Corrective Action Plans

Finding 1218716 (2025-061)

Material Weakness 2025

State of Michigan

MI

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

Finding 2025-061 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), ALN 93.323 and Block Grants for Prevention and Treatment of Substance Abuse, ALN 93.959 Management Views MDHHS agrees with the finding. Planned Corrective Action MDHHS is actively pursuing the implementation of an A...

Finding 2025-061 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), ALN 93.323 and Block Grants for Prevention and Treatment of Substance Abuse, ALN 93.959 Management Views MDHHS agrees with the finding. Planned Corrective Action MDHHS is actively pursuing the implementation of an API for the submission of FFATA data to the federal system, SAM, to improve both timeliness and accuracy through automation. This API will connect EGrAMS with SAM, enabling backend communication between the systems and allowing SAM to automatically retrieve data directly from EGrAMS. To ensure accurate reporting until the API is established, MDHHS will continue reviewing validation errors when submitting web-based information to SAM and will work with the SAM federal helpline to report federal system issues and identify interim alternatives to submit the required data. Also, MDHHS implemented an enhancement in August 2025 that validates federal funding sources in EGrAMS against their effective dates, reducing coding errors and improving data reliability. In addition, the query used to obtain certain FFATA data elements was modified during fiscal year 2026 to improve accuracy of reporting. Anticipated Completion Date December 31, 2027 Responsible Individual(s) Matt Blackburn, MDHHS Jeanette Hensler, MDHHS Rebecca Jones, MDHHS

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Finding 1218680 (2025-054)

Material Weakness 2025

State of Michigan

MI

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

Finding 2025-054 Adoption Assistance, ALN 93.659 - Lack of Fingerprint Background Checks Management Views MDHHS disagrees that completion of fingerprint-based background checks within 12 months of adoption finalization are a condition of eligibility for adoption assistance payments. Federal law 42 U...

Finding 2025-054 Adoption Assistance, ALN 93.659 - Lack of Fingerprint Background Checks Management Views MDHHS disagrees that completion of fingerprint-based background checks within 12 months of adoption finalization are a condition of eligibility for adoption assistance payments. Federal law 42 USC 671(a)(20) requires states to complete a fingerprint-based criminal background check before a prospective adoptive parent may be finally approved for placement; however, federal statute does not mandate additional or subsequent fingerprint-based criminal history rechecks after placement approval as a condition of eligibility for adoption assistance payments. Michigan’s Title IV-E State Plan incorporates the safety requirements mandated by federal law 42 USC 671(a)(20) and cites MDHHS policy ADM 0520 (Background Checks, Clearances, Criminal History Checks, and Fingerprinting). ADM 0520 governs all background checks, clearances, criminal history checks, and fingerprinting requirements that MDHHS must complete for foster care and adoptive home providers. The policy establishes the department’s comprehensive safety check framework and is not limited to adoption assistance eligibility determinations. Rather, ADM 0520 outlines the procedures MDHHS uses to meet federal and State safety requirements for approving and supervising foster and adoptive placements, including checks conducted both before placement approval and those completed afterward to ensure the ongoing safety and well being of children under MDHHS supervision. For all cases sampled, fingerprint based clearances were completed within 12 months of the family’s approval for placement, and documentation of these clearances is included in the adoption assistance file. Therefore, MDHHS is compliant with all applicable federal and State requirements for adoption assistance payments. Planned Corrective Action MDHHS will clarify policy to explicitly distinguish safety-driven clearances from federally required placement-approval checks, including clarification that the required prerequisite for adoptive placement and adoption assistance payments is completion of fingerprint-based clearances within 12 months of approval. Anticipated Completion Date December 1, 2026 Responsible Individual(s) Heather Williams, MDHHS Kim Borja, MDHHS Kathonya Triplett, MDHHS

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Finding 1218678 (2025-020)

Material Weakness 2025

State of Michigan

MI

Allowable Costs / Cost Principles Reporting Internal Control / Segregation of Duties

Finding 2025-020 Foster Care Title IV-E, ALN 93.658 and Adoption Assistance, ALN 93.659 - Accuracy of Financial Reports Management Views MDHHS disagrees with the finding. The expenditures noted were recorded through MDHHS’s normal, federally approved Public Assistance Cost Allocation Plan cost alloc...

