Corrective Action Plans

Finding Number 2024-032 Subject Heading (Financial) or AL no. and program name (Federal) 93.575 – CCDF Cluster Planned Corrective Action The Oklahoma Department of Human Services (OKDHS) partially concurs with this finding. The Agency agrees opportunities existed to strengthen oversight of Child Care provider monitoring activities and has implemented corrective actions to enhance monitoring procedures, documentation, supervisory oversight, Quality Rating and Improvement System (QRIS) verification, and monitoring during non-traditional operating hours. Child Care Services has resumed full QRIS monitoring, implemented precertification visits, enhanced monitoring documentation, strengthened supervisory review, expanded staff training, and continues to refer suspected fraud or misuse of program funds to the Office of Inspector General for investigation. The Agency also recognizes the analytical techniques utilized during the audit as a valuable opportunity to strengthen its detective control environment. OKDHS is evaluating implementation of similar data analytics as part of its routine monitoring activities to better identify providers that warrant additional review. These analytics will enhance oversight by directing monitoring resources toward higher-risk providers while complementing existing licensing and investigative processes. This will become possible to implement shortly with the implementation of the new childcare invoicing system. However, the Agency respectfully disagrees with the questioned costs. The finding identifies a weakness in one component of the Agency's oversight framework but does not demonstrate that the underlying provider payments failed to satisfy applicable federal or state reimbursement requirements. Licensing monitoring is intended to evaluate compliance with health and safety requirements, while payment allowability is supported through separate controls, including child eligibility determinations, authorized rate assignments, electronic attendance records, and automated payment system edits. The audit did not identify deficiencies in these payment controls or demonstrate that providers receiving the questioned payments failed to meet the requirements governing reimbursement. The Agency also respectfully disagrees with the report's characterization of the non-traditional hours payment methodology. Non-traditional hours enhancements are payable only when established eligibility, attendance, and reimbursement requirements have been satisfied in accordance with the approved Child Care Provider Rate Schedule. Accordingly, the Agency does not believe the hypothetical examples contained in the finding accurately reflect how non-traditional hours payments are authorized or processed. While the Agency agrees that strengthening monitoring activities and expanding analytical oversight will further reduce program risk, the presence of analytical risk indicators or the absence of a monitoring visit during nontraditional hours does not, by itself, establish that otherwise supported expenditures are unsupported or unallowable. The Agency believes the audit appropriately identified opportunities to strengthen preventive and detective controls but does not believe the evidence demonstrates that the questioned costs represent improper expenditures. Anticipated Completion Date In Progress Responsible Contact Person Kayla Urtz

Finding Number 2024-031 Subject Heading (Financial) or AL no. and program name (Federal) 93.575 – CCDF Cluster Planned Corrective Action OKDHS agrees that certain administrative errors identified through program reviews and audit activities, including confirmed payment calculation errors, eligibility determination issues, attendance verification deficiencies, and provider noncompliance, require corrective action. The Agency has initiated reviews and recovery efforts for confirmed overpayments and instances of provider noncompliance and continues to strengthen monitoring, award calculations, documentation requirements, and recovery procedures for provider assistance programs. However, OKDHS respectfully disagrees with several conclusions contained within this finding, including the characterization of questioned costs, the treatment of unsupported expenditures as unallowable expenditures, the attribution of provider actions directly to the Agency, the extrapolation methodology, and conclusions regarding the overall design and effectiveness of the Desert Grant Program. The Desert Grant Program was developed using emergency American Rescue Plan Act (ARPA) funding to rapidly increase child care capacity in underserved areas of Oklahoma within federally established obligation and liquidation deadlines. As previously communicated to the Administration for Children and Families (ACF), the applicable Notice of Award expressly excluded substantial portions of the traditional federal grant administration requirements, including most pre-award requirements, most post-award requirements, and the federal cost principles. Accordingly, OKDHS does not concur that the program should be evaluated using the same framework applicable to traditional federal grant programs or that retrospective disagreement with the program's design, funding methodology, or implementation strategy constitutes evidence of noncompliance. The Agency further does not concur with the treatment of unsupported expenditures as equivalent to unallowable expenditures. Providers receiving Desert Grant funding certified that grant funds would be used only for allowable purposes, agreed to maintain supporting documentation, and acknowledged their obligation to repay funds if they failed to comply with program requirements. While the absence of documentation during audit testing may warrant additional review, it does not independently establish that funds were expended for unallowable purposes. Likewise, the closure of a provider or other post-award business outcomes do not, by themselves, establish misuse of grant funds or Agency noncompliance. The Agency continues to evaluate these cases individually and pursue recovery when the facts demonstrate noncompliance with the terms of the award. OKDHS also respectfully disagrees with conclusions regarding the overall effectiveness or sustainability of the Desert Grant Program. The audit contains numerous observations regarding alternative funding methodologies, incremental payment structures, business planning considerations, sustainability assumptions, and other program design decisions. While these observations may identify opportunities for future program improvement, they represent differences in program design philosophy rather than evidence that the Agency failed to administer the federal award in accordance with applicable requirements. The Agency does not believe retrospective assessments regarding how the program could have been structured differently constitute a basis for questioned costs. Finally, OKDHS does not concur with the extrapolation methodology reflected in this finding. The questioned costs combine fundamentally different exception types, including confirmed administrative errors, unsupported expenditures, provider documentation deficiencies, provider closures, provider spending decisions, and observations regarding program design. These categories arise from different causes, involve different responsibilities, and require different corrective actions. Accordingly, OKDHS does not believe combining these distinct exception types into a single projected questioned cost accurately reflects actual noncompliance or federal exposure associated with the program. Although the Agency respectfully disagrees with significant portions of the finding, OKDHS has strengthened oversight of provider assistance initiatives by enhancing award calculations, documentation expectations, provider certifications, monitoring activities, analytical review procedures, and recovery processes. The Agency will continue reviewing Desert Grant awards, recovering confirmed overpayments and unallowable expenditures where appropriate, and incorporating lessons learned into future program implementation. Anticipated Completion Date On Going Responsible Contact Person Kayla Urtz

