Corrective Action Plans

Higher Education Institutional Aid – Fostering Inclusive Excellence for STEM Achievement – Assistance Listing No. 84.031C Recommendation: We recommend the University calculate the indirect costs when the direct cost is incurred instead of claiming the amount per the budget to ensure indirect costs are consistently calculated and allocated throughout the grant term. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to the finding: The Finance department implemented a quarterly process aimed at accurately calculating indirect costs, ensuring their recognition period when expenses are incurred. Name(s) of the contact person(s) responsible for corrective action: Shalini Patel, Controller Planned completion date for a corrective action plan: April 1, 2024

Department staff has reviewed the Legislative Audit Bureau’s (LAB) interim audit memo for Finding 2023-300: Eligibility for the Children’s Health Insurance Program. This is the department’s Corrective Action Plan. Recommendation (2023-300): Eligibility for the Children’s Health Insurance Program We recommend the Wisconsin Department of Health Services work with the federal government to resolve these improper payments, including the determination of the total amount of improper payments, and return these amounts to the federal government, as appropriate. Wisconsin Department of Health Services Planned Corrective Action: The Division of Medicaid Services (DMS) acknowledges that we maintained eligibility under the Children’s Health Insurance Program (CHIP) for individuals who had turned age 19, including SCHIP participants. It was our overarching policy to not terminate health care coverage upon certain changes in circumstances for Medicaid participants during the federal public health emergency (PHE). To comply with this policy, DHS made system changes at the beginning of the pandemic to maintain eligibility for all participants. After CMS provided additional information specific to SCHIP, DHS considered whether to make the necessary system changes to terminate SCHIP participants who turned 19 during the public health emergency. Because of the system limitation and DHS’s overarching goals to maintain continuous coverage, amongst other reasons, DHS decided to temporarily keep all CHIP participants enrolled until the public health emergency ended. DMS leaders met with CMS leaders on May 11, 2022, to discuss this compliance issue and related systems limitations. During that meeting, CMS indicated that they understood the system and communication challenges of having a single program that combines Medicaid and CHIP. CMS also acknowledged that the federal public health emergency was likely to end at any time, so making the required system changes would not be prudent. CMS said they would follow up with Wisconsin if they determined that further state action was needed, but they did not communicate to us after the meeting that they felt the compliance issue needed to be addressed. This confirmed the Medicaid Director’s decision to not pursue costly systems changes to support a change that might only be needed for a short period of time. After the PHE ended, DHS took proactive steps to identify aged-out CHIP participants and ensure that their eligibility was redetermined in the first two months of unwinding. In contrast to the rest of the CHIP and Medicaid population, whose renewals were distributed over a 12-month period from June 2023 through May 2024, these members’ renewals were accelerated to June and July 2023, so that their CHIP coverage would end as soon as possible after the end of the PHE. While we agree conceptually with the finding, the questioned costs identified do not consider that many (if not most) of the ineligible members would have been eligible for Medicaid as childless adults upon aging out of the CHIP program. We will discuss this likelihood with CMS and if necessary, use data available in our CARES eligibility system to assess how many of these members did retain eligibility as childless adults or in other categories of Medicaid after completing renewals in June and July. Anticipated Completion Date: March 31, 2024 Person responsible for corrective action: Jori Mundy, Director Bureau of Eligibility and Enrollment Policy, Division of Medicaid Services jori.mundy@dhs.wisconsin.gov. Rebuttal from the Wisconsin Legislative Audit Bureau - As stated in the finding, and as acknoledged by DHS, DHS maintained continous eligibility for SCHIP participants who were over age 19. This eligibility requirement continue through the public health emergency. Since CHIP and MEDICAID are separate programs, consideration of whether these participants could have been eligible for the Medicaid program would not have been part of our audit. Payments to providers for these participants were funded by SCHIP and not the medicaid program.