Finding 2025-020 Foster Care Title IV-E, ALN 93.658 and Adoption Assistance, ALN 93.659 - Accuracy of Financial Reports Management Views MDHHS disagrees with the finding. The expenditures noted were recorded through MDHHS’s normal, federally approved Public Assistance Cost Allocation Plan cost allocation process. As part of this process, certain administrative costs are not identifiable or allocable to federal programs until the allocation is completed. At that point, MDHHS recognizes these costs as expenditures in the CB-496 report in the quarter in which the allocation occurs and the costs are assigned to the grant. Consistent with this approach, MDHHS has historically reported these amounts as current quarter expenditures. MDHHS previously consulted with the U.S. Department of Health and Human Services (HHS) Administration for Children and Families (ACF) on the appropriate use of the prior quarter adjustment column, and MDHHS was verbally instructed to no longer record these administrative costs as adjustments since this is part of the normal cost allocation process. ACF approves the CB-496 reports in the federal system and ensures the final award amount reconciles with the amounts reported. This approval process supports the reporting approach used by MDHHS is both consistent with prior guidance and accepted by ACF through its approval and award process. Planned Corrective Action Although MDHHS disagrees with the finding, MDHHS sought written guidance from ACF and will follow up to obtain clarification on the appropriate reporting of administrative costs. Anticipated Completion Date September 30, 2026 Responsible Individual(s) Rebecca Jones, MDHHS

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Finding 1218654 (2025-048)

Material Weakness 2025

State of Michigan

MI

Allowable Costs / Cost Principles Eligibility Subrecipient Monitoring § 200.516

Finding 2025-048 Refugee and Entrant Assistance State/Replacement Designee Administered Programs, ALN 93.566 - Assistance to Ineligible Refugees Management Views LEO and MDHHS agree with the finding. Planned Corrective Action MDHHS acknowledges that documentation supporting compliance with refugee c...

Finding 2025-048 Refugee and Entrant Assistance State/Replacement Designee Administered Programs, ALN 93.566 - Assistance to Ineligible Refugees Management Views LEO and MDHHS agree with the finding. Planned Corrective Action MDHHS acknowledges that documentation supporting compliance with refugee cash assistance work registry requirements must be consistently maintained in the electronic case record. The issue identified pertains to documentation of ongoing work registration requirements within the case record to maintain eligibility, noting that the clients were eligible at the time of application approval. Beginning January 2026, MDHHS implemented a monthly manual review of active cases to ensure required documentation is present. MDHHS is also pursuing a Bridges system enhancement to automate generation and storage of the DHS-4785R (Refugee Employment Program Appointment Notice) in the electronic case file. This enhancement will be submitted through the Departmental Work Intake Process for prioritization and implementation by the Bridges technical team. Anticipated Completion Date MDHHS has not yet determined an anticipated completion date because the date is dependent on the priority assigned to the system enhancement as determined by the Departmental Work Intake Process. Responsible Individual(s) Benjamin Cabanaw, LEO Nicole Adams, LEO Bethany Cabanaw, MDHHS Kent Schulze, MDHHS Mariah Schaefer, MDHHS

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Finding 1218653 (2025-047)

Material Weakness 2025

State of Michigan

MI

Subrecipient Monitoring Allowable Costs / Cost Principles Period of Performance

Finding 2025-047 Refugee and Entrant Assistance State/Replacement Designees Administered Programs, ALN 93.566 - Salesforce Security Management and Access Controls Management Views LEO agrees with the finding. For part a., the LEO Office of Global Michigan (OGM) maintains a limited number of internal...

Finding 2025-047 Refugee and Entrant Assistance State/Replacement Designees Administered Programs, ALN 93.566 - Salesforce Security Management and Access Controls Management Views LEO agrees with the finding. For part a., the LEO Office of Global Michigan (OGM) maintains a limited number of internal Salesforce user licenses. As a result, internal user access is inherently constrained and proactively monitored based on employment status. LEO OGM’s existing process for validating continued need is tied to personnel changes: internal user access remains appropriate as long as the employee occupies a position with assigned Salesforce responsibilities, and access is removed when employees separate or move to roles that do not require use of the system. Because license allocation is strictly managed and user roles are position-based, LEO OGM has considered this process to constitute ongoing monitoring rather than an annual recertification process. However, LEO OGM acknowledges that this practice does not fully meet the specific requirement for a documented annual review as noted in SOM Technical Standard 1340.00.020.01 (Access Control Standard). Planned Corrective Action For part a., LEO OGM will formalize and implement an internal user account review process, including conducting and documenting an annual review of all user access accounts in accordance with the Access Control Standard. For part b., LEO OGM will work collaboratively with program and system administrators to strengthen controls around identifying and timely deactivating inactive internal and external user accounts. LEO OGM will establish clearer procedures, increase review frequency, and document the actions taken to ensure accounts exceeding inactivity thresholds are disabled consistently and timely. Anticipated Completion Date September 30, 2026 Responsible Individual(s) Ben Cabanaw, LEO Nicole Adams, LEO

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Finding 1218646 (2025-044)

Material Weakness 2025

State of Michigan

MI

Allowable Costs / Cost Principles Student Financial Aid Cash Management § 200.516

Finding 2025-044 Temporary Assistance for Needy Families, ALN 93.558 - Inappropriate TANF-Funded Emergency Foster Care Assistance Management Views MDHHS agrees with the finding. Planned Corrective Action MDHHS redetermined the Foster Care Title IV-E (Title IV-E) eligibility after the birth certifica...

