Corrective Action Plans

The Town of Highgate has endured a significant amount of turnover in the Town Administrator's role. This reporting was a task of the Town Administrator. The Town Treasurer was unaware that the SF-425 reports for the Town's active grant awards were not being filed in a timely fashion. The newly appointed Town Administrator has been made aware we are required to file the SF-425 when a grant award mandates the submission. Corrective action has began, the Town Administrator and Treasurer have been working together to get in compliance with our required reporting across all State and Federal Agencies that have awarded the Town grant funds. Trainings have taken place and the newly hired Administrator is aware of the required reporting and is able to perform this task on time when required.

SAMARITAS AND SUBSIDIARIES Management’s Corrective Action Plan For the Year Ended December 31, 2025 Finding 2025-001 Contact Person(s): Bridgette Zappacosta, Chief Financial Officer Corrective Action Planned: Management concurs with the finding. During the period under review, the Finance Department was transitioning to a new accounting system. The identified exceptions occurred prior to the implementation of the new system and related processes. As part of the transition to Blackbaud Financial Edge NXT, Samaritas has implemented controls designed to prevent expenditures from being charged outside of a federal award's period of performance. Grant records within the system now include defined start and end dates that prevent expenditures from being applied to awards outside the authorized grant period. In addition, Samaritas enhanced its invoice approval process by adding a required custom field to identify the service period associated with each invoice. This information is reviewed during the monthly close process to identify invoices received before or after a grant period and to ensure expenditures are recorded in the appropriate award period. The Finance Department completed training on these revised procedures in July 2026. Management will continue to monitor compliance with these controls as part of its monthly grant and financial review processes. Anticipated Completion Date: Implemented July 2026; ongoing monitoring procedures are in place.