Department staff has reviewed the Legislative Audit Bureau’s (LAB) interim audit memo for Finding 2023-302: Social Services Block Grant – FFATA Reporting. This is the department’s Corrective Action Plan.  Recommendation (2023-302): Social Services Block Grant – FFATA Reporting We recommend the Wisconsin Department of Health Services: • Revise its procedures for Federal Funding Accountability and Transparency Act reporting to ensure all subawards funded by federal grants are included in reports used to identify subawards for reporting; and • Develop procedures to identify and report subawards made by the state agencies to which it has transferred federal funding. Wisconsin Department of Health Services Planned Corrective Action: DHS will update FFATA procedures to ensure all DHS federal programs are included in FFATA reporting. DHS will also develop procedures to report the subawards made by other state agencies to whom DHS has transferred federal funding. Anticipated Completion Date: August 31, 2024 Person responsible for corrective action: Vanessa Salata, Section Chief Expenditure Accounting, Bureau of Fiscal Services, Division of Enterprise Services vanessaa.salata@dhs.wisconsin.gov

Department staff has reviewed the Legislative Audit Bureau’s (LAB) interim audit memo for Finding 2023-301: Social Services Block Grant – Subrecipient Contracts. This is the department’s Corrective Action Plan.  Recommendation (2023-301): Social Services Block Grant – Subrecipient Contracts We recommend the Wisconsin Department of Health Services update its procedures for contract development to ensure information provided in its subrecipient contracts identifies the Social Services Block Grant as the federal funding source for the basic county allocation of the community aids program related to the transferred Temporary Assistance for Needy Families funds. Wisconsin Department of Health Services Planned Corrective Action: DHS will change the Assistance Listing Number (ALN) for Temporary Assistance for Needy Families funds transferred to the Social Services Block Grant (SSBG) to the SSBG’s ALN, 93.667, for future Basic County Allocation contracts. Anticipated Completion Date: July 31, 2024 Person responsible for corrective action: Rebecca Mogensen, Section Chief Managerial Accounting, Bureau of Fiscal Services, Division of Enterprise Services rebeccaj.mogensen@dhs.wisconsin.gov

