Corrective Action Plans

Action Item Title 2022-002 – Financial Management and Internal Controls Compliance Requirement Allowable Costs/Cost Principles Status (Open: In-process) Condition Written Policies The Corporation has no written policies for determining the activities allowed or unallowed and the allowability of costs as described in subpart E, Cost Principles of 2 CFR Part 200. Identified root cause It is the first year for the Corporation to be subjected to a single audit compliance requirement. However, since the Commonwealth of Puerto Rico (the Commonwealth) filed for Title III under the PROMESA, all the instrumentalities of the Commonwealth had to reduce their staff as part of the Fiscal Plan to reduce expenditures. This has disrupted the segregation of duties, which is a key control. Grantee resolution plan Written Policies The Corporation received federal funds for the first time in 2022. For the purposes of purchases or acquisitions, the Corporation is governed by Law of the General Service Administration for the Centralization of Government Purchases in Puerto Rico, Law No. 73 of 2019, which establishes the uniform purchasing process for acquisitions by the Commonwealth. The Corporation will adopt regulations for the use and disbursement of federal funds and comply with the federal regulations. Completion Date Written Policies By June 30, 2025 Name and Title of contact: Linnette Dávila Alemán- Financial and Budget Assistant Manager Phone: 787-724-4747 ext. 2105 Email: ldavila@cba.pr.gov Jetppeht Pérez de Corcho Morgado – General Manager Phone: 787-724-4747 ext. 2102 Email: jperez@cba.pr.gov

Corrective Action Planned: Subsequent to the filing of the Period 1 reports Monongalia Health System, Inc. and Subsidiaries instituted new policies and procedures surrounding the use, tracking and reporting on federal funds, including the Provider Relief Fund and American Rescue Plan Act (ARP) Rural Distribution. Under the new policies and procedures the usage of all funds is accumulated and reviewed on a monthly basis, and all reporting is subjected to reviews by the VP’s of Finance prior to reporting. Name(s) of Contact Person(s) Responsible for Corrective Action: Kevin Gessler, VP of Finance and Rick Scherich, VP of Finance are responsible for effectuating updated procedures Anticipated Completion Date: Updated Policies and procedures were implemented on September 30, 2023

Contact Person Evan Peltier Planned Corrective Action Dunseith Public School Dist. #1 will implement the recommendation from Brady Martz. Planned Completion Date The planned completion date will be the start of FY-23.

Contact Person Evan Peltier Planned Corrective Action Dunseith Public School Dist. #1 will implement the recommendation from Brady Martz. Planned Completion Date The planned completion date will be the start of FY-23.

Management Response #2022-016: Due to the staff shortages and turnover in FY2020-2022 the company did not have adequate personnel in place to monitor or document grant activity. Formal documentation of policies and procedures were also deficient. Additionally, documents were not stored centrally, which made it extremely difficult to find supporting documentation. Corrective Action Plan: The Grants program management team will expand upon their current process that was instituted in 2024 to ensure the calculation for indirect costs and documentation supporting the indirect cost pools is properly maintained and that costs conform to the current regulations as required. Responsible Party: Tamara Barnes, CFO

Management Response #2022-009: Due to the staff shortages and turnover in FY2020-2022 the company did not have adequate personnel in place to monitor or document grant activity. Formal documentation of policies and procedures were also deficient. Additionally, documents were not stored centrally, which made it extremely difficult to find supporting documentation. Corrective Action Plan: The following action plans have since been implemented: • During the fourth quarter in 2022, finance team delineated and expanded positions whose primary responsibility is to monitor and manage all grant activities. • During the fourth quarter in 2022 a new process was implemented to track grant related activities. Prior to any drawdown, the expenses are pulled from the G/L and reviewed. The expenses are entered into a spreadsheet and totaled based on the applicable federal award which has been assigned a client ID in the accounting system. The finance team is notified of the amount due to be drawn for each federal award. That amount is entered into the accounting system as an accounts receivable entry. This process has been formally documented. • Project Budget Reports have been created for each federal award. These reports include the budget, expenses for each month and the revenue (drawdown) incurred for each month. The reports will be reviewed and reconciled by the grants administration staff and finance monthly to ensure all agree with the allocated costs and costs and are in compliance with grant regulations. Once approved by both teams the reports will be routed for signatures. This process was launched in July 2022. • Supporting documentation for all draws will be maintained on a shared network drive so that an adequate audit trail will be established. This drive will be backed up on a regular basis by the Information Technology team. Responsible Party: Tamara Barnes, CFO