CORRECTIVE ACTION PLAN — Finding 2025-003 Grant Accounting Reconciliation and Compliance over Allowable Costs / Reporting — Compliance Finding (Allowable Costs / Cost Principles, Reporting) and Material Weakness in Internal Control over Compliance and Financial Reporting Programs: Weatherization Assistance for Low-Income Persons (ALN 81.042); Low-Income Home Energy Assistance Program – LIHEAP (ALN 93.568), and related state and federal funds administered through the Weatherization program | Cognizant / Pass-Through Agencies: U.S. Department of Energy; U.S. Department of Health and Human Services; State of Vermont Department for Children and Families | Entity: Southeastern Vermont Community Action, Inc. (SEVCA) | CAP Contact: Joshua Davis, Executive Director, JDavis@sevca.org 1. Summary of Finding Finding 2025-003 identified that Weatherization work-in-progress (WIP), grant revenue, and deferred revenue balances did not reconcile to the supporting documentation required under the related grants, resulting in significant audit adjustments; those balances were adjusted to agree with program reporting only at grant-year and fiscal-year close rather than on an ongoing basis. The finding also identified that expenditures recorded in the general ledger could not be reconciled to expenditures reported in the state reporting system (Hancock) for both the LIHEAP and Weatherization programs, and that subcontract labor and subcontract material costs were overstated and billed to both programs, requiring repayment of $133,144.05 to the State of Vermont. 2. Management’s Response Management concurs with the finding, and the $133,144.05 has been repaid. Both conditions share a common root cause: Weatherization and Finance operate on separate systems — Hancock for program job-costing, the general ledger for financial reporting — without a recurring, independently reviewed monthly reconciliation between the two. Program staff prepare both the Hancock job-closing data and the resulting Monthly Expenditure Reports (MERs), and Finance’s role has been limited to sign-off on the cash draw request and MER rather than independent verification of the underlying data. This allowed a set of jobs that were closed, reported, then inadvertently reopened, re-closed, and billed a second time to go undetected until identified by the independent audit. 3. Root Cause Gap A – Balance reconciliation (drives the WIP, revenue, and deferred revenue condition): No recurring monthly reconciliation exists between Hancock’s reported WIP activity by grant and the general ledger’s WIP asset, revenue, and deferred revenue balances. Alignment has relied on a semi-annual adjusting entry that forces the general ledger to agree with year-end or grant-end program reporting, without documenting the variance being corrected. Gap B – Source data review (drives the expenditure reporting and overbilling condition): Finance’s review of the MER and cash draw request has not included independent verification that the population of jobs and costs reported as newly closed for the month is accurate and non-duplicative, which allowed reopened-and-reclosed jobs to be billed twice without detection. Gap C – Subcontract cost validation: Subcontractor invoices and purchase orders are reviewed and approved at the point of payment. Weatherization’s existing job-closeout procedure for verifying subcontract labor and material costs on a closed job has not been reviewed for consistency with grant requirements, and is not currently integrated with Finance’s review of cash draw requests and MERs. 4. Corrective Actions The actions below establish monthly, documented, independently reviewed controls for closing Gaps A, B and C scoped to what can be reliably implemented and sustained in the near term. 1. Develop and implement a written Monthly Grant Reconciliation Procedure requiring Hancock’s month-end WIP, revenue, and deferred revenue activity by grant to be reconciled to the corresponding general ledger balances every month, rather than only at grant-year and fiscal-year close — Finance Director; within 60 days (by early October 2026). 2. Replace the semi-annual WIP adjusting entry with a monthly adjusting entry supported by a documented reconciliation identifying the variance between Hancock-reported and general-ledger balances. During the initial implementation period, Finance will develop and refine the reconciliation methodology; each variance identified will be documented, researched, and corrected once its cause is determined. A specific materiality threshold and escalation protocol for unresolved variances will be documented and adopted by January 2027, based on the pattern observed in the initial reconciliation cycles. The reconciliation and any correcting entries are subject to documented Finance Director review and sign-off, and independent review and sign-off by the Executive Director, retained for audit testing — Finance Director / Staff Accountant / Executive Director; first full month applied July 2026, ongoing thereafter; materiality threshold and escalation protocol adopted by January 2027. 3. Develop and implement a written MER Review Procedure requiring that, prior to submission, Finance compare the current month’s Hancock closed-job listing against the prior month’s listing for each grant to identify jobs appearing more than once, including jobs closed, reopened, and re-closed — Finance Director / Staff Accountant; within 60 days (by early October 2026). 4. Formalize the existing Finance review and sign-off of the MER and cash draw request to explicitly include and document this closed-job comparison, subject to independent review and sign-off by the Executive Director prior to submission, — Finance Director / Executive Director; effective with the September 2026 submission cycle. 5. Require Weatherization to flag, at the point of submission, any job reopened after an initial closing, so Finance’s review has a defined starting point — Weatherization Administration Staff; effective with the October 2026 submission cycle. 6. Train Weatherization and Finance staff on the updated procedures, including the integrated job-closeout review (Item 7), and on 2 CFR 200 Subpart E (allowable, allocable, and properly supported costs), and retain completed reconciliations and MER review documentation, including job-closeout review documentation, to support future audit testing — Finance Director / Accounting Staff; training by early November 2026, retention ongoing. 7. Review Weatherization’s current job-closeout procedure, in coordination with Weatherization Administration Staff, to confirm that subcontract labor and material costs attributed to a closed job are verified as complete, accurate, not previously billed, and correctly classified. Correct or strengthen the procedure as needed to bring it into compliance, document it, and integrate it with Finance’s review of the MER and cash draw request (Items 3–4) — Finance Director / Weatherization Administration Staff; review completed by mid-September 2026, procedure documented, corrected as needed, and integrated with Finance’s review by mid-November 2026. 8. After the monthly WIP/general ledger reconciliation (Item 2) and MER closed-job comparison (Items 3–4) have been operating for at least one full quarter, apply the same closed-job comparison methodology retrospectively to Hancock data for FY24 and FY25 to identify any additional jobs closed, reopened, and re-closed and billed more than once. Document the results, including any additional amounts potentially due to the State of Vermont or U.S. Department of Energy, and report findings to the Finance Committee and, if additional overbilling is identified, to the State of Vermont Department for Children and Families and the U.S. Department of Energy — Finance Director; lookback completed by April 2027, following at least one full quarter of the new procedures operating. 9. Establish a semiannual internal compliance review across all major federal award programs (Head Start, CSBG, LIHEAP, HWAP, and CDBG), phased in to match available capacity. The first cycle will verify that expenditures recorded in the general ledger reconcile to amounts reported to each funder; a sample-based test of cost allowability will be incorporated beginning with the second cycle. The review is performed by the Finance Director and independently reviewed by the Executive Director, with results reported to the Finance Committee — Finance Director / Executive Director; first review by June 2027, semiannual thereafter, cost-allowability testing added beginning with the review in December 2027. 5. Anticipated Completion Date Both procedures will be documented, approved, and in effect no later than October 2026, with the first full reconciliation and MER review cycle completed at October month-end close. The Weatherization job-closeout review (Item 7) will be completed, corrected as needed, and integrated with Finance’s review by mid-November 2026. Staff training will be completed by early November 2026. The materiality threshold and escalation protocol for reconciliation variances (Item 2) will be adopted by January 2027. The FY24–FY25 historical lookback (Item 8) will be completed by April 2027. The program-wide semiannual internal compliance review (Item 9) will begin no later than June 2027, with cost-allowability testing phased in by December 2027. 6. Broader Process Review – Weatherization / Finance Integration These near-term actions reduce but do not fully resolve a systemic issue: Weatherization and Finance rely on separate systems and staff, connected only by manual, summary-level data transfer. Fully closing that gap — including possible transaction-level reconciliation between Hancock and the general ledger — requires broader cross-departmental review, which management has begun, led by the Executive Director and Finance Director in consultation with Weatherization Administration Staff. The review will incorporate the results of the Weatherization job-closeout procedure review (Item 7) and will evaluate the feasibility of transaction-level reconciliation, staffing needs, and interim manual controls, and is targeted for completion by November 2026. A detailed scope, timeline, and set of deliverables is maintained as a supplementary document, available to the Finance Committee and auditors on request; a summary of findings and any resulting recommendations will be incorporated into next year’s corrective action reporting. 7. Monitoring The Finance Director will review completed monthly reconciliations and MER review documentation, and the integrated Weatherization job-closeout review (Item 7), as part of each monthly close and submission cycle; the Executive Director will independently review and sign off on this documentation on the same cycle. Unresolved reconciliation variances will be handled per the protocol adopted under Item 2. Reconciliation status and any unresolved variances will be reported to the Finance Committee monthly, together with progress on the broader Weatherization / Finance process review until that work concludes. The semiannual program-wide internal compliance review (Item 9) will be reported to the Finance Committee upon completion of each cycle. 8. Evidence of Completion Items 1–2 (Monthly WIP/GL reconciliation): Reconciliation workpapers, variance research notes, Finance Director and Executive Director sign-off, and escalation records where applicable. Items 3–4 (MER closed-job comparison): Closed-job comparison reports, and the MER and draw request with Finance Director and Executive Director sign-off. Item 5 (Weatherization reopened-job flag): Flagged job listing submitted with each MER cycle. Item 6 (Training): Training materials and sign-in sheets or completion certificates. Item 7 (Weatherization job-closeout review): Documentation of the procedure review, any corrections made, and sign-off integrating it into the MER/draw review. Item 8 (Historical lookback): Lookback workpapers, a summary of results, and related Finance Committee and funder correspondence. Item 9 (Semiannual compliance review): Review workpapers, sample testing documentation, and the Finance Committee report. All records will be retained in accordance with SEVCA’s record retention policy and 2 CFR 200.334.