Finding 2025-044 Temporary Assistance for Needy Families, ALN 93.558 - Inappropriate TANF-Funded Emergency Foster Care Assistance Management Views MDHHS agrees with the finding. Planned Corrective Action MDHHS redetermined the Foster Care Title IV-E (Title IV-E) eligibility after the birth certificate was received and the youth was determined to be Title IV-E eligible. MDHHS has already reclassified the funds to the appropriate funding source, allowing the department to claim Title IV-E for the eligible placement, and repaying any TANF overpayments. Reconciliations between different fund sources, or recoupments for overpayments, will be created within 30 calendar days of receipt of supporting documentation and approved timely by management. All recoupment and reconciliation records will be approved by management no later than September 30 each fiscal year to ensure compliance with year-end requirements. Anticipated Completion Date September 30, 2026 Responsible Individual(s) Nancy Berger, MDHHS

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Finding 1218645 (2025-043)

Material Weakness 2025

State of Michigan

MI

Allowable Costs / Cost Principles Eligibility § 200.516

Finding 2025-043 Temporary Assistance for Needy Families, ALN 93.558 - Non-Financial Eligibility Documentation Management Views MDHHS agrees with the finding. Planned Corrective Action MDHHS will issue a memo to reinforce documentation requirements for TANF eligibility determinations by September 30...

Finding 2025-043 Temporary Assistance for Needy Families, ALN 93.558 - Non-Financial Eligibility Documentation Management Views MDHHS agrees with the finding. Planned Corrective Action MDHHS will issue a memo to reinforce documentation requirements for TANF eligibility determinations by September 30, 2026. The memo will clarify expectations for obtaining, uploading, and retaining all required non-financial eligibility verifications in accordance with federal regulations and MDHHS policy. MDHHS will also address each individual case-specific issue with the appropriate local office. In addition, these findings will be addressed as part of TANF mandatory audit training for local office staff scheduled in July 2026. This training will emphasize the importance of maintaining complete eligibility records, proper use of the Work and Self Sufficiency Rules (DHS-1538) form, verification of age and relationship, and timely completion of the Family Automated Screening Tool. Further, MDHHS ESA policy staff are working with the MDHHS Bridges technical team to implement a system modification during September 2026 that will enhance the application review process. Anticipated Completion Date September 30, 2026 Responsible Individual(s) Bethany Cabanaw, MDHHS Kenton Schulze, MDHHS Brian Sanborn, MDHHS Ashley Soper, MDHHS

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Finding 1218636 (2025-042)

Material Weakness 2025

State of Michigan

MI

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

Finding 2025-042 Medicaid Cluster, ALN 93.775, 93.777, and 93.778 - Benefits Monitoring Program Management Views MDHHS agrees with the finding. Planned Corrective Action For part a., for the one identified exception, MDHHS notified the MHP that the enrollment notification letter was not sent in a ti...

Finding 2025-042 Medicaid Cluster, ALN 93.775, 93.777, and 93.778 - Benefits Monitoring Program Management Views MDHHS agrees with the finding. Planned Corrective Action For part a., for the one identified exception, MDHHS notified the MHP that the enrollment notification letter was not sent in a timely manner. To ensure compliance moving forward, the MHP Benefits Monitoring Program (BMP) care managers were provided training in February 2026 on the BMP process, emphasizing the importance of verifying that enrollment notification letters are created and sent to members within the required timeframe. MDHHS believes this is an isolated incident, however, MDHHS obtained and reviewed each MHP’s documented step-by-step enrollment process to confirm that it includes the generation and distribution of the enrollment notification letter. For part b., MDHHS implemented a monitoring process in February 2026. As part of this process, the Enrolled Research Report is reviewed weekly to ensure all required 24 month reviews are identified and completed in a timely manner. Anticipated Completion Date Completed Responsible Individual(s) Torey Schlaufman, MDHHS

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Finding 1218635 (2025-041)

Material Weakness 2025

State of Michigan

MI

Matching / Level of Effort / Earmarking Allowable Costs / Cost Principles § 200.516

Finding 2025-041 Medicaid Cluster, ALN 93.775, 93.777, and 93.778 - Medical Records Management Views MDHHS agrees with the finding. Planned Corrective Action MDHHS will continue to reinforce provider responsibilities related to documentation and record retention. As part of the annual communication ...