Management Response #2022-006: Due to turnover of several key financial executives and personnel, the Corporation did not maintain evidence of fringe benefit cost objectives calculations. Corrective Action Plan: Due to the staff turnover and shortage in 2020-2021, this process was not consistently maintained or documented. The following action items have been or will be taken: • In 2022, finance team delineated and expanded positions whose primary responsibility is to monitor and manage all grant activities. • The grants finance department will also create actual to budget reports in accordance with HRSA guidelines for fringe costs. • The report will be reconciled monthly based on fringe costs allowed by the grant as it relates to the employee class such as part time or providers that may have additional benefits. Adjustments will be recorded in the GL (General Ledger) accordingly. Responsible Party: Tamara Barnes, CFO

Management Response #2022-005: The time keeping system and process does not currently allow tracking of time based on funded resources. The past practice had been for the finance department manually calculated salary allocations but due to staff turnover in FY2021-22, the process was not consistently followed. Corrective Action Plan: The following action items have been or will be taken: • In 2022, the finance team delineated and expanded positions whose primary responsibility is to monitor and manage all grant activities. • Monthly time and effort reports to include recorded time worked under each grant will be sent to the employee and require employee and supervisor approval. • As of 2022 salary/wages are allocated to federal grants based on actual costs received from payroll. • Finance Management will also create actual to budget reports in accordance with HRSA (Health Resources and Services Administration) guidelines for salaries/wages and hours. The report will be reconciled monthly. • Human Resources department will collaborate with the Grants and Finance teams to ensure grants hours is added as an option within the timekeeping system for accurate recording for FY24. Responsible Party: Tamara Barnes, CFO

Responsible: Thomas Hoover, CFO Corrective Actions: 1) Update Finance policies to specify documentation and maintenance of such documentation of the review and approval of costs allocated to federal grants within the grant funding period. 2) Update grant policies to include subrecipient periodic submission of supporting documentation. Completion Date: July 10, 2024 Explanation: Management concurs that the procedures should specify documentation and maintenance of such documentation of the review and approval of costs allocated/charged to the federal grant within the grant funding period. Grant policies and procedures have been updated to include subrecipient periodic submission of general ledger or other financial documentation supporting expenditures during the period.

Responsible: Thomas Hoover, CFO Corrective Actions: Update Finance policies to specify that documentation of review and approval of both the costs charged and the allocation methods of costs charged to federal grants be maintained. Completion Date: March 29, 2023 Explanation: Policies have been in place over the coding of costs allocated to federal grants in compliance with CFR 200 and were enhanced in 2023 in response to an OJJDP/OCFO recommendation. Review and approval of costs after being approved by an authorized signer takes place in multiple steps and concludes with preparation of reimbursements and financial grant reports (FFR). In order to further demonstrate compliance as recommended, Management has updated Finance policies to capture the documentation and maintenance of such documentation of Supervisory review and approval.

