Corrective Action Plans

Recommendation: The Department of Social Services should strengthen internal controls to ensure that it allocates costs to the appropriate federal award in accordance with federal regulations. The Department of Social Services should return federal reimbursements for unallowable costs that it claimed to Children’s Health Insurance Program federal awards. Corrective Action Plan as Reported by the Department of Social Services: The Department agrees with this finding. The Department will review internal controls to identify possible corrective actions. Anticipated Completion Date: December 31, 2026 Department of Social Services Contact Person: Nelida Maldonado, Fiscal Administrative Manager 2 (860) 424-5461

Recommendation: CT State Community College should strengthen