Corrective Action Plans

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.

Dear Mr. Waguespack: The Department of Children and Family Services has reviewed the finding “Noncompliance and Control Weakness Related to Cost Allocation”. The Department concurs with the finding and recommendation. When processing the July 2022 cost allocation statistics, we inadvertently selected the wrong report date for one statistic, which resulted in incorrect percentages being charged to various cost pools. The Cost Allocation Unit has implemented a review process to ensure that supporting data is accurate prior to processing monthly statistics. The Program Consultant will run all reports used by the Cost Allocation Unit each month and submit the reports to the Program Manager for approval. The Program Manager will verify the accuracy of the report dates and supporting documentation, sign the reports, and return them to the Program Consultant for processing monthly stats. The Cost Allocation Unit is updating the Cost Allocation Plan to include the missing cost pool and will submit future amendments promptly when major changes occur. Plan updates will continue to be submitted semi-annually. If you have any questions, please contact Tonja Hayes, Cost Allocation Unit Program Manager. Ms. Hayes can be reached at (225) 342-4859 or Tonja.Hayes.DCFS@LA.GOV

Dear Mr. Waguespack: Please find below our management response to the audit finding "Control Weakness and Noncompliance with Personnel Expenses Charged to Federal Awards.” The University concurs with the finding results. As you may recall, FY 22's finding prompted us to create an effort reporting policy and system in draft mode and tested it starting at the end of FY 22 and FY23. This audit has brought to the attention of the office of Sponsored Programs Finance Administration and Compliance (SPFAC) that there are deficiencies in our adopted system, particularly in the generation of effort reports, which regrettably missed some key personnel and required information. Your identification of these shortcomings underscores the urgency of our need to enhance our internal controls and procedures to ensure compliance with federal regulations. Regarding the draft policy calling for quarterly effort reports, we have carefully considered your recommendation and in light of our operational capacities have decided to proceed with an annual, calendar year (CY) reporting time frame. We believe that an annual reporting cycle aligns better with our current operational resources. We will ensure that this chosen reporting cycle is rigorously adhered to and supplemented with additional measures as needed to enhance accuracy and timeliness. Moving forward, we are committed to the following actions to address the identified deficiencies: 1. Enhancing Internal Controls: We will review and strengthen our internal control framework to ensure that all required information is captured accurately and comprehensively in our effort reports. 2. Annual Time & Effort Certification: We will revise our Time & Effort Certification policy to reflect the decision to adopt an annual reporting time frame. This will involve refining our processes to ensure that annual certifications provide a thorough and accurate reflection of personnel effort on federal awards as required by federal regulations. The annual reports will be processed on a calendar year (CY) basis. To allow for a fresh start for CY 2024, the next effort reporting cycle will cover July 1, 2023, through December 31, 2023. 3. Monitoring and Oversight: We will establish robust monitoring mechanisms to track changes in personnel effort and ensure that any deviations from approved thresholds are promptly identified and addressed. To further assist with correction of this finding, the University has engaged Ellucian Banner to apply the Effort Certification Module which is a systematic certification process for us to review, validate and certify the work effort performed by faculty and staff in support of sponsored research. The module is expected to go in test mode in 2024 and anticipated to go live in 2025. The director of SPFAC will oversee the implementation of this action plan.

Dear Mr. Waguespack: The Department of Children and Family Services (DCFS) has reviewed the finding “Improper Employee Activity in Federal Program”. The Department concurs with the finding and continues to prioritize prevention and detection of improper activity associated with programs it administers. The Fraud and Recovery Unit (FRU) investigated two employees for suspected payroll fraud. The FRU determined that one employee received wages from DCFS and a secondary employer for the same hours worked. DCFS is pursuing recoupment of wages paid for the duplicative hours and will seek recoupment of funds in the amount $875.00 from this employee. DCFS is conducting additional inquiries related to the other employee’s suspected activities to determine the actual loss to the agency and will proceed accordingly. Both employees are no longer employed with the Department. DCFS will continue to investigate improper employee activities and emphasize the consequences of illegal acts. If you have any questions, please contact Rhonda Brown, Fraud and Recovery Unit Director, at Rhonda.Brown.DCFS@LA.GOV.

