

Material Weakness 2025

State of Arkansas

AR

Allowable Costs / Cost Principles Eligibility Special Tests & Provisions

Finding Number: 2025-027 ALN Number(s) and Program Title(s): 93.767 – Children’s Health Insurance Program Views of Responsible Officials and Planned Corrective Action: DHS concurs with this finding. For Sample Items 8, 11, and 28, DMS is currently developing system upgrades that will establish a rev...

Finding Number: 2025-027 ALN Number(s) and Program Title(s): 93.767 – Children’s Health Insurance Program Views of Responsible Officials and Planned Corrective Action: DHS concurs with this finding. For Sample Items 8, 11, and 28, DMS is currently developing system upgrades that will establish a revalidation date that is 60 days prior to the revalidation expiration date and auto-terminate providers at the time of their revalidation expiration date if they have not successfully completed the revalidation process. For Sample Item 30, a site visit has been completed for the provider. The process used for completion of site visits has been updated to address the cause for the delayed site visit. For Sample Item 12, DMS has implemented a system change to electronically collect information contained on the W-9 form which will eliminate the need for provider to submit the form. DHS is in the process of promulgating this policy change. Anticipated Completion Date: 6/30/2026 Contact Person: Name: Elizabeth Pitman Title: Director, Division of Medical Services Agency: Department of Human Services Address: 700 Main Street City, State, Zip: Little Rock, AR 72201 Phone Number: 501-244-3944 Email Address: Elizabeth.Pitman@dhs.arkansas.gov

View Audit 396807

Finding 1205138 (2025-020)

Material Weakness 2025

State of Arkansas

AR

Student Financial Aid Subrecipient Monitoring Allowable Costs / Cost Principles

Finding Number: 2025-020 ALN Number(s) and Program Title(s): 93.658 – Title IV-E Foster Care Views of Responsible Officials and Planned Corrective Action: DHS concurs with this finding. The reconciliation process will be revised to specify steps to identify clients that are eligible to receive Title...

Finding Number: 2025-020 ALN Number(s) and Program Title(s): 93.658 – Title IV-E Foster Care Views of Responsible Officials and Planned Corrective Action: DHS concurs with this finding. The reconciliation process will be revised to specify steps to identify clients that are eligible to receive Title IV-E funding and the process to update their IV-E status. The agency could not make the necessary corrections in AASIS when notified of the deficiency due to the expenses being posted in the prior fiscal year. All necessary adjustments will be made on the quarterly report for the period ending on 3/31/26. Anticipated Completion Date: 4/30/26 Contact Person: Name: Tiffany Wright Title: Director, Division of Children and Family Services Agency: Department of Human Services Address: 700 Main Street City, State, Zip: Little Rock, AR 72201 Phone Number: 501-396-6477 Email Address: Tiffany.Wright@dhs.arkansas.gov

View Audit 396807

Finding 1205130 (2025-016)

Material Weakness 2025

State of Arkansas

AR

Subrecipient Monitoring Allowable Costs / Cost Principles § 200.332

Finding Number: 2025-016 ALN Number(s) and Program Title(s): 21.029 – Coronavirus Capital Project Funds Views of Responsible Officials and Planned Corrective Action: ASBO acknowledges the auditor’s observation regarding the sequencing of the technical close-out letter and subsequent expenditures for...

Finding Number: 2025-016 ALN Number(s) and Program Title(s): 21.029 – Coronavirus Capital Project Funds Views of Responsible Officials and Planned Corrective Action: ASBO acknowledges the auditor’s observation regarding the sequencing of the technical close-out letter and subsequent expenditures for one project. ASBO respectfully clarifies that a Technical Close-Out Letter reflects that the primary network infrastructure has been constructed and service capability established. It does not necessarily signify final project completion for all eligible cost components under the grant agreement. Project completion for reporting purposes occurs upon final reporting to the U.S. Department of the Treasury. In October 2025, the subrecipient requested approval to perform additional network equipment upgrades using remaining grant funds. ASBO obtained written confirmation from the U.S. Department of the Treasury Senior Federal Program Officer that the identified OLT upgrade constituted an eligible network component necessary to deliver service and was not maintenance. No additional grant funds were awarded for this work; the proposal involved remaining grant balances. It should be noted that as of the date of audit review, no expenses had been incurred related to the proposed upgrade. As such, ASBO does not concur that the identified $2,096,990 represents ongoing maintenance costs or unallowable expenditures. In fact, all reimbursements to date include eligible network build-out costs incurred prior to “technical closeout” but financially processed after that date, or fiber-to-the-home (FTTH) drops. FTTH drops have been an allowable expense in the Arkansas CPF Program following technical closeout yet prior to reporting the project complete to U.S. Treasury. The misclassification of these costs as maintenance appears to stem from an assumption that they were related to the proposed network upgrade, when in actuality, they were not. To avoid ambiguity in future projects, ASBO will formalize procedures clarifying the distinction between technical close-out, formal project completion, and eligible use of remaining funds. Any Treasury-approved scope clarifications or post-close-out adjustments will be formally documented prior to reimbursement to ensure alignment between technical certification and financial reporting. Anticipated Completion Date: June 30, 2026 Contact Person: Name: Glen Howie Title: State Broadband Director Agency: Arkansas State Broadband Office Address: 1 Commerce Way City, State, Zip: Little Rock, AR 72202 Phone Number: 501-683-6000 Email Address: broadband@arkansas.gov