Finding 2025-041 Medicaid Cluster, ALN 93.775, 93.777, and 93.778 - Medical Records Management Views MDHHS agrees with the finding. Planned Corrective Action MDHHS will continue to reinforce provider responsibilities related to documentation and record retention. As part of the annual communication plan, MDHHS issues provider alerts twice per year to remind providers of the MDHHS record retention policy and post payment review process. The most recent provider alert was issued on January 5, 2026, and communicated to providers the importance of maintaining appropriate documentation for services provided. The provider was not responsive to MDHHS’s request for documentation for the exception identified. As a result, MDHHS voided the associated claim on February 11, 2026, recouped the full payment, and notified the provider of the action taken. Anticipated Completion Date Completed Responsible Individual(s) Alexis Bond, MDHHS

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Finding 1218634 (2025-040)

Material Weakness 2025

State of Michigan

MI

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

Finding 2025-040 Medicaid Cluster, ALN 93.775, 93.777, and 93.778 - Practitioner Reimbursement Management Views MDHHS agrees with the finding. Planned Corrective Action In March 2025, MDHHS implemented an interface fix to resolve multiple system issues and eliminate limitations that contributed to r...

Finding 2025-040 Medicaid Cluster, ALN 93.775, 93.777, and 93.778 - Practitioner Reimbursement Management Views MDHHS agrees with the finding. Planned Corrective Action In March 2025, MDHHS implemented an interface fix to resolve multiple system issues and eliminate limitations that contributed to retroactive disenrollment. MDHHS has also submitted a work request for a system enhancement within Bridges to prevent recurrence of retroactive eligibility removals and improve the accuracy of eligibility across systems. In addition, MDHHS will evaluate additional potential processes to identify and resolve discrepancies between eligibility and enrollment data across systems, thereby reducing the risk of improper payments. Anticipated Completion Date MDHHS will determine an anticipated completion date after the work request has been prioritized. Responsible Individual(s) Jamy Hengesbach, MDHHS

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Finding 1218633 (2025-039)

Material Weakness 2025

State of Michigan

MI

Matching / Level of Effort / Earmarking Allowable Costs / Cost Principles Eligibility § 200.516

Finding 2025-039 Medicaid Cluster, ALN 93.775, 93.777, and 93.778 - Ineligible HHP Payments Management Views MDHHS agrees with the finding. Planned Corrective Action MDHHS generates and distributes a monthly hospitalization report to adult services supervisors, who then distribute to adult services ...

Finding 2025-039 Medicaid Cluster, ALN 93.775, 93.777, and 93.778 - Ineligible HHP Payments Management Views MDHHS agrees with the finding. Planned Corrective Action MDHHS generates and distributes a monthly hospitalization report to adult services supervisors, who then distribute to adult services workers as part of the post-payment review process. During February 2025, MDHHS issued an Adult Services Notification to managers and directors reminding local office management of the expectation to thoroughly monitor and review the hospitalization reports to ensure timely and accurate action is taken by adult services workers. MDHHS also reissued the Home Help Recoupment Process training and procedural resources during February 2025 to adult services workers who manage Home Help cases to ensure process steps are consistently followed. In addition, during February 2026, MDHHS issued recoupments for the two clients identified by the Office of the Auditor General as part of the audit finding. During June 2025, MDHHS enhanced the monthly hospitalization report to improve data accuracy for identified service overlaps and ensure timely recovery of payments. However, MDHHS identified timing differences between the report run dates and the weekly schedule updates of CHAMPS hospitalization data that could result in incomplete hospitalization data within the monthly monitoring report. To ensure all relevant records are captured and promptly recover payments to clients hospitalized while receiving Home Help Program services who no longer met eligibility requirements, the timing of the report has been modified. Anticipated Completion Date Completed Responsible Individual(s) Elaina Brown, MDHHS

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Finding 1218632 (2025-038)

Material Weakness 2025

State of Michigan

MI

Matching / Level of Effort / Earmarking Allowable Costs / Cost Principles Eligibility § 200.516

Finding 2025-038 Medicaid Cluster, ALN 93.775, 93.777, and 93.778 - Payments on Behalf of Ineligible Beneficiaries Management Views MDHHS agrees with the finding. Planned Corrective Action MDHHS continues to work with DTMB on the underlying issues in Bridges causing the overpayments, as well as deve...