Responsible: Thomas Hoover, CFO Corrective Actions: 1) Update Finance policies to document and maintain the documentation of Supervisory review and approval of journal entries charging payroll costs to federal grants; 2) Update Finance policies to review estimates of accrued costs charged to federal grants at calendar/fiscal year end to determine whether true-ups to actual costs are necessary. Completion Date: March 29, 2023 Explanation: 1) Review of allocated payroll costs: Payroll processing and recording of costs charged to federal grants has in practice, consistently involved multiple review and approval steps by at least two employees. Detailed records of these steps are maintained in Finance records for each payroll, including the allocated grant costs. However, Management acknowledges that an additional step be added to capture the documentation of review and approval of the payroll journal entries that allocate payroll costs to federal grants. This step was put in place in 2023 to resolve a recommendation from OJJDP/OCFO. Supervisor review and approval is captured directly in the general ledger system. Finance policies have been updated to codify this additional step as recommended. 2) Procedure for trueing up estimates: Three of sixty transactions tested showed that payroll costs were accrued at year end based on the approved grant budget but were not trued up in the new accounting period based on actual costs. The total variance of the three transactions was $6.20. Finance policies have been updated to include evaluating year-end accruals to determine whether a true-up is necessary in the new period as recommended.

Finding No. 2022-003; Supportive Housing for the Elderly (Section 202), CFDA 14.157 Criteria Loans are not permitted to be made from project cash without prior authorization from HUD. Condition During the year ended November 30, 2022, the project paid expenses in the amount of $326,282 on behalf of other affiliates from project cash without HUD approval. The amount due to the project as of November 30, 2022 is $326,282. Cause Procedures were not in place to ensure that cash disbursements of project funds were limited to project operating costs. Effect or Potential Effect The payments of $326,282 were unauthorized loans and therefore considered to be questioned costs. Questioned Costs $326,282 Recommendation Management should immediately reimburse the amount due to the project and establish procedures to ensure payments of this nature are not made in the future. Auditor Noncompliance Code: B – Allowable Costs/Cost Principles Views of Responsible Officials and Planned Corrective Actions Because the PRAC renewals were so delayed, therefore there was no money available to pay back the project. Furthermore, the insurance costs are tremendous and had to be financed. In order to ensure the payments are applied and paid timely it is best to have the entire amount pulled from one bank account. If each entity were to pay its share it would cause confusion and may result in possible cancellation. Upon finalizing the audits and submitting to HUD, management intends to request funds from the replacement reserve to enable them to pay down the due from affiliates.

Finding 2022-002 Unauthorized loans from project assets Comments on the Finding and Each Recommendation Statement of Condition During the year ended September 30, 2022, the project paid expenses in the amount of $81,886 on behalf of an affiliate from project cash without HUD approval. The amount due to the project as of September 30, 2022 is $81,886. Criteria Loans are not permitted to be made from project cash without prior authorization from HUD. Cause Procedures were not in place to ensure that cash disbursements of project funds were limited to project operating costs. Effect or Potential Effect The payments of $81,886 were unauthorized loans and therefore considered to be questioned costs. Questioned Costs $ 81,886. Recommendation Management should immediately reimburse the amount due to the project and establish procedures to ensure payments of this nature are not made in the future. Auditor Noncompliance Code B – Allowable Cost/Costs Principles Reporting Views of Responsible Officials The Corporation agrees with the finding and the auditor's recommendations have been adopted. Upon finalizing the audits and submitting to HUD, management intends to request funds from the replacement reserve to enable them to pay down the due from affiliates..

2- Finding No. 2022-002; Unauthorized loans from project assets Statement of Condition During the year ended September 30, 2022, the project paid expenses in the amount of $32,736 on behalf of an affiliate from project cash without HUD approval. The amount due to the project as of September 30, 2022 is $32,736. Criteria Loans are not permitted to be made from project cash without prior authorization from HUD. Cause Procedures were not in place to ensure that cash disbursements of project funds were limited to approved project operating costs. Effect or Potential Effect The payments of $32,736 were unauthorized loans and therefore considered to be questioned costs. Questioned Costs $32,736. Recommendation Management should immediately reimburse the amount due to the project and establish procedures to ensure payments of this nature are not made in the future. Auditor Noncompliance Code B – Allowable Cost/Costs Principles Reporting Views of Responsible Officials The Corporation agrees with the finding and the auditor's recommendations have been adopted. Upon finalizing the audits and submitting to HUD, management intends to request funds from the replacement reserve to enable them to pay down the due from affiliates.

