Corrective Action Plans

Finding 1201859 (2025-008)

Material Weakness 2025

FL

Allowable Costs / Cost Principles Reporting Special Tests & Provisions

Finding Number: 2025-008 Planned Corrective Action: In the 2026 Legislative Session, FCOM submitted a Legislative Budget Request to obtain funding for resources to implement an Identity Access Management tool which would resolve this finding. The estimated cost is $990,550. The estimated resolution ...

Finding Number: 2025-008 Planned Corrective Action: In the 2026 Legislative Session, FCOM submitted a Legislative Budget Request to obtain funding for resources to implement an Identity Access Management tool which would resolve this finding. The estimated cost is $990,550. The estimated resolution date is June 30, 2027, provided FCOM receives funding to resolve the issue. Anticipated Completion Date: June 30, 2027 Responsible Contact Person: Roosevelt Petithomme

View Audit 396183

Finding 1201820 (2025-007)

Material Weakness 2025

Liberty County District School Board

FL

Allowable Costs / Cost Principles Special Tests & Provisions Eligibility

Finding Number: 2025-007 Planned Corrective Action: FCOM submitted a Legislative Budget Request to obtain funding for resources to ensure system code changes are corrected; however, FCOM is continuing development of the functional design documentation. The estimated resolution date is June 30, 2027....

Finding Number: 2025-007 Planned Corrective Action: FCOM submitted a Legislative Budget Request to obtain funding for resources to ensure system code changes are corrected; however, FCOM is continuing development of the functional design documentation. The estimated resolution date is June 30, 2027. Anticipated Completion Date: June 30, 2027 Responsible Contact Person: Roosevelt Petithomme/Paul Forrester

View Audit 396183

Finding 1201704 (2025-003)

Material Weakness 2025

Liberty County District School Board

FL

Allowable Costs / Cost Principles Eligibility Reporting

Finding Number: 2025-003 Planned Corrective Action: To address this finding, FNW immediately implemented a temporary solution. On or about September 8, 2025, FNW created a ticket to commence work on a permanent solution to address the audit finding. The solution deployed on March 18, 2026. Anticipat...

Finding Number: 2025-003 Planned Corrective Action: To address this finding, FNW immediately implemented a temporary solution. On or about September 8, 2025, FNW created a ticket to commence work on a permanent solution to address the audit finding. The solution deployed on March 18, 2026. Anticipated Completion Date: March 18, 2026 Responsible Contact Person: Terricka Washington, Division of Food, Nutrition and Wellness Information Office/LaSharonté Williams-Potts, Assistant Division Director

View Audit 396183

Finding 1201580 (2025-003)

Material Weakness 2025

Clarkson University

NY

Student Financial Aid Reporting Matching / Level of Effort / Earmarking

Finding No.: 2025-003 – Disbursements Reporting Federal Agency: U.S. Department of Education Program Name: Student Financial Assistance Cluster – Pell Grant Program and Federal Direct Loan (FDL) Program ALN Number: 84.063, 84.268 Federal Award Year: July 1, 2024 – June 30, 2025 Criteria Institutions...

Finding No.: 2025-003 – Disbursements Reporting Federal Agency: U.S. Department of Education Program Name: Student Financial Assistance Cluster – Pell Grant Program and Federal Direct Loan (FDL) Program ALN Number: 84.063, 84.268 Federal Award Year: July 1, 2024 – June 30, 2025 Criteria Institutions submit Direct Loan, Pell Grant, TEACH Grant, and IASG origination records and disbursement records to the COD system. Origination records can be sent well in advance of any disbursements, as early as the institution chooses to submit them for any student the institution reasonably believes will be eligible for a payment. An institution follows up with a disbursement record for that student no earlier than (1) seven calendar days prior to the disbursement date under the Advance or Heightened Cash Monitoring 1 payment methods, or (2) the date of the disbursement under the Reimbursement or Heightened Cash Monitoring 2 Payment Method. The disbursement record reports the actual disbursement date and the amount of the disbursement. ED processes origination and/or disbursement records and returns acknowledgments to the institution. The acknowledgments identify the processing status of each record: Rejected, Accepted with Corrections, or Accepted. In testing the origination and disbursement data, the auditor should be most concerned with the data ED has categorized as accepted or accepted with corrections. Institutions must report student disbursement data within 15 calendar days after the institution makes a disbursement or becomes aware of the need to make an adjustment to previously reported student disbursement data or expected student disbursement data. Institutions may do this by reporting once every 15 calendar days, bi-weekly or weekly, or may set up their own system to ensure that changes are reported in a timely manner. Title 2 U.S. Code of Federal Regulations Part 200 (2CFR 200) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, section 303(a) states, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statues, regulations and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Conditions Found For two (2) out of 69 Pell COD Reports selected for test work, the required Pell student payment data was reported to the Common Origination and Disbursement (COD) website 52 days after disbursement, which exceeds the 15-day timeframe required by federal regulations. For one (1) out of 69 Pell COD Reports selected for test work, the required Pell student payment data was reported to the Common Origination and Disbursement (COD) website 261 days after disbursement, which exceeds the 15-day timeframe required by federal regulations. For four (4) out of 69 Pell COD Reports and three (3) out of 113 FDL COD Reports selected for test work, the Cost of Attendance was misreported to the COD website. There was no follow-up by the University to correct the discrepancies. For ten (10) out of 69 Pell and ten (10) out of 113 FDL COD Reports selected for test work, the transaction number did not agree between the FASFA Submission Summary Form and the COD website. Cause The cause of the conditions found is insufficient review to ensure that accurate disbursement reporting is occurring on a timely basis, all records submitted to COD were accepted, and, for those that were rejected, that corrected data is submitted within the required timeframe. Possible Asserted Effect The possible effect of the condition found is that the University may not be reporting Pell and FDL disbursements to COD completely, accurately, and in a timely manner. Questioned Costs No questioned costs were identified. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding Yes; 2024-002 Views of Responsible Officials Management accepts this finding and notes several issues that affected the submissions including staffing onboarding and training, submission review, and deadline controls. Management continues to fill positions experiencing unexpected turnover and to improve training for current and newly hired staff in order to restore adequate staffing levels and ensure continuity of COD reporting responsibilities. From May through September 2025, management retained Blue Icon Advisors (BIA) to provide dedicated coaching and support for improved onboarding and compliance knowledge, including providing specialized training to the Loan Manager relative to federal regulations and proper loan record management. Management is implementing processes to improve the weekly review and update of Cost of Attendance (COA) information and CPS transaction numbers to further ensure institutional records are aligned with COD data and to reduce the risk of mismatched records. Management has also strengthened internal controls with improvements to processes which enhance the monitoring of submission deadlines, review of file acceptance reports, and identification and correction of electronic records issues prior to submission. These improvements include the increased and more effective utilization of COD-delivered reports (including Pell Reconciliation and Anticipated Disbursement Reports) and institutional and PeopleSoft reports and queries, with reviews conducted on a weekly basis to promptly identify record discrepancies requiring resolution. Anticipated Completion Date March 2026 - completed Responsible Person Nicole Adner, Director of Financial Aid