View Audit 396807

Finding 1205126 (2025-012)

Material Weakness 2025

State of Arkansas

AR

Subrecipient Monitoring Allowable Costs / Cost Principles § 200.332

Finding Number: 2025-012 ALN Number(s) and Program Title(s): 21.029 – Coronavirus Capital Project Funds Views of Responsible Officials and Planned Corrective Action: ASBO acknowledges the auditor’s observation regarding the execution of subaward agreements with ISP entities that are wholly owned sub...

Finding Number: 2025-012 ALN Number(s) and Program Title(s): 21.029 – Coronavirus Capital Project Funds Views of Responsible Officials and Planned Corrective Action: ASBO acknowledges the auditor’s observation regarding the execution of subaward agreements with ISP entities that are wholly owned subsidiaries of electric cooperatives and the related affiliate payment structure. Subaward agreements were executed with legally distinct ISP entities holding unique entity identifiers (UEIs) and responsible for performance under the Capital Projects Fund (CPF) award. In certain instances, affiliated parent entities processed invoice payments as part of established intercompany accounting practices. These arrangements reflected corporate structure and operational efficiencies rather than an intent to shift accountability or bypass program requirements. ASBO notes that no questioned costs were identified and that project deliverables were completed in accordance with the terms of the award. The ISP entities remained responsible for reporting, certification, and compliance under the executed agreements. ASBO recognizes, however, that clearer documentation of intercompany payment flows would strengthen audit traceability and reduce ambiguity regarding which legal entity incurred and paid specific costs. To enhance documentation clarity, ASBO will require subrecipients with affiliated entities to maintain documented intercompany reconciliations where applicable and will update subaward templates to further clarify entity-level responsibility for payment, ownership, and record retention. Internal review procedures will also be reinforced to ensure alignment between invoicing practices and designated subrecipient entities. Anticipated Completion Date: June 30, 2026 Contact Person: Name: Glen Howie Title: State Broadband Director Agency: Arkansas State Broadband Office Address: 1 Commerce Way City, State, Zip: Little Rock, AR 72202 Phone Number: 501-683-6000 Email Address: broadband@arkansas.gov

View Audit 396807

Finding 1205125 (2025-011)

Material Weakness 2025

State of Arkansas

AR

Allowable Costs / Cost Principles Cash Management § 200.405

Finding Number: 2025-011 ALN Number(s) and Program Title(s): 21.029 – Coronavirus Capital Project Funds Views of Responsible Officials and Planned Corrective Action: Administrative costs charged to CPF were program-related and remained within the statutory administrative cap. ASBO acknowledges, howe...

Finding Number: 2025-011 ALN Number(s) and Program Title(s): 21.029 – Coronavirus Capital Project Funds Views of Responsible Officials and Planned Corrective Action: Administrative costs charged to CPF were program-related and remained within the statutory administrative cap. ASBO acknowledges, however, that documentation supporting the internal methodology used to allocate administrative costs across multiple broadband funding streams was not sufficiently formalized during the period reviewed. The identified variance of $22,516 reflects an administrative reconciliation issue rather than an unallowable expenditure, and the variance amount was reduced from a subsequent administrative cost drawdown. Moving forward, the team will more formalize its administrative cost allocation methodology to include a narrative explanation to support allocation percentages, as well as authorizing signatures. Anticipated Completion Date: June 30, 2026 Contact Person: Name: Glen Howie Title: State Broadband Director Agency: Arkansas State Broadband Office Address: 1 Commerce Way City, State, Zip: Little Rock, AR 72202 Phone Number: 501-683-6000 Email Address: broadband@arkansas.gov

View Audit 396807

Finding 1205124 (2025-010)

Material Weakness 2025

State of Arkansas

AR

Subrecipient Monitoring Allowable Costs / Cost Principles § 200.201 § 200.403

Finding Number: 2025-010 ALN Number(s) and Program Title(s): 21.029 – Coronavirus Capital Project Funds Views of Responsible Officials and Planned Corrective Action: ASBO respectfully notes that Treasury’s SLFRF and CPF Supplementary Broadband Guidance provides that ISPs receiving fixed amount subaw...