Condition: The Organization’s controls in place for reporting submissions did not identify that the General and Targeted Distribution Post-Payment Notice of Reporting Requirements guidelines were not followed related to expense amounts reported in the Organization’s period 2 portal submissions. Planned Corrective Action: The Organization will review its processes surrounding the quantification of expenses reported and will implement additional levels of review to ensure that the expense amounts are validated for future reporting periods. Contact person responsible for corrective action: Tom Garvey, Interim CFO Anticipated Completion Date: 9/30/2023

Condition: The Organization’s lacked effective controls to ensure documentation for expenses reported within the Organization’s period 2 portal submission were retained. The Organization was able to produce documentation for total expenses of $7,516,920, while the Organization had reporting to HRSA that it had incurred $8,509,978 of expenses. As a result, the Organization was unable to provide support for $993,058 of the total expenses reported. Planned Corrective Action: The Organization will review its processes surrounding the retention of documentation used to report expenses and will implement additional levels of review to ensure that the proper documentation is retained for future reporting period portal submissions. Contact person responsible for corrective action: Tom Garvey, Interim CFO Anticipated Completion Date: 9/30/2023

Finding 2022-001 – Special Education Cluster – AL No.’s 84.027 & 84.173 Department of Education Massachusetts Department of Elementary and Secondary Education and the Massachusetts Department of Early Education and Care Noncompliance and Significant Deficiency Related to Internal Control over Compliance of the Major Programs Criteria: Grantees must provide reasonable assurance that federal awards are expended only for allowable activities and that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles. Management of the Town is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context: Control deficiencies related to disbursements were noted as a result of the testing of internal controls over payroll. Specifically, a sample of payroll disbursements charged to the programs were tested in order to determine if adequate internal controls were in place. As a result of the testing of payroll disbursements charged to the programs, all of the employees tested were found to not have adequately approved employee payroll rate agreements. Cause: Weaknesses in the design and operation of controls. Effect or Potential Effect: Due to the weaknesses in internal controls noted above, there is a risk of inappropriate salaries and wages being paid. Identification as a Repeat Finding: Yes, finding number 2021-001 Questioned Costs: Questioned costs are reported equal to $256,796.58, calculated as payroll charged to the programs. Recommendation: The Town should improve internal controls over Activities Allowed/Allowable Costs by ensuring employee’s payroll rate agreements are approved by an appropriate level of management and in a timely manner. Managements Response: Though we believe that Finding 2022-001occured due to staff turnover at the time of the rate agreement approval, the Town and the Schools will assure federal awards are expended only for allowable activities. Consistent with State and Federal requirements and as in Acushnet’s updated Federal Grant Procedures Manual (February 2023), the Town will maintain source documentation (invoices, time sheets, payroll stubs, etc.) – including approved payroll rate agreements – that support federal expenditures. Responsible for Corrective Plan: Patrick McIntyre, School Business Manager Estimated Completion Date: Fiscal Year 2023 Action Taken: All employee’s payroll rate agreements are approved by an appropriate level of management and in a timely manner.

