Corrective Action Plans

Activities Allowed or Unallowed, Allowable Costs/Costs Principles, and Reporting Federal Agency Name: Department of Health and Human Services Program Name: COVID-19 Provider Relief Fund and American Rescue Plan Rural Distribution Federal Assistance Listing #93.498 Finding Summary: The Medical Center's final expenditure listing, lost revenue calculation identified as eligible and claimed under the Provider Relief Fund program, and special report submitted to the Department of Health and Human Services for Period 4 did not have evidence of being reviewed and approved by a separate individual outside of the preparer. Responsible Individuals: Cory Ulmer, CFO Corrective Action Plan: We will implement internal control policies to ensure all invoices are reviewed and approved to ensure all expenses claimed under the federal program are necessary, correct, and meet the requirements of the federal program. We will also implement a control process which includes a secondary review and approval of the final expenditure listing and lost revenue calculation used to claim the allowable costs under the federal program and that there is documented evidence of the review and approval. In addition, the Report submitted to HHS will have a secondary review and approval that is documented. Anticipated Completion Date: 6/30/2024

Activities Allowed or Unallowed, Allowable Costs/Costs Principles Federal Agency Name: Department of Health and Human Services Program Name: COVID-19 Provider Relief Fund and American Rescue Plan Rural Distribution Federal Assistance Listing #93.498 Finding Summary: The Medical Center does not have an adequate internal control policy in place to ensure review and approval of cash disbursements claimed under the federal programs were documented and to ensure that expenses claimed in the Report were complete, accurate, and reduced by other funding sources. Responsible Individuals: Corey Ulmer, CFO Corrective Action Plan: We will implement internal control policies to ensure all amounts reimbursed by other funding sources are adequately documented and reduced from the eligible expenditure listing and are properly recorded in the Report required to be submitted to the federal agency. We will also implement internal control policies to ensure that the required Report are properly reviewed prior to submission to ensure all key line items are necessary, correct, meet the requirements of the federal program, and are properly recorded in the Report required to be submitted to the federal agency. Anticipated Completion Date: 6/30/2024

Identifying Number: 2023-001 – Activities Allowed or Unallowed; Allowable Costs/Costs Principles Finding: The Code of Federal Regulations (CFR) Section 200.403(g) states that for costs to be allowable under federal awards, they must be adequately documented and there must be sufficient documentation. Additionally, CFR Section 200.430 states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and are supported by a system of internal control which provides reasonable assurance that the charges are accurate and allowable. The Florida’s Division of Accounting and Auditing Reference Guide for State Expenditures states that supporting documentation shall be maintained in support of expenditure payment requests for cost reimbursement contracts including that approved timesheets support the hours worked on the project or activity must be kept. During our testing of payroll disbursements, we noted that seven of the 120 payroll expenditures selected for testing did not have a properly approved timecard for the pay period selected. Corrective Actions Taken or Planned: All of the timecards noted in the finding above have been reviewed for accuracy and retroactively approved by the Chief Talent Officer. The following corrective actions are in the process of being implemented: • CHS’s Payroll and Talent teams will conduct a review of timecards completed after July 1, 2023. The accuracy of any unapproved timecards identified will be verified and retroactively approved by the designated supervisor, or the Chief Talent Officer if the designated supervisor is no longer available. • After each payroll period, a list of unapproved timecards will be provided to the Talent Team so the respective Talent Business Partner may follow up with corrective action with those supervisors who have two or more repeat occurrences. Such corrective action will include: o A thorough review with the supervisor of the CHS policies and practices relative to supervisory duties regarding the management and approval of employee timecards. o Mandatory refresher education and training on the supervisory timecard review and approval process in the CHS HRIS, Paylocity. In addition, CHS is formally implementing a new HRIS, UKG PRO, in July 2024. This system has advanced notification and tracking features that will assist supervisors in proper management and approval of timecards. Person(s) Responsible for Corrective Actions: Barbara McDonald, Chief Financial Officer and Chief Administrative Officer and Heather Vogel, Chief Talent Officer Anticipated Completion Date for Corrective Actions: Implementation of the Corrective Actions outlined above will begin immediately to be completed by June 30, 2024.