Finding Number 2024-066 Subject Heading (Financial) or AL no. and program name (Federal) 93.558 – TANF Planned Corrective Action OKDHS agrees that controls related to the timely completion and documentation of T ANF eligibility redeterminations can be strengthened. During the period reviewed, eligibility operations were impacted by the Public Health Emergency (PHE) and associated continuous coverage requirements. As the agency worked through the post-PHE unwinding process, efforts were focused on reviewing and updating affected cases. During this period, some staff incorrectly believed T ANF reviews were subject to the same review flexibilities that applied to medical programs, resulting in untimely completion of certain TANF eligibility redeterminations. To strengthen controls, OKDHS has implemented the Current system, which automatically assigns cases requiring review and provides enhanced workload management and monitoring capabilities. Current includes tracking and reporting functionality that identifies untimely reviews, places overdue items on management reports, and alerts staff and supervisors when action is needed. In addition, supervisory staff conduct monitoring activities, including spot checks and review of workload reports, to ensure eligibility reviews are completed and documented within required timeframes. OKDHS believes these system enhancements and monitoring activities strengthen oversight of T ANF eligibility redeterminations and provide greater assurance that reviews are completed timely and appropriately documented. Anticipated Completion Date In progress Responsible Contact Person Kayla Urtz

Finding Number 2024-064 Subject Heading (Financial) or AL no. and program name (Federal) 93.558 – TANF Planned Corrective Action OKDHS concurs and will ensure that staff are refreshed on the importance of including all verifications in the case file at certification. Anticipated Completion Date N/A Responsible Contact Person Kayla Urtz

Finding Number 2024-063 Subject Heading (Financial) or AL no. and program name (Federal) 93.558 – TANF Planned Corrective Action OKDHS agrees that controls related to the timely completion and documentation of TANF eligibility redeterminations can be strengthened. During the period reviewed, eligibility operations were impacted by the Public Health Emergency (PHE) and associated continuous coverage requirements. As the agency worked through the post-PHE unwinding process, efforts were focused on reviewing and updating affected cases. During this period, some staff incorrectly believed TANF reviews were subject to the same review flexibilities that applied to medical programs, resulting in untimely completion of certain TANF eligibility redeterminations. To strengthen controls, OKDHS has implemented the Current system, which automatically assigns cases requiring review and provides enhanced workload management and monitoring capabilities. Current includes tracking and reporting functionality that identifies untimely reviews, places overdue items on management reports, and alerts staff and supervisors when action is needed. In addition, supervisory staff conduct monitoring activities, including spot checks and review of workload reports, to ensure eligibility reviews are completed and documented within required timeframes. OKDHS believes these system enhancements and monitoring activities strengthen oversight of T ANF eligibility redeterminations and provide greater assurance that reviews are completed timely and appropriately documented. Anticipated Completion Date In progress Responsible Contact Person Kayla Urtz

Finding Number 2024-058 Subject Heading (Financial) or AL no. and program name (Federal) 93.558 – TANF Planned Corrective Action OKDHS agrees that controls supporting the compilation and validation of the Child Welfare Services (CWS) population used in the TANF allocation methodology can be strengthened. OKDHS will enhance procedures used to compile and validate the population included in the Child Welfare Services TANF allocation methodology. Management will implement additional review procedures to verify that participants included in the allocation methodology meet the applicable eligibility criteria established by the Oklahoma TANF State Plan and that supporting documentation is available to substantiate eligibility. The agency will also formalize review procedures for the preparation and approval of the allocation calculation, including validation of source data used to determine the applicable percentage applied to Child Welfare Services contract expenditures. These procedures will include management review of supporting documentation and reconciliation of the underlying population prior to completion of the allocation methodology. These enhancements are intended to strengthen internal controls over the allocation process, improve the reliability of the supporting data, and provide greater assurance that expenditures charged to the TANF program are based on an accurately supported eligible population. Anticipated Completion Date In Progress Responsible Contact Person Kayla Urtz

Finding Number 2024-111 Subject Heading (Financial) or AL no. and program name (Federal) 93.323: Epidemiology and Laboratory Capacity for Infectious Diseases Planned Corrective Action Management agrees with this finding. To mitigate this issue going forward, the established network drive for FFR supporting documentation retention will now be reviewed at closeout of each FFR to ensure all detailed schedules are centrally retained and accessible prior to certification. Anticipated Completion Date 6/30/2026 Responsible Contact Person Kimberly Courtney, Director of Accounting

Finding Number 2024-109 Subject Heading (Financial) or AL no. and program name (Federal) 93.323: Epidemiology and Laboratory Capacity for Infectious Diseases Planned Corrective Action OSDH management agrees with this finding and will work with OMES to ensure Workday payroll expenditures are accurately reflected in PeopleSoft’s general ledger based on actual project time worked rather than budgeted position setup allocations. We are actively exploring reconciliation steps within PeopleSoft to accurately record project time worked in accordance with approved timecards to the appropriate funding within the general ledger. Anticipated Completion Date 06/30/27 Responsible Contact Person Ryon Fields, Interim CFO

Finding Number 2024-108 Subject Heading (Financial) or AL no. and program name (Federal) 93.268: Immunizations Cooperative Agreements Planned Corrective Action OSDH management agrees with this finding and will work with OMES to ensure Workday payroll expenditures are accurately reflected in PeopleSoft’s general ledger based on actual project time worked rather than budgeted position setup allocations. We are actively exploring reconciliation steps within PeopleSoft to accurately record project time worked in accordance with approved timecards to the appropriate funding within the general ledger. Anticipated Completion Date 06/30/27 Responsible Contact Person Ryon Fields, Interim CFO

Finding Number 2024-028 Subject Heading (Financial) or AL no. and program name (Federal) AL #84.010 TITLE I, PART A – GRANTS TO LOCAL EDUCATIONAL AGENCIES AL #84.425 – EDUCATION STABILIZATION FUND (ESF - AL #84.425D; 84.425U) Planned Corrective Action Since January 2025, the Office of Title Services (OTS) has maintained time and effort records per internal guidelines. OSDE is drafting policies to ensure all employees meet the requirements of 2 CFR §200.430. After implementation, OTS will train staff on these procedures. Anticipated Completion Date Jan-2025 Responsible Contact Person Tammy Smith

Finding Number 2024-016 Subject Heading (Financial) or AL no. and program name (Federal) AL #84.425 – EDUCATION STABILIZATION FUND (ESF - AL #84.425D; #84.425U) Planned Corrective Action The agency acknowledges that certain ESSER II and ARP ESSER III claims were approved without adequate review of supporting documentation by authorized claims reviewers. To address this finding, the agency has strengthened its claims review procedures and internal controls related to reimbursement processing. Additional training will be provided for all claims reviewers regarding: • allowable use of funds requirements, • supporting documentation standards, • verification of invoice documentation, • program coding requirements, and • review and approval expectations for federal claims. The agency will also implement enhanced supervisory review and monitoring procedures to help ensure claims are consistently reviewed in accordance with federal requirements prior to approval. The agency acknowledges that allocation notices were not consistently generated and provided to certain LEAs in accordance with the requirements of 2 CFR § 200.332(a)(1). Additionally, one allocation notice did not contain all required elements, including the Federal Award Identification Number (FAIN) and Federal award date. Although the audit confirmed that allocation amounts and approved budgets within the grants management system were accurate, the agency recognizes the need to strengthen procedures related to issuance and documentation of subrecipient award notifications. To address this finding, the agency will revise and strengthen internal procedures to ensure all required allocation notices are generated, maintained, and distributed timely and consistently to subrecipients. The agency will also coordinate with our third party vendor to implement additional quality control measures and staff training to ensure all required federal award information, including the FAIN and Federal award date, is included in future allocation notices in accordance with 2 CFR § 200.332 requirements. Anticipated Completion Date Sept-26 Responsible Contact Person Tammy Smith