View Audit 396132

Finding 1201560 (2025-002)

Material Weakness 2025

The Kennedy Collective, Inc. and Affiliates

CT

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

Coronavirus State and Local Fiscal Recovery Funds 21.027 Recommendation: CLA recommends that management reinforce and consistently apply key control procedures requiring documented review and approval of all program invoices prior to payment. Management should ensure that reviews explicitly address ...

Coronavirus State and Local Fiscal Recovery Funds 21.027 Recommendation: CLA recommends that management reinforce and consistently apply key control procedures requiring documented review and approval of all program invoices prior to payment. Management should ensure that reviews explicitly address allowability, eligibility and within the period of performance under the program and that evidence of such review is retained in accordance with record retention requirements. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action planned in response to finding: Management will enforce the internal controls in place to ensure full compliance. Name of the contact person responsible for corrective action: Maria Giaimo, CFO Planned completion date for corrective action plan: June 30, 2026

View Audit 396125

Finding 1201556 (2025-001)

Material Weakness 2025

The Kennedy Collective, Inc. and Affiliates

CT

Allowable Costs / Cost Principles

Coronavirus State and Local Fiscal Recovery Funds 21.027 Recommendation: CLA recommends that management strengthen internal controls over compliance by implementing procedures to ensure that all expenditures are supported by complete and accurate documentation that is retained in accordance with fed...

Coronavirus State and Local Fiscal Recovery Funds 21.027 Recommendation: CLA recommends that management strengthen internal controls over compliance by implementing procedures to ensure that all expenditures are supported by complete and accurate documentation that is retained in accordance with federal record retention requirements. Management should also periodically review documentation for completeness to ensure that expenditures charged can be substantiated and verified as allowable, related to eligible activities, and within the period of performance. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action planned in response to finding: Management will enforce the internal controls in place to ensure full compliance. Name of the contact person responsible for corrective action: Maria Giaimo, CFO Planned completion date for corrective action plan: June 30, 2026

View Audit 396125

Finding 1201547 (2025-002)

Material Weakness 2025

Beulah Heights University

GA

Student Financial Aid Internal Control / Segregation of Duties Subrecipient Monitoring

Finding 2025-002 - U.S. Department of Education (ED), Title IV Student Financial Aid Programs - Federal Work-Study Community Service Requirement Not Met and Failure to Report FWS Earnings (significant deficiency): Criteria – Per 34 CFR § 675.18(g), each institution participating in the Federal Work-...

Finding 2025-002 - U.S. Department of Education (ED), Title IV Student Financial Aid Programs - Federal Work-Study Community Service Requirement Not Met and Failure to Report FWS Earnings (significant deficiency): Criteria – Per 34 CFR § 675.18(g), each institution participating in the Federal Work-Study (FWS) Program must use at least 7 percent of its total FWS allocation to compensate students employed in community service activities unless the institution has received an approved waiver from the Department of Education. Per 34 CFR § 675.19(b), institution must maintain fiscal control and accountability over FWS funds and comply with all reporting requirements established by the Secretary. This includes accurately reporting FWS student earnings through required federal systems and maintaining documentation to support reported activity. Condition - Based on documentation provided for the 2024–2025 award year, the institution was authorized a total of $26,649 in Federal Work-Study funds. Of this amount, only $1,057 was identified as wages paid to students employed in community service activities. No documentation was provided to demonstrate that additional community service wages were paid or that a waiver from the U.S. Department of Education of not meeting the required 7 percent community service expenditure threshold. Additionally, during review of the institution’s 2024–2025 Federal Work-Study (FWS) activity, it was noted that FWS student earnings were not reported to the Common Origination and Disbursement (COD) System. The institution’s financial aid records and payroll registers indicate that students earned a total of $23,131 in FWS wages during the award year; however, no corresponding COD submissions or COD acknowledgment files were provided for review to demonstrate that these earnings were reported as required. Cause – The infraction appears to have resulted from failure to monitor compliance with the 7 percent FWS community service requirement and inadequate internal controls to ensure timely and accurate reporting of FWS earnings. Effect – The institution did not comply with the statutory community service spending requirement and FWS earnings were not reported through required federal reporting channels, limiting transparency and federal oversight. Questioned Costs - $0 Perspective – The Federal Work-Study Program includes explicit statutory spending and reporting requirements that are considered key compliance controls. In this instance, the institution expended approximately 4 percent of its authorized FWS allocation ($1,057 of $26,649) on community service wages, compared to the required 7 percent, resulting in a 43 percent shortfall from the required threshold. In addition, 100 percent of FWS earnings identified during testing ($23,131) were not reported to the COD System, as no submission or acknowledgment records were available. Repeat Finding – No Auditor’s Recommendation – We recommend that the institution strengthen monitoring of community service requirements and establish formal FWS reporting controls and perform periodic internal audits of FWS expenditures and reporting to identify and correct issues prior to year-end and federal reporting deadlines. Management’s Response – Per 34 CFR § 675.18(g), each institution participating in the Federal Work-Study (FWS) Program must use at least 7 percent of its total FWS allocation to compensate students employed in community service activities. Based on documentation provided for the 2024-2025 award year, the institution was authorized a total of $26,649 in Federal Work-Study funds. Of this amount, $1,057 was identified as community service wages. No documentation was provided to demonstrate that additional community service wages were paid or that a waiver from ED was requested or approved