Finding Number: 2025-010 ALN Number(s) and Program Title(s): 21.029 – Coronavirus Capital Project Funds Views of Responsible Officials and Planned Corrective Action: ASBO respectfully notes that Treasury’s SLFRF and CPF Supplementary Broadband Guidance provides that ISPs receiving fixed amount subawards for broadband infrastructure projects are not required to comply with the cost principles of 2 CFR Part 200, Subpart E (see U.S. Department of the Treasury, SLFRF and CPF Supplementary Broadband Guidance, available at: https://home.treasury.gov/system/files/136/SLFRF-and-CPF-Supplementary-Broadband-Guidance.pdf) Further, the guidance states, “...[m]ore specifically, subawards that provide for a maximum payment amount that is calculated based on a reasonable estimate of actual cost (see 2 CFR 200.201(b)(1)) will be considered fixed amount subawards even if the subaward agreement also provides that payments to the ISP subrecipient will be limited to actual costs after review of evidence of costs.” Arkansas’ CPF subawards meet these criteria. In short, relative to the applicability of cost principles under the Uniform Guidance, U.S. Treasury treats Arkansas’ CPF subawards as fixed amount subawards, exempting cost principles. Accordingly, ALA’s citation to §200.403(g) under Subpart E is not directly applicable to Arkansas’ CPF Program. Nevertheless, while ASBO maintains that the cost principles standard noted above does not apply to the awards in question, the office conducted a detailed review of the invoices identified. That review determined the following: • A substantial portion of the invoices were specific to approved CPF projects and included subrecipient certification statements affirming project use. • Certain invoices flagged as insufficiently detailed included annotations or supporting documentation sufficient to trace costs to the relevant project. • Invoices identified as potential duplicates were, in several cases, attributable to mixed inventory usage (allowed under GAAP) or subsequent credit/refund adjustments. • A limited subset of invoices (approximately $47,047.79) may require further reconciliation due to a known calculation variance. This funding may be returned, if deemed necessary. ASBO does not concur that the invoices totaling $6,666,409 represent unallowable expenditures. Rather, the observation reflects differences in documentation presentation, invoice formatting, and inventory accounting practices. The office maintains that the costs were associated with eligible broadband infrastructure activities under CPF. Further, in accordance with 2 CFR § 200.201(b)(1), the CPF broadband projects reviewed were monitored through routine oversight and reporting. To strengthen documentation consistency and audit traceability, ASBO is implementing a standardized reimbursement checklist requiring clearer identification of project attribution and supporting documentation prior to approval. Anticipated Completion Date: June 30, 2026 Contact Person: Name: Glen Howie Title: State Broadband Director Agency: Arkansas State Broadband Office Address: 1 Commerce Way City, State, Zip: Little Rock, AR 72202 Phone Number: 501-683-6000 Email Address: broadband@arkansas.gov

View Audit 396807

Finding 1205122 (2025-008)

Material Weakness 2025

State of Arkansas

AR

Allowable Costs / Cost Principles Subrecipient Monitoring Cash Management § 200.403

Finding Number: 2025-008 ALN Number(s) and Program Title(s): 21.027 – COVID 19: Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Views of Responsible Officials and Planned Corrective Action: During the audit, initial evidence was submitted, including monthly and daily logs from vendor coach...

Finding Number: 2025-008 ALN Number(s) and Program Title(s): 21.027 – COVID 19: Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Views of Responsible Officials and Planned Corrective Action: During the audit, initial evidence was submitted, including monthly and daily logs from vendor coaches to verify coaching activities. Additional documentation, including daily logs obtained from vendors, is available for review. Adjustments and recommendations that have resulted from this audit will be incorporated into future processes and requirements for vendor coaches, to further strengthen our oversight and ensure ongoing adherence to required standards. There are procedures put into place to monitor vendor adherence to scheduled coaching days, with vendors consistently held to a high standard and expectation to fully complete contracted days by requiring vendors to do the following: • Submit monthly evidence of coaching activities that align with contracted days. The Division Received monthly summaries from vendors detailing coaching support, activities, and specific dates when coaching was provided. • Conduct scheduled site visits with state content leaders • Complete monthly walkthroughs with school leaders, with consistency of walkthrough data being outcomes-based and providing tangible evidence that coaching actions directly supported the improvement of instructional programs. Data is collected through Jot Form and displayed on an Air Table Dashboard. This has been maintained since 2023. • Hold ongoing meetings with district staff to review outcomes and address improvement areas, ensuring fulfillment of literacy coaching contracts under Agency requirements Transparency and compliance remain a priority. Required documentation will continue to be accessible to support any future reviews. Anticipated Completion Date: Continuous. Contact Person: Name: Greg Rogers Title: Chief Fiscal Officer Agency: DESE Address: 4 Capitol Mall, Room 204-A City, State, Zip: Little Rock, AR 72201 Phone Number: 501-682-4475 Email Address: Greg.Rogers@ade.arkansas.gov

View Audit 396807

Finding 1205097 (2025-003)

Material Weakness 2025

Puerto Rico Safe Drinking Water Treatment Revolving Loan Fund

PR

Cash Management Allowable Costs / Cost Principles § 200.302 § 200.303

The PRDOH agreed with the findings and is working with the Finance Department to establish and strengthen our internal controls to ensure all payments comply with the guidelines established by the Federal Government. On the other hand, PRDOH is working and verifying our written procedures to ensure ...