Finding Number 2024-015 Subject Heading (Financial) or AL no. and program name (Federal) AL #10.558 CHILD AND ADULT CARE FOOD PROGRAM (CACFP) AL #84.010 TITLE I, PART A – GRANTS TO LOCAL EDUCATIONAL AGENCIES AL #84.425 – EDUCATION STABILIZATION FUND (ESF - AL #84.4 25U) Planned Corrective Action The LEA did not upload sufficient supporting documentation to substantiate the amount claimed. Additionally, the reviewer did not conduct an adequate review of the supporting documentation submitted with the claim. To address this finding, the agency will provide additional training to reviewers on claim review procedures, required supporting documentation, and documentation verification standards. The agency will also strengthen internal review procedures to help ensure claims are properly supported and consistently reviewed prior to approval. Anticipated Completion Date Jul-26 Responsible Contact Person Tammy Smith

Finding Number 2024-013 Subject Heading (Financial) or AL no. and program name (Federal) AL #84.010 TITLE I, PART A – GRANTS TO LOCAL EDUCATIONAL AGENCIES Planned Corrective Action OSDE acknowledges the audit finding. During the FY24 audit period, monitoring procedures for LEA Supplement Not Supplant (SNS) methodologies were identified as lacking adequate documentation and verification measures. On July 25, 2024, OSDE submitted corrective action plans to USDE, which included revisions to the ESEA Resource Toolkit, Title I Handbook, and GMS review protocols. As of April 11, 2025, USDE determined that the SNS requirements have been satisfied and confirmed that OSDE’s revised resources are consistent with federal guidance. OSDE has subsequently strengthened internal controls and improved monitoring procedures to ensure ongoing compliance of LEA SNS methodologies and supporting documentation. Anticipated Completion Date Apr-25 Responsible Contact Person Tammy Smith

Finding Number 2024-073 Subject Heading (Financial) or AL no. and program name (Federal) #64.015 Veterans State Nursing Home Care Planned Corrective Action The Oklahoma Department of Veterans Affairs (ODVA) acknowledges the audit findings regarding non-compliance with state and federal procurement protocols and the overreliance on retroactive Ratification Agreements. While the audit verified that 100% of the sampled funds were utilized for allowable, critical nursing home care activities under Assistance Listing #64.015, we recognize that bypassing the encumbrance process creates compliance risks and reduces real-time budgetary visibility. The agency is fully committed to correcting these procedural deficiencies and strengthening its internal financial controls. Corrective Action Plan (CAP):  Systemic Procurement Overhaul: ODVA will strictly enforce the Oklahoma Statewide Accounting Manual mandate requiring a pre-encumbrance (Department Purchase Requisition) or encumbrance (Purchase Order) to be fully approved in the state accounting system prior to ordering goods or authorizing vendor services.  Vendor Management Remediation: Management discontinued the use of all temporary staffing agencies in FY26, except for an occasional contract nurse in the case of critical short-staffing situations. As of July 15th, 2026, ODVA has less than 10 contracted nursing staff, down from a high of +/-225 in FY25.  Targeted Training Initiative: On September 11 and September 19, 2025, the CFO conducted mandatory training for all procurement, accounts payable, and facility administrative staff – a total of around 36 attendees. Training focused on state encumbrance laws, the strict definitions of "unauthorized commitments," and proper routing workflows.  Strict Ratification Governance: The use of Ratification Agreements will be restricted to true emergency exceptions as permitted by policy.  Internal Pre-Audit Reviews: Since September of FY26, ODVA finance division has incorporated a routine, daily quality assurance check to flag any vendor payments attempted without an active PO, ensuring immediate corrective action before vouchers are finalized. These payments are tracked via a SharePoint file accessible by all relevant staffers. Anticipated Completion Date Completed in September 2025; compliance monitoring is ongoing. Responsible Contact Person Chris Busby, Chief Financial Officer; Eric Edstedt, Purchasing Director