View Audit 396108

Finding 1201512 (2025-004)

Material Weakness 2025

Volunteers of America Western Washington and Subsidiary

WA

Subrecipient Monitoring Allowable Costs / Cost Principles Significant Deficiency § 200.414

2025-004 Indirect Cost Rate Application on Federal Invoices We acknowledge BDO’s observation regarding the indirect cost rate applied to federal invoices during the period in which VOAWW transitioned from its approved NICRA rate to the de minimis rate. During this transition, VOAWW applied the NICRA...

2025-004 Indirect Cost Rate Application on Federal Invoices We acknowledge BDO’s observation regarding the indirect cost rate applied to federal invoices during the period in which VOAWW transitioned from its approved NICRA rate to the de minimis rate. During this transition, VOAWW applied the NICRA rate of 17.2% while moving to the de minimis rate but did not complete the required true-up to 10% for a three-month period prior to the de minimis rate being increased to 15%. VOAWW has reviewed the circumstances that led to this error and determined that it occurred during an unusual and infrequent set of conditions. Transitions between indirect cost methodologies are rare and increases to the federal de minimis rate are also uncommon. As a result, this specific scenario is unlikely to recur. Nonetheless, VOAWW recognizes the importance of strengthening controls around indirect rate changes to ensure accurate application during any future transitions. To address this finding and strengthen controls over indirect cost rate application, VOAWW will implement the following corrective actions: • Formal Rate Transition Procedures – Before the end of FY26, the Finance Department will develop and document a standardized procedure for transitioning between indirect cost rates, including effective dates, interim rate requirements, required true-ups, and approval checkpoints to ensure accurate application during any future rate changes. • Centralized Indirect Rate Tracking – Before the end of FY26, the Finance Department will maintain a centralized indirect rate schedule that includes approval documentation, effective dates, and any required adjustments. This schedule will be referenced during invoice preparation and review to ensure consistent and accurate rate application across all federal awards. • Contract Kick-Off Meetings and Cross-Department Alignment – Before the end of FY26, Finance, Grants, and Contract Compliance will implement contract kick-off meetings for new awards and significant contract amendments to align on billing requirements, approved indirect cost rates, effective dates, and other critical compliance information and ensure consistent communication across departments. • Documentation of Important Communications – Before the end of FY26, VOAWW will implement guidance for documentation of important communications with funders that have a single audit impact. Responsible Individual: Claire Danielson, VIP of Finance Estimated Completion Date: June 30, 2026

View Audit 396088

Finding 1201508 (2025-003)

Material Weakness 2025

Volunteers of America Western Washington and Subsidiary

WA

Allowable Costs / Cost Principles § 200.303

2025-003 Activities Allowed or Unallowed, Allowable Costs/Cost Principles We acknowledge BDO’s finding regarding an unallowable cost that was initially charged to the Home Investment Partnerships Program. Although the error was able to be rectified, the initial error indicated that internal controls...

2025-003 Activities Allowed or Unallowed, Allowable Costs/Cost Principles We acknowledge BDO’s finding regarding an unallowable cost that was initially charged to the Home Investment Partnerships Program. Although the error was able to be rectified, the initial error indicated that internal controls did not prevent or detect the unallowable charge at the time of posting. To strengthen internal controls over allowable costs and ensure expenditures charged to federal programs comply with Uniform Guidance and program-specific requirements, VOAWW will implement the following corrective actions: Strengthened Review of Allowable Costs Before the end of FY26, the Finance Department will enhance its invoice review procedures for all programs. This strengthened review will include verification of: • Allowability under 2 CFR §200 Subpart E • Program specific requirements • Contract terms and approved budgets • Supporting documentation for each cost Review steps will be documented to ensure a clear audit trail. Training for Staff on Federal Allowable Cost Requirements Beginning in FY26, Finance, Grants, and Contract Compliance staff responsible for coding, approving, or reviewing federal expenditures will receive training on: • Allowable cost principles under 2 CFR §200.403–.405 • Program specific cost restrictions • Documentation standards • The importance of internal controls over federal expenditures Before the end of FY26, VOAWW will implement internal controls to ensure that allowability determinations are made internally by trained staff prior to charging costs to federal awards. Centralized Federal Award Compliance Reference By the end of FY26, Contract Compliance will maintain a centralized compliance reference for all federal programs, including allowability rules, program specific restrictions, and documentation requirements. Finance staff will reference this tool during invoice review to ensure consistent application of federal requirements. These corrective actions will strengthen VOAWW’s internal controls over allowable costs, reduce the risk of unallowable expenditures being charged to federal programs, and ensure compliance with Uniform Guidance and HUD program requirements. Responsible Individual: Claire Danielson, VIP of Finance Estimated Completion Date: June 30, 2026

