Corrective Action Plans

Views of Responsible Officials and Planned Corrective Action: DHS concurs, in part, and disputes, in part, this finding. The noted MLR remittance was submitted for collection on December 12, 2023. The agency has developed and implemented a process to collect all MLR rebates through monthly capitation payments. The agency will amend its Dental Managed Care contract to address this recoupment process. The agency has provided its actuary with the audited financial statements for all Dental Managed Care and PASSE entities dating back to the beginning of these programs and will update its internal control to clarify the process for calculating the three years of reports that must be submitted to the actuary. The agency disagrees that approved contracted rates were not being used for calendar year 2022. 42 CFR § 438.4(b) only requires that capitation rates be set at an actuarially sound rate for a specified time period. The requirement to receive approval for capitated rates does not mean that states are required to use previously approved rates from a prior year until a new one is approved. Actuarial best practices dictate that it is not appropriate to pay actuarial rates developed for a prior time period because there may be material differences in trend rates, covered benefits, provider reimbursement, and covered populations. Instead, it is optimal to use rates specifically developed for the applicable time limit even if CMS has not approved the rates. By using this approach, the agency ensures that it is paying MCO’s and PASSE’s capitation rates developed to be consistent with their financial responsibilities. Continued adherence to this practice is necessary as CMS consistently approves rates well after the beginning of the contract year. While CMS approval is beyond the agency’s control, agency controls and contracts have been updated to ensure rates and contracts are submitted 90 days prior to the start of the contract year. Anticipated Completion Date: Complete Contact Person: Name: Elizabeth Pitman Title: Director, Division of Medical Services Agency: Department of Human Services Address: 700 Main Street City, State, Zip: Little Rock, AR 72201 Phone Number: 501-244-3944 Email Address: Elizabeth.Pitman@dhs.arkansas.gov

Views of Responsible Officials and Planned Corrective Action: The agency agrees with the finding. We found an error in the formula of the worksheet used for the preparation and submission of the quarterly expenditure report. The error resulted in not properly reporting the CARES Act reimbursement. The agency will report to the federal Child Support Services program to account for the over-reimbursement of federal share of expenditures. The error in the specific worksheet that resulted in the over-reporting of allowed expenditures has been corrected. Further, the agency will perform a review of all other subsidiary reports and worksheets that are used in preparation of the federal expenditure reports. This will be done in order to ensure that the federal reports are prepared accurately. Additionally, procedures for review of report preparation will be enhanced to further strengthen internal controls. Anticipated Completion Date: Correction of the specific worksheet deficiency has been completed. Corrections to the federal reports to account for the over-reimbursement will be completed in the next federal reporting cycle due on May 15, 2024. Review of all other subsidiary reports and worksheets and the enhanced report preparation review is part of an ongoing project to be completed no later than August 15, 2024. Contact Person: Name: Robert Hallmark Title: Agency Controller II Agency: Department of Finance and Administration-Office of Child Support Enforcement Address: 322 S Main St, Suite 100 City, State, Zip: Little Rock, AR 72201 Phone Number: 501-682-6306 Email Address: Robert.hallmark@ocse.arkansas.gov