Department staff has reviewed the Legislative Audit Bureau’s (LAB) interim audit memo for Finding 2023-306: Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response – Subrecipient Monitoring. This is the department’s response.  Recommendation (2023-306): Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response – Subrecipient Monitoring We recommend the Wisconsin Department of Health Services: • Review the tracking spreadsheets completed in fiscal year 2022-23, and complete the assessment of the progress and fiscal reports and consideration of potential unallowable costs, document the conclusions, and return funding to the federal government if costs were determined to be unallowable; Wisconsin Department of Health Services Planned Corrective Action: Emergency Health Care (OPEHC) will create a workgroup that includes subject matter expert staff from all impacted areas that will be tasked with reviewing all the tracking spreadsheets for fiscal year 2022-2023. Staff will conduct the recommended assessment on all progress and fiscal reporting to determine any possible unallowable costs under the parameters of the cooperative agreement. The workgroup will coordinate efforts, as needed, with impacted health departments and workers. The workgroup will document all conclusions and, in coordination with leadership, will work with the correct federal agency to discuss and complete any necessary next steps. We recommend the Wisconsin Department of Health Services: • Develop a written monitoring plan for the Cooperative Agreements program that includes a description of the subrecipient monitoring expected for low-moderate-, and high-risk subrecipients; procedures for completing and documenting review of the progress and fiscal reports; procedures for completing and documenting desk reviews or on-site visits; procedures for assessing and documenting the reliance that can be placed on review of a subrecipient’s single audit report; and procedures for documenting management oversight of the monitoring plan. Wisconsin Department of Health Services Planned Corrective Action: The Department of Health Services (DHS), Division of Public Health (DPH) Grant Managers and their designees are responsible for subrecipient monitoring. As part of the ongoing monitoring, DHS DPH recognized opportunities for improvement of this process and began developing a new Internal Controls Checklist during FY 2022-23. On February 15, 2024, DHS DPH Bureau of Operations provided training to DHS DPH staff who regularly work on financial, granting, and/or contracting items on a new Internal Controls Checklist for Federal Funding. This checklist provides DHS DPH federal Grant Managers and their designees a best practice tool for reviewing how their grant activities are carried out and to ensure their consistency with the terms and conditions of the federal award and with federal and state policies. The Internal Controls Checklist guides DHS DPH federal Grant Managers and their designees through a series of questions that, among other things, direct them to have knowledge of, follow, and maintain written policies for administering federal grant programs; document procedures for verifying invoices; archive relevant documentation; ensure financial reports are submitted timely; monitor subgrantees for fiscal and program requirements; document procurement authority; and monitor expenses against waiver and contract limits. The Internal Controls Checklist is to be signed by the Grant Managers or their designees in the last quarter of the grant. The policy states the Section Manager is accountable to make sure the Checklist is completed accurately. Using the Internal Controls Checklist will formalize management oversight as it will be signed by the Section Manager overseeing the grant. The Internal Controls Checklist will be updated to identify the need for subrecipient monitoring to be attributed to the risk levels of subrecipients. Also, it will include direction to document procedures for completing and documenting review of the progress and fiscal reports, procedures for completing and documenting desk reviews or on-site visits, and for procedures for assessing and documenting the reliance that can be placed on review of a subrecipient’s single audit report. Grant Managers and their designees are encouraged to use the Internal Controls Checklist as a monitoring plan by evaluating each item in the checklist and saving the procedures, documents, and emails associated with those steps in a folder, in addition to the program’s usual record keeping practice, to enhance the effectiveness of the information. Grant Managers and their designees may also produce a separate monitoring plan instead of using the Internal Controls Checklist, and if a separate document is produced, management oversight will be documented within the plan. We recommend the Wisconsin Department of Health Services: • Develop a central location to maintain documentation related to the subrecipient monitoring, including email correspondence. Wisconsin Department of Health Services Planned Corrective Action: Grant Managers and their designees maintain documentation related to subrecipient monitoring in various ways, and to provide better consistency, the newly created Internal Controls Checklist provides some recommendations. The Internal Controls Checklist recommends Grant Managers and their designees develop plans for archiving relevant documents for program administration and to maintain information to support subgrantee monitoring, including risk analyses and reporting. Individual units in DHS DPH will develop a central location to maintain documentation related to the subrecipient monitoring, including email correspondence. We recommend the Wisconsin Department of Health Services: • Provide sufficient training to the Department of Health Services staff administering the Health Disparities program to ensure all subrecipient monitoring responsibilities are completed consistently and are based on the risk assessment level determined. Wisconsin Department of Health Services Planned Corrective Action: Current Grant Managers and their designees in DHS DPH who oversee federally awarded programs will be informed of the federal requirements as they relate to 2 CRF s. 200.331, though specific subrecipient monitoring. DHS DPH will administer annual trainings to Grant Administrators and their designees on subrecipient monitoring requirements and policies for conducting risk assessments. Anticipated Completion Date: June 30, 2025 Person responsible for corrective action: Natalie Easterday, Director Office of Preparedness & Emergency Health Care, Division of Public Health natalie.easterday@dhs.wisconsin.gov

Finding 2023-400: Education Stabilization Fund—ESSER Fund Reporting Planned Corrective Action: The Wisconsin Department of Public Instruction (DPI) will use data reporting procedures established after FY21 data to address the FY20 data reporting discrepancies found during the audit. These procedures include data quality testing to ensure data accuracy and will address the discrepancies between the information reported in the federal portal and the data collected in DPI’s grant management system. DPI will have the corrected data available for the Re-Open Data Collection Reporting Period by June 30, 2024. Additionally, DPI will utilize the federal Re-Open Data Collection Reporting period for FY22 to address the discrepancies identified in expenditure data previously reported and use our quality assurance procedures to ensure FY22 data is reflective of the accurate grants management data within WISEgrants and the ESF ESSER report. The federal Re-Open Data Collection Reporting period for FY22 data is between July 29, 2024, and August 15, 2024. The United States Department of Education will not re-open the portal sooner. Anticipated Completion Date: June 30, 2024 Person responsible for corrective action: Shelly Babler, Director Title I and School Support Team Division for Student and School Success Department of Public Instruction shelly.babler@dpi.wi.gov. Kyle Peaden, Assistant Director Title I and School Support Team Division for Student and School Success Department of Public Instruction kyle.peaden@dpi.wi.gov