View Audit 396088

Finding 1201506 (2025-002)

Material Weakness 2025

Volunteers of America Western Washington and Subsidiary

WA

Reporting Allowable Costs / Cost Principles § 200.303 § 200.403

2025-002 Accounts Payable Cutoff We acknowledge BDO’s inquiry regarding an invoice that appeared to relate to the prior fiscal period. The invoice was received after Accounts Payable closed without advance notification for accrual. BDO noted a similar issue in an additional sample. To strengthen our...

2025-002 Accounts Payable Cutoff We acknowledge BDO’s inquiry regarding an invoice that appeared to relate to the prior fiscal period. The invoice was received after Accounts Payable closed without advance notification for accrual. BDO noted a similar issue in an additional sample. To strengthen our accounts payable cutoff controls and prevent similar issues, we will implement the following improvement measures: • Formalize the Accrual Process – While an accrual process already exists, before the end of FY26, we will document and strengthen the accrual procedures by requiring Program Managers to notify Finance, specifically the AP team inbox, when work from a vendor has been completed, but an invoice has not yet been received, on an annual basis by a given deadline. This will ensure that known obligations are captured in the correct fiscal period. • Strengthen Review of Post-Year-End Invoices – While regular review of invoices is already a part of our regular AP process, Accounts Payable will implement a more stringent review process before the end of FY26 for all invoices received in the first period after fiscal year end, including verification of service dates, contract terms, and deliverables. • Enhanced Communication Expectations – Program Managers will receive training and guidance before the end of FY26 on the importance of timely invoice submission and the need to alert Finance when delays occur. • Documentation of Cutoff Decisions – For invoices received after close, before the end of FY26, Accounts Payable will document the receipt date, supporting details, and rationale for the period in which the expense is recorded to maintain a clear audit trail. These improvements will strengthen our internal controls over AP cutoff, improve the consistency of accrual practices, and reduce the risk of misstatements due to late or ambiguous invoices. Responsible Individual: Claire Danielson, VIP of Finance Estimated Completion Date: June 30, 2026

View Audit 396088

Finding 1201504 (2025-001)

Material Weakness 2025

Hardee County District School Board

FL

Subrecipient Monitoring Allowable Costs / Cost Principles Eligibility

The District appreciates the opportunity to respond to the audit finding regarding inconsistencies between Title I rank order and the allocation of funds based on low-income student percentages for the 2024-2025 fiscal year. Our review indicates that the variance in allocations resulted from a budge...

The District appreciates the opportunity to respond to the audit finding regarding inconsistencies between Title I rank order and the allocation of funds based on low-income student percentages for the 2024-2025 fiscal year. Our review indicates that the variance in allocations resulted from a budget decision to provide additional Title I funding to Bowling Green Elementary to support after-school programming, without fully accounting for per-pupil allocation. Historically, Bowling Green Elementary has served one of the highest concentrations of students from low-income families in the District, and the additional allocation was intended to ensure continuity of extended learning opportunities for students with significant academic need. While this decision was grounded in student need, the District recognizes that the additional funds were not fully reconciled with updated poverty data and required rank-order calculations. The District has demonstrated compliance with rank and serve requirements in prior years; however, to prevent recurrence, we are strengthening our internal controls. Beginning immediately, the District will implement a structured monthly review of Title I school allocations involving the Title I Program Specialist, the Finance Director, and the Deputy Superintendent to ensure that the 2025-2026 allocations align with current poverty data and PSES calculations. Additionally, the District will seek guidance from the Florida Department of Education Title I Office to confirm that our procedures fully meet all regulatory expectations. The District is confident that these corrective actions will ensure full compliance in 2025-2026 moving forward and will strengthen the integrity of our allocation processes.

View Audit 396085

Finding 1201500 (2025-001)

Material Weakness 2025

North Central Behavioral Health Systems, Inc.

IL

Allowable Costs / Cost Principles

Finding 2025-001 Criteria: The Organization should have controls in place over payroll related expenditures to ensure appropriate allocation between federal award programs and the relevant approval should be retained. Condition: Documented review of employee time-cards was not retained for an employ...

Finding 2025-001 Criteria: The Organization should have controls in place over payroll related expenditures to ensure appropriate allocation between federal award programs and the relevant approval should be retained. Condition: Documented review of employee time-cards was not retained for an employee selected for testing. Additionally, the documentation of review of the allocation between federal award programs was not retained by the Organization for the remaining employees selected for testing. Cause: The controls in place were not sufficiently documented to support their occurrence. Effect: Employee time was allocated to the corresponding major program without retaining sufficient documentation of review. Questioned Costs: There were no questioned costs identified. Context: A sample of 40 employee time-cards was tested. One time-card did not have documentation of review retained. The remaining 39 time-cards did not have documented review of the allocation between federal award programs. Recommendation: We recommend that management review the existing policies and procedures in place over personnel time and allocation and ensure that sufficient reviews are occurring and the corresponding documentation of the reviews are obtained. Anticipated completion date – Resolved in 2026 Corrective Action: Management agrees with the finding. NCBHS implemented policies and procedures to ensure accurate, timely, and compliant reporting of personnel effort charged to State of Illinois grants (including IDHS) and all Federal awards. The policy ensures the agency meets the requirements under 2 CFR 200.430(i) for Federal awards and applicable State grant accountability standards.