Views of Responsible Officials and Planned Corrective Action: ASBO has entered a contract with a new 3rd party administrator to provide oversight for all subgrant awardees. This contact is active now. We developed our contract to ensure improved monitoring for expenditures and verification of receipts. Also, we are in the process of developing a portal which will allow this contractor and ASBO to have full access to all documents from subgrantees. Our new vendor does have prior experience with subgrants management. In addition, ASBO commits internally to the following: • We will monitor all capital purchases when the invoices are received at our office. • We will pull a random sample of five invoices per month and conduct our own review of expenses. Views of Responsible Officials and Planned Corrective Action (Continued): Highlights for the Baker contract: ASBO’s broadband grant program management vendor-partner, Michael Baker International (MBI), is contracted for the following activities and deliverables: • Developing the workflow, process, and online forms that facilitate project monitoring and expense reimbursement. • Responsible for pursuing and documenting additional information required for project monitoring and reimbursement activities. These activities shall be completed within the framework of the Broadband Grants Project Monitoring and Reimbursement System (see below for details) and not through external email or other document exchange system. • Develop and apply standardized naming conventions for all project documents that will be maintained throughout the life of the project. Documents shall be stored in a manner that promotes transparency and facilities ease of use by auditors. • Take all reasonable measures to ensure grant activities are implemented in a manner that ensures transparency, accountability, and oversight sufficient to (1) minimize the opportunity for waste, fraud, and abuse; (2) ensure that subrecipients use funds to further the objectives of Federal programs and the Arkansas State Broadband Office; and (3) allow the public to understand and monitor subgrants awarded under the program. • Ensuring all reimbursement activity complies with Federal requirements, including Section 60102 of the Infrastructure Act, 2 C.F.R. Part 200 and any supplemental guidance issued by the Federal government. • Responsible for knowing what constitutes eligible and ineligible expenses under both state and Federal rules. • Provide education and guidance to subrecipients and the ASBO on key oversight and compliance requirements. • Ensure payment activities follow all state and Federal policies and procedures. Contractor acknowledges policies may change over the life of the contract. • Identify policies the ASBO is required to adopt and assist in drafting those policies to ensure ASBO compliance with Federal regulations. • Assist the Arkansas State Broadband Office in enforcing program rules and laws and imposing penalties for nonperformance, failure to meet statutory obligations, or wasteful, fraudulent, or abusive expenditure of funds. Such penalties include, but are not limited to, imposition of additional award conditions, payment suspension, award suspension, grant termination, de-obligation/clawback of funds, and debarment of organizations and/or personnel. Views of Responsible Officials and Planned Corrective Action (Continued): • Conduct audits of subrecipients as are necessary and appropriate. Contractor shall report the results of any audits it conducts to the Arkansas State Broadband Office. • Develop a template contract for subrecipients, specifying key terms including contract length, performance standards, construction and service rollout schedules, competitive access requirements, regulatory compliance requirements, environmental controls, grant reporting and data sharing requirements, monitoring and oversight procedures, and penalties for non-compliance. • Retain and provide to the Arkansas State Broadband Office upon request all records, documents, and communications of any kind that relates in any manner to grant awards and project procurement, performance, and reimbursement. This data shall be labeled and stored in a manner that promotes transparency and facilitates ease of use by auditors. Additionally, MBI is building two new systems for ASBO and subgrantee use: 1. Broadband Grants Project Monitoring and Reimbursement System 2. Grant Application Submission, Evaluation, Award, and Appeal System These systems will have the following features: • Facilitate inputs, responses, data gathering, analysis, and adjudication decision recommendations and subsequent documentation of payment decisions for the Arkansas State Broadband Office’s final approval. • Provide a secure mechanism for grant applications and safeguard protected, proprietary, and other confidential information. • Assign a unique identifier to each application and each project. Contractor shall develop and apply a standardized naming convention to all applications and associated documents that will be maintained throughout award, technical review, project monitoring, and project closing. Documents shall be named and stored in a manner that facilitates ease of use by auditors. • System shall exhibit built-in quality controls, such as pre-screening, that assist applicants in submitting applications that meet all minimal requirements for consideration (such as requiring a SAM number). • MBI shall be responsible for pursuing and documenting additional information required for clarification of submitted applications, technical reviews of applications, and project monitoring Views of Responsible Officials and Planned Corrective Action (Continued): • and reimbursement activities. These activities shall be completed within the framework of the Grant Application Submission, Evaluation, Award, and Appeal System or the Broadband Grants Project Monitoring and Reimbursement System and not through external email or other document exchange systems. Anticipated Completion Date: System anticipated go live Date: April 26, 2024 Contact Person: Name: Glen Howie Title: Director Agency: Department of Commerce, Arkansas State Broadband Office Address: 1 Commerce Way, Suite 601 City, State, Zip: Little Rock, AR 72202 Phone Number: 501-682-1123 Email Address: Glen.howie@arkansasEDC.com

Contacts: Alex Antkowiak, David Kilpatrick, and Katherine Robinson Titles: VP Accounting and Senior Director, Education Programs & Productions, and Payroll Manager, respectively Anticipated Completion Date: September 2024 Corrective Action: The Center is committed to ensuring the appropriate documentation is in place to adhere to federal regulations regarding activities allowed or unallowed and allowable costs. In response to the audit finding, the Center is taking the following corrective actions to address the audit recommendations: • Accounting will convene meetings with Production and Operations Managers to communicate the Fiscal Year 2023 Federal Award Findings, study and strengthen internal controls in place, review the general criteria within 2 CFR Section 200.403 for manager awareness, and reinforce the importance of accuracy and timeliness of pay rates. • Production and Operations Managers will enact recommendations from Accounting Personnel to strengthen internal controls, proactively communicate with Unions throughout the year and prior to year-end to stay informed of any changes to rates established in Collective Bargaining Agreements and apply changes in pay rates prospectively from date of notice and retrospectively when required. • The Payroll Department, in collaboration with Accounting, will establish a schedule to sample support from managers for compliance with transparency initiatives. Status as of February 2024: The Theater for Young Audience Touring Production and Operations Manager in charge of payroll processing has updated processes to create an audit trail for pay rate calculation, update payroll submission form to include a PDF copy of the audit trail for Payroll Department’s inspection.