Finding Number 2024-075 Subject Heading (Financial) or AL no. and program name (Federal) ALN: 21.027 Federal Program name: Coronavirus State And Local Fiscal Recovery Funds (CSLFRF) Planned Corrective Action Office of Management and Enterprise Services – Grants Management Office Response: OMES-GMO respectfully disagrees with several conclusions contained in this finding. The finding concludes that the transfer of CSLFRF funds to the twenty-two (22) state agencies does not create a subrecipient relationship because OMES and the agencies are part of the same State of Oklahoma Single Audit. OMESGMO respectfully disagrees with this conclusion. Pursuant to 62 O.S. § 255.1, “The Legislature authorizes the Office of Management and Enterprise Services to manage federal APRA funds by requiring all receiving entities known as subrecipients to sign a grant agreement. Any entity, without exception, including state agencies receiving an appropriation from the Statewide Recovery Fund or a similar fund with federal requirement attached to its use shall have a fully executed grant agreement in place within sixty (60) days after enactment of any legislation that appropriates funding from the Statewide Recovery Fund of the State Treasury created in Section 1, Chapter 319, O.S.L. 2022, and be in compliance with such agreement before a disbursement can be made.” Under this statutory framework, each agency enters into a Grant Agreement with OMES and is subject to grant-specific terms and conditions, reporting requirements, monitoring, and ongoing oversight. Accordingly, OMES has administered the CSLFRF grant in accordance with state law and consistent with its responsibilities as the State's designated pass-through entity since the inception of the program. The authorization from the Oklahoma State Legislature has provided for a much more extensive oversight of the state entity subrecipients than would exist if OMES followed the model suggested by SAI, as OMES would not be subject to the subrecipient monitoring Federal regulation under 2 CFR § 200.332, for these state entities. By following the state law passed by the Legislature, OMES monitors each state entity subrecipient, and in turn, has signed a grant agreement with these state entity subrecipients that requires them to do the same for any of their subrecipients that are administering projects set out specifically by the State Legislature through appropriation bills. OMES requests SAI to revisit the position that these state entities are not OMES’ subrecipients and consider the implications that if OMES were to treat the state entities as non-subrecipients, OMES would be in direct defiance of state law. OMES-GMO also disagrees with the conclusion that sufficient supporting documentation was unavailable for several of the transactions identified in this finding. OMESGMO is committed to strong documentation standards, reimbursement review procedures, and project oversight to ensure continued compliance with applicable federal and state requirements. Despite OMES-GMO’s request to be included in audit communication with the state entities, SAI’s documentation requests for the sampled expenditures were directed primarily to the individual agencies. Several agencies experienced staffing changes during the audit period, resulting in inconsistencies in responding to documentation requests and, in some instances, uncertainty regarding the specific information being requested by the auditors. In multiple cases, the supporting documentation ultimately existed and was available but was either maintained by OMES-GMO or inadvertently omitted from the agency's initial submission. If OMES-GMO was afforded the opportunity to submit or explain documentation maintained by its office before the finding was finalized, both the administering agency and OMES-GMO would have been able to provide a more complete record for evaluation and may have altered the conclusions reached for certain transactions. OMES-GMO has had recent conversations with SAI regarding this issue, and are encouraged by the willingness of SAI to be open to working with OMES-GMO to facilitate a different process for future audits that involves a coordinated with both the administering agency and OMES-GMO so that auditors have access to the complete record before audit conclusions are finalized. Agency Responses: Agency 025 – Oklahoma Military Department (OMD) OMD partially concurs with the finding regarding the level of supporting documentation submitted with the vendor's invoices for payment. However, the construction contracts in question were executed using Guaranteed Maximum Price (GMP) contract structures. Under these contracts, the contractor is responsible for maintaining all subcontractor invoices, material invoices, and supporting financial records associated with each progress payment. The contracts require these records to be retained for the applicable record retention period and made available for review by the agency, State, or federal government upon request. Agency 085 – Oklahoma Broadband Office (OBO) Broadband Mapping / Cross-Grant Expenditures The Oklahoma Broadband Office (OBO) requests the transactional detail associated with these findings to allow the agency to fully evaluate the questioned transactions. While OBO agrees that expenditures must be charged to the appropriate federal funding source and class fund, the office respectfully disagrees that the questioned expenditures represented unallowable supplementation of other federal awards. The contracts included shared deliverables necessary to complete the CSLFRF Broadband Mapping project. During contract administration, OBO identified billing discrepancies involving work performed under multiple grant programs. Following approximately eleven months of negotiations, OBO entered into a settlement agreement with the contractor that limited payment to services actually received and excluded services that were not performed. The resulting payments represented services provided under multiple funding sources and were processed together to accurately reflect work completed during FY2024. Procurement Finding – Lee Consulting Contract OBO concurs with the finding that services began prior to the execution of a purchase order for the April 2023 services. Upon identifying the issue, OBO completed the required ABS Form 009 Ratification Agreement to formally document the procurement exception and properly authorize payment. To prevent future occurrences, OBO has: • Hired a full-time General Counsel to oversee contract administration and procurement compliance. • Implemented a policy prohibiting execution of contracts or commencement of work until a purchase order has been fully approved and funds have been encumbered. • Provided procurement training to management and staff regarding Oklahoma encumbrance requirements. Agency 400 – Office of Juvenile Affairs (OJA) OJA partially concurs with the finding. The agency believes the purchase of a Keurig coffee maker and heater towers by Western Plains falls within the approved project scope for the purchase and installation of furniture, fixtures, and equipment. However, OJA acknowledges that decorative wall art purchased by Youth and Family Services of Hughes and Seminole Counties does not appear to fall within the approved project scope. Agency 452 – Oklahoma Department of Mental Health and Substance Abuse Services (ODMHSAS) ODMHSAS acknowledges the documentation and procurement concerns identified in the finding. Specifically, the agency recognizes that certain invoices lacked sufficient detail describing services performed and that one expenditure required ratification because services were obligated prior to encumbering funds. ODMHSAS agrees that federally funded expenditures should be supported by documentation demonstrating the services performed, the project purpose, and the relationship to the approved scope of work. ODMHSAS also agrees that obligations should not be incurred before a valid purchase order and encumbrance have been established. Agency 619 – Oklahoma Health Care Workers Training Commission (HWTC) During the period associated with the questioned expenditure, the Care Providers program submitted a significant volume of supporting documentation with each reimbursement request, often consisting of 500 to 1,000 pages transmitted through multiple emails over several days. In some instances, the documentation was not organized sequentially, making it difficult to efficiently compile and review the complete reimbursement package. As staff assembled documentation received through multiple transmissions, a portion of the supporting documentation was inadvertently omitted from the reimbursement file maintained by the agency. Consequently, the complete documentation package was not included in the materials submitted to OMES-GMO with the reimbursement request. To address this issue, management revised its documentation review procedures. Rather than requiring agency staff to reorganize incomplete or disorganized submissions, staff are now instructed to return reimbursement packages that are incomplete or not properly organized and require the submitting entity to provide a revised, complete documentation package. This change places responsibility for maintaining complete supporting documentation with the originating entity and has resulted in more organized reimbursement submissions while reducing the risk of incomplete supporting records. Agency 830 – Oklahoma Department of Human Services (DHS) DHS disagrees that the questioned incentive gift cards were outside the approved project scope. The PCCT Fatherhood Today program is designed to strengthen father-parent-child relationships by engaging fathers through education, support services, and community resources. The program targets fathers residing in underserved communities who often face barriers to participation, including transportation, childcare, financial hardship, and food insecurity. The $100 gift cards are provided only after participants successfully complete the twelve-week 24/7 Dad curriculum. The gift cards serve as an incentive to recruit and retain participants and support the program's objective of increasing father engagement. DHS believes the incentives directly support successful program participation and allow participants to obtain essential household items for their families. DHS further noted that participant outcomes are measured through pre- and post-program assessments demonstrating increased knowledge and engagement among participating fathers. Gift cards are purchased using agency purchasing procedures, maintained in secured storage, and distributed only upon successful completion of all program requirements with appropriate documentation maintained for each recipient Anticipated Completion Date OMES: December 31, 2026 025: Completed 085: Completed 400: Completed 452: December 31, 2026 619: December 31, 2026 830: Completed Responsible Contact Person OMES: Elizabeth Base 025: Angela Tackett 085: Beverlee Harbuck 400: Kevin Haddock 452: Chad Carden 619: Kami Fullingim 830: Lindsey Kanaly