I am writing to you in response to the finding 2023-500: Coronavirus State and Local Fiscal Recovery Funds. I agree with the finding and recommendation that was identified during the audit. Please see our below action plan that was conducted as soon as we were made aware of the issue: Corrective Action Plan Finding 2023-500: Coronavirus State and Local Fiscal Recovery Funds—Unallowable Costs Planned Corrective Action: Communication was sent out on October 2nd, 2023, to the Division of State Patrol on what classifications were deemed allowable for reimbursement to prevent future unallowable costs. On October 9th, 2023, a journal was completed for $2,173.12 to remove the unallowable costs from the grant. Lastly, on October 10th, the process of reviewing and approving the expenditures being submitted for reimbursement are now completed in three different organizational areas in the Department to ensure compliance with the MOA. Anticipated Completion Date: Completed on October 10th, 2023 Person responsible for corrective action: Cody Castillo, WisDOT Controller Division of Business Management, Bureau of Financial Management Cody.Castillo@dot.wi.gov

Department staff has reviewed the Legislative Audit Bureau’s (LAB) interim audit memo for Finding 2023-309: Coronavirus State and Local Fiscal Recovery Funds – Unallowable Costs. This is the department’s Corrective Action Plan.  Recommendation (2023-309): Coronavirus State and Local Fiscal Recovery Funds – Unallowable Costs We recommend the Wisconsin Department of Health Services ensure it retains documentation to support the costs charged to the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) program, and work with the Department of Administration and the U.S. Department of the Treasury to resolve the questioned costs we identified. Wisconsin Department of Health Services Planned Corrective Action: As CSLFRF programs have matured, DHS has continued to review and revise our processes. DHS will take this opportunity to ensure that procedures surrounding approving of invoices, storing of documentation, and comprehension of the period of performance are updated and understood by our grant administrators. DHS will work with DOA and US Treasury to resolve the questioned costs. Anticipated Completion Date: June 30, 2024 Person responsible for corrective action: Natalie Easterday, Director Office of Preparedness and Emergency Health Care, Division of Public Health natalie.easterday@dhs.wisconsin.gov

Department staff has reviewed the Legislative Audit Bureau’s (LAB) interim audit memo for Finding 2023-307: Coronavirus State and Local Fiscal Recovery Funds – Unallowable Costs. This is the department’s response.  Recommendation (2023-307): Coronavirus State and Local Fiscal Recovery Funds – Unallowable Costs We recommend the Wisconsin Department of Health Services: • Review its current procedures for approving invoices related to the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) program to ensure the steps required for approving invoices are appropriate and documented, and that documentation is maintained either in STAR or in a central location accessible in the event of employee turnover; • Take additional steps to ensure that expenditures charged to the CSLFRF program are within the period of performance; • Provide training to staff responsible for approving invoices to ensure staff understand what documentation is required to support approvals and the required period of performance for the CSLFRF; and • Work with the Wisconsin Department of Administration and the U.S. Department of the Treasury to resolve the questioned costs related to the CSLFRF program. Wisconsin Department of Health Services Planned Corrective Action: As CSLFRF programs have matured, DHS has continually reviewed and revised our processes. We will take this opportunity to ensure that procedures surrounding approving of invoices, storing of documentation, and comprehension of the period of performance are updated and understood by our grant administrators, including providing training as necessary. DHS will work with DOA and US Treasury to resolve the questioned costs. Anticipated Completion Date: September 30, 2024 Person responsible for corrective action: Christina Isenring, Director Bureau of Operations, Division of Public Health christinam.isenring@dhs.wisconsin.gov

Finding 2023-105: Coronavirus State and Local Fiscal Recovery Funds—Unallowable Costs Auditor Recommendation: We recommend the Wisconsin Department of Administration ensure only allowable costs are charged to federal grant programs, and work with the U.S. Department of the Treasury to resolve the questioned costs we identified related to the Coronavirus State and Local Fiscal Recovery Funds program. Planned Corrective Action: The Wisconsin Department of Administration (Department) resolved the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) costs questioned by the auditors by recouping from the school district the amount of the overpayment and obtaining from the local law enforcement agencies documentation of additional eligible expenses in amounts not less than the overpayments. The Department will continue to ensure only allowable costs are charged to federal grant programs. Anticipated Completion Date: December 18, 2023 Person responsible for corrective action: Colleen Holtan, Director Bureau of Financial Management Division of Enterprise Operations colleen.holtan@wisconsin.gov