Corrective action planned: Utilize a CPA experienced with federal award to review and ensure compliance with grant proposals and activities. Anticipated completion date: April 30, 2024 Contact person responsible for corrective action: Jalen Tollefson, Grant Director

Finding 2023-001 – Head Start Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Contact Person Responsible for Corrective Action: Brenda Overton Contact Phone Number: 574.393.5866 Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: We will ensure all vouchers are reviewed by a secondary individual, all supporting backup is maintained for each claim, and all payroll amounts agree to approved contracts. Anticipated Completion Date: April 2024

Finding No. 2023-02: Cash Management During the year, a condition was noted that $87,640 of federal funds were drawn and were not expended in a timely manner. Management recognizes the important of complying with federal reporting guidelines and repaid the federal funds on September 1, 2023. In addition, as a response to finding 2023-02, efforts will be made to ensure that federal funds are only drawn to reimburse the Organization for eligible expenses previously incurred. If funds must be drawn in advance, management will establish policies and procedures that are consistent with the Uniform Guidance administrative requirements to ensure the funds are expended in a timely manner.

Finding No. 2023-01: Allowable Costs (Time and Effort) In finding 2023-01, a condition was noted that salaries and wages charged to the Opioid STR (ALN 93.788) federal award were based on preliminary time and effort estimates. Employees and clinical staff track their time by the grant/program but actual time was not reconciled to the preliminary time and effort estimates before billed. As a response, the Organization updated its timekeeping system to include pay codes to allow every employee to input their actual time and effort for each specific grant. The timecards will be completed by each employee and reviewed by their supervisor. This updated timekeeping system will ensure salaries and wages charged to federal grants is based on actual time and effort. The updated timekeeping system was implemented in December 2023.

The University implemented a new grant management software that will provide greater functionality to complete the effort certification process within the time requirements as identified in the University's Time and Effort Reporting policy.

Recommendation: We recommend the District design procedures and controls to ensure adequate prior approval of construction related expenditures charged to the Education Stabilization Fund program. Explanation of disagreement with audit findings: There isno disagreement with the audit finding. District Response: Name of the contact person responsible for corrective action: Ruben Hernandez, Assistant Superintendent, Business Services. Planned completion date for corrective action plan: Immediate.

Condition: The Commission was unable to provide adequate source documentation to support that the match requirement was met. Planned Corrective Action: Management agrees that match requirements for Continuum of Care awards have not been maintained as required by the Uniform Guidance. In July 2023, management was notified by HUD after completion of an on-site monitoring visit that the Commission's claimed matching expenses that were not adequately supported by source documentation. In response, management has placed in service additional controls to ensure the compliance requirements are being monitored and in place for the new program. Contact person responsible for corrective action: Steve Raiche Anticipated Completion Date: 6/30/2024

Criteria: 2CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Health System’s final expenditure listing identified as eligible and claimed under the Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution program were not reviewed and approved by a separate individual outside of the preparer. In addition, the Health System’s special report submitted to the Department of Health and Human Services for Period 4 was not reviewed and approved by a separate individual outside of the preparer. Responsible Individual: Ashley Woodward, Chief Financial Officer Corrective Action Plan: Management is aware of this control deficiency. Management is reviewing its system of internal control over compliance and plans to implement a control process which includes a secondary review and approval of the summarized final expenditure listing used to claim the allowable costs under the federal program and a secondary review and approval of required reports to be submitted to the federal agency. Anticipated Completion Date: June 30, 2024

FA 2023-001 Strengthen Controls over Wage Rate Requirements Compliance Requirement: Special Tests and Provisions Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education Assistance Listing Number and Title: COVID-19 - 84.425U - American Rescue Plan Elementary and Secondary School Emergency Relief Fund Federal Award Number: S425U210012 (Year: 2021) Questioned Costs: None Identified Prior Year Finding: Not Applicable Description: A review of construction-related expenditures charged to the Elementary and Secondary School Emergency Relief Fund programs revealed that the School District's internal control procedures were not operating to ensure that Wage Rage Requirements were followed properly. Corrective Action Plans: The School District will review and update the current procedures to ensure that the Wage Rate requirements are met. Estimated Completion Date: June 30, 2024 Contact Person: Dr. Samuel P. Light, Superintendent Telephone: (706) 359-3742 Email: slight@lcboe.us

We will review processes uon termination to ensure all necessary documentation is maintained.