Management's Response Management will review the provided State Conservation Commission and Department of Environmental Protection grant awards with the percentage breakdown of Federal and State money grant sources from the contract allocations and spending balance of the federal monies verses state monies within the grant allocation.

The County has implemented procedures to ensure all future foster care maintenance for which reimbursement is sought is allowable.

Finding 2025-004 See response to finding 2025-001.

1. Explanation of Disagreement with Audit Finding: There is no disagreement with the finding. 2. Actions Planned in Response to Finding: Corrective actions are underway, including clarified expectations, additional training, and improved monitoring to prevent recurrence. Also, site-level recording and reporting templates have been implemented for the 2025-2026 school year and are in place at each recipient program. 3. Official Responsible for Ensuring CAP: The District’s Principal on Special Assignment who oversees the Title I program and the Business Services Director are the school officials responsible for carrying out the corrective action plan. 4. Planned Completion Date for CAP: The planned completion date for the CAP is June 30, 2026. 5. Plan to Monitor Completion of CAP: The Board of Education and administration will be monitoring this corrective action plan.

CORRECTIVE ACTION PLAN Name and Number of the Project: Alamo Area Mutual Housing Association, Inc. Audit Firm: M Group, LLP Audit Period: The year ended December 31, 2025 Compliance Review A. COMMENTS ON FINDINGS AND RECOMMENDATIONS We concur with the findings and recommendations of our auditors regarding our noncompliance as cited in the accompanying Schedule of Findings and Questioned Costs. ACTIONS TAKEN FINDING 2025-003: The Company does not have effective internal controls or consistently follow the written policies and procedures over federal awards. CORRECTIVE ACTION: Effective January 1, 2026, Prospera has control over ACG and plans to improve the internal control procedures and monitor the federal awards.

BPTC will ensure that all future operating grant purchases are allowable costs/activities per the grant agreements. BPTC will return the funds improperly reimbursed through Pay.gov.