Based on FY2022 findings, Higher Horizons implemented internal control policies and procedures, effective May 1, 2023. The procedures address all the segregation of duties from journal entries to posting, reconciliation to reporting, and access to the accounting software. The implementation of the internal control policies and procedures were initiated in May and June of 2023 (the last two months of FY 2023). During FY2024, these procedures were enforced to mitigate risks due to lack of sound internal control. To further strengthen the internal control system, Higher Horizons changed the requisition and accounts payable paper-based to paperless (electronic) process effective July 1, 2023. The electronic requisition system (Microix) is integrated with the accounting software (Abila), which has noticeably enhanced the internal control system.The Microix electronic requisition system eliminates the need to monitor the flow of paper documents, eliminates the risk of losing documents, and disallows purchases without approval. Microix features also require allowability of requisitions to be determined, all changes & communications to be captured, eliminates re-keying the information into Abila, minimizes manual interventions in entering & posting transactions, and much more. Higher Horizons will continue assessing & monitoring the effectiveness of our internal control, review the outcomes, and as needed, will further strengthen the process. Higher Horizons will monitor individual access to general ledger, subsidiary ledger, assets of the organization, accounting software, and Paycom. Access control procedures will be developed and implemented before the end of May 2024. As indicated in FY2023 audit findings, one of the causes for inadequate segregation of duties is the small number of staff in the Finance Department. Higher Horizons will contract with a finance consultant to review the current finance department staffing structure. The consultant will provide feedback and recommendation for adequately staffing the finance department to ensure segregation of duties. The finance management staff will conduct a comprehensive study of accounting and financial tasks, policies and procedures, and standard operating procedures by contracting the financial consultant before the end of June 2024. The study will be presented to the Board for approval, and OFC and OHS for funding.

Audit Firm: RSM US LLP 30 South Wacker Drive, Suite 3300 Chicago, IL 60606 Audit Period: 07/01/2022 – 06/30/2023 Contract Number: FSCWJ00302 Award Year: 2022 – 2023 Comments on Findings and Recommendations: Finding 2023-001—Certification over payroll cost allocation (Control Finding)— Envision Unlimited allocated staff salaries and related fringe benefits to the federal program based on budgeted estimates, which were determined before the services were provided. There was no employee certification or documented review of actual time and effort incurred for the payroll costs charged to the grant at the time audit procedures were performed. 2 CFR 200.430(i) Standards for Documentation of Personnel Expenses (1) 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 which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that the non-federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a federal award based on budget estimates. All necessary adjustments must be made such that the final amount charged to the federal award is accurate, allowable, and properly allocated. Action Taken- Employee certifications were obtained and reviewed by supervisors for all grant payroll costs charged during the award year and were provided to the auditors. A new process is in place for quarterly certifications to follow 2CFR 200.430(i). The required corrective action for Finding 2023-001 for the period 07/01/2022 – 06/30/2023 was completed in December 2023. The person now responsible for completion of the corrective action plan is Dennis James, Chief Financial Officer.

Finding: 2023-003 Significant Deficiency in Internal Controls over Compliance and Compliance – Reporting (Bartlett Regional Hospital enterprise fund) Name of Contact Person: Joe Wanner, Chief Financial Officer Corrective Action: For any unusual or new grant reporting, management will implement additional review procedures to ensure information is captured as expected. The unallowable expense, which had previously been reported and was mistakenly included in the report again, will be “replaced” by unreimbursed lost revenues, which was the intended use of the funds from the beginning. Proposed Completion Date: March 26, 2024

Finding 2023-003 Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Special Tests and Provisions Identification of the federal program: Federal Grantor: United States Department of Homeland Security Pass-Through Grantors: State of Missouri, State Emergency Management Agency Arkansas Division of Emergency Management Assistance Listing No.: 97.036, COVID-19 Disaster Grants – Public Assistance (Presidentially Declared Disasters) (“FEMA”) Pass-Through Award Numbers and Award Periods: Project# 185883 P/W# 529 01/20/2020–09/14/2020 Project# 699963 P/W# 624 01/01/2022–07/01/2022 Project# 699667 P/W# 233 01/01/2022–07/01/2022 Project# 699670 P/W# 211 01/01/2022–07/01/2022 Condition: Adequate documentation was not retained to support the average unit cost applied to COVID-19 personal protective equipment (PPE) inventory usage charged to the FEMA program as Force Account Material (FAM) costs. In addition, for 12 of 40 non-FAM costs (including purchased equipment, purchased supplies and rental equipment) charged to the program, we noted adequate documentation was not retained to evidence review and approval of the expenditure for allowability. Views of Responsible Officials and Planned Corrective Actions: Mercy Health has a system to calculate average cost of inventory items. We rely on this system, but it was not tested as part of compliance. In addition, Mercy Health has a robust capital approval process (for all equipment) and financial approval thresholds. All COVID purchases were logged in the capital system (VFA) and approvals were documented. During this time, we changed approval systems from VFA to Strata. We will implement testing of our inventory system (Lawson) to ensure calculations are accurate. All review and approvals of capital equipment will be maintained in Strata. Responsible Party: Jill McCart, VP Accounting and Reporting Date of Completion: By 6/30/24