The PRDOH agreed with the findings and is working with the Finance Department to establish and strengthen our internal controls to ensure all payments comply with the guidelines established by the Federal Government. On the other hand, PRDOH is working and verifying our written procedures to ensure that payments are issued promptly after the drawdown is made.

View Audit 396776

Finding 1205069 (2025-001)

Material Weakness 2025

Economic and Community Development Institute, Inc.

OH

Allowable Costs / Cost Principles Reporting Matching / Level of Effort / Earmarking

Condition: During our testing of allocated salaries and wages, we identified errors in how employee time was allocated to the program, and salaries and wages allocated to the program in excess of the Executive Level II Salary maximum. One employee in each program, 59.046 and 93.570, had an inappropr...

Condition: During our testing of allocated salaries and wages, we identified errors in how employee time was allocated to the program, and salaries and wages allocated to the program in excess of the Executive Level II Salary maximum. One employee in each program, 59.046 and 93.570, had an inappropriate wage rate applied to allocated time to the program. Additionally, for the 59.046 program only, one employee had compensation levels allocated to the program in excess of the Executive Level II Salary maximum amount in effect for the respective period. Planned Corrective Action: ECDI will put additional steps in place related to the Payroll Review process to ensure reconciliation of payroll charges to actual time records and rates. The organization will modify its calculations to ensure that pay rates are reflective of the timeframe in question (not for periods before or after). ECDI will update its calculations to include thresholds for Executive pay so they are not entered more than approved rates. The company is also exploring technology enhancements so that information from ECDI’s Payroll system flows directly into ECDI’s Accounting system to limit the chance of errors during extraction from Payroll system and uploading into Accounting system. Contact Person Responsible for Corrective Action: David Chew and Hudu Ahmed. Completion Date: In process

View Audit 396710

Finding 1205040 (2025-002)

Material Weakness 2025

New London Homeless Hospitality Center, Inc.

CT

Allowable Costs / Cost Principles

In the past month we have recruited a new Chief Administrative Officer with experience in financial management. By May we are scheduled to add a full charge accountant to our staff. With these staffing additions, we will be able to complete ongoing reviews of compliance with our cost allocation plan...

In the past month we have recruited a new Chief Administrative Officer with experience in financial management. By May we are scheduled to add a full charge accountant to our staff. With these staffing additions, we will be able to complete ongoing reviews of compliance with our cost allocation plan.

View Audit 396681

Finding 1205013 (2025-001)

Material Weakness 2025

New London Homeless Hospitality Center, Inc.

CT

Allowable Costs / Cost Principles Cash Management Reporting

While all the costs reported to grantors were fully allowable per our contract, we continued to have some challenges in reflecting these costs in QuickBooks at the detailed level. We have implemented several accounting improvements that have addressed most of the differences between our cost reports...

While all the costs reported to grantors were fully allowable per our contract, we continued to have some challenges in reflecting these costs in QuickBooks at the detailed level. We have implemented several accounting improvements that have addressed most of the differences between our cost reports by contract and QuickBooks. We continue, however, to face challenges in allocating indirect costs (allowed by a contract) down to the level of individual contract accounts in QuickBooks. The second continuing challenge is allocation of certain fringe benefits such as employee savings match and contributions to Health Savings Accounts down to the contract level for staff who work on multiple contracts. In the past month we have added new staff with greater experience in accounting and are implementing new ongoing reviews that will assure that our QuickBooks information remains exactly in sync with our fiscal reports.

View Audit 396681

Finding 1204978 (2025-003)

Material Weakness 2025

Puerto Rico Medical Services Administration

PR

Reporting Subrecipient Monitoring Allowable Costs / Cost Principles § 200.302 § 200.303 § 200.305 § 200.328 § 200.329

Conduct a full review of all FEMA funds received in FY 2024-2025 to properly reclassify them as Federal Revenue/Income in the General Ledger. Implement a mandatory review of FEMA Project Worksheets (PWs) and Obligation Notifications to distinguish between "Reimbursements" and "Capital Advances" upon...