2022-006 – Allowable Costs Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Immunization Cooperation Agreements Assistance Listing Number: 93.268 Federal Award Identification Number and Year: FY 21/22 and 22/23 Pass-Through Agency: Pennsylvania Department of Health Pass-Through Number(s): None Award Period: 1/1/2022 – 12/31/22 Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Condition and Context: While testing allowable costs relating to payroll expenditures, sixteen out of forty transactions were identified that could not be appropriately re-calculated per the amount that was charged to the grant. The County was not able to provide support for payroll expenditure amounts charged to the grant for part-time hourly employees. Recommendation: We recommend management should review the process of timekeeping for grant eligible employees for daily time input, as well as grant authorized wages. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The Grant Accountant met with department staff to review the time tracking process for grant-eligible employees to ensure that all payroll expenditures charged to the grant are eligible, authorized, and charged on an individual employee basis. Project codes in Infor allow salary distribution and personnel information to be assigned to each grant. Where possible, this function is to assist in supporting the amounts charged to the grant program. The department will maintain documentation to support the amounts and allowability of the charges applied to the grant for payroll. The County is evaluating new time tracking systems to be implemented in 2025 that will allow for time tracking and reporting at a grant/program level. Name(s) of the contact person(s) responsible for corrective action: Thomas Landauer and Dean Dortone Planned completion date for corrective action plan: March 2025

Finding #SA2022-008: Accurate Review and Payment of Vendor Reimbursement Requests Assistance Listing Number: 14.218 Assistance Listing Title: COVID-19 - Community Development Block Grants/Entitlement Grants Name of Federal Agency: Department of Housing and Urban Development Pass Through Entity: San Joaquin County Community Development Department Federal Award Identification Number: A-93-916 • Name(s) of the contact person: Shay Narayan, Director of Finance; Carmen Gusman, Deputy Director of Finance • Corrective Action Plan: The City will develop procedures to ensure accurate review and payment of vendor reimbursement requests, including providing training to administrative staff as necessary. • Anticipated Completion Date: 06/30/24