View Audit 396075

Finding 1201466 (2025-001)

Material Weakness 2025

Scripps Health and Affiliates

CA

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

Corrective Action Plan Corrective Action Plan – Uniform Guidance Audit Finding Organization: Scripps Health and Affiliates Federal Agency: U.S. Department of Homeland Security Pass-Through Agency: California Governor’s Office of Emergency Services UEI Number: JJRCL53EXL36 Audit Period: Year Ended Se...

Corrective Action Plan Corrective Action Plan – Uniform Guidance Audit Finding Organization: Scripps Health and Affiliates Federal Agency: U.S. Department of Homeland Security Pass-Through Agency: California Governor’s Office of Emergency Services UEI Number: JJRCL53EXL36 Audit Period: Year Ended September 30, 2025 Finding Reference Number: 2025-001 Federal Program: COVID-19 – Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing Number: 97.036 Finding Summary: The organization did not employ an adequate internal control review of payroll expenditures to support activities allowed or unallowed and allowable costs/cost principles related to payroll expenditures reimbursed for the project worksheet. Corrective Action Plan: Additional internal controls to ensure payroll expenditures are reviewed were implemented in late fiscal year 2022 by adopting a new approach to ensure compliant timekeeping. The new approach includes the following steps: revised the timekeeping policy to clarify employee and manager responsibilities, modified “failure to comply” provisions, deployed educational programs for both management and staff, reviewed/improved Kronos and UKG Pro Time and Attendance system automated notifications, and training resources have been available to management and staff via our Scripps intranet site. Leadership monitors policy compliance by individual employee and managers via systemwide reporting on a biweekly basis. Responsible Officials & Contact Person: Brett Tande, Executive Vice President & Chief Financial Officer Scripps Health and Affiliates Expected Completion Date: Completed in fiscal year 2022. As the expenditures in the project worksheet were incurred from the beginning of the COVID-19 pandemic, the corrective action plan put in place during 2022 could not previously remediate the project; however, all payroll expenditures incurred after the end of fiscal year 2022 have these corrective actions in place.

View Audit 396036

Finding 1201452 (2025-001)

Material Weakness 2025

Heartwood AZ dba Heartwood Montessori

AZ

Allowable Costs / Cost Principles Internal Control / Segregation of Duties § 200.302 § 200.403

2025-001 Unallowable Costs Planned Corrective Action Plan: Heartwood agrees with the finding and acknowledges that two expenditures charged to the Preschool Development Grants (PDG) program were determined to be unallowable under Federal cost principles. To address this issue and prevent similar occ...

2025-001 Unallowable Costs Planned Corrective Action Plan: Heartwood agrees with the finding and acknowledges that two expenditures charged to the Preschool Development Grants (PDG) program were determined to be unallowable under Federal cost principles. To address this issue and prevent similar occurrences in the future, Heartwood will implement the following corrective actions: 1. Enhanced Review Procedures Heartwood will implement additional review procedures for expenditures charged to Federal programs to ensure that all costs are evaluated for allowability under Uniform Guidance (2 CFR §200.403) and the specific terms and conditions of the PDG grant prior to being charged to the grant. 2. Training for Program and Fiscal Staff Program administrators and fiscal staff responsible for processing or approving grant expenditures will receive training on Federal cost principles and allowable expenditures under Uniform Guidance and the PDG program requirements. 3. Monitoring and Oversight Heartwood will require periodic supervisory review of grant expenditures to confirm that costs charged to the program are properly supported, reasonable, and allowable. 4. Review of Current-Year Expenditures Heartwood will review other expenditures charged to the PDG program during the fiscal year to determine whether additional unallowable costs were incurred and will take appropriate corrective action if necessary. 5. Disposition of Questioned Costs Heartwood will work with the pass-through entity or Federal awarding agency to determine the appropriate disposition of the questioned costs totaling $1,467.53, which may include reimbursement to the grant if required. Anticipated Completion Date: December 31, 2026 Responsible Contact Person: Sherri Sampson, Executive Director

View Audit 395999

Finding 1201419 (2025-005)

Material Weakness 2025

County of Orange, California

CA

Allowable Costs / Cost Principles § 200.303 § 200.430

Program: HIV Emergency Relief Project Grants (Ryan White) Federal Financial Assistance Listing Number: 93.914 Federal Grantor: U.S. Department of Health and Human Services Award No. and Year: 6H89HA00019-32-04; 2024 Compliance Requirements: Activities Allowable or Unallowed and Allowable Costs/Cost ...