Conduct a full review of all FEMA funds received in FY 2024-2025 to properly reclassify them as Federal Revenue/Income in the General Ledger. Implement a mandatory review of FEMA Project Worksheets (PWs) and Obligation Notifications to distinguish between "Reimbursements" and "Capital Advances" upon receipt. Create separate General Ledger (GL) accounts for FEMA disaster/project and Federal Funds to track expenditures vs. drawdowns in real-time. Establish a semi-annual meeting between the FEMA Coordinator and Finance departments to verify that all FEMA-funded work performed matches the reported expenditures. Update the SEFA preparation process to ensure FEMA expenditures are reported in the period they were incurred, regardless of when the reimbursement was received. Provide specialized training for the finance team on Federal Funds accounting.

View Audit 396649

Finding 1204966 (2025-002)

Material Weakness 2025

City of Manteca

CA

Allowable Costs / Cost Principles Cash Management

Finding #SA2025-002 Unallowable Expenditures Charged to the Grant Assistance Listing Number: 20.507, 20.526 Assistance Listing Title: COVID-19 – Federal Transit Formula Grants (Urbanized Area Formula Program) – Federal Transit Cluster Name of Federal Agency: Department of Transportation Federal Awar...

Finding #SA2025-002 Unallowable Expenditures Charged to the Grant Assistance Listing Number: 20.507, 20.526 Assistance Listing Title: COVID-19 – Federal Transit Formula Grants (Urbanized Area Formula Program) – Federal Transit Cluster Name of Federal Agency: Department of Transportation Federal Award Identification Number: CA-2022-083-00, 2020-206, 2020-212 • Name(s) of the contact person: Melissa Munoz, Interim Assistant Finance Director • Corrective Action Plan: The City will develop procedures for grant management, accounting and reporting to ensure that only allowable costs are claimed. • Anticipated Completion Date: 06/30/2026

View Audit 396634

Finding 1204955 (2025-001)

Material Weakness 2025

Casa Blanca Community School, Inc.

AZ

Allowable Costs / Cost Principles § 200.430

Finding Number: 2025‐001, 2024‐002 Program Name/Assistance Listing Title: Indian School Equalization Program Assistance Listing Number: 15.042 Contact Person: Eloyce Gillespie, Business Manager Anticipated Completion Date: February 20, 2026 Planned Corrective Action: Casa Blanca Community School com...

Finding Number: 2025‐001, 2024‐002 Program Name/Assistance Listing Title: Indian School Equalization Program Assistance Listing Number: 15.042 Contact Person: Eloyce Gillespie, Business Manager Anticipated Completion Date: February 20, 2026 Planned Corrective Action: Casa Blanca Community School completed the required review process in accordance with the established procedure, however, the error still occurred due to a system limitation. Specifically, although staff followed the process and performed the required review, the system does not currently flag or prevent adjustments that exceed the allowable threshold from being rolled into the next fiscal year. Because this condition is not automatically identified or restricted by the system, the adjustment was able to process despite the control being executed. To address this, the School will work with the system support team to evaluate options for adding automated validation or warning to prevent adjustments from rolling into the next fiscal year when limits are exceeded, which will include manual review. These actions were completed by February 20, 2026, and the process owner will monitor compliance.

View Audit 396606

Finding 1204947 (2025-001)

Material Weakness 2025

Garfield County School District No. 16

CO

Allowable Costs / Cost Principles School Nutrition Programs Cash Management § 200.302 § 200.403

Garfield County School District No. 16 respectfully submits the following corrective action plan for the year ended June 30, 2025. Finding 2025-001 Reporting Significant Deficiency in Internal Control over Compliance and Other Non-Compliance Corrective Action: The District agrees with the finding re...

Garfield County School District No. 16 respectfully submits the following corrective action plan for the year ended June 30, 2025. Finding 2025-001 Reporting Significant Deficiency in Internal Control over Compliance and Other Non-Compliance Corrective Action: The District agrees with the finding related to insufficient supporting documentation for the National School Lunch Program reimbursement claims, as it related to sack lunches/field meals. Personnel Responsible for Corrective Action: Jody Williams, Food Service Director Anticipated Completion Date: The District has corrected this issue as of the date of this report, and now requires formal written requests for all sack lunches/field meals, to ensure counts are properly documented.

View Audit 396571

Finding 1204927 (2025-001)

Material Weakness 2025

Glen Oaks Community College

MI

Allowable Costs / Cost Principles Reporting Significant Deficiency

Improper Period Recognition of SEFA Expenses Auditor Description of Condition and Effect. During our testing of compliance and related controls, we identified instances where expenses covering service periods extending beyond the fiscal year under audit were recorded in full rather than prorated for...