TINDLEY ACTION PLAN 1. Develop and implement Procurement Policy (completed and on-going by CFO/Accounting Manager/Accountant/Grants Manager/Network President/Department Heads) a. Enhance written procedures for procurement and accounts payable. i. Purchases between $15,000-$25,000 will require two quotes for all new vendors; purchases between $25,000-$75,000 will require three quotes for all vendors; and purchases over $75,000 will require a competitive bid process for all vendors. ii. Establish a Master Vendor list. 1. Master Vendors may be used for up to $20,000 for regular services and products in the normal course of business with dual approval by the Network President and CFO. b. Require vendor bids/quotes for services. c. Segregate purchasing duties. 2. Research new vendors prior to utilization (implemented and ongoing by CFO/Accountant) a. Are these vendors commonly known in the industry or the community? b. Does the vendor have a valid website, phone number, address and email address? 3. Conduct Periodic/Continuous Fraud-Detection Monitoring (CFO – at every fiscal year end) a. Annually identify (1) Tindley’s top 20 vendors, (2) all Tindley vendors receiving annual payments totaling more than $10,000, and (3) any new vendors receiving annual payments totaling more than $5,000. i. Ensure there are valid and updated contracts for these vendors. ii. Ensure the description for services on the corresponding. invoices are detailed and complete. iii. Assess multiple corresponding invoices that have the same total amounts. 4. Refine and codify job descriptions/job duties for Network President, CFO, Grants & Compliance Manager, and Director of Development (HR/Board to be completed by 9/30/24) a. Keep these job descriptions in a database to ensure a smooth transition in the event of a departure or retirement. b. The job descriptions should highlight the financial compliance aspects of each position. 5. Change reporting structure for CFO (to be implemented by HR/Board 9/30/24) a. CFO will report directly to the Board with a dotted line to the Network President. 6. Provide anti-fraud training for Network President, CFO, Director of Development, Grants & Compliance Manager, and in-house accounting professionals (to be implemented by Network President/CFO and completed by 11/30/24) 7. Establish a Whistleblower/Ethics hotline to report suspected fraud (to be implemented by HR 9/30/24) a. Ensure employees understand that it is available to report suspected fraud. b. Develop procedures for responding to whistleblower allegations. PROCUREMENT POLICIES AND PROCEDURES I. INTRODUCTION AND PURPOSE Tindley should adhere to strict ethical and legal standards to prevent fraud and ensure accountability. This procurement policy should be cross-referenced with current local, state, and federal laws. II. CODE OF CONDUCT A. Conflict of Interest Tindley purchasers shall not participate in the selection, award, or administration of a contract if they have a real or apparent conflict of interest. Such a conflict arises when the Tindley purchaser; any immediate family member (spouse, child, parent, parent in law, sibling, or sibling in law); partner; or an organization that employs, or is about to employ, any of the above has a direct or indirect financial or other interest in, or will receive a tangible personal benefit from, a firm or individual considered for the contract award. An “organizational conflict of interest” is created because of a relationship that a Tindley employee has with a parent, affiliate, or subsidiary organization that is involved in the transaction such that the Tindley employee is or appears to be unable to be impartial in conducting a procurement action involving the related organization. B. Gifts, Money, Gratuities Tindley employees involved in the purchasing process shall not solicit or accept gifts, money, gratuities, favors, or anything of monetary value, except unsolicited items or services of nominal value from vendors, prospective vendors, parties to subcontracts, or any other person or entity that receives, or may receive compensation for providing goods or performing services to Tindley. All Tindley purchasers shall review and comply with Tindley’s procedures for disclosing, reviewing, and addressing actual and potential conflicts of interest. III. PROCUREMENT PROCEDURES A. Procurement Procedure See chart at the end of document B. Bid Procedures All procurement shall be conducted in a manner that provides, to the maximum extent practical, a full and open competition. Tindley bid procedures should always follow local, state, and federal requirements. Procurement Processes should include the following: 1. Assemble a Procurement Committee consisting of the Network President, CFO, Grant Manager, and the requestor of the product or service. i. In the event that the requestor of the product or service is the Network President, a Tindley Board member of the applicable committee that corresponds to the request will be asked to participate. 2. Pre-Bid Phase. i. If an outside vendor is needed to develop the bid specifications for a bid project, the vendor, or related parties to the vendor cannot participate in the bid. ii. The procurement committee should have specific criteria of the bid specifications including how bids will be judged based on price, quality, experience of vendors, etc. iii. All solicitations shall incorporate a clear and accurate description of the technical requirements for products or services to be procured. iv. Identify all requirements which offerors must fulfill and all other factors to be used in evaluating bids and proposals. v. If required by local, state, and or federal laws, Tindley should publicly announce in advance of projects that require a competitive bid process. vi. Vendors should not be allowed to interface with Tindley procurement committee members before any public bids are announced, and post-bid announcement, interactions should occur only as part of the formal bid process (questions and answers in writing, face-to-face walk-throughs, proposal phases, and actual bid submissions). 