Finding 2023-001 Activities Allowed or Unallowed Information on the federal program: Federal Grantor: United States Department of Health and Human Services, Health Resources and Services Administration (HRSA) Assistance Listing No.: 93.498, COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution (“PRF”) Award Period of Performance: 01/01/2020–12/31/2022 (Period 4) and 01/01/2020–06/30/2023 (Period 5) Condition: Management performed a duplication of benefits analysis to ensure expenses to be used to substantiate PRF funding received were not reimbursed or obligated to be reimbursed by another source. The methodology included the development of estimated cost reimbursement rates by location that was applied to the PRF expenditures. During our allowable costs testing of expenditures, we noted errors in the duplication of benefits analysis and/or misapplication of the estimated cost reimbursement rates which resulted in a net overstatement of expenses totaling $2,078,408. In addition, we noted instances where employees’ hours reported on the timecards for substantiation of funding for the federal program were not consistently evidenced as reviewed and approved. Views of Responsible Officials and Planned Corrective Actions: While we overstated the expenses submitted totaling $2.1 million, this was an oversight during our review process. There are additional expenditures available in excess of funding received; therefore, we believe we have incurred either lost revenues or expenditures in excess of funding received. We will perform additional review of expenditures including the duplication of benefits analysis and application of the cost reimbursement rates to ensure appropriate amounts are used for PRF funding and ensure compliance with the terms of the agreement. Mercy Health’s Finance team will continue to stress the importance of timecard approval to leadership. Responsible Party: Jill McCart, VP Accounting and Reporting Date of Completion: By 6/30/24

The Department will retrain staff on when an overpayment is needed, when to cancel a case and what to look for in the system when an alert is received about a child entering foster care. A reminder will be provided to all Income Maintenance staff providing the policies and procedures for duplicate benefits. This reminder will be emailed and also discussed at team staff meetings.

The Department will work with the U.S. Department of Education to identify appropriate steps for resolution. In addition, Department leadership directed ESEA and federal grants management training for the Bureau of Federal Programs and all other relevant department staff, which will provided by the Council for Chief State Schools Officer’s Federal Education Group beginning in April of 2024.

The Department will review allocable rates during the time frame to determine if corrective disbursement entries are needed to their respective program codes. The Department began the process in October 2023. The Department will also revise, and update policies and procedures related to allocable costs based on time entries.

The Department has implemented a payroll policy and procedure, that requires staff to enter a work reporting code for time worked and addresses timelines in which correcting entries must be completed. The Department will review all pay periods during the time frame to determine if corrective disbursement entries need to be made to properly allocate actual time reported to their respective program codes. The Department began the process in October 2023.

Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Activities Allowed and Allowable Costs Significant Deficiency in Internal Control over Compliance Finding Summary: Our testing over activities allowed and allowable costs identified four instances where the supporting documentation did not agree with the expenditures claimed in the expenditure listing for the program. Responsible Individuals: Jamie Schaefer, John Neth Corrective Action Plan: The Organization will review and strengthen the controls surrounding the period of performance and activities allowed and allowable costs. There are no questioned costs related to this finding. The Organization is in the process of implementing a new enterprise resource planning software which will include a grant module. The grant module will have automated controls surrounding period of performance evaluation and costs will be drillable to ensure cost claimed and supporting documentation exact alignment. Anticipated Completion Date: October 1, 2024

Department of Health and Human Services Federal Financial Assistance Listing #10.331, 93.136, 93.243, 93.279, 93.310, 93.393, 93.837, 93.838, 93.865, and 93.898 Research and Development Cluster Activities Allowed and Allowable Costs Significant Deficiency in Internal Control over Compliance and Noncompliance Finding Summary: Our testing over activities allowed and allowable costs identified one instance where an employee’s time was not properly allocated between two grants. Additionally, there were four instances where the grant was under/over-charged in our recalculation of payroll and fringe benefits. Responsible Individuals: Jamie Schaefer, John Neth Corrective Action Plan: The Organization will review and strengthen the controls surrounding activities allowed and allowable costs. $2,132.52 of questioned costs resulted from one instance where an employee’s time was not properly allocated between two grants through a submission of a personal action form. The Organization has revised its’ workflow surrounding submission of personal action forms related to grant time and related costs allowing for more control and visibility of amounts and grants being allocated to. ($6.26) of questioned costs resulted from four instances combined to an under allocation of employee benefits to a grant. The Organization is in the process of implementing a new enterprise resource planning software which will include a grant module. The grant module will have automated controls surrounding allocations of personnel costs. Anticipated Completion Date: October 1, 2024