Improper Period Recognition of SEFA Expenses Auditor Description of Condition and Effect. During our testing of compliance and related controls, we identified instances where expenses covering service periods extending beyond the fiscal year under audit were recorded in full rather than prorated for the portion incurred during the fiscal year. This resulted in an initial overstatement of expenses reported on the Schedule of Expenditures of Federal Awards (SEFA). Initial SEFA amounts were not accurately stated in accordance with accrual accounting requirements. Auditor Recommendation. We recommend the College implement procedures to ensure expenses are recorded in the proper period in accordance with GAAP and Uniform Guidance requirements. Corrective Action. The Controller will review supporting documentation during the completion of the SEFA, which will then be reviewed by a second, qualified individual to ensure GAAP is being followed and that expenses are only being recorded when incurred. Responsible Person. Jennifer Dodson, Controller Anticipated Completion Date. June 30, 2026

View Audit 396536

Finding 1204883 (2025-002)

Material Weakness 2025

County of Ventura

CA

Allowable Costs / Cost Principles Internal Control / Segregation of Duties § 200.303 § 200.430

Finding 2025-002 Program: Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) Assistance Listing No.: 10.557 Federal Grantor: U.S. Department of Agriculture Passed-through: California Department of Public Health Award No.: 22-10307 Award Year: 2022 Compliance Requirement: A...

Finding 2025-002 Program: Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) Assistance Listing No.: 10.557 Federal Grantor: U.S. Department of Agriculture Passed-through: California Department of Public Health Award No.: 22-10307 Award Year: 2022 Compliance Requirement: Activities Allowable or Unallowed and Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control Over Compliance Department’s Management Response: HCA’s Ventura County Public Health (VCPH) Management agrees with the recommendation to strengthen the established policies and procedures to ensure all timecards consistently document evidence of supervisor approval. View of Responsible Officials and Corrective Action: The timesheet identified during this audit were submitted in the County’s payroll system prior to the completion of the 2024 fiscal year audit and related finding 2024-003; therefore, the related corrective actions had not yet been implemented at the time of submission. In response to the prior year’s finding, VCPH Management implemented enhanced controls to ensure compliance with timecard approval requirements moving forward from that date. Payroll staff now sends reminder notifications to supervisors, managers, and VCPH Management before and after each pay period closing to identify and resolve unapproved timecards. Management has also reinforced expectations through additional training for supervisors and managers. When a primary supervisor is unavailable, the established alternate approver process will be used to ensure timely approvals. VCPH Management will continue monitoring compliance with these procedures, and these requirements will be reviewed again with all supervising staff at the next scheduled WIC Supervisor Meeting. Name of Responsible Persons: Laura Flores, Manager, VCPH Rigoberto Vargas, Director, VCPH Implementation Date: May 1, 2025 – Instructions were provided to all supervisors at the WIC Supervisor Team Meeting May 7, 2026 – Timecard instructions will again be discussed at the WIC Supervisor Team Meeting

View Audit 396507

Finding 1204864 (2025-004)

Material Weakness 2025

Gila Crossing Community School

AZ

Allowable Costs / Cost Principles Procurement, Suspension & Debarment Reporting

Finding Number: 2025‐004 Program Name/Assistance Listing Title: Indian School Equalization Program, Special Education Cluster (IDEA) Assistance Listing Number: 84.425, 84.027 Contact Person: Holena Lebron, Superintendent Anticipated Completion Date: June 30, 2026 Planned Corrective Action: The Schoo...

Finding Number: 2025‐004 Program Name/Assistance Listing Title: Indian School Equalization Program, Special Education Cluster (IDEA) Assistance Listing Number: 84.425, 84.027 Contact Person: Holena Lebron, Superintendent Anticipated Completion Date: June 30, 2026 Planned Corrective Action: The School lacked adequate internal controls over disbursements, journal entries, and payroll. - Efforts to maintain proper supporting documentation for various transactions must improve.Staff training to highlight the importance of following procedures and maintaining supporting documentation for all transactions has already occurred and will be held multiple times in the future. - Two current employees have unusual employment status that makes recalculating their pay difficult; they are part‐time, but on salary.

View Audit 396487

Finding 1204848 (2025-001)

Material Weakness 2025

Nami Chicago

IL

Allowable Costs / Cost Principles § 200.303

NAMI Chicago acknowledges the finding regarding documentation of approvals for expenses charged to federal awards. The exceptions identified occurred during the first half of the fiscal year, prior to the January 1, 2025, implementation of our enhanced Internal Control and Disbursement Policy develo...

NAMI Chicago acknowledges the finding regarding documentation of approvals for expenses charged to federal awards. The exceptions identified occurred during the first half of the fiscal year, prior to the January 1, 2025, implementation of our enhanced Internal Control and Disbursement Policy developed in direct response to the FY24 audit recommendations, which were finalized and communicated in early 2025. Since January 1, 2025, NAMI Chicago has successfully implemented a mandatory digital approval workflow for all grant-funded expenditures to ensure contemporaneous documentation. Management is confident that these strengthened protocols, which were fully operational for the latter half of FY2025 and continue to date, have resolved the underlying issue. We expect no further instances of this finding in future audit cycles.