3. Bid Phase. i. All bidders should have adequate time to respond to a bid, including Q&A sessions, and a face-to-face walk-through if necessary. ii. The Tindley employee sending out bid packages including specifications, should not be the same person receiving the vendor bid submissions. iii. The Tindley employee receiving the bid submissions should time and date stamp each bid received and the committee should exclude any bids submitted after the bid deadline. iv. Tindley employees are forbidden to disclose to vendors information about other bidders, including bid proposal contents such as pricing. 4. Bid Selection Phase. i. The procurement committee should develop a bid template and checklist that ranks bids based on criteria developed by the committee and ensures bid procedures are followed. ii. If the procurement committee chooses the winning bid on criteria other than what is stated in the original specifications, the committee must document the reasons why. For example, if the winning bid was not the lowest price, the committee must justify in writing why the vendor was selected. C. Competition All procurement shall be conducted in a manner that provides, to the maximum extent practical, a full and open competition. 1. Procurements shall avoid noncompetitive practices that may restrict or eliminate competition, including but not limited to: a. Unreasonable qualification requirements. b. Unnecessary experience and excessive bonding requirements. c. Non-competitive pricing practices between firms or affiliated companies. d. Non-competitive contracts to consultants on retainer contracts e. Organizational conflicts of interest. f. Specifying “brand name” only instead of allowing “an equal to product.” 2. Procurements shall not intentionally split a single purchase into two or more separate purchases to avoid dollar thresholds that require more formal procurement methods. 3. Procurements shall include in any pre-qualified list an adequate number of current qualified vendors firms or products. 4. Procurements shall not preclude potential bidders from qualifying during the solicitation period. 5. Procurements shall not use any geographic preferences (state local or tribal) in the evaluation of bid proposals except where expressly mandated or encouraged by applicable federal statutes. 6. The procurement team must find, when possible, bidders to compete that were not provided by the Tindley requester. 7. The procurement committee must use independent judgment and notify the Board of Directors and ethics hotline if the requester of products or services is attempting to use undue influence for the team to select specific vendors. D. Considerations Tindley purchasers should take the following actions when procuring goods and services. 1. Conduct a lease versus purchase analysis when appropriate, including for property and large equipment. 2. Consolidate or break out procurements to obtain a more economical purchase if possible. 3. Use state and local intergovernmental or inter-entity agreements, or common or shared goods and services, where appropriate. 4. Use federal excess and surplus property in lieu of purchasing new equipment and property if it is feasible and reduces project costs. 5. Use time and materials contracts only if no other contract is suitable and the contract includes a ceiling price that the contractor exceeds at their own risk. If such a contract is negotiated and awarded, Tindley must assert a high degree of oversight to obtain reasonable assurance that the contractor is using efficient methods and effective cost controls. IV. PROCUREMENT METHODS A. All procurements made under this policy shall: 1. Be necessary, at a reasonable cost, documented, not prohibited by law or the applicable funding source, and made in accordance with this policy. 2. Avoid acquiring unnecessary or duplicative items. 3. Engage responsible vendors who possess the ability to perform successfully under the terms and conditions of a proposed procurement. 4. Tindley purchasers shall consider vendor integrity, public policy compliance, past performance record, and financial and technical resources. B. Procurement Parameters For all transactions, Tindley shall follow the applicable procurement method set forth in Appendix 1 C. Exceptions to Standards Methods Solicitation of a proposal from a single source may only be used if the following apply and are documented: 1. The item is only available from single source. 2. Public exigency or emergency will not permit any delay. 3. The Federal awarding agency or pass-through expressly authorizes the sole source in response to a Tindley request. 4. After soliciting a number of sources, competition is determined inadequate. V. DOCUMENTATION A. Records Tindley shall maintain records sufficient to detail the history of each procurement transaction. These records must include, but are not limited to: 1. A description and supporting documentation showing the rationale for the procurement method (e.g., cost estimates). 2. Selection of contract type. 3. Written price or rate quotations (such as catalog price, online price, e-mail or written quote), if applicable. 4. Copies of advertisements, requests for proposals, bid sheets or bid proposal packets. 5. Reasons for vendor selection or rejection, including Finance Committee and Board Minutes, rejection letters, and award letters. 6. And the basis for the contract price. VI. COMPLIANCE WITH THIS POLICY Program directors and, where applicable, the purchasing committee, shall maintain oversight to ensure that contractors and vendors perform in accordance with the terms, conditions, and specifications of contracts or purchase orders. Violations of this policy may result in disciplinary action, up to and including termination. VII. VENDOR SELECTION CRITERIA For vendors that have been selected in a competitive bid or that will provide critical services to the school, Tindley should evaluate them based on cost, quality, past performance, experience, and financial stability. Before providing services or products, the selected vendor can be asked to provide references, allow for background checks, and provide documentation such as certificate of insurance, certificate standing, adherence to anti-fraud policies, and contracts with right-toaudit clauses.