Finding 2025-038 Medicaid Cluster, ALN 93.775, 93.777, and 93.778 - Payments on Behalf of Ineligible Beneficiaries Management Views MDHHS agrees with the finding. Planned Corrective Action MDHHS continues to work with DTMB on the underlying issues in Bridges causing the overpayments, as well as developing mitigation strategies to temporarily address the overpayment concerns while more permanent system solutions are developed. As part of the Departmental Work Intake Process, MDHHS submitted work requests for prioritization to implement larger system changes that will resolve the remaining synchronization issues. Anticipated Completion Date MDHHS will determine an anticipated completion date after the work requests have been prioritized. Responsible Individual(s) Jamy Hengesbach, MDHHS

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Finding 1218631 (2025-037)

Material Weakness 2025

State of Michigan

MI

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

Finding 2025-037 Medicaid Cluster, ALN 93.775, 93.777, and 93.778 - Transitional Medicaid Eligibility Management Views MDHHS agrees that renewals for certain beneficiaries within the 16,682 of the total 375,345 beneficiaries receiving transitional medical assistance (TMA) during the audit period wer...

Finding 2025-037 Medicaid Cluster, ALN 93.775, 93.777, and 93.778 - Transitional Medicaid Eligibility Management Views MDHHS agrees that renewals for certain beneficiaries within the 16,682 of the total 375,345 beneficiaries receiving transitional medical assistance (TMA) during the audit period were not processed in a timely manner. MDHHS also notes that if a beneficiary was misclassified in an incorrect aid category but remained eligible to transition to another Medicaid aid category, no improper payments would have occurred. During the audit testing period, MDHHS had a limited timeframe to conduct manual validation making it infeasible to determine whether improper classifications were associated with all 16,682 beneficiaries identified. Planned Corrective Action As part of the regular eligibility redetermination process, MDHHS has already ended TMA for approximately 14,300 of the 16,682 beneficiaries cited as of January 2026. MDHHS will continue to complete a full review of the remaining beneficiaries to confirm the current eligibility status of these beneficiaries and assess whether they should remain in TMA, transition to another Medicaid aid category, or have their coverage closed if they are no longer eligible. While some individuals may no longer meet TMA criteria, many may be eligible for other Medicaid coverage, and this will be assessed through the follow-up review. MDHHS will complete the review, and establish an ongoing process to monitor redetermination metrics, by September 2026. In December 2025, MDHHS enhanced MI Reports functionality for redetermination reports used to manage the eligibility renewal process to improve timely processing of redeterminations. Also, MDHHS evaluated system functionality related to the timeliness of TMA renewals and identified that the system currently creates one alert for beneficiaries with multiple program renewals. To ensure TMA renewals are processed on a timely basis, MDHHS is collaborating with the Bridges technical team to implement a system enhancement that will generate a separate TMA-specific redetermination alert. This enhancement is expected to be implemented by December 2026. Anticipated Completion Date December 2026 Responsible Individual(s) Jamy Hengesbach, MDHHS Mariah Schaefer, MDHHS

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Finding 1218630 (2025-036)

Material Weakness 2025

State of Michigan

MI

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

Finding 2025-036 Medicaid Cluster, ALN 93,775, 93.777, and 93.778 - MiAIMS User Access Management Views MDHHS agrees with the finding. Planned Corrective Action The MDHHS Access Management Section will continue to perform the monthly Michigan Adult Integrated Management System (MiAIMS)-to-DSA user r...

Finding 2025-036 Medicaid Cluster, ALN 93,775, 93.777, and 93.778 - MiAIMS User Access Management Views MDHHS agrees with the finding. Planned Corrective Action The MDHHS Access Management Section will continue to perform the monthly Michigan Adult Integrated Management System (MiAIMS)-to-DSA user reconciliation, resolve discrepancies, and provide LOSCs with a summary of results. As part of strengthening access controls, the MDHHS Access Management Section discontinued the practice of issuing advance notices prior to access termination, which previously allowed additional time for the user to complete recertification. Going forward, any active MiAIMS user who does not have a corresponding approved DSA request will have their access terminated as part of the monthly reconciliation process. Anticipated Completion Date Completed Responsible Individual(s) Cynthia Farrell, MDHHS Tim Kwast, MDHHS

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Finding 1218550 (2025-033)

Material Weakness 2025

State of Michigan

MI

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

Finding 2025-033 CCDF Cluster, ALN 93.575 and 93.596 - Provider Health and Safety Requirements Management Views MiLEAP agrees with the finding. Planned Corrective Action To improve compliance and inspection timeliness, MiLEAP will take the following key steps: • Enhanced regional oversight: The Chil...