View Audit 396483

Finding 1204805 (2025-002)

Material Weakness 2025

University Enterprises Corporation at Csusb

CA

Reporting Allowable Costs / Cost Principles § 200.302 § 200.303 § 200.309 § 200.403

Federal Program Title: R&D Cluster and TRIO Cluster Assistance Listing Number: R&D and 84.TRIO Type of Finding: • Significant Deficiency in Internal Control over Compliance Recommendation: We recommend that UEC strengthen its controls over expenditure recognition to ensure costs are recorded in the ...

Federal Program Title: R&D Cluster and TRIO Cluster Assistance Listing Number: R&D and 84.TRIO Type of Finding: • Significant Deficiency in Internal Control over Compliance Recommendation: We recommend that UEC strengthen its controls over expenditure recognition to ensure costs are recorded in the appropriate fiscal period and enhance payroll review procedures to ensure timesheets are submitted and reviewed in a timely manner to support accurate payroll reporting. Views of Responsible Officials: There is no disagreement with the audit finding. Action Taken in Response to Finding: University Enterprises Corporation (UEC), as the entity responsible for fiscal oversight, compliance, and financial reporting for sponsored programs, has initiated and continues to implement enhancements to strengthen internal controls and ensure expenditures are recorded in the appropriate fiscal period. These actions include strengthening period-end review and accrual practices to improve fiscal accuracy, reinforcing expectations for timely payroll documentation and supervisory review through formal communication and standardized procedures, clarifying roles and responsibilities across UEC and campus partners to support consistent compliance, enhancing documentation standards and internal review processes, and establishing ongoing monitoring to ensure sustained adherence to federal requirements. These efforts build upon recent communications and procedural updates issued to Deans, Principal Investigators, and campus leadership to reinforce compliance expectations and accountability. Contact(s) Responsible for Corrective Action: UEC Executive Director Planned Completion Date for Corrective Action: In action as of February 2026.

View Audit 396456

Finding 1204664 (2025-001)

Material Weakness 2025

Neomed Center, Inc.

PR

Allowable Costs / Cost Principles Cash Management § 200.305 § 200.309

Condition: During the fiscal year ended June 30, 2025, NeoMed Center, Inc. used the advance payment method through the HHS Payment Management System (PMS) to obtain federal funds. In certain instances, drawdowns were requested based on aggregated projections and liquidity needs before specific eligi...

Condition: During the fiscal year ended June 30, 2025, NeoMed Center, Inc. used the advance payment method through the HHS Payment Management System (PMS) to obtain federal funds. In certain instances, drawdowns were requested based on aggregated projections and liquidity needs before specific eligible expenses were fully identified and ready for immediate disbursement. Although the funds were later applied to eligible expenses incurred within the authorized award periods, the absence of a documented, expense-level linkage at the time of each drawdown created a temporary timing difference between cash receipt and expense recognition. Accordingly, funds that did not meet revenue recognition criteria at the end were recorded as Unearned Revenue. Consistent with U.S. GAAP and federal grant revenue recognition policies, the Unearned Revenue balance of approximately $1.8 million as of June 30, 2025, represents federal funds received in advance, for which revenue recognition was contingent on incurring future eligible expenses. This balance was analyzed, reconciled, and recognized as eligible expenses were incurred, as supported by reconciliations provided to the external auditors, and was appropriately disclosed in the notes to the financial statements for the years ended June 30, 2025, and 2024. Planned Corrective Action: To prevent recurrence, NeoMed Center, Inc. adopted and implemented “Federal Fund Drawdown via HHS Payment Management System (PMS)” (Policy No. NMCIP 46), approved by the Board of Directors and effective March 2026. The policy requires drawdowns to be based solely on immediate cash needs, supported by a documented short-term cash forecast, and prohibits requesting funds for expenses not yet incurred or not ready for immediate disbursement. Key internal controls include: • Mandatory preparation of a cash forecast by award prior to each drawdown. • Independent review and approval by the Finance Department prior to submission of drawdown requests in PMS. • Monthly reconciliations between PMS, bank accounts, and the general ledger. • Monitoring of the time elapsed between the receipt of funds and their disbursement, with a maximum internal standard of three (3) business days. • Documentation and formal approval of any exceptions. • Adoption of an internal benchmark of 8.33% per month (1/12 of the annual award) as a control parameter. • Clear definition of segregation of duties; and • Periodic reporting to Senior Management and the CEO. Management concludes that this matter resulted from cash-management timing and not from misuse of federal funds. Monitoring: Management will perform monthly monitoring of federal fund drawdowns beginning April 1st ,2026 to ensure they are limited to immediate cash needs and supported by documented short‑term cash forecasts. Drawdowns will be reconciled monthly to the general ledger, bank statements, and allowable expenditures incurred within the approved period of performance. Any timing variances or exceptions will be reviewed and documented. Monitoring results will be reviewed by senior management to ensure continued compliance with Uniform Guidance requirements. Responsible Official: Jose A. Guzman Machuca Time frame: This condition was identified on February 20, 2026, and is expected to be resolved by May 2026, upon the implementation of formal monitoring procedures and enhanced remittance controls.