Views of Responsible Officials: Grant funds received pursuant to a period of performance or an approved drawdown or reimbursement request will be expended as specified in the request. When Federal grants are funded in advance, rather than on a reimbursement basis, the Foundation will minimize the time elapsing between the receipt of Federal grant funds and disbursement of such funds for their approved purpose. We will implement procedures to ensure that expenses are recorded or accrued properly.

The City will implement policies and procedures to ensure the City itself is not identified as a subrecipient and that all City payroll charges are supported by timesheets and other supporting documentation required by the Uniform Guidance. The City staff have been trained regarding these policies and procedures and the proper coding of their timesheets to support payroll charges.

FINDING 2023-002 Finding Subject: Child Nutrition Cluster – Internal Controls Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listing Numbers: 10.553, 10.555 Federal Award Number: 7350 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed and Unallowed, Allowable Costs/Costs Principles, Special Tests and Provisions-Verification of Free and Reduced Price Applications Summary of Finding: Material Weakness Internal Controls were not implemented to prevent noncompliance related to the verification of free and reduced applications and hours and wages. A new internal control procedure will be implemented for the second review of the free and reduced applications and for the hours and wages. Repeat Finding: Prior audit finding number was 2021-002. Contact Person Responsible for Corrective Action: Tammy Achenbach Contact Information: Phone: 317-835-7461 Email: tachenbach@nwshelbyschools.org Views of Responsible Officials: Management agrees with the finding. Management will ensure proper documented review of amounts billed for personnel and for the free and reduce verification 􀀃 INDIANA STATE BOARD OF ACCOUNTS 23 First ~ Best ~ Different! 􀀃 Northwestern􀀃 Consolidated􀀃School􀀃 District􀀃of􀀃Shelby􀀃County􀀃 􀀃 4920􀀃W.􀀃600􀀃N􀀃 Fairland,􀀃IN􀀃46126􀀃 􀀃 Phone:􀀃317􀍲835􀍲7461􀀃 Fax:􀀃317􀍲835􀍲4441􀀃 􀀃 www.nwshelbyschools.org􀀃 Superintendent􀀃 Mr.􀀃Chris􀀃Hoke􀀃 􀀃 Business􀀃Manager􀀃 Mrs.􀀃Tammy􀀃Achenbach􀀃 􀀃 Technology􀀃Director􀀃 Mr.􀀃Josh􀀃Landis􀀃 􀀃 Maintenance􀀃Director􀀃 Mr.􀀃Terry􀀃Coons􀀃 􀀃 Transportation􀀃Director􀀃 Mrs.􀀃Susie􀀃Childress􀀃 􀀃 Special􀀃Education􀀃Director􀀃 Mrs.􀀃Terri􀀃Branson􀀃 􀀃􀀃 School􀀃Board􀀃 Mr.􀀃David􀀃Ploog􀀃 Mrs.􀀃Brooke􀀃Lockett􀀃 Mrs.􀀃Cressa􀀃Rund􀀃 Mr.􀀃Ken􀀃Polston􀀃 Mr.􀀃Terry􀀃Morgan􀀃 Mr.􀀃Travis􀀃Hensler􀀃 Mrs.􀀃Karen􀀃Humphreys􀀃 Cont. page 2 Description of Corrective Action Plan: Review for personnel charges: During the monthly meeting to review the FSMC invoice, along with Operations Ledger, Client P&L, Monthly Reimbursements, Invoices, USDA Reconciliation, Direct Certification, The Hours and Wages will be reviewed and approved. Free and Reduced Verification: Internal Controls for the first round of Free and Reduce Applications will be verified by the Data Controller or the Business Manager and the verification of the random testing of the verifications will be done by the Business Manager or the Deputy Treasurer. Anticipated Completion Date: The district will start the new internal control procedure March 2024 to correct for the 23-24 school year.

The County is aware of the above finding and has adjusted our procedures related to disbursing federal funds to subrecipients. We have changed to a cost reimbursement basis for disbursing the federal funds to subrecipients. We currently receive supporting documentation prior to payment.