Finding 2025-033 CCDF Cluster, ALN 93.575 and 93.596 - Provider Health and Safety Requirements Management Views MiLEAP agrees with the finding. Planned Corrective Action To improve compliance and inspection timeliness, MiLEAP will take the following key steps: • Enhanced regional oversight: The Child Care Licensing Bureau (CCLB) will utilize monitoring features within the Child Care Hub Information Records Portal (CCHIRP) to proactively track inspection due dates and identify providers approaching annual inspection deadlines. Consultants, lead workers, and area managers will utilize automated reporting dashboards and task notifications to monitor upcoming inspections and overdue activities in real time. CCLB will establish standardized supervisory review procedures by November 30, 2026, requiring regional management to review inspection completion status on a monthly basis to ensure timely intervention when inspections are at risk of exceeding the required timeframe. In addition, CCLB leadership will monitor statewide inspection completion rates, overdue inspections, and regional trends through recurring data reviews to identify systemic issues and implement timely corrective actions. • Ongoing Technology and Process Improvements: CCLB will continue enhancing the functionality and oversight capabilities within CCHIRP to ensure the system supports current, efficient, and effective inspection processes. Ongoing system improvements will focus on strengthening workflow management, maintaining up-to-date task guidance and tracking mechanisms, and improving the accuracy and visibility of inspection timelines and required activities. Anticipated Completion Date Ongoing Responsible Individual(s) Courtney Adams, MiLEAP Scott Bettys, MiLEAP Erika Bigelow, MiLEAP Monica Sturdivant, MiLEAP

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Finding 1218522 (2025-063)

Material Weakness 2025

State of Michigan

MI

Subrecipient Monitoring Allowable Costs / Cost Principles Internal Control / Segregation of Duties

Finding 2025-063 Special Education Cluster (IDEA), ALN 84.027 and 84.173 Management Views MDE disagrees with the finding. MDE maintains that its current monitoring approach satisfies federal requirements. The MDE Office of Special Education’s (OSE) monitoring framework is consistent with the risk-ba...

Finding 2025-063 Special Education Cluster (IDEA), ALN 84.027 and 84.173 Management Views MDE disagrees with the finding. MDE maintains that its current monitoring approach satisfies federal requirements. The MDE Office of Special Education’s (OSE) monitoring framework is consistent with the risk-based requirements of the Uniform Guidance (2 CFR 200.332). The Uniform Guidance does not require routine review of underlying supporting documentation for every subrecipient in every monitoring cycle. Rather, source documentation review is one available monitoring tool, which MDE OSE uses, when warranted, based on risk, audit results, identified concerns, or other relevant information. MDE OSE’s monitoring activities include budget review and approval, budget-to-actual analysis, review of expenditure activity, direct engagement and technical assistance with subrecipients, review of single audit reports, issuance of management decisions (when applicable), and enhanced review procedures for higher-risk subrecipients. These activities collectively provide reasonable assurance that funds are used for authorized purposes and in compliance with applicable requirements. MDE OSE also notes that subrecipient single audits have not routinely identified questioned costs or significant noncompliance, which supports the effectiveness of the existing monitoring framework. Planned Corrective Action MDE disagrees with the finding and does not believe corrective action is required to resolve noncompliance. However, MDE OSE will update its internal monitoring procedures to document the circumstances under which expenditure sampling may be performed for medium- and low-risk subrecipients to enhance clarity of MDE OSE procedures. Anticipated Completion Date September 30, 2026 Responsible Individual(s) Sean McLaughlin, MDE

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Finding 1218515 (2025-027)

Material Weakness 2025

State of Michigan

MI

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

Finding 2025-027 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027 - Salesforce Security Management and Access Controls Management Views MSF agrees that Salesforce was not written as an exception in the identified policy but disagrees that there is a control deficiency. MSF maintains eff...

Finding 2025-027 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027 - Salesforce Security Management and Access Controls Management Views MSF agrees that Salesforce was not written as an exception in the identified policy but disagrees that there is a control deficiency. MSF maintains effective controls within its control environment that effectively mitigate risks associated with exempting Salesforce from the identified policy and provide reasonable assurance MSF is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of federal awards. Planned Corrective Action Based on the factors that led MSF to exempt Salesforce from SECU.01.020.01 (Access Control Standard), including risk assessments and MSF’s existing control environment, Salesforce will be included in the policy as a written exception. Anticipated Completion Date September 30, 2026 Responsible Individual(s) Alex Fox, MSF Ian McCorvie, MSF Calvin Myers, MSF William Chaffee, MSF

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Finding 1218514 (2025-026)

Material Weakness 2025

State of Michigan

MI

Allowable Costs / Cost Principles Subrecipient Monitoring Period of Performance § 200.303

Finding 2025-026 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027 - Insufficient Respite Payment Controls Management Views MDHHS agrees with the finding. Planned Corrective Action MDHHS implemented a post payment review process for the final respite payments issued through the Medical S...