View Audit 396440

Finding 1204654 (2025-005)

Material Weakness 2025

Puerto Rico Department of Economic Development and Commerce

PR

Allowable Costs / Cost Principles § 200.403 § 200.414 § 200.68

Findings and Questioned Costs Relating to Federal Awards: Insufficient Controls Related to the Application of Indirect Cost Rates The Department will strengthen its administrative and management control processes to ensure accurate preparation and calculation for the Indirect Cost. The following cor...

Findings and Questioned Costs Relating to Federal Awards: Insufficient Controls Related to the Application of Indirect Cost Rates The Department will strengthen its administrative and management control processes to ensure accurate preparation and calculation for the Indirect Cost. The following corrective actions will be implemented: 1. Establish Internal Review Process: The Department will implement an excel report that includes all Grants to ensure adequate calculation and review. 2. Assign Reporting Responsibility: A designated staff member will be responsible for monitoring federal reporting requirements according to NICRA limitations. 3. Review and Approval Process: Management will implement an internal review and approval process prior to report submission to ensure accuracy and completeness.

View Audit 396429

Finding 1204651 (2025-004)

Material Weakness 2025

Puerto Rico Department of Economic Development and Commerce

PR

Subrecipient Monitoring Allowable Costs / Cost Principles § 200.339

Findings and Questioned Costs Relating to Federal Awards: Eligibility of Individuals, Allowable Costs DDEC is implementing a series of corrective actions to ensure full compliance with WIOA eligibility documentation requirements, internal controls, and participant file management. The primary correc...

Findings and Questioned Costs Relating to Federal Awards: Eligibility of Individuals, Allowable Costs DDEC is implementing a series of corrective actions to ensure full compliance with WIOA eligibility documentation requirements, internal controls, and participant file management. The primary corrective strategy is the establishment of the PRIS system as the official digital participant file, combined with strengthened internal controls, mandatory documentation requirements, system validations, staff training, and ongoing monitoring. These corrective actions are designed to ensure that: • Eligibility documentation is completed and verified before services are provided. • Costs are only charged to WIOA programs for eligible participants. • Internal controls comply with 2 CFR 200 requirements. • Monitoring and validation processes ensure long-term compliance and sustainability. 1.Official Digital Participant File (PRIS) DDEC will designate the PRIS system as the official participant file repository for all WIOA programs. Services may not be recorded, and costs may not be charged unless the participant’s digital file contains complete eligibility documentation and a signed eligibility certification. Key Actions: • Issue formal directive establishing PRIS as the official file system. • Update operational manuals and program guidance. • Notify all subrecipients of implementation requirements. 2. Required Eligibility Documentation Controls DDEC will require that all eligibility documentation be uploaded to PRIS before participant activation or service entry. Required documentation includes proof of age, work authorization or citizenship, Selective Service registration (if applicable), proof of residence (if applicable), and signed eligibility certification. Key Actions: • Establish mandatory documentation checklist by participant type. • Require digital upload of all eligibility documentation. • Establish document quality and digital format standards. 3. PRIS System Controls and Validations DDEC will implement system controls within PRIS to prevent the entry of services or costs for participants with incomplete eligibility documentation. Key Actions: • Configure required fields for eligibility documentation. • Develop exception reports for incomplete participant files. • Pilot system controls with one subrecipient prior to full implementation. 4. Internal Controls and Monitoring DDEC will strengthen internal controls to ensure that eligibility documentation is verified prior to service delivery and cost charging. Key Actions: • Monthly PRIS exception reports identifying incomplete files. • Required correction within established timeframe. • Suspension of services or payments for non-compliant files. • Integration of digital file review into monitoring visits. • Standardized eligibility checklist for all subrecipients. 5. Training and Technical Assistance DDEC will provide training to subrecipients and internal staff on WIOA eligibility requirements, documentation standards, PRIS usage, and federal compliance requirements under Uniform Guidance (2 CFR 200). Training Topics: • WIOA eligibility requirements • Acceptable documentation • PRIS document upload procedures • Allowable costs and federal compliance • Internal control responsibilities 6. Ongoing Monitoring and Compliance Validation DDEC will implement quarterly compliance validation through sampling of participant files in PRIS to ensure documentation completeness and sustained compliance. Monitoring Measures: • Quarterly file sampling by subrecipient • Documentation completeness verification • Corrective action plans for subrecipients with deficiencies • Escalation procedures for repeated non-compliance • Annual compliance review after full implementation

View Audit 396429

Corrective Action Plans

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