Finding 2023-102: Emergency Rental Assistance Program—Documentation to Support Applicant Eligibility and Benefit Payments Auditor Recommendation: Obtain required documentation for the four applicants we identified or seek to recoup improper benefit payments it made to these applicants. Planned Corrective Action: The Wisconsin Department of Administration (Department) requested and received from the auditors the four applicants they identified. The Department has reviewed available documentation in its eligibility and benefit determination system and will work with the responsible community action agencies and Energy Services, Inc. (ESI) to obtain required documentation supporting the applicants’ eligibility to receive Wisconsin Emergency Rental Assistance (WERA) Program benefits. Should the Department determine that it provided WERA Program benefits to ineligible recipients, it will seek to recoup the payments made. Auditor Recommendation: Provide additional training and technical assistance to the community action agencies and Energy Services, Inc. (ESI) on the adequacy of supporting documentation that is to be obtained and entered into Home Energy (HE) Plus by the community action agencies and ESI. Planned Corrective Action: The Department will provide additional training and technical assistance to the community action agencies and ESI on the adequacy of supporting documentation obtained and entered into Home Energy (HE) Plus, its eligibility and benefit determination system, based on its monitoring of accepted documentation. Anticipated Completion Date: June 30, 2024. Persons responsible for corrective action: David Pawlisch, Administrator Division of Energy, Housing and Community Resources david.pawlisch@wisconsin.gov

Finding Reference: 2023-001 Finding: During testing of student loan notifications, it was identified that one of forty students selected for test work did not receive a notification for three loan disbursements during the year. The item that was an exception described above did not result in changes to the amounts awarded or disbursed to students by the College for the current fiscal year. The condition identified was the result of a student that selected to opt-out of College email notifications, which resulted in federal loan notifications to not be delivered. The College did not have adequate processes in place to ensure appropriately notification in accordance with federal regulations when a student selected to opt-out of receiving College communications. Endicott College Responsible Contact: Bryan Cain, Senior VP for Student and External Engagement Corrective Action Plan: This finding was the result of students being allowed to opt out of all notifications from Endicott College, which are initiated thru a notification system called EMMA. EMMA is the system of record used for notifying students of loan disbursements and as a result of students being able to opt out of all EMMA notifications this student was not notified of their loan disbursements. As a result of this finding the college has disabled the ability for students to be able to opt out of all EMMA notifications and thus being unable to opt out of student financial notifications such as loan disbursements. Anticipated Completion Date: February 2024

This finding was self-identified and addressed. Procedures allocating payroll expenditures in accordance with actual time records and wage amounts were implemented during the year ended June 30, 2023.

Finding 2023-001 Condition The Corporation lacks proper segregation of duties with respect to the calculation of lost revenue. Proper segregation of duties is necessary to prevent a situation where one individual handles a transaction from beginning to end in order to reduce the potential for noncompliance due to error or fraud. During the audit of the lost revenue calculation, six months out of fifty-six were input incorrectly into the calculation from the source documents in error. Using the correct revenue amounts for those six months results in a higher total of lost revenue for the period. As a result of the lack of proper segregation of duties, noncompliance due to error or fraud could occur without being detected and corrected, timely. Corrective Action Plan Corrective Action Planned: The Corporation will have more than one person complete a full review of the lost revenue calculation for each report submission. After the information is gathered and reported by the Chief Financial Officer (CFO) but before the information is submitted, the Controller will be asked to review the data. After review and documentation that there has been a review, the reporting will be submitted. Name(s) of Contact Person(s) Responsible for Corrective Action: Brent Foster, Chief Financial Officer Anticipated Completion Date: Review process will be implemented immediately.

We are in agreement and have educated staff by reviewing the “Time and Effort” information provided by KSDE along with the “Time and Effort Clarification Enclosure C”. The Executive Director of Teaching & Learning will review the positions being paid from federal funds to determine if the position is considered a “single cost objective”. Once this is determined, the business office (or assigned staff) will move forward with collecting the Certification of Time or Personnel Activity Report (PAR). These forms will be available to the auditor during the annual fiscal audit.

ection IV – Corrective Action Plan Finding 2023-001 Programs: LIFF Grant Significant Deficiency over Financial Reporting Repeat Finding: No Auditee’s Corrective Action Plan: In the future, when payroll data is imported from ADP, we will include LiFF grant code to track costs on the accounting system. This is implemented for non-payroll related costs. Contact Person: Berhane Ayichew