Program: HIV Emergency Relief Project Grants (Ryan White) Federal Financial Assistance Listing Number: 93.914 Federal Grantor: U.S. Department of Health and Human Services Award No. and Year: 6H89HA00019-32-04; 2024 Compliance Requirements: Activities Allowable or Unallowed and Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During our testing, for one (1) out of sixty (60) payroll expenditures, we noted the timecard did not contain documented evidence of supervisory approval. Cause: The County’s internal control procedures were not consistently followed to ensure that the review and approval of timecards was documented. Effect: Lack of documented review for personnel hours could lead to an increased risk that unallowable or inaccurate activities and costs to be charged to the Federal program. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sampling of sixty (60) timecards were selected for testing out of a population of 5,994. The condition noted above was identified during our procedures related to activities allowed or unallowed and allowable costs/cost principles. Repeat Finding from Prior Years: No. Recommendation: We recommend that the County strengthen its policies and procedures to ensure that timecards consistently include documented evidence of supervisor approval prior to payroll processing. The County should also establish compensating controls for circumstances where timely supervisory approvals is not possible, and ensure such controls are consistently documented. Management Response and Corrective Action Plan: 1. Person Responsible: Barbara Harano, HCA Disbursements Manager 2. Corrective action plan: HCA Payroll will continue to review the Unapproved Timesheets Report in OC Time and send reminder emails to all supervisors with pending approvals. If supervisory approvals cannot be obtained by the OC Time timesheet upload deadlines, HCA Payroll will ensure documented timesheet approvals are appended through the OC Time amendment process and archived in the Unit’s shared drive. 3. Anticipated Implementation date: January 22, 2026

View Audit 395982

Finding 1201417 (2025-008)

Material Weakness 2025

County of Orange, California

CA

Allowable Costs / Cost Principles Eligibility Significant Deficiency § 200.303

Program: Refugee and Entrant Assistance State/Replacement Designee Administered Programs Federal Financial Assistance Listing Number: 93.566 Federal Grantor: U.S. Department of Health and Human Services Pass Through: California Department of Social Services Award No. and Year: Various Compliance Req...

Program: Refugee and Entrant Assistance State/Replacement Designee Administered Programs Federal Financial Assistance Listing Number: 93.566 Federal Grantor: U.S. Department of Health and Human Services Pass Through: California Department of Social Services Award No. and Year: Various Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance and Instance of Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 45 CFR Part 400, prescribes the eligibility conditions refugees must meet to receive RCA including the following: • RCA recipients must meet the general eligibility requirements for immigration status and refugee identification in accordance with 45 CFR §400.40 - §400.44. • RCA is limited to refugees who are ineligible for TANF, SSI, OAA, AB, APTD, and AABD in accordance with 45 CFR §400.53. • Mandatory work registrants must comply with work requirements and may not voluntarily quit or refuse suitable employment within 30 days prior to application; benefits must be terminated when requirements are not met (45 CFR §§400.75(a), 400.77, and 400.82(a)). • RCA payments may not exceed ORR-authorized rates and may not be less than the State TANF payment rate (45 CFR §§400.60(b) and 400.60(d); ORR PL 22-01). Condition: During our testing of the Social Services Agency’s (SSA) compliance with eligibility and allowable cost/cost principles, we noted the following: • One (1) instance of payment issued to a participant who did not meet eligible immigration status requirements. • One (1) instance of payment issued to a participant who was eligible for another federally funded cash assistance program. • One (1) instance of payment issued to a participant who failed to meet the mandatory work registrant requirements within the required time frame. • One (1) instance of payment issued to a participant using an incorrect benefit rate. Cause: Controls over eligibility determination and benefit rate calculation were not consistently applied, including insufficient verification and supervisory review of eligibility criteria and payment amounts. Effect: Program funds were expended for ineligible participants and an incorrect benefit rate was used, increasing the risk of noncompliance with federal requirements. Questioned Costs: Questioned costs for cases tested in which we determined to be ineligible to receive cash assistance was $1,814. Context/Sampling: A nonstatistical sample of sixty (60) out of all active program participants were sampled. For ineligible cases, we have projected questioned costs against the remaining population for a total of $24,276. The underpayment related to an incorrect benefit rate used was not projected as questioned costs as this did not result in an over-expenditure of federal funds The condition above was identified during our procedures over eligibility, activities allowed or unallowed, and allowable costs/cost principles testing. Repeat Finding from Prior Years: Yes. Recommendation: We recommend that the SSA department strengthen its internal controls to ensure that program eligibility criteria and benefit determinations are properly supported. Management Response and Corrective Action Plan: 1. Person Responsible: Rosa Palacios, Human Services Manager 2. Corrective action plan: Staff Guidance and Eligibility Reminder: Program will issue a reminder to all eligibility staff reinforcing program eligibility requirements and the importance of thoroughly reviewing documentation when making eligibility determinations. The reminder will highlight key areas identified in the audit findings, including verification of immigration eligibility, identifying applicants who may qualify for other federally funded cash assistance programs, and ensuring accurate benefit determinations. Work Requirement Reporting Coordination: Program will also communicate with the contracted provider responsible for monitoring work participation requirements to reinforce expectations regarding timely reporting of participant non-compliance. Internal staff will be reminded to take timely action once non-compliance is reported to ensure benefits are discontinued in accordance with program requirements. System Correction: The incorrect benefit rate identified during the audit was related to a prior system configuration issue that required manual processing. The system has since been updated. Program staff will continue to monitor system updates and verify benefit calculations as needed. 3. Anticipated Implementation date: June 30, 2026

View Audit 395982

Finding 1201405 (2025-004)

Material Weakness 2025

County of Orange, California

CA

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

Program: WIC Special Supplemental Nutrition Program for Women, Infants, and Children Federal Financial Assistance Listing Number: 10.557 Federal Grantor: U.S. Department of Agriculture Pass-Through: California Department of Public Health Award No. and Year: 22-10270 A03 and 2022 Compliance Requireme...