Management acknowledges that owner certified financial data is required to be submitted through the Federal Audit Clearinghouse online system by March 31st of each year for the preceding fiscal year. To ensure that this deadline is adhered to each year going forward the CFO or designee will create an aggressive closing schedule so that accurate financial information is available on a timely basis to adhere to future filing requirements. In addition, RAIN is in the process of implementing NetSuite, a new accounting software system, which will help automate and accelerate the monthly and year-end close process, further supporting timely completion of the audit and future Federal Audit Clearinghouse submissions. Anticipated Completion Date: 12/31/2026 Contact Person: Kendell Burroughs, CFO

Management agrees with the finding that payroll costs charged to HUD-funded programs were based on estimated allocations and did not consistently reflect actual time and effort in accordance with 2 CFR §200.430 (Compensation—Personal Services) and applicable HUD program requirements. Management acknowledges the requirement that personnel costs charged to HUD awards (e.g., CDBG, HOME, CoC) must be supported by records that accurately reflect work performed on eligible program activities.

Management has updated its policies and procedures to require a formal annual review and update of the cost allocation plan. This review will occur in conjunction with the finalization and Board approval of the organization’s annual operating budget, ensuring that the CAP aligns with the most current program structure, funding sources, and cost allocation methodologies.

We agree with the auditor's comments. Prior to transferring financial responsibilities back to Essex County Public Schools Administration effective July 1, 2026, a process was put into place for all staff to have current and fully executed contracts stating their pay rate, FLSA status, expected length of contract (with number of workdays), and associated benefits. A process was also established to utilize an automated or manual timekeeping report to reflect all hours worked and approved by the supervisor prior to submission for payment. All records should be matched and retained to support payroll payments.

The accounting system will also be used to track expenditures by grant. Grant agreements will also be saved in a central location for simple access.

A designated Finance staff member with knowledge of the Uniform Guidance requirements will be responsible for overseeing SEFA preparation for each fiscal year-end. A grant-by-grant SEFA reconciliation will be completed prior to yearend close, with particular attention to period-end cutoff. The SEFA will be independently reviewed by the Finance Director and compared to grant expenditure reports before the audit commences. Management will engage its external accountants earlier in the year-end close process.

SD 2025-005 REPORTING - DATA COLLECTION FORM (REPEAT FINDING PREVIOUSLY REPORTED AS - SD2024-005) Current Year Corrective Actio1t Response: Management concurs with the findings . Management will implement policie s and procedures as per the auditor' s recommendation.

Finding Summary – During the audit, it was determined that an employee used a District purchasing card to make unauthorized personal purchases that were subsequently charged to the Twenty-First Century Community Learning Centers federal program. Existing monitoring and approval procedures did not identify the improper expenditures. As a result, approximately $7,000 of unallowable costs were charged to the federal award, resulting in a significant deficiency in internal control over compliance related to allowable costs and cost principles. Contact Person Responsible for Corrective Action – Dr. Chace Ramey, Superintendent Corrective Actions Planned – The District has implemented additional review and monitoring procedures over purchasing card transactions and federal program expenditures. Supporting documentation is reviewed to ensure expenditures are allowable, properly approved, and directly related to program purposes. District administration will continue to monitor compliance with federal requirements to reduce the risk of unallowable costs being charged to federal awards. Anticipated Completion Date of Corrective Action Plan – June 30, 2026.

Finding 2025-001 Department of Homeland Security and Emergency Management Federal Financial Assistance Listing 97.036 Disaster Grant Public Assistance Allowable Costs/Activities Allowed or Unallowed Material Weakness in Internal Control over Compliance Finding Summary: In the testing of allowable costs and activities, there were instances where material inventory expenses were submitted for federal reimbursement at a cost per unit that did not agree to the replacement cost. Responsible Individuals: Troy Knutson, Andy Weiss, and Ann Watson Corrective Action Plan: The Cooperative will perform a thorough review and reconciliation of supporting documentation for expenditures, including material transactions, before amounts are claimed for reimbursement. Anticipated Completion Date: December 31, 2026

FINDING 2025-001 Finding Subject: COVID-19 Coronavirus State and Local Fiscal Recovery Funds - Reporting Contact Person Responsible for Corrective Action: Amy Borns Contact Phone Number and Email Address: 812-663-8582 ext 1 & aborns@greensburg.in.gov Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: When the SLFRF Compliance report is completed by the Clerk-Treasurer, either the Accounts Payable/Receivable Specialist or the Personnel Administrator will double check it and sign off (or send an email) concurring with the report. Anticipated Completion Date: This will be completed no later than April 30, 2027.