Rosita Timmons, Deputy Administrator, is currently working with the Project Officer, Jennifer Gray, to gain a better understanding of the finding and the changes necessary to comply with the site visit report. In prevoius conversations with Melody Berry, former project officer, during 2023, the changes were considered acceptable. The department was moving forward with the plan to update duties. After discussing the logistics of adding Non-Medical Case Management, it was determined by the Planning Council Evaluation and Assessment Committee which consists of sub-recipients and clients that it is not feasible to add Non-Medical Case Management because it would create a barrier for the clients due to having to see multiple staff and make multiple appointments, which is something the clients and provider agreed would cause a barrier. The Evaluation Committee agreed that EIS workers could take some of those Non-Medical Case Management duties from the medical case managers which will give them more time to focus on the clients' helthcare outcomes. Final approval and acceptance of the corrective action taken is still pending. Upon final approval from the HRSA, this finding will be considered addressed and closed.

Finding Number: 2023-002 Condition: The College provided funds to two individuals for transportation in advance of being approved for participation in the program. Planned Corrective Action: The College has returned the questioned costs by transferring the expenditures out of the grant funds and reducing the next drawdown for the grant. The College will immediately suspend the practice of providing grant funds to individuals prior to their approval for participation in program. Moving forward, the College will require the Program Director to approve all applicants for eligibility prior to any training or support activities beginning. This will include a review of the application materials, eligibility documents, and any other required materials. Participants who do not meet the eligibility requirements will receive written notice of the reason for denial and will not be admitted to any programming or receive any supportive services. The College will also look to have staff members involved in grant administration receive targeted training and education on the revised grant disbursement procedures as well as general grant administration training. Contact person responsible for corrective action: Vice President for Finance & Business Anticipated Completion Date: 06/30/2024

U.S. Department of Transportation 2023-004 Formula Grants for Rural Areas – Assistance Listing No. 20.509 Recommendation: We recommend the Organization properly document Sam.gov searches. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The Organization will take the steps necessary to properly document that they have searched Sam.gov. Names of the contact persons responsible for corrective action: Rich Pavek, Executive Director, and Kris Burkey, Finance Manager Planned completion date for corrective action plan: December 31, 2024

U.S. Department of Transportation 2023-003 Formula Grants for Rural Areas – Assistance Listing No. 20.509 Recommendation: We recommend the Organization review its policy and implement a procedure for proper approval over all disbursements. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The Organization will take the steps necessary to ensure that costs are appropriately approved. Names of the contact persons responsible for corrective action: Rich Pavek, Executive Director, and Kris Burkey, Finance Manager Planned completion date for corrective action plan: December 31, 2024

2023-001 ALN 14.871 – Housing Voucher Cluster – Activities Allowed or Unallowed The Executive Director acknowledges the finding and is following the auditor's recommendation as listed in the Schedule of Findings and Questioned Costs. In 2021, the Authority was instructed by Keith Landrum of the Columbia, South Carolina HUD Field Office to stop making payments until the matter could be further investigated to see what amounts, if any, are still owed. Management will continue to monitor budgets to ensure that funds are adequate. Management has and will continue to make budget revisions to reduce unessential operating costs. The Authority has designed and implemented a Board approved formal repayment agreement. Person Responsible for Correction of Finding: Mark Fountain, Executive Director Projected Completion Date: June 30, 2024

U.S. Department of Housing and Urban Development 2023-001 Home Investment Partnerships Program – Assistance Listing No. 14.239 Recommendation: CLA recommended that PHFA review their procedures surrounding the division sign-off form utilized in the pre-commitment meeting. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: PHFA implemented a new process to ensure the required divisional signoffs are received after the completion of the pre-commitment meeting. The Lending Officer prepares an electronic approval listing in Microsoft Teams to capture the approvals after the pre-commitment meeting. The Lending Officer follows up with the requested signors to ensure that all outstanding questions have been answered and the signer can mark the Microsoft Teams’ listing approved. Name of the contact person responsible for corrective action: Jessica Perry, Director of Development The new Microsoft Teams approval system was implemented in August 2023. To date, approximately 20 developments have been approved via the new system.

FINDING 2023-001 Finding Subject: COVID-19 - Education Stabilization Fund - Reporting Summary of Finding: The annual reports provided for audit did not tie back to supporting records. One annual report, ESSER III Year 2, was not filed. Contact Person Responsible for Corrective Action: Superintendent Contact Phone Number and Email Address: (812) 649-2591 / brad.schneider@sspencer.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: In the future, the School Corporation will ensure all required annual reports for grant reporting are submitted and supported by school records. The required annual reports will be completed by the Corporation Treasurer and reviewed and approved by another knowledgeable employee for accuracy and completeness. Anticipated Completion Date: June 2024