The Organization has taken steps to ensure that the calculation of indirect costs is executed properly and reviewed for compliance in accordance with the contract agreement. Management brought the error in the contracted indirect rate to the funders attention initially, but unfortunately a misstep back to the original contract terms was made before close-out. The development and application of indirect rates will be conducted by the Sr. Director of Finance with oversight by the Chief Financial & Operating Officer and is in place as of the date of this corrective action plan.

Management acknowledges that it is necessary to more specifically itemize employee time that is applicable to the federal grants and contracts that partially fund broad programs and services and has instituted infrastructure to ensure that this is done and documented correctly in the future. The necessary codes are in place in our payroll system and guidance and leadership of the timesheet process will be provided by all program executives (EVP, VP) to all staff that are impacted, with oversight by the Chief Financial & Operating Officer and Sr. Director of Finance. This is in place as of the date of this corrective action plan.

All SEFA grants will be tracked thoroughly in FundEZ and annotated with their own cost center code to allow tracking them to be easier. The Director of Finance, Ethan Terrio, will reconcile these awards and expenses once a month to ensure that the numbers tie out in the general ledger. Should there be any issues, he will contact the respective Division Director, either Susan Cody or Roxane Carpenter, to determine the cause of the variance, and how to correct the entry to be accurate.

Finding 2022-001 – Education Stabilization Fund – AL No.’s 84.425D & 84.425U Department of Education Massachusetts Department of Elementary and Secondary Education Noncompliance and Significant Deficiency Related to Internal Control over Compliance of the Major Programs Criteria: Grantees must provide reasonable assurance that federal awards are expended only for allowable activities and that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles. Management of the Town is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context: Control deficiencies related to disbursements were noted as a result of the testing of internal controls over payroll. Specifically, a sample of payroll disbursements charged to the Accelerated Literacy Learning Grant were tested in order to determine if adequate internal controls were in place. As a result of the testing of payroll disbursements charged to the programs, employees tested were found to not have adequately approved and or documented employee payroll rate agreements. Cause: The School Department failed to produce copies of documented appointment letters to support pay rates of pay and/or wages paid. Effect or Potential Effect: Due to the weaknesses in internal controls noted above, there is a risk of inappropriate rate of pay and/or wages being paid. Identification as a Repeat Finding: N/A Questioned Costs: Questioned costs could not be determined. Recommendation: The Town should improve internal controls over Activities Allowed/Allowable Costs by ensuring employee’s payroll rate agreements are approved by an appropriate level of management and in a timely manner. Responsible for Corrective Plan: Director of Finance, Schools Estimated Completion Date: March 2024 Action Taken: School management will ensure that documented appointment letters from management will support payments.

Finding 2022-003 – Education Stabilization Fund – AL No.’s 84.425D & 84.425U Department of Education Massachusetts Department of Elementary and Secondary Education Noncompliance and Significant Deficiency Related to Internal Control over Compliance of the Major Programs Condition: During our test of controls over compliance it was noted that payroll for Nurses was posted to the Education Stabilization ESSER II major program grant, however an English Language Learning Teacher was charged to the Education Stabilization ESSER II major program grant, however not included as part of the original or amended grant application. Criteria: Costs charged to the Education Stabilization ESSER II major program should meet the requirements as set forth by Uniform Guidance 2 CFR Part 200, subpart E (Cost Principles). Context: During our review of payroll transactions posted to the Education Stabilization ESSER II major program it was noted that an English Language Learning Teacher was charged to the Education Stabilization ESSER II major program grant and was not included as part of the original or amended grant application. Effect: Town of Bellingham was not in compliance with the allowable costs/ cost principals requirement as set forth by the Uniform Guidance 2 CFR Part 200, subpart E (Cost Principles). Questioned Costs: Could not be determined. Cause: Amendments to the grant were not posted at the time of change. Identification as a Repeat Finding: N/A Recommendation: We recommend the Town of Bellingham follow procedures to ensure that expenditures charged to the grants are allowable costs as set forth by Uniform Guidance 2 CFR Part 200, subpart E (Cost Principles) Responsible for Corrective Plan: Director of Finance, Schools Estimated Completion Date: March 2024 Action Taken: Management will ensure that all amendments are processed at the time of the occurrence.