Finding 2025-026 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027 - Insufficient Respite Payment Controls Management Views MDHHS agrees with the finding. Planned Corrective Action MDHHS implemented a post payment review process for the final respite payments issued through the Medical Services Administration Manual Payment System during fiscal year 2025 and finalized the review during fiscal year 2026, noting no improper payments. As all respite payments concluded at the end of fiscal year 2025, this review is no longer applicable moving forward. Anticipated Completion Date Completed Responsible Individual(s) Crystal Kline, MDHHS

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Finding 1218513 (2025-025)

Material Weakness 2025

State of Michigan

MI

Allowable Costs / Cost Principles Subrecipient Monitoring Period of Performance § 200.303

Finding 2025-025 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027 - PTMS Security Management and Access Controls Management Views MDOT agrees that security management and access controls should be fully established for the Public Transportation Management System (PTMS). Planned Correcti...

Finding 2025-025 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027 - PTMS Security Management and Access Controls Management Views MDOT agrees that security management and access controls should be fully established for the Public Transportation Management System (PTMS). Planned Corrective Action Because PTMS is a legacy system that is being retired, MDOT will not re-create historical user data that was deleted due to a system limitation. Rather, MDOT EIM and the MDOT Office of Passenger Transportation (OPT) will collaborate and provide oversight to ensure that the new system, the Public Transportation Information Management System (PTIMS), which is scheduled for full implementation August 31, 2026, has fully established security management and access controls and that there is pertinent documentation regarding users’ roles. Also, EIM and OPT will continue to ensure that PTMS, and PTIMS after its implementation, user access is reviewed at least annually in accordance with SOM Technical Standard 1340.00.040.01 (Audit and Accountability Standard). Under the existing process, the designated system security administrators obtain, verify, and document the written approval for all identified users, and access is modified/removed timely and as appropriate based on responses received or removed when no response is received. Anticipated Completion Date September 2026 Responsible Individual(s) Sandy Lovell, MDOT Gina Huhn, MDOT Jean Ruestman, MDOT Kyle Nelson, MDOT Andy Esch, MDOT

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Finding 1218512 (2025-024)

Material Weakness 2025

State of Michigan

MI

Allowable Costs / Cost Principles Subrecipient Monitoring Period of Performance § 200.303

Finding 2025-024 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027 - MiSSG Security Management and Access Controls Management Views MiLEAP agrees with the finding. Planned Corrective Action For part a., for the exceptions noted in the finding, MiLEAP had the contractors complete the acce...

Finding 2025-024 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027 - MiSSG Security Management and Access Controls Management Views MiLEAP agrees with the finding. Planned Corrective Action For part a., for the exceptions noted in the finding, MiLEAP had the contractors complete the access forms and has approved their access. MiLEAP also updated its procedures to ensure that contractors complete the Michigan Student Aid Scholarships and Grants (MiSSG) access forms before access is granted to the system. For part b., MiLEAP updated its procedures to ensure that it maintains sufficient documentation of its recertification review of internal users. Anticipated Completion Date Completed Responsible Individual(s) Diann Cosme, MiLEAP

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Finding 1218511 (2025-023)

Material Weakness 2025

State of Michigan

MI

Subrecipient Monitoring Allowable Costs / Cost Principles Cash Management § 200.303

Finding 2025-023 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027 - EGrAMS Security Management and Access Controls Management Views LEO agrees with the finding. Planned Corrective Action For part a., LEO has a process to maintain documentation and support for internal users. For externa...

Finding 2025-023 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027 - EGrAMS Security Management and Access Controls Management Views LEO agrees with the finding. Planned Corrective Action For part a., LEO has a process to maintain documentation and support for internal users. For external users, LEO will ask the vendor to upgrade the system so it logs every external user activation, including the approving LEO staff member’s name and the timestamp, rather than overwriting previous external user activation records. For part b., LEO established a user reconciliation process in March 2026 that will be managed by the LEO Grants Division. For part c., LEO will change its policy requiring the disablement of user accounts inactive for over 60 days to comply with SOM Technical Standard 1340.00.020.01 (Access Control Standard). LEO will work with DTMB to complete a system security plan so user accounts will be automatically deactivated after 60 days of inactivity. LEO will also explore options to address the issue of EGrAMS users who typically only access the system every 90 days to complete required system reports. Anticipated Completion Date a. December 31, 2026 b. Completed c. December 31, 2026 Responsible Individual(s) Jason Hamblin, LEO

View Audit 404775

Finding 1218510 (2025-022)

Material Weakness 2025

State of Michigan

MI

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

Finding 2025-022 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027 - Concur Security Management and Access Controls Management Views The Michigan Strategic Fund (MSF) agrees that Concur was not written as an exception in the identified policy but disagrees that there is a control deficie...