The School has now made personnel and policy changes, and established procedures regarding time certifications that provide assurance that charges are accurate, allowable, and properly allocated.

The School has made personnel and policy changes and has put in place a purchase order process of approval that documents expenditures in compliance with audit regulations. The School has also made coding corrections and implemented proper controls over program expenditures.

The School has contacted DESE for guidance regarding this matter and has implemented proper controls over Title One program expenditures.

The School has made personnel and policy changes and has also been in contact with DESE for guidance. The School has since made coding corrections and implemented proper controls over program expenditures.

Views of Responsible Officials and Planned Corrective Actions: (Prepared by Cooperative Management) 2025 -002 – Significant Deficiency in Internal Controls When the Cooperative completed the Essential Elements of Information (EEI) Worksheet, they excluded amounts billed to the Cooperative for mutual aid help that was performed in an area that was not included in the declared area on the same invoice as work performed in the declared area. On September 25, 2024, the Cooperative sent an email to the FEMA representative with a reconciliation worksheet attached to the email showing the difference between the amounts listed on the mutual aid invoices and the amount reported by the Cooperative on the EEI Worksheet for mutual aid because the FEMA representative could not tie the invoice amounts to the amount reported on the EEI Worksheet. Notation of the amount to be excluded, $11,746, and why it should be excluded was documented on the reconciliation worksheet that was attached to the email. It was the FEMA representative that ultimately included an amount in the final submission that the Cooperative did not include in the EEI Worksheet and clearly communicated should not be included. In the future the Cooperative will verify all final numbers that the FEMA representative intends to report to the CRC. In December 2025, when the Cooperative was reviewing a work order for damage that happened in Colorado during the same storm that was the declared event, it was discovered that $2,294 in retirement costs performed by a contractor was accidentally included in the FEMA claim. In May 2024 when the contractor invoice was received and paid, it was accidentally coded as 100% Nebraska when 3.5% of the invoice should have been coded as Colorado retirement. In the future the Cooperative will have a better review process to catch any accidental coding errors. The Cooperative acknowledges that a total of $14,040 in costs were included when they should not have been.

Views of Responsible Officials and Planned Corrective Actions: (Prepared by Cooperative Management) 2025 -001 – Significant Deficiency in Internal Controls The electronic timesheet system used by the Cooperative, which is also used to track vehicle and equipment used by an employee only allows tracking of vehicle/equipment by mileage and/or hour usage, since the trailers owned by the Cooperative do not have a meter to track either mileage and/or hour usage it is not normal business practice to track the trailer usage on the timesheets. There is a comment section on the timesheet where the information can be entered to bypass the system requirement of entering mileage and/or hour usage, in future storm situations, trailer usage will be entered into the comment section of the timesheet. As for the ATV’s and loader/skid steer equipment it is not normal practice to enter those on the timesheet even though they have a meter to track miles and/or hours. In future storm situations, usage for such equipment will be tracked on the timesheet. The basis for including the trailers in question even though they were not tracked on timesheets was that the trailers were used to haul material (poles) that were checked out of inventory. The Cooperative had to change out over 500 poles, the poles had to be hauled at least 45 miles from the Cooperative inventory yard to the job site, the trailers are pulled by specific trucks which the usage of the trucks was documented on timesheets. The trailers were loaded with the poles in the morning, pulled to job site, a pole unloaded at each pole location, returned in the evening when the shift of the employee driving the truck that pulled the trailer was over. Between inventory records and timesheets documenting the trucks pulling the trailers, the Cooperative was able to determine when the trailers were used. The operations manager made note every day of the ATV’s and loader/skid steers that were used and by which employee. That equipment had to be hauled to the job sites which were at least 45 miles away from the office where they are normally kept. The equipment was pulled to the job sites with the assigned trailer (dump trailers) for that equipment in the morning and returned in evening when the employees shift was over. The FEMA representative the Cooperative worked with wanted the force equipment usage in excel format, the directive given to the Cooperative by the FEMA representative was to add the trailers, ATV’s, loader/skid steers to the excel spreadsheet based upon the documentation that was kept by the operations manager, the inventory records and timesheets. The FEMA representative gave the advice that the handwritten documents did not need to be kept once it was added to the excel spreadsheet since that was the document submitted to the FEMA representative, not the timesheets. In future storm situations all handwritten documents will be scanned as a pdf document and electronically kept.