(Repeat) Federal Direct Student Loans, ALN 84.268; Grant period—Year ended June 30, 2023 Condition: There was lack of documentation related to disbursement notices and exit counseling for eight out of thirty-four students tested. Criteria: According to §668.165, before an institution disburses title IV, HEA program funds for any award year, the institution must notify a student of the amount of funds that the student or his or her parent can expect to receive under each title IV, HEA program, and how and when those funds will be disbursed. Additionally, according to §682.604, a school must ensure that exit counseling is conducted with each loan borrower and graduate either in person, by audiovisual presentation, or by interactive electronic means. Cause: The College was unable to locate the documents for the students as a result of transitioning softwares. Effect: Certain documentation for disbursement notices and exit counseling was lost during the transition of the College's software. Context: During the compliance audit testing of ALN 84.268, it was determined that documentation to confirm delivery of disbursement notices and performance of exit counseling could not be provided for certain students selected for testing. Recommendation: We recommend all required documentation be backed up to support compliance with certain requirements. View of Responsible Officials and Planned Corrective Action: The College is currently working with their IT department to make sure that all types of communication includes copying the financial aid department email to make sure the College has support for all communications to prevent this in the future.

Planned Correction Action: Moving forward grants will not be set up with account #s for use until the funds are received and award letter is issued with actual start date. This will stop any expenses being posted prior to the start date. Name of Contact Person and Completion Date: Jeremy Roche, Assistant Superintendent of Finance and Operations. This plan will go into effect immediately.

Corrective Action Plan Finding 2023-004 Improve Time and Effort Documentation Planned Corrective Action: The Housing and Economic Development Department will amend the current process used to document time and effort certifications for salaried employees, by adding the signature of the supervisor to each weekly time tracker. The supervisor for HCD staff is the HCD Division Director. The supervisor for the HCD Division Director and the Senior Accountant is the Housing and Economic Development Department Director Anticipated Completion Date: April 1, 2024 Contact Person: Mary Davis, Division Director, Housing and Community Development

Audit Finding Reference: 2023-003 Improve Controls and Documentation over Payroll Process Planned Corrective Action: Beginning with the first payroll of the calendar year 2024, the Portland Public School District went to the ADP payroll system. This change in payroll ERP system allowed for the overhaul of the payroll process that was currently in place. The Executive Director of Finance worked with ADP to ensure that permissions for both the Human Resources and the Payroll teams were specifically set up so that they did not have access to each other’s processes. The HR generalists have been trained to process the information that once was processed by payroll personnel. Furthermore, access is not managed by staff but by a department head to ensure that proper access for individuals is maintained. Proper documentation of time and attendance is maintained in payroll and electronically filed with each payroll period in an organized manner. The Executive Director of Finance is always looking for continuous improvements for proper documentation in payroll. Name of Contact Person: Helene DiBartolomeo, CPA Executive Director of Finance Anticipated Completion Date: Internal controls - 1/1/2024 Documentation - 2/23/24 353

Audit Finding Reference: 2023-004 Lack of Documentation to Support Distribution of Wages Management’s View and Planned Corrective Action: After review we have also determined that this documentation was lacking due to the employee longer working in the district. The grant manager did verify that the employee worked the hours noted, but lacks the employees’ signature. This is not a typical occurrence Time and Effort is used and submitted. A Time and Effort policy and procedure has been established, documented and implemented. Federally funded stipends are no longer processed until the Time and Effort Log of hours have been received. Once we have received the form(s), which we now attach to the position in our accounting system we then process in payroll. This procedure is also located in our Federal Funds Handbook. A communication will be sent to Grant Manager’s reminding them of the Time & Effort policy and procedures. Name of Contact Person and Completion Date: Name 1 Amber Wheeler Name 2 Danielle Rossetti Anticipated Completion Date – Procedure has changed a reminder will be communicated by March 30th.