The personnel activity reports (PARs) for May and June were singed off in the first week of May before the time was charged to the grant. PARs are required to be an after the fact look book. So they should be completed either the last day of the month or shortly after in the preceding month. Response: The district has created a checklist of the requirements for all salaries paid from federal funds that meets the standards outlines in Subsection 8.h. (5) of the 0MB Circular A-87 Part 225 Appendix B. In doing so the district will obtain signatures on the Personnel activity report (PAR) within two weeks of the last day of the previous month. The district has since adopted this practice for the 2024-2025 school year Implementation Date: July 2023 Person Responsible for the Implementation: Kayla Hughes, School District Business Administrator

CORRECTIVE ACTION PLAN (Concerning Finding 2023-001) Contact Person Responsible for Corrective Action: Sarah Haven, Director of Finance & Operations Corrective Action: The Winooski School District will implement the following to address finding 2023-001 Implement control processes and procedures to ensure that time certifications are accurate and complete. Anticipated Completion Date: 6/30/2024

SIGNIFICANT DEFICIENCY 2023-003 Section 8 Housing Choice Voucher Cluster – Assistance Listing No. 14.871 Recommendation: We recommend the County review and enhance its internal controls, policies, and procedures to ensure that the amounts included on the FDS are accurate. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The department will modify its SOP to include a second reviewer before the final FDS figures are submitted. The first submission is due in August and the final submission is due in March. Name(s) of the contact person(s) responsible for corrective action: Mike Kapa Planned completion date for corrective action plan: June 30, 2024

Federal Program: COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution (PRF), Assistance Listing No. 93.498 Federal Agency: U.S. Department of Health and Human Services (HHS) Planned Responsible Officials: Mike Crofton, VP of Finance and Interim Chief Financial Officer Corrective Action: TriHealth is committed to ensuring internal controls are implemented to ensure compliance with Section 200.303 of the Uniform Guidance. In response to the findings, TriHealth has or will implement the following policies and procedures: 1. Design and implement controls over our any future PRF reporting, including both General Distributions and Targeted or Rural Distributions, to ensure the necessary documentation is submitted in the HHS Reporting Portal and that the information submitted is complete and accurate based on accounting records and other data. This will include retention of necessary documentation to support reported expenditures and lost revenues and that such documentation is reviewed by TriHealth’s Controller and VP of Finance and Interim Chief Financial Officer. 2. Utilize Internal Audit to perform detail review and testing over the PRF program reporting, as applicable. This will include the use of Internal Audit to review PRF reporting prior to submission to the HHS Portal, as well as appropriateness of lost revenue and allowability of healthcare related expenses. 3. Prior to submission, the Controller and the Executive Director of Internal Audit will review the draft reporting submissions with the Executive Director of Decision Support and Reimbursement prior to submitting the reports in the HHS Portal. As TriHealth and its affiliates did not receive PRF General Distributions in excess of $10,000, individually or in the aggregate, during PRF Reporting Period 6 (payments received from July 1, 2022 to December 31, 2022), TriHealth will not be required to submit any future reporting in the HHS Portal for PRF General Distributions. However, TriHealth will ensure appropriate levels of review occur for any future reporting of PRF or similar federal funding, including PRF Targeted or Rural Distributions.

Condition: The Town has not documented in writing its policies regarding federal awards. Corrective Action Planned: A written federal policy has been prepared and is in the process of final acceptance by the Board of Selectmen. Anticipated Completion Date: June 2024 Contact: Austin Cyganiewicz, Town Administrator

The University updated its DS-2 form and submitted it electronically to the U.S. Department of Health and Human Services on December 4, 2023. The Controller’s Office implemented an annual review of the DS-2 to identify factors that may require amendments to our next filing. In addition, prior to our submission of any DS-2 amendments, University staff other than the initial preparer will re-confirm the accuracy of changes to the DS-2. Tara Thomason, Controller and Assistance Vice President, was responsible for addressing the above.