Program: WIC Special Supplemental Nutrition Program for Women, Infants, and Children Federal Financial Assistance Listing Number: 10.557 Federal Grantor: U.S. Department of Agriculture Pass-Through: California Department of Public Health Award No. and Year: 22-10270 A03 and 2022 Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During our testing of the HCA’s provisions for activities allowed or unallowed and allowable costs/cost principles requirements, we noted that for one (1) of sixty (60) payroll samples tested, the employee was able to review and approve their own timecard. Cause: It was determined that the control deficiency resulted from a system configuration error that permitted the employee to approve their own timecard under the supervisor/manager review role. Effect: Failure to consistently apply internal controls over payroll charges increases the risk that unallowable or unsupported payroll costs could be charged to the Federal program and not be detected in a timely manner. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sampling of sixty (60) timecards was selected for testing out of a population of 1,144. The condition noted above was identified during our procedures related to activities allowed or unallowed and allowable costs/cost principles. Repeat Finding from Prior Years: No. Recommendation: Management should ensure appropriate segregation of duties within the payroll system by restricting approval authority to independent supervisors or managers and implementing controls to prevent self-approval. In addition, management should periodically review user access roles and system configurations to confirm that approval controls are operating as designed and that payroll charges to Federal programs are allowable, properly allocated, and adequately supported. Management Response and Corrective Action Plan: 1. Person Responsible: Barbara Harano, HCA Disbursements Manager 2. Corrective action plan: An unexpected change occurred in the OC Time system that allowed an employee to both submit and approve their own timesheet. This issue had been previously reported and resolved. Auditor-Controller IT has reported the issue again to the timekeeping system vendor and is currently validating and testing the updated configuration to ensure the problem does not recur. 3. Anticipated Implementation date: June 30, 2026

View Audit 395982

Finding 1201396 (2025-005)

Material Weakness 2025

Eastern Carolina Human Services Agency, Inc.

NC

Allowable Costs / Cost Principles HUD Housing Programs Reporting

Finding: 2025-005 Name of Contact Person: Linda Higuet, Interim Finance Director Corrective Action: Management will make organizational changes as needed to ensure that each program is self-sustaining. Upper level management will obtain training for allowable costs/cost principles and activities all...

Finding: 2025-005 Name of Contact Person: Linda Higuet, Interim Finance Director Corrective Action: Management will make organizational changes as needed to ensure that each program is self-sustaining. Upper level management will obtain training for allowable costs/cost principles and activities allowed/unallowed under the Uniform Guidance and specific program regulations. Additionally, all upper level management will obtain training for financial and program specific reporting. Financial reports will be reviewed monthly by program directors, and program specific reporting will undergo monthly review by program directors. Proposed Completion Date: As soon as possible.

View Audit 395970

Finding 1201391 (2025-004)

Material Weakness 2025

Eastern Carolina Human Services Agency, Inc.

NC

Allowable Costs / Cost Principles

Finding: 2025-004 Name of Contact Person: Linda Higuet, Interim Finance Director Corrective Action: Management will review all costs to ensure they are allowable and in accordance with the cost principles of the Uniform Guidance and specific program regulations, as applicable. Management will obtain...

Finding: 2025-004 Name of Contact Person: Linda Higuet, Interim Finance Director Corrective Action: Management will review all costs to ensure they are allowable and in accordance with the cost principles of the Uniform Guidance and specific program regulations, as applicable. Management will obtain training regarding these cost principles and regulations. Proposed Completion Date: Immediately.

View Audit 395970

Finding 1201390 (2025-002)

Material Weakness 2025

Tuba City Unified School District No.15

AZ

Allowable Costs / Cost Principles Internal Control / Segregation of Duties Significant Deficiency

CORRECTIVE ACTION PLAN U.S. Department of Education | Arizona Department of Education Tuba City Unified School District No. 15 respectfully submits the following corrective action plan for the year ended June 30, 2025. Audit period: July 1, 2024 – June 30, 2025 The findings from the schedule of find...

CORRECTIVE ACTION PLAN U.S. Department of Education | Arizona Department of Education Tuba City Unified School District No. 15 respectfully submits the following corrective action plan for the year ended June 30, 2025. Audit period: July 1, 2024 – June 30, 2025 The findings from the schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. FINANCIAL STATEMENT FINDINGS 2025-001 INFORMATION TECHNOLOGY Type of Finding: Material Weakness in Internal Control Over Financial Reporting Condition/Context: The District did not establish internal control procedures over information technology systems to ensure proper protection of District and student data. The following control deficiencies were noted regarding the District’s information technology policies and procedures: • The District did not limit access within the District’s accounting software to only those areas in each employee’s job function. Several employees had full administrative access to the accounting software, including third-party consultants, without compensating manual controls. • The District did not have a formal written policy regarding system or software changes. • Data-sharing agreements with third party provides that had access to the District’s data were not provided. • Documentation was not provided to support that the IT systems generated electronic audit trail reports or change logs were being reviewed or analyzed. This would include systemgenerated incident or error reports. • Disaster recovery and contingency plans were not provided. Recommendation: To strengthen internal controls, the District should evaluate its procedures regarding information technology security. The District should review and establish IT policies and procedures to protect the District’s data, train employees, establish backup plans, disaster recover or contingency plans, and 3rd party security and data confidentiality agreements. System general irregularity reports, including incident or error reports should be reviewed on an ongoing basis. Corrective Action: The District will evaluate its procedures regarding information technology security. The District will review and establish IT policies and procedures to protect the District’s data, disaster recovery or contingency plans, and 3rd party security and data confidentiality agreements. Additionally, the District will review system generated irregularity reports, including incident or error reports on an ongoing basis. Planned completion date for corrective action plan: For the period ending June 30, 2026. Name of the contact person responsible for corrective action: Leah Begay, Business Manager

View Audit 395963

Finding 1201297 (2025-005)

Material Weakness 2025

State of Hawaii, Department of Accounting and General Services

HI

Cash Management Subrecipient Monitoring Allowable Costs / Cost Principles

Finding No. 2025-005 ALN No. 10.179 Program Title: Micro-Grants Food Security Program Grant Award No.: AM200100XXXG132 21MGFSPHI1003-00 AM22MGFSPHI1007-04 23MGFSPHI1011-00 24MGFSPHI1016-00 Condition An elapsed time of 583 days between the drawdown and disbursement date of funds for the program and t...