Department of Homeland Security Federal Financial Assistance Listing #97.036 Disaster Grants - Public Assistance Activities Allowed and Allowable Costs Significant Deficiency in Internal Control over Compliance Finding Summary: Our testing over activities allowed and allowable costs identified one instance where the internal control process failed to identify that the grant was charged at a rate of pay higher than the employee’s hourly approved rate of pay. Responsible Individuals: Jamie Schaefer, John Neth Corrective Action Plan: The Organization will review and strengthen the controls surrounding activities allowed and allowable costs. There are no questioned costs related to this finding. The Organization is in the process of implementing a new enterprise resource planning software which will include a grant module. The grant module will have automated controls surrounding allocations of personnel costs. Anticipated Completion Date: October 1, 2024

Department of Health and Human Services Federal Financial Assistance Listing #93.697 COVID-19 Testing and Mitigation for Rural Health Clinics Period of Performance Significant Deficiency in Internal Control over Compliance Activities Allowed and Allowable Costs Significant Deficiency in Internal Control over Compliance Finding Summary: Our testing over activities allowed and allowable costs and period of performance identified one expenditure that fell outside of the period of performance under the grant and two expenditures that did not agree to supporting documentation. Responsible Individuals: Jamie Schaefer, John Neth Corrective Action Plan: The Organization will review and strengthen the controls surrounding the period of performance and activities allowed and allowable costs. There are no questioned costs related to this finding. The Organization is in the process of implementing a new enterprise resource planning software which will include a grant module. The grant module will have automated controls surrounding Period of performance evaluation and costs will be drillable to ensure cost claimed and supporting documentation are in alignment. Anticipated Completion Date: October 1, 2024