Finding 2025-022 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027 - Concur Security Management and Access Controls Management Views The Michigan Strategic Fund (MSF) agrees that Concur was not written as an exception in the identified policy but disagrees that there is a control deficiency. MSF maintains effective controls within its control environment that effectively mitigate risks associated with exempting Concur from the identified policy and provide reasonable assurance MSF is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of federal awards. Planned Corrective Action Based on the factors that led MSF to exempt Concur from SECU.01.020.01 (Access Control Standard), including risk assessments and MSF’s existing control environment, Concur will be included in the policy as a written exception. Anticipated Completion Date September 30, 2026 Responsible Individual(s) Alex Fox, MSF Ian McCorvie, MSF Calvin Myers, MSF William Chaffee, MSF

View Audit 404775

Finding 1218509 (2025-021)

Material Weakness 2025

State of Michigan

MI

Allowable Costs / Cost Principles Subrecipient Monitoring Period of Performance § 200.303

Finding 2025-021 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027 - AASHTOWare Security Management and Access Controls Management Views MDOT agrees it did not fully establish effective security management and access controls over the American Association of State Highway and Transportat...

Finding 2025-021 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027 - AASHTOWare Security Management and Access Controls Management Views MDOT agrees it did not fully establish effective security management and access controls over the American Association of State Highway and Transportation Officials software (AASHTOWare) users. Planned Corrective Action For part a., the MDOT Office of Enterprise Information Management (EIM), Bureau of Field Services-Construction Field Services Division, and Bureau of Development-Design Division will collaborate and provide oversight to ensure that internal user access for AASHTOWare is reviewed at least annually. MDOT will implement an improved process, which will be facilitated by the designated system security administrators, to ensure an internal user review at least annually. For part b., MDOT worked with DTMB in May 2026 to correct and enhance the auto-disabler function of the AASHTOWare program. In addition, MDOT will continue to monitor this functionality as part of its improved access control process to ensure users who have not accessed AASHTOWare within 365 days for internal user accounts and 18 months for external user accounts are disabled timely. Anticipated Completion Date a. September 30, 2026 b. Completed Responsible Individual(s) Mark Shulick, MDOT Dan Burns, MDOT Kristin Schuster, MDOT Dee Parker, MDOT Lindsey Renner, MDOT Jason Gutting, MDOT Kyle Nelson, MDOT Andy Esch, MDOT

View Audit 404775

Finding 1218464 (2025-004)

Material Weakness 2025

Exceptional Children Have Opportunities

IL

Allowable Costs / Cost Principles Internal Control / Segregation of Duties

Corrective Action Plan Finding No.: 2025 - 004 Condition: During testing of expenditures claimed under the Education Stabilization Fund program we identified $41,157 of expenditures that were included in a reimbursement request were not supported by allowable program expenditures. Subsequent to the ...

Corrective Action Plan Finding No.: 2025 - 004 Condition: During testing of expenditures claimed under the Education Stabilization Fund program we identified $41,157 of expenditures that were included in a reimbursement request were not supported by allowable program expenditures. Subsequent to the reimbursement request and receipt of grant funds, the checks issued as payment to vendors were voided as the vendors did not provide goods or services. These expenditures were determined to be unsupported and resulted in questioned costs. Plan: Administration will not create and hold checks for goods and services not yet rendered under a grant award, as this can lead to unsupported expenditures, should the goods or services not be provided or the checks are voided and not timely reported. The encumbrance process will be used appropriately, and payments will be made once the goods or services have been rendered. Anticipated Date of Completion: June 30, 2026 Name of Contact Person: Dr. Rena Whitten, Superintendent

View Audit 404752

Finding 1218443 (2025-005)

Material Weakness 2025

Crazy Horse School

SD

Allowable Costs / Cost Principles Internal Control / Segregation of Duties

#2025-005 FINDING: Payroll Testing Responsible Individual: Pedro Rosa, Business Manager Corrective Action Plan: The Business Manager will continue to review payroll prior to payroll being paid. The Payroll/Accountant will double check all timesheets before entering and double check payrate against c...

#2025-005 FINDING: Payroll Testing Responsible Individual: Pedro Rosa, Business Manager Corrective Action Plan: The Business Manager will continue to review payroll prior to payroll being paid. The Payroll/Accountant will double check all timesheets before entering and double check payrate against contract amount. Anticipated Completion Date: Ongoing

View Audit 404724

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