Finding No. 2025-005 ALN No. 10.179 Program Title: Micro-Grants Food Security Program Grant Award No.: AM200100XXXG132 21MGFSPHI1003-00 AM22MGFSPHI1007-04 23MGFSPHI1011-00 24MGFSPHI1016-00 Condition An elapsed time of 583 days between the drawdown and disbursement date of funds for the program and that the check date of 01/24/2025 occurred after the grant period expiration of 09/29/2024. Indicating that cash management controls were not operating to minimize time between transfer and disbursement and that the period of performance was unauthorized to be extended past the budget date. Corrective Action Plan Concur. The Hawaii Department of Agriculture and Biosecurity (DAB) will change administrative procedures for drawdown and disbursement of federal funds under the Micro-Grants Food Security Program. DAB will process the grant contracts and payments in batches of about 100 micro-grants per month, and federal drawdown will not occur until about a batch of 100 contracts have been executed. Additional staff hired for grant processing will expedite the payment process to ensure conformity with the 25-day disbursement timeline. Person Responsible Brendan Akamu, Market Development Branch Manager Anticipated Date of Completion Corrective action plan will be implemented in April 2026.

View Audit 395953

Finding 1191763 (2025-001)

Material Weakness 2025

Dawn Center for Independent Living

NJ

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

Responsible Executive: CEO – Carmela Slivinski Implementation Status: Effective Immediately Full Implementation Date: No later than June 30, 2026 Finding — Compliance (Period of Performance) Significant Deficiency Condition: Auditor noted while testing period of performance, 1 of the 10 expenses rec...

Responsible Executive: CEO – Carmela Slivinski Implementation Status: Effective Immediately Full Implementation Date: No later than June 30, 2026 Finding — Compliance (Period of Performance) Significant Deficiency Condition: Auditor noted while testing period of performance, 1 of the 10 expenses recorded in June 2025 pertained to subsequent months outside of the contract period. Effect: One expense was included in the expenditure report under the incorrect grant period ending June 30, 2025. Cause: The Organization noted that this finding came about due to a clerical error. The bookkeeper inadvertently recorded a July invoice on June 30th and this led to an incorrect charge to the grant period ending June 30th. Recommendation: Auditor recommends management continue to perform a second review on the grant submission especially towards the end of the grant period. Management’s Response: Management concurs with the finding regarding deficiencies in grant period-of-performance compliance. Corrective Action Plan - Review existing Accounts Payable and Accounting Controls processes and revise as needed to ensure expenses are recorded as required. - Staff Training and Competency Development conducted annually to review accounting controls and ensure accounting personnel understand period of performance grant compliance requirements. - Ongoing Monitoring and Internal Compliance Review conducted periodically to ensure oversight of financial controls and grant compliance.

View Audit 395564

Finding 1191751 (2025-009)

Material Weakness 2025

School District of the City of St. Louis

MO

Subrecipient Monitoring Allowable Costs / Cost Principles Material Weakness

Personnel Responsible For Corrective Action: Kelly Dobell, Controller, Square Watson, Chief Operations Officer, and Spencer Winn, Director of Food and Nutrition Services Anticipated Completion Date: June 30, 2026 Corrective Action Plan: Food and Nutrition Services along with Finance will implement p...

Personnel Responsible For Corrective Action: Kelly Dobell, Controller, Square Watson, Chief Operations Officer, and Spencer Winn, Director of Food and Nutrition Services Anticipated Completion Date: June 30, 2026 Corrective Action Plan: Food and Nutrition Services along with Finance will implement procedures and controls to ensure pre-approval in accordance with the Uniform Guidance compliance requirements.

View Audit 395555

Finding 1191716 (2025-002)

Material Weakness 2025

Change, Inc.

MN

Allowable Costs / Cost Principles Material Weakness Reporting

Finding 2025-002 Material Weakness Inadequate Documentation and Training for CECL Calculation Process Finding Summary: The staff member responsible for the CECL calculation left during FY25. The replacement staff member did not have adequate understanding of the prior calculations or the supporting ...

Finding 2025-002 Material Weakness Inadequate Documentation and Training for CECL Calculation Process Finding Summary: The staff member responsible for the CECL calculation left during FY25. The replacement staff member did not have adequate understanding of the prior calculations or the supporting workpapers. Therefore, the CECL adjustment was not recorded at the beginning of the audit and required multiple attempts before a reasonable estimate was determined and recorded. Responsible Individuals: Jill Johnson, Executive Director Corrective Action Plan: We will capture detailed documentation of the CECL calculation process, including training and detailed written procedures. Anticipated Completion Date: January 1, 2026

View Audit 395531

Finding 1191656 (2025-003)

Material Weakness 2025

Isd 115 Cass Lake-Bena

MN

Allowable Costs / Cost Principles HUD Housing Programs School Nutrition Programs

Contact Person – Sue Chase, Superintendent Corrective Action Plan – The District should implement policies and procedures to ensure only allowable activities/costs are being charged against grants. Completion Date – March 31, 2026

View Audit 395508

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