TOWN OF ELKTON 173 W. SPOTSWOOD AVENUE ELKTON, VIRGINIA 22827 P: (540) 298-1951/F: (540) 298-1270 WWW.ELKTONV A.GOV March 15, 2024 CORRECTIVE ACTION PLAN Greg Lunsford, Town Manager respectfully submits the following corrective action plan for the year ended June 30, 2023. Name and address of independent public accounting firm: Brown, Edwards & Company, L.L.P. 1909 Financial Drive Harrisonburg, VA 22801 Audit period: June 30, 2023 The findings from the June 30, 2023 Schedule of Findings and Questioned Costs (the "Schedule") are discussed below. The findings are numbered consistently with the number assigned in the Schedule. FINDINGS- FINANCIAL STATEMENT AUDIT 2023-001: Material Audit Adjustments (Material Weakness) Condition: During the audit, we detected material misstatements in the trial balance. Generally accepted auditing standards dictate that detection of errors in an audit is a strong indicator of a significant deficiency or material weakness. Accordingly, we are required to communicate this finding as such. Recommendation: Material audit adjustments indicate that financial information presented to us for the audit was missing or inaccurate. We recommend that management implement processes to ensure accuracy of accounts. Corrective Action: The Treasurer has implemented a two-step process, which includes one person reviewing the General Ledger for errors and creating a list of correcting journal entries. The proposed list would be presented to Council for review and approval. Once approved, a different individual would input the adjustments. 2023-002: Segregation of Duties (Material Weakness) Condition: Multiple duties in a transaction cycle are performed by the same individual. Consequently, errors or irregularities may occur and not be detected. Recommendation: In an ideal system of internal controls, no individual would perform more than one duty in connection with any transaction or series of transactions. While we understand that limited staff can make this difficult, controls should be in place to mitigate the risk. We have suggested specific controls in a separate communication. Corrective Action: This is a work in progress. The Treasurer has solicited advice/assistance from the Virginia Treasurer's Association for the segregation of duties with a limited number of staff. The requested information and the suggestions submitted by Brown Edwards will be compiled and drafted into a formal process for the Treasurer's Office staff to follow. 2023-003: Journal Entries (Material Weakness) Condition: Journal entries were not reviewed and did not have supporting documentation. As a result, improper entries may be made and not detected. Recommendation: We recommend all journal entries be reviewed and approved by an individual other than the preparer to ensure accuracy and appropriateness of the entry. Management responsible for posting the journal entry after review should not post an entry that results in unbalanced funds. Corrective Action: The Treasurer has implemented a process, which consists of journal entries being compiled by one individual (to include supporting documentation for each proposed journal entry) and reviewed/keyed by a different individual in an effort to mitigate inaccuracies, and out of balance entries. 2023-004: Bank Reconciliations (Material Weakness) Condition: Bank reconciliations were prepared for each month of the year; however many were performed over a year after the reconciliation month. Recommendation: As cash accounts are particularly vulnerable to misappropriation due to their high liquidity and volume, we recommend timely monthly reconciliation of all accounts and review of the completed reconciliations by an individual independent of the preparer. Corrective Action: The Treasurer has implemented a process for monthly reconciliations of the bank accounts, which consists of one individual performing the reconciliations and a separate individual reviewing/keying the adjustments. This should mitigate the vulnerability for undetected errors. 2023-005: Financial System Data (Material Weakness) Condition: Activity was not timely recorded in the financial system by staff; however, activity was recorded during bank reconciliations. Additionally, encumbrances related to open purchase orders are not tracked. Recommendation: Activity should be recorded as it is incurred throughout the year while maintaining supporting documentation. Encumbrances should be utilized for budgeting within the financial system and a procurement process with the use of purchase orders should be established. Corrective Action: The Treasurer has implemented a process for the timely recordation of transactions which will be in harmony with the monthly bank reconciliations. 2023-006: Capital Assets and Construction in Progress (Material Weakness) Condition: Construction in progress expenditures are not tracked per project. Consequently, expenditures were not recorded appropriately, resulting in material audit entries. Recommendation: Management should track projects to ensure accurate recordkeeping and that projects are within budget. Upon completion of each project, the balance of expenditures should be placed in service as a capital asset and depreciated. Corrective Action: The Treasurer has implemented a process for tracking separate capital projects and managing expenditures within the project. This will aid in appropriately recording transactions as they occur. In addition, the Town has purchased new software to aid in the management of capital assets and capital construction projects. 2023-007: Annual and Monthly Close Process (Material Weakness) Condition: The Town does not have a complete monthly or annual close process in place. Monthly and annual close processes have been implemented; however accrual entries are still not being recorded. Recommendation: We recommend the Town improve a monthly and annual close process to ensure financial records are accurate and complete. Corrective Action: The Treasurer is currently drafting a monthly close process to ensure completion and accuracy of the Town's financial records. The annual close process currently consists of physically closing the Treasurer's Office on June 30th to input all utility/tax payments received by noon and then final reports for the fiscal year are printed. The actual fiscal year closure does not happen until the formal audit is completed. 2023-008: Grant Awards (Significant Deficiency) Condition: No formal process is in place to track grant expenditures or monitor compliance with federal and state grant requirements. As a result, compliance requirements may not be met. Federal awards are subject to the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) and require a single audit if expenditures exceed $750,000. The Town is also responsible to maintain compliance with federal and state grant requirements. Recommendation: Expenditures must be documented and monitored to ensure compliance requirements are met. Additionally, should a single audit be required, expenditure information for all federal grant programs is necessary to prepare a Schedule of Expenditure of Federal Awards. All federal program awards should be immediately communicated to the Treasurer or designated employee prior to expenditure. Corrective Action: The Treasurer has implemented a process for recording and maintaining all grant expenditures to include: establishing a spreadsheet for each project based on the award document; the requirements for the grant, the amount of the award, and the tracking of approved expenditures as they occur. FINDINGS AND QUESTIONED COSTS - MAJOR FEDERAL AWARD PROGRAM AUDIT 2023-009: Water and Waste Disposal Systems for Rural Communities-AL# 10.760, Late Filing of Data Collection Form Condition: The Town did not file the data collection forms for the years ended June 30, 2022 and June 30, 2020 timely. Criteria: Under the requirements in the Uniform Guidance and the Office of Management and Budget (0MB), all entities are required to file the annual data collection form with the Federal Audit Clearinghouse the earlier of either 30 days after the issuance of the entity's annual audit or twelve months after the entity ' s fiscal year end (June 30th for the Town of Elkton). Cause: Management did not complete and certify auditee portion of the form before the deadline. The form was not completed for either years ended June 30, 2022 and June 30, 2020. Effect: The Town's form was not submitted to the Federal Audit Clearinghouse. Recommendation: Management should take steps to ensure that the form is filed timely. Corrective Action: The Treasurer is aware that an annual audit needs to be completed for all major federal awards and will work with the auditing firm to provide the necessary information for compilation of the report by the stated deadline 2023-010: Federal Procurement Policies Condition: There are no written procurement policies specific to the federal awards cost principle requirements under Uniform Grant Guidance. Existing procurement policies are minimal and do not meet federal requirements. Criteria: Federal award recipients must have written policies, procedures, and standards of conduct as required by 2 CFR 200, Subparts D and E. Cause: Certain required policies under 2 CFR 200, Subparts D and E are not present. Effect: Lack of required policies may create noncompliance with regulations as stated requirements may not be followed. Recommendation: Develop procurement policies and financial policies that meet federal standards. Corrective Action: The Treasurer has drafted a Procurement Policy for Council to review and approve for implementation. If the Federal Audit Clearinghouse has questions regarding this plan, please call Donna Curry, Treasurer at 540-298-1951. Sincerely yours, Greg Lunsford Town Manager Town of Elkton, Virginia