Item 2023‐001 – Allowable Costs/Activities Contact person: Wendy Stephens, Senior Accounting Manager Management’s Response – Management’s controls over approval of time sheets operated effectively 97.5% of the time prior to processing of payroll. The payroll expenditures allocated to the COVID-19 Provider Relief Fund – Assistance Listing 93.498 were allocated to the Provider Relief Funding and including in reporting of expenditures based on management review of guidance provided by HRSA in determination of the portion of the payroll costs allocated as qualifying and allowable expenditures under the program. The guidance on allowable costs was determined by HRSA subsequent to disbursement of the funds by HRSA and after incurrence of the expenditures given the immediacy of the COVID-19 pandemic providing of funds and incurrence of costs. Management will perform an annual review of expenditures allocated to a grant to confirm the allowability of the costs under the respective program. Management’s controls over approval of time sheets operated effectively 97% of the time prior to processing payroll. The payroll expenditures related to the 1 time sheet not approved prior to payment of payroll are for an employee assigned to work specifically on the program funded by Assistance Listing #93.778. Management will perform an annual review of expenditures allocated to a grant to confirm the allowability of the costs under the respective program. Management expects the corrective actions described above to be complete no later than June 30, 2024.

Audit Period: Fiscal Year July 1, 2022 - June 30,2023 Re: Lima UMADAOP respectively submits the following corrective action plan for the year ended June 30, 2023. 2023-001 Reporting (Significant Deficiency) Recommendation: We suggest that Management engage in quarterly monitoring of their federal expenditures. This proactive strategy will aid management in preparing the Schedule of Expenditures of Federal Awards (SEFA) at year-end, as the amounts will have undergone partial scrutiny for completeness and accuracy throughout the year. Corrective Action Plan: The Agency will review and strengthen all controls and make any necessary changes moving forward. The Accountant will provide any necessary training to the Bookkeeper as well as monitor and review all expenditures on monthly basis. The Accountant and the CEO will review the Schedule of Expenditures of Federal Awards (SEFA) on a quarterly basis to confirm the completeness and accuracy for all future audits. Responsible Party: CEO, Accountant, Bookkeeper Date Expected to be Corrected: Immediately

FINDING 2023-005 Finding Subject: COVID‐19 Education Stabilization Fund ‐ Reporting Summary of Finding: Reports were not supported by underlying accounting records. Contact Person Responsible for Corrective Action: Carrie Alford Contact Phone Number and Email Address: (812)254-5536 calford@wcs.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: Washington Community Schools like all other school corps across the state, got the requests for these reports with very little to no instruction of how to complete them. We weren’t told they would be part of the audit and therefore didn’t retain reports used to complete some of the reports. Going forward we will ensure reports proving numbers reported are available to SBOA. Anticipated Completion Date: 06/30/2024

FINDING 2023-003 Finding Subject: Special Education Cluster (IDEA) ‐ Earmarking Summary of Finding: Proportionate Share Reporting could not be verified Contact Person Responsible for Corrective Action: Kevin Frank Contact Phone Number and Email Address: 812-254-5536 kfrank@wcs.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: Washington Community Schools will require the Director of the Daviess Martin Special Ed Cooperative to provide Proportionate Share expenditure data and emphasize the importance of having this information available for SBOA. Unfortunately, due to our configuration, WCS doesn’t have access to this data and it is up to the Coop to complete the requirements. Mr. Frank will offer training to DMSEC staff to ensure compliance. Anticipated Completion Date: 02/01/2024

2023-001 Block Grants for Prevention and Treatment of Substance Abuse – Assistance Listing No. 93.959 Recommendation: We recommend procedures be implemented to ensure that all costs charged to the grant are incurred within the grant period of performance. Explanation of disagreement with audit finding: There is no disagreement with the finding. Action taken in response to finding: We have controls in place to ensure that costs charged to a grant are incurred within the grant period of performance. This finding exposed a vulnerability that circumvented our controls. We will use this finding to pinpoint the cause(s) and make the necessary corrective adjustments. Name(s) of the contact person(s) responsible for corrective action: Deborah Grupp-Patrutz and Steve Simmons Planned completion date for corrective action plan: Prior to June 30, 2024