As noted in our prior year response, the University continued to have cost transfers in fiscal year 2023 as it reconciled its grants. To limit cost transfers in the future, the following steps have been taken by the University: • The Controller’s Office along with the Office of the Vice President of Research configured our accounting system with an automated control that prevents general (non-payroll) expenditures from being charged to the grant after the period of performance end date, one root cause of cost transfers. • For payroll expenditures, post-award specialists updated grant labor costing allocations in our accounting system to contain an end date that coincides with the period of performance end date. This change in Workday restricts labor costs from being charged after the period of performance. The University’s post-award specialist review grant labor costing allocations on a periodic basis. • With collaboration between the payroll department, the Controller’s Office and post-award specialists, before each payroll is processed within the accounting system, grants that have ended are identified and the payroll expenditures are removed from the feed and not charged to the grant. • On-going training on data certification by post-award grant managers has improved grant-expenditure compliance and data accuracy. In addition, the Controller’s Office implemented a process in which post-award grant managers are now reviewing grant level budget versus actual reporting on a periodic basis to identify errors timely (i.e. before the 90 day threshold). Additionally, the University’s Workday team is exploring additional functionality within our Workday grants management module to build in additional expense approvals, specifically for labor, before those expenses are charged to the grant to reduce future cost transfers. As part of the University’s corrective action plan, during fiscal year 2023 the sponsored programs accounting team recalculated fringe and indirect costs on all federal grants to ensure the correct expense was recorded to each grant. During this reconciliation process cumulative award to date errors were identified and corrected. The sponsored program accounting team continues to reconcile fringe and indirect costs on cost transfers at the grant level on a periodic basis to ensure accuracy. Tara Thomason, Controller and Assistance Vice President, is responsible for addressing the above items by June 2024.

Federal Agency Name: Department of Education Pass-Through Entity: State of Iowa Department of Education Federal Financial Assistance Listing #84.287 Program Name: Twenty-First Century Community Learning Centers Program Activities Allowed or Unallowed and Allowable Costs/Cost Principles Material Weakness in Internal Control over Compliance and Material Noncompliance Finding Summary: Through review of the indirect costs charged to the federal awards, we noted the following: • The Organization charged an 8% administrative indirect cost rate to the federal awards, however, calculated the 8% on the budgeted grant award rather than on the actual direct costs incurred under the federal award, resulting in overcharging the award by $14,704. • The Organization serves as an employer of record for organizations that need assistance in providing benefits, payroll and human resources to employees. A fixed rate is applied to total payroll wages and charged as additional payroll costs to cover administrative time incurred. In addition to the amount charged above, the Organization charged $49,049 to the federal program under this methodology resulting in an overcharge to the award. Corrective Action Plan: SHIP will make the following changes in Fiscal Year 2024: • SHIP was charging the Employer of Record fee originally with the understanding that it was a direct expense, because the Employer of Record fee was only being charged on the direct staff that are running the programs at the schools. SHIP has had this grant for many years with the same terms. Now that SHIP has had a finding on the current process of the Employer of Record, SHIP will correct the process. This was not an intentional disregard. • Moving forward and currently in FY24, all claims submitted for 21st Century grants will be reviewed to ensure the administrative indirect cost is assigned to direct expenses only. In the event this was charged incorrectly, adjustments will be made to ensure the fee is only assessed on total direct expenses. Responsible Individuals: Mindy Baylor - SHIP Finance Director Anticipated Completion Date: March 2024

FINDING 2023-003 Finding Subject: Title I Grants to Local Educational Agencies – Internal Controls Summary of Finding: The School Corporation did not have a properly developed internal control process over payroll transactions to ensure expenditures were allowed and in conformance with the cost principles. The Program Administrator reviewed a report attached to program reimbursement requests which showed the total amount paid from each fund and account; however, a detailed payroll report was not reviewed which would have identified the employee and related payroll benefits being paid from the grant fund. Contact Person Responsible for Corrective Action: Terry Richey and Chrystal Street Contact Phone Number and Email Address: 812.793.2061 trichey@crothersville.k12.in.us cstreet@crothersville.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: INDIANA STATE BOARD OF ACCOUNTS 37 The corporation treasurer and superintendent will review current internal controls policies especially segregation of duties and the areas in which we are lacking. We will consider rotation of duties in which employees will learn different roles when possible. We will also consider using technological solutions to enhance the reliability and integrity of processes. Superintendent will start to review the detailed payroll report posted to the Title I funds to match to the reimbursement request. Anticipated Completion Date: April 1, 2024