Department of Health and Human Services Federal Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Reporting Material Weakness in Internal Control Over Compliance and Material Noncompliance Finding Summary: The Hospital selection the Actual Revenue Option (i.e., Option 1) in the HHS Special Report. Option 1 is based on actual quarterly net revenues by payor which are included in the HHS Special Report -Period 4 for years 2019 through 2022. However, management calculated the net revenues using various allocations due to reporting limitations within the accounting and billing system and did not use the actual quarterly financial statements to complete the HHS Special Report. The calculation used by management would be considered an Alternative Reasonable Methodology (i.e., Option 3). The selection of Option 1 was improperly reported within the HHS Special Report – Period 4 which caused the report to be inaccurate. In addition, for Quarter 3 and Quarter 4 of 2021, the amounts reported on the HHS Special Report do not agree to the related client support by $168,838 and $157,009, respectively. In both cases, the support indicated a higher amount of revenue. It should be noted that no lost revenue was reported for Quarter 3 and Quarter 4 in 2021, so there was no impact to the lost revenue calculation. In addition, lost revenue was not used to support the provider relief fund amounts claimed by the Hospital in the HHS Special Report – Period 4 as the Hospital had eligible expenditures to support the amount of provider relief funds claimed. Responsible Individuals: Lynn Broyles, CFO Corrective Action Plan: The Hospital will update the selection for lost revenue on the Report to option 3 and will include a lost revenue calculation narrative on the next Special Report that is required to be filed for Provider Relief Funds. Anticipated Completion Date: June 30, 2024

U.S. Department of Treasury U.S. Department of Health and Human Services 2023-002 Material Weakness in Internal Control over Compliance 21.023- Emergency Rental Assistance 93.914 – HIV Prevention 93.959 – Block Grants for Prevention and Treatment of Substance Abuse City of Philadelphia, Office of Addition Services (Contract # 22-20624-01) City of Philadelphia, Division of HIV Health (Contract #21-20003-02) Philadelphia Housing Development Corporation Condition: As part of the audit management was to provide us with a complete final trial balance where balances agree to the supporting schedules, reconciliations and documentation provided by management. We noted that the trial balance and general ledger detail reports originally provided by management were (a) delayed, (b) included unreconciled material account balances, (c) multiple journal entries (material and not material), (c) transactions missing from the trial balance, and (d) some reconciliations that either did not agree with the trial balance or individual transactions could not be traced back from the documentation provided to the general ledger. This had caused delays in the completion of the audit, preparation of financial statements, and associated disclosures and the timely arrival of our audit and single audit conclusion. Recommendation: We recommend that management implement policies and procedures as it relates to the reconciliation of accounts, tracking of transactions, and regular review to ensure that calculations of general ledge account balances are accurate and complete. In addition, we continue to recommend that management revisit its financial closing and reporting policies to include updates to its procedures for year-end closes and the timing of when final journal entries and analysis are performed.

Dear Mr. Waguespack: The Department of Children and Family Services (DCFS) has received the finding titled “Weakness in Controls over Payroll.” The finding noted DCFS employees and supervisors did not timely certify and approve time and attendance records and supervisors did not approve or reject leave requests before the end of the applicable pay period. Although DCFS has procedures in place for both the employee and appointing authority or designee to approve, reject, and certify payroll and attendance records by utilizing the electronic time sheets in the Cross-Application Time Sheets (CATS) system, we concur with the finding that some were not completed timely. DCFS continuously strives to improve processes and controls and has taken corrective action. As part of our continuous improvement plan, we provided time administrators with instructions and reminders on how to review the eCertification Report (ZP241) in LaGov HCM each pay period to identify time statements that have not been certified and approved and to provide appropriate follow up with staff. DCFS Human Resources will continue to send periodic notices to all DCFS employees regarding the eCertification process including a reminder of the importance of all employees being vigilant and compliant in completing the process to ensure time reporting is accurate and complete. The contact person for Payroll is Marion Creft-Jackson, Human Resources Supervisor, and she can be reached at (225) 342-3146 or Marion.Creft-Jackson.DCFS@la.gov.