Finding Number 2024-074 Subject Heading (Financial) or AL no. and program name (Federal) ALN: 21.027 Federal Program name: Coronavirus State And Local Fiscal Recovery Funds (CSLFRF) Planned Corrective Action Office of Management and Enterprise Services – Grants Management Office Response: OMES-GMO respectfully disagrees with the conclusion that adequate supporting documentation was unavailable and that OMES-GMO's procedures do not ensure that key documentation elements are provided prior to reimbursement. The State Auditor and Inspector's Office requested documentation directly from the Department of Human Services (DHS) but did not contact OMES-GMO to determine whether additional supporting documentation or clarification was available before concluding that the documentation was insufficient. Throughout the administration of the CSLFRF program, OMES-GMO requested to be included in audit documentation requests involving agency expenditures to ensure that all available supporting documentation could be provided and that any questions regarding reimbursement requests, contract administration, or project documentation could be addressed before conclusions were reached. Had OMES-GMO been afforded the opportunity to supplement the agency's submission, additional documentation supporting the reimbursement requests and contract administration could have been provided for consideration. OMES-GMO recognizes that the contractor invoices could have contained greater detail. While OMES-GMO believes sufficient supporting documentation existed to demonstrate the allowability and allocability of the costs, it agrees that enhanced invoice detail would improve transparency, strengthen the audit trail, and facilitate the audit process. Prior to this audit, OMES-GMO had already strengthened its reimbursement review procedures to help ensure that key documentation elements are obtained before reimbursement. Beginning in SFY 2025, all CSLFRF payment requests from state entities have been processed through the newly implemented OMES Grants Management System (OGX), which provides an additional layer of internal control. The system requires a two-tier review and approval process by the requesting state entity before reimbursement requests are submitted to OMES-GMO. Once received, each request undergoes a three-tier review by separate OMES-GMO team members using the approved CSLFRF award, supporting documentation submitted by the state entity, and applicable program eligibility requirements before payment is authorized. This process provides multiple levels of review designed to help ensure that reimbursement requests are adequately supported and consistent with applicable ARPASLFRF requirements. OMES-GMO respectfully requests that future audit documentation requests involving CSLFRF reimbursements be coordinated with both the administering agency and OMES-GMO. This collaborative approach would help ensure auditors have access to the complete documentation maintained by all parties and allow for a more comprehensive evaluation of compliance before deficiencies are concluded. 830 – Oklahoma Department of Human Services The Oklahoma Department of Human Services (OKDHS) does not concur that the full $67,998 identified in the finding should be classified as questioned costs. OKDHS acknowledges that the original JGC invoices did not contain the level of project- and staff-specific detail recommended in the finding. However, the absence of all supporting detail on the face of an invoice does not, by itself, establish that the underlying costs were unallowable or unsupported. The applicable Federal cost principles require costs to be adequately documented, but do not require all supporting documentation to be contained within the vendor invoice itself. Following the identification of SAI's specific concerns, OKDHS provided additional underlying documentation, including detailed timekeeping records identifying staff, hours worked, projects associated with the work, and descriptions of the activities performed. SAI subsequently indicated that the total hours reflected on the invoices materially agreed to the total hours reflected in the underlying timekeeping records. Accordingly, the additional documentation substantiates that the underlying labor hours were incurred and provides support regarding the nature of the services performed. For the $13,320 associated with SB 1186, the finding acknowledges that SB 1186 funded only one project. Therefore, there is no allocation of the invoiced costs among multiple SB 1186 projects at issue. To the extent the subsequently provided timekeeping and supporting records substantiate that the services were performed in support of the authorized project, OKDHS does not believe the full amount should remain classified as questioned costs solely because the original invoice summarized the services performed. For the $54,678 associated with HB 2884, OKDHS acknowledges that the distribution of costs among individual projects reflected on the invoice does not directly correspond to the project designations reflected in the detailed timekeeping records. However, the detailed records substantiate the total hours worked and the nature of the administrative and program management services performed. HB 2884 expressly authorized OKDHS to retain up to two percent of the funds appropriated by the act to reimburse costs incurred by OKDHS, or costs incurred on the agency's behalf, associated with administration of the appropriated funds and programming required under the act. JGC provided program management and administrative services supporting OKDHS's implementation and administration of the ARPA-funded projects. Additionally, 2 CFR § 200.405(d), as cited in the finding, recognizes that when a cost benefits two or more projects or activities and the proportional benefit cannot be readily determined because of the interrelationship of the work involved, the cost may be allocated to benefited projects on a reasonable documented basis. Accordingly, a difference between the project designation reflected in an employee's detailed time record and the allocation of shared administrative costs among benefited projects does not, by itself, establish that the underlying cost was unallowable. OKDHS recognizes that the documentation maintained with the reimbursement requests did not clearly demonstrate the relationship between the detailed timekeeping records and the methodology used to allocate shared administrative costs among the HB 2884 projects. OKDHS will review the allocation methodology and supporting records to confirm that the costs were allocated among benefited projects on a reasonable basis and will correct any actual unsupported or ineligible costs identified through that review. OKDHS has also strengthened its documentation expectations for administrative cost reimbursements. Going forward, supporting documentation will provide a clearer audit trail between the underlying services performed, applicable projects or activities, and the amounts invoiced or allocated. Where administrative services benefit multiple projects and cannot reasonably be assigned based solely on direct project hours, the allocation methodology and basis will be documented and retained with the supporting records. Accordingly, OKDHS agrees that documentation supporting the allocation methodology should be strengthened but does not concur that the documentation deficiency, in itself, supports questioning the full $67,998 where underlying records substantiate the labor incurred and services performed Anticipated Completion Date Completed Responsible Contact Person OMES: Elizabeth Base DHS: Lindsey Kanaly

Finding Number 2024-069 Subject Heading (Financial) or AL no. and program name (Federal) ALN: 21.027 Federal Program name: Coronavirus State And Local Fiscal Recovery Funds (CSLFRF) Planned Corrective Action Office of Management Enterprise Services – Grant Management Office Response: OMES-GMO acknowledges that $80,370 in Pathfinder employer contributions were charged to the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) program and that these costs are not allowable federal grant expenditures. OMES Finance and OBO had previously identified this issue and had discussed the necessary corrective actions prior to the audit finding. Implementation of the corrections was contingent upon OBO receiving a state appropriation to fund these costs. Following discussions between OMES Finance and OBO, OBO has received a state appropriation specifically to fund Pathfinder costs that are not allowable under federal awards. Because the CSLFRF period of performance remains open, the State is able to make the necessary accounting corrections and reallocate the recovered CSLFRF funds to eligible and approved program expenditures. The remaining Pathfinder employer contributions identified in this finding will be reclassified from CSLFRF to the appropriate state funding source through journal voucher (JV) entries. Corrective Action Plan OBO will complete all remaining journal voucher entries to transfer the identified Pathfinder costs from Class Fund 497 to the applicable state appropriation. Oklahoam Broadband Office Response: The Oklahoma Broadband Office (OBO) concurs with this finding. The OBO agrees that the employer's supplemental contribution to the Oklahoma’s Pathfinder Defined Contribution retirement plan (account 513300) is unallowable under federal grant awards and must be paid using state funds. Further, it is not possible using the Workday system to bifurcate the account code to be withheld from the payroll payment. Payroll must be paid in total under one account, according to our understanding. The OBO emphasizes that these Pathfinder expenditures were never reported to the federal government as part of our State and Local Fiscal Recovery Funds (SLFRF) compliance reporting, as our office was aware they were unallowable and so could not be charged to the account. These expenditures could not be separated and so had to be paid and thus remain outstanding within the 497-account balance and require reimbursement from non-federal sources. Reason for the Shortage in State Funding: The OBO proactively sought a state appropriation to resolve these Pathfinder expenses since 2023. To present the OBO has not received one. However, the Office of Management and Enterprise Services (OMES) Grants Management Office (GMO) did secure an annual state appropriation for Pathfinder expenses starting in FY25. The allocation of those funds given to the OBO is structurally insufficient to absorb the legacy pathfinder amounts owed for the unallowable Pathfinder expenditures incurred during the OBO's start-up years in FY23 and FY24. Corrective Action Plan & Remedy: To resolve the remaining $80,370 in questioned costs, the OBO has actively coordinated with the State’s Office of Management and Enterprise Services (OMES) to bridge this funding gap. State-Directed Solution: Following formal consultation with the State Chief Financial Officer (CFO), the OBO has been officially instructed to utilize a portion of our upcoming FY27 annual state Pathfinder appropriation to fully reimburse class fund 497 for the outstanding FY23 and FY24 unallowable expenditures. Anticipated Completion Date December 31, 2026. Responsible Contact Person OMES: Elizabeth Base 085: Beverlee Harbuck

Finding Number 2024-043 Subject Heading (Financial) or AL no. and program name (Federal) ALN: 21.027 Federal Program name: Coronavirus State And Local Fiscal Recovery Funds (CSLFRF) Planned Corrective Action Office of Management Enterprise Services – Grant Management Office Response: The Oklahoma Office of Management and Enterprise Services (OMES) agrees that strong project planning and feasibility evaluations for large-scale capital projects are important processes for each individual agency to implement. OMES also recognizes that certain factors can impact the original evaluation, and if those factors occur, reevaluation of a project’s feasibility is a prudent measure to determine the future direction of a project. The Federal regulation 2 CFR § 200.317, directs that “a State must follow the same policies and procedures it uses for procurements from its non-Federal funds.” Oklahoma has laws in place for state agencies for the purchase of tangible and intangible property, which ensure obligations are properly encumbered by a contract or purchase order. Therefore, OMES agrees that in order to be in compliance with federal and state laws and regulations, each individual agency should have strong internal controls in place to ensure obligations of federal funds are properly encumbered before commitments are made. ODMHSAS Response to Finding No. 2024-043 ODMHSAS partially concurs with Finding No. 2024-043. ODMHSAS agrees that controls should be strengthened for large-scale federally funded capital projects and acknowledges the separate encumbrance issue identified in the finding. ODMHSAS does not concede that the full $6,218,295 questioned amount was wasted, unallowable, or subject to repayment based solely on the later cancellation of the original Donahue new-build project. ODMHSAS acknowledges that the original Donahue Behavioral Health Campus new-build project did not proceed to construction and that the Department later pursued a different facility solution through acquisition and renovation of an existing facility. The Donahue project, however, was an active, legislatively funded capital project intended to replace Griffin Memorial Hospital at the time the expenditures were incurred. Based on the available expenditure detail, the questioned-cost population includes architectural services, site or lease-related payments, consulting services, surveying or mapping services, and other planning and development costs associated with the project. ODMHSAS recognizes that the original project did not result in a completed capital asset. ODMHSAS also recognizes that federal allowability requires more than the existence of an approved project. Costs must be necessary, reasonable, allocable, and adequately documented. For that reason, ODMHSAS will conduct a reasonable transaction-level review using available records to determine what documentation exists for the expenditures identified in this finding, what work was performed, whether any deliverable or work product was received, whether the expenditure provided planning, feasibility, decision-making, or other project value, and whether further coordination with OMESGMO is needed regarding accounting treatment or other resolution. ODMHSAS further notes that the decision to discontinue the original Donahue new-build project should not, by itself, determine whether every planning or development cost incurred before cancellation was wasted or unallowable. ODMHSAS did not pay for a completed building at that stage of the project; it paid for planning, design, cost-estimating, site-evaluation, and feasibility-related services for an authorized replacement hospital project. The SLFRF capitalexpenditure framework recognizes that recipients may evaluate the need addressed, the appropriateness of a capital expenditure, and alternative capital approaches before determining the best path forward. Available information indicates the original concept contemplated moving both Griffin Memorial Hospital and CRC functions to the Donahue site, and the project scope, bed count, and estimated cost were later reevaluated as construction costs increased significantly, including post-COVID construction-cost escalation. Those services produced project information, design materials, cost information, and feasibility analysis that provided decision-making value, including information that helped ODMHSAS determine that the original newbuild approach was not financially feasible and that an alternative facility solution was necessary before substantially greater construction costs were incurred. ODMHSAS will therefore review the expenditures by category and transaction rather than treating the later cancellation of the project as dispositive of the allowability or value of each prior cost. ODMHSAS also notes the timing of the legislative and project changes. On October 5, 2022, the Legislature appropriated $87 million through HB 1013 for construction of a replacement facility for Griffin Memorial Hospital. During SFY 2024, ODMHSAS incurred planning, design, and initial development expenditures for the Donahue Behavioral Health Campus. The original new-build approach later became financially infeasible due to escalating construction costs and budget shortfalls, and by May 2025 ODMHSAS had moved away from the original construction plan and pursued acquisition and renovation of the former SSM Health facility as the successor facility solution. SB 1178 then reappropriated and redesignated $66.5 million of the original $87 million appropriation from construction of a replacement facility for Griffin Memorial Hospital to purchase and renovation of a replacement facility for Griffin Memorial Hospital, within the same thirty (30) mile geographic limitation. SB 1178 also recognized that the original appropriation could be reduced by prior expenditures, encumbrances, and transfers. ODMHSAS does not contend that SB 1178 alone resolves the allowability of prior costs, but it is relevant context showing that the remaining project funding was redirected by legislative action for the same public-health purpose of replacing Griffin Memorial Hospital. ODMHSAS further notes that the successor SSM acquisition and renovation project continued the same underlying public health purpose as the original Donahue project: replacing Griffin Memorial Hospital and expanding behavioral health treatment capacity. Available SSM transaction documents reflect that ODMHSAS pursued the purchase of the property at 2129 S.W. 59th Street for use in addressing the ongoing demand for mental health services, and related lease documentation reflects that ARPA-SLFRF funds used for the lease were designated for behavioral health services expansion. After the original Donahue new-build approach was no longer financially viable, ODMHSAS pursued the SSM acquisition and renovation approach as a feasible alternative to continue the Griffin replacement purpose. ODMHSAS will also review whether any amounts included in the federal questioned-cost population were recovered, refunded, offset, corrected, or otherwise resolved after the original expenditure. Separately, ODMHSAS has identified Donahue-related refund activity associated with private donations and grants, including an Oklahoma State University refund of $4,822,671.93, donor refunds totaling $1,820,000, and a remaining balance of $3,002,671.93 as of March 26, 2026. Based on current information, ODMHSAS understands this activity to relate to private donations and grants, not CSLFRF/ARPA funds. ODMHSAS will review the underlying accounting records to confirm the funding source, deposit, refund, and remaining balance treatment, and to ensure that this private donation and grant activity is treated separately from the federal questioned-cost population. ODMHSAS has also identified local contribution activity within the questioned-cost population that requires further review. Based on initial internal review, approximately $2.5 million of the questioned-cost population appears to relate to Oklahoma County and City of Oklahoma City contributions associated with the Donahue project, including $1.5 million from Oklahoma County and $1 million from the City of Oklahoma City. ODMHSAS understands that the Oklahoma County amount was repaid in December 2025 and that the City of Oklahoma City amount remains associated with the successor OKCBHC/SSM project or related project accounting. ODMHSAS will review the underlying accounting records, funding-source documentation, refund records, and project accounting treatment to determine whether these local contribution amounts should remain in the federal questioned-cost population, should be treated separately, or should otherwise affect the questioned-cost amount. ODMHSAS acknowledges the separate encumbrance issue related to claim 629685. Based on available records, the claim involved an obligation for services that was incurred before the applicable purchase order and encumbrance process was completed, requiring a subsequent ratification. The Department recognizes that obligations should not be incurred before a valid purchase order and encumbrance are in place. As reflected in the finding, the $50,000 claim was corrected by payment with state funds and was not questioned. ODMHSAS will address that issue through strengthened pre-obligation controls, procurement review, and targeted guidance or training for staff responsible for initiating purchases or contracts. Nothing in this response should be construed as an admission that the full questioned-cost amount is unallowable or subject to repayment. ODMHSAS will coordinate with OMESGMO as needed after review of the available records, including any refund, recovery, offset, correction, or other accounting issue relevant to the questioned-cost population. Corrective Action Planned ODMHSAS will take reasonable steps to strengthen controls over planning, documentation, procurement, and encumbrance review for significant federally funded capital projects. ODMHSAS will develop or update internal review procedures for significant federally funded capital-project expenditures. The procedures will address project scope, available funding, estimated project cost, material changes in feasibility, and approval authority before substantial planning, design, development, or construction-related costs are incurred. The review process will be scaled to the size, complexity, and funding source of the project. ODMHSAS will also strengthen documentation expectations for federally funded capital project invoices. For future expenditures, invoices or supporting materials should identify the services performed, billing period, project phase, and connection to the approved project scope. Where invoices contain only general descriptions, such as “progress billing” or “work completed,” ODMHSAS will seek additional support from the vendor, project manager, or available project file before approving the cost for federal reimbursement. ODMHSAS will require program or project-level confirmation that services were received and were related to the approved project before payment or reimbursement is processed. Finance and Procurement will review federally funded capital-project expenditures for appropriate coding, available support, and compliance with applicable funding and encumbrance requirements. ODMHSAS will conduct a risk-based review of the Donahue expenditures identified in Finding No. 2024-043 using available records. The review will focus on identifying the vendor, amount, funding source, available support, and whether any cost was refunded, recovered, offset, corrected, or requires additional accounting review or coordination with OMES-GMO. Because many of the underlying project decisions and records predate current leadership and staff, ODMHSAS will conduct this review based on the documentation reasonably available to the Department. As part of that review, ODMHSAS will review available accounting and reporting records for the Donahue and SSM projects to determine how ARPA-SLFRF funds associated with the replacement-facility work were obligated, reported, redirected, or applied to the successor Griffin replacement facility project, and whether that treatment affects the federal questioned-cost population. ODMHSAS will separately review the Donahue-related private donation and grant refund activity, including the OSU-OKC settlement documentation, to confirm the funding source, deposit, refund, and remaining balance treatment, and to ensure that non-federal donation and grant activity is not included in, or confused with, the federal questioned-cost population. ODMHSAS will also review the Oklahoma County and City of Oklahoma City contribution amounts identified within the questioned-cost population, including documentation of the reported Oklahoma County repayment and the accounting treatment of the City of Oklahoma City contribution, to determine whether those amounts should remain in the federal questioned-cost population, should be treated separately, or otherwise affect the questioned-cost amount. To address the encumbrance concern, ODMHSAS will implement or reinforce a pre-obligation verification process for future procurements. Staff responsible for initiating purchases, contracts, task orders, or service authorizations will be directed to confirm that a valid purchase order and encumbrance are in place before authorizing work. Any transaction requiring ratification will be reviewed to determine the cause and whether additional corrective action is needed. ODMHSAS will provide targeted written guidance and, as needed, training to appropriate staff regarding federal documentation requirements, invoice review, project-scope review, funding-source verification, and state encumbrance requirements. Anticipated Completion Date ODMHSAS anticipates completing updated procedures, review checklists, and targeted written guidance by June 30, 2027. Because the Donahue review requires analysis of historical project expenditures, related accounting and reporting records, multiple funding sources, and coordination with OMESGMO, ODMHSAS anticipates completing the risk-based transaction review and related followup by December 31, 2027. Responsible Contact Person OMES: Elizabeth Base 452: Chad Carden

Finding Number 2024-040 Subject Heading (Financial) or AL no. and program name (Federal) ALN: 21.027 Federal Program name: Coronavirus State And Local Fiscal Recovery Funds (CSLFRF) Planned Corrective Action Office of Management Enterprise Services – Grant Management Office Response: OMES-GMO concurs with the audit finding that $88,768 in expenditures from CSLFRF Class Fund 488 were applied to costs associated with the Governor's Emergency Education Relief (GEER) and Emergency Rental Assistance (ERA) programs. While these expenditures were allowable under their respective federal programs, they were inadvertently charged to the incorrect federal funding source. OMES-GMO is currently working with OMES Finance to complete all necessary accounting adjustments to reclassify the expenditures to the appropriate federal funding source. The corrective entries are in process, and once completed, the recovered CSLFRF funds will be utilized solely for eligible and allowable CSLFRF administrative expenditures in accordance with U.S. Department of the Treasury requirements. OMES has increased staffing, standardized financial review procedures, and strengthened grant management processes. To further enhance internal controls, OMES-GMO has implemented a two-tier review process for all PeopleSoft expenditures charged to federal grant funds. Under this process, expenditures are reviewed by multiple levels of staff to verify the appropriate class fund, funding source, and federal award prior to payment and financial reporting. This enhanced review process reduces the risk of expenditures being charged to an incorrect federal program. Additionally, beginning in SFY 2025, all expenditure requests submitted by CSLFRF subrecipients are processed through the OMES Grants Management System (OGX). Because OGX is dedicated exclusively to administering the ARPA State and Local Fiscal Recovery Fund (SLFRF) program, routing all CSLFRF payment requests through the system provides an additional level of internal control. The system requires expenditures to be reviewed against the approved SLFRF award, supporting documentation, and program eligibility requirements before payment is authorized, helping ensure that only eligible ARPA-SLFRF expenditures are processed using the appropriate funding source. Collectively, these corrective actions—including the accounting reclassification currently being completed in coordination with OMES Finance, the enhanced PeopleSoft review procedures, implementation of OGX for CSLFRF payment processing, management oversight, and routine reconciliations—have significantly strengthened OMESGMO's internal controls over federal program expenditures and will help prevent future miscoding of expenditures among federal awards. Anticipated Completion Date September 1, 2026 Responsible Contact Person Elizabeth Base

Finding Number 2024-054 Subject Heading (Financial) or AL no. and program name (Federal) 20.205 - Highway Planning and Construction Planned Corrective Action The Agency went live in PeopleSoft Financials with online voucher entry to pay invoices for operating accounts and the 747 process (Load Vouchers from Remote) for invoices for capital accounts. Both these interfaces have built in edit capabilities to detect and deter duplicate invoices. During the PeopleSoft implementation, division staff were trained on keeping Invoice logs for all their payments. Also, reports have been built to be run by Financial Services Accounts Payable staff monthly to pull all possible duplicate payments for review. Anticipated Completion Date 07/02/2025 Responsible Contact Person Sam Ddamba

Finding Number 2024-050 Subject Heading (Financial) or AL no. and program name (Federal) 20.205 - Highway Planning and Construction Planned Corrective Action The following actions will be taken to improve our payroll processes and ensure compliance with the Code of Federal Regulations (CFR) and the Oklahoma Department of Transportation (ODOT) Specifications and Construction Control Directive (CCD). We have detailed written procedures for the Residencies in the form of a Construction Control Directive (CCD). It is the expectation that the CCD will be followed, and this expectation will be relayed to those responsible for ensuring that ODOT is in compliance with the Davis- Bacon Act. It is unknown whether or not appropriate actions were taken by the Residency in response to the delayed submission of payroll records. The CCD will be emphasized at a future District Engineer meeting and at an upcoming Resident Engineer Academy. Steps will be taken to ensure each Residency has a date stamp and is instructed to use it appropriately. Steps will be taken to ensure that those responsible for verifying payroll with interview results are conducting the process correctly. Expectations will be made clear that interviews will be conducted with the appropriate contractor and subcontractor personnel. Management will stress to the Residencies that extra effort will be needed to diversify interviews on projects. We are in the process of activating the electronic payroll portion of AASHTOWare Project, which will automate much of our payroll process and reduce the occurrence of discrepancies such as those identified in this finding. The use of this system will become mandatory for our contractors with the October 2026 lettings. As part of this process, we will create a Special Provision and update the CCD. ODOT Audit Office conducted an internal Labor Wage Audit last year and covered the findings at the last Resident Engineer Academy. Anticipated Completion Date 10/31/2026 Responsible Contact Person John B. Leonard

Finding Number 2024-047 Subject Heading (Financial) or AL no. and program name (Federal) 20.205 - Highway Planning and Construction Planned Corrective Action ODOT Contract Compliance Division (CCD) is updating the Guidelines for the Administration of Consultant Contracts, Standard Operating Procedures (SOPs) and training staff on correct procedures for filing documentation. Discussion was held with the ACEC Admin Working Group on 4/7/2026, that FAR Audits were not being submitted timely, and additional guidance would be issued by ODOT. ODOT CCD is partnering with the ODOT Audit Office for FAR Audit Requirements and the development of Self-Certification and Safe Harbor Rate Programs. FAR requirements will be discussed at the annual ACEC Partnering Conference in September 2026. ODOT will provide copies of updated Guidelines and SOPs as they are developed. Anticipated Completion Date 12/31/2026 Responsible Contact Person Jennifer Hankins

Finding Number 2024-107 Subject Heading (Financial) or AL no. and program name (Federal) 10.557: Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) Planned Corrective Action OSDH management agrees with this finding and will work with OMES to ensure Workday payroll expenditures are accurately reflected in PeopleSoft’s general ledger based on actual project time worked rather than budgeted position setup allocations. We are actively exploring reconciliation steps within PeopleSoft to accurately record project time worked in accordance with approved timecards to the appropriate funding within the general ledger. Anticipated Completion Date 06/30/27 Responsible Contact Person Ryon Fields, Interim CFO

Finding 2024-003: Activities Allowed and Unallowed, Allowable Costs, Period of Performance (Title V, C FDA 93. U0 1) Material Weakness (Repeat Finding: 2021-003, 2022-003, 2023-003) Condition: Title V expenditures were recorded through summary journal entries without transactionlevel detail, preventing the auditor from selecting a valid sample or testing compliance. A disclaimed opinion on compliance was issued for this major program. Questioned costs are undetermined due to scope limitation. Corrective Action: • Restructure the chart of accounts/ GL coding so every Title V transaction is individually recorded and traceable to source documentation, rather than aggregated into journal entries. • Require program/grant coding at the point of transaction entry (accounts payable, payroll allocation, purchasing) rather than after the fact. • Implement a quarterly internal review reconciling Title V ledger detail to the approved Title V budget and contract terms. • Provide finance staff training on Uniform Guidance recordkeeping requirements (2 CFR §200.302, §200.333) specific to federal award transactions. Responsible Party: Chief Financial Officer Anticipated Completion Date: GL restructuring to be implemented concurrent with the Organization's new fund accounting system (Blackbaud Financial Edge NXT), implementation kickoff August 13, 2026; complete by March 31, 2027, with the first fully traceable Title V transaction month in April 2027

Audit Finding Reference: 2024-002 Document Policies and Procedures Over Federal Awards Planned Corrective Action: A Uniform Guidance policy and Procedure document has been adopted. Planned Implementation Date of Corrective Action: The policy was effective 03/21/2025. Person Responsible for Corrective Action: Finance Director