Dear Mr. Waguespack: The Department of Children and Family Services (DCFS) has reviewed the finding “Control Weakness over Social Services Block Grant Activities Allowed or Unallowed”. The finding noted that as of June 30, 2023, the Department of Children and Family Services (DCFS) did not have a formalized process in place to ensure Temporary Assistance for Needy Families (TANF) grant funds transferred to the Social Services Block Grant (SSBG) were only used for programs or services for children or their families whose income is less than 200 percent of the federal poverty level. DCFS continuously strives to improve processes and controls and concurs with the finding. In addition to developing written procedures to document the department’s process for ensuring expenditures related to TANF funds transferred to SSBG are used only for services related to children and families who meet TANF income requirements, DCFS will no longer utilize TANF transfer funds on salaries to caseworkers through its Public Assistance Cost Allocation Plan. The new procedures, which include monthly reports of TANF eligibility to support TANF transfers to SSBG, were implemented in October 2023, and system enhancements to Tracking Information Payment System (TIPS) is in progress. The expected date of completion is January 2024. The contact person for the Title IVE Foster Care program is Sharla Lewis-Thomas, Child Welfare Manager 2, and she can be reached at (318) 487-5437 or Sharla.Thomas.DCFS@LA.GOV.

Dear Mr. Waguespack: The Louisiana Department of Health (LDH) acknowledges receipt of correspondence from the Louisiana Legislative Auditor (LLA) dated February 7, 2024, regarding a reportable audit finding related to inadequate controls over payroll for the following programs in the Office of Public Health (OPH): Public Health Emergency Preparedness (PHEP) and HIV Prevention Activities (HIV). LDH appreciates the opportunity to provide this response to your office's finding. Finding: Inadequate Controls over Payroll - OPH Recommendation: OPH should ensure employees comply with existing policies and procedures, including properly certifying and approving electronic time statements. LDH Response: LDH concurs with the finding and concurs with the recommendation. Corrective Action: As part of a comprehensive agency-wide plan to address this finding, OPH is developing a corrective action plan to enact control measures and monitor the certification and approval of electronic time statements. The below corrective measures have been put in place or will be put in place to prevent future findings. OPH implemented an updated Time Entry Policy in place in April 2023. This policy includes employee, supervisor, and time administrator responsibilities regarding the certification and approval of electronic time statements. This policy will be redistributed agency wide. Each pay period, LDH Human Resources sends all LDH and OPH time administrators an email containing Time Administrator payroll timelines and reports that must be run each pay period. Included are reports indicating errors requiring corrections prior to payroll close and the eCertification Report used to identify any electronic time statements that have not been certified or approved for follow-up. Each pay period, LDH Human Resources emails the OPH Assistant Secretary reports of time statements not certified and/or approved. These reports are sent to all areas of OPH to ensure corrective measures are taken. OPH will also set earlier internal deadlines for employees and supervisors to certify and approve their timesheets. This will allow Time Administrators to run reports sooner to identify electronic time statements that have not been certified or approved and allow time for follow-up. OPH will implement a new procedure requiring Time Administrators to conduct an orientation with any new hires or transfers within the first week of hire or transfer. The Time Administrator will review the entry of time, the entry of leave requests, and the deadlines for approval and certification. You may contact Devin George, Deputy Assistant Secretary, by telephone at (225) 342-2655, or by email at devin.george@la.gov.

Dear Mr. Waguespack: Listed below is the University's response to the finding regarding Control Weaknesses over Higher Education Emergency Relief Funds Requirements FINDING: Control Weaknesses over Higher Education Emergency Relief Funds Requirements RESPONSE: Southern University - Baton Rouge (SUBR) concurs with the above noted finding The University does concur that during the current year errors in a formula as well as procedural errors did result in a miscalculation of loss revenue resulting in an under draw of $69,731. An updated review of the procedures will be implemented and a review of the calculations by additional staff will ensure that such errors are identified during the closing period. The University will continue to review the USDOE website and attend webinars for guidance related to HEERF reporting requirements. Management will continue to monitor the concerns noted in this finding. Desiree' Honore' Thomas, Associate Vice President and Acting Vice Chancellor of Finance, is responsible for implementing and monitoring corrective actions. The projected deadline to finalize the review of the concern brought to the University's attention with this audit finding is June 30, 2024. If you have any questions or require additional information, please contact Mrs. Desiree' Honore' Thomas at 225-771-5971.

Dear Mr. Waguespack, Below is the response by Central Louisiana Technical Community College to the audit finding for fiscal year 2022-2023. Finding: Inadequate Controls Over and Noncompliance with Higher Education Emergency Relief Fund Requirements Central Louisiana Technical Community College concurs with this finding. Corrective Action Plan: Finance inadvertently included the Oakdale campus activity in its lost revenue calculation. CLTCC does not anticipate any new Higher Education Emergency Relief Funds for lost revenue. At the direction of the federal government, Amanda Cain, CLTCC Vice Chancellor of Finance and Administration, will either return the funds or apply the funds to HEERF institutional expenditures within the open award period.

Dear Mr. Waguespack, Thank you for the opportunity to respond to your office's finding related to federal research and development expenses. LSU Health Sciences Center in Shreveport (LSUHSC-S) has reviewed the concerns/issues identified by your staff. LSUHSC-S concurs with the recommendation for addressing the finding and provides the following response and corrective action plan. Recommendation: Management should monitor, investigate, and obtain justification from department personnel for untimely time and effort certifications, untimely adjustments, and lack of supporting documentation for adjustments to enforce established policies. Response and Corrective Action Plan: To continue to strengthen the institutional internal controls within award management, LSUHSC-S is addressing the organizational structure. LSUHSC-S historical organizational structure reflects the award management of grants administration and grants accounting functions separately. In contrast, the prevailing model at peer institutions is centralized management, aiming to enhance communication and transparency across grants administration and finance. In response, LSUHSC-S is actively taking steps to consolidate these functions under joint authority. The chancellor has approved an organizational restructuring of award management resulting in the creation of the Office for Sponsored Awards Management (SAM). This office will operate under a Director reporting jointly to the Vice Chancellor for Research and Chief Financial Officer. The institution is initiating the recruitment of a SAM Director and Associate Director of Grants and Contracts Accounting to further strengthen the research infrastructure. In addition, the following processes are under revision and /or implemented to enforce award management requirements. Time and Effort Reporting. LSUHSC-S Administrative Directive 4.4: Time and Effort Reporting and Certification will be updated to reflect the on-line process that is being developed through our Peoplesoft IT Group and with the LSUHSC- New Orleans functional users. Once operational, Office for Sponsored Awards Management (SAM) will evaluate the time and effort reporting procedures, along with associated forms used to report supporting evidence, ensuring accurate documentation and recertification of time and effort for each personnel action as reported on active grants. SAM will also monitor and maintain time and effort certifications to ensure alignment of cost transfers with award terms. Cost Transfers. Effective July 2023, LSUHSC-S implemented new policies, specifically Administrative Directive 1.1.8: Closing Out Grants and Contracts and Administrative Directive 1.1.9: Elimination of Grants and Contracts Account Overdrafts, outlining procedures to facilitate the closure of grants and contracts accounts and to eliminate overdrafts within such accounts. These directives include the establishment of a matrix detailing responsibilities and timelines for closing out grants. The policies offer procedural guidance to rectify overdrafts beyond the approved budget. A feature in PeopleSoft is activated to restrict personnel expenditures exceeding budget limits or extending beyond the performance period. Such expenditures are recorded in a suspense account, subject to review by departmental business staff for the identification of alternate funding sources. To prevent non-personnel expenditures beyond the performance period, LSUHSC-S assigns end dates to sponsored awards. Training. LSUHSC-S continues to conduct and improve training sessions and educational meetings that cover federal, state, and institutional requirements. Mandatory annual training for all employees involved or planning to engage in research includes a module on time and effort certifications and expense monitoring. In addition to the annual training, supplementary education consists of one-on-one departmental meetings held by the Office for Sponsored Programs, continuing education for department business managers and administrative staff, and specialized sessions designed for research personnel. Examples of such educational opportunities include a New Grant Award Meeting and additional training sessions publicized in the Research Matters Newsletter. Emphasis is placed on grant management organizational podcasts and classes for seasoned and new business staff, principal investigators, and institutional grant and contract support staff. Name of Contact(s) Responsible for Action Plan Marcia Scarmardo, Chief Advisor to Chancellor Jen Katzman, Assistant Vice Chancellor for Administration and Finance (with Departmental Business Managers) Bill Haacker, Assistant Director of Grants Accounting Steven McAlister, Associate Director of General Accounting Annella Nelson, Assistant Vice Chancellor for Research Development Anticipated Completion Date: Continuous If you have questions or require additional information, please contact me at (318) 675-5230 or via email at cindy.rives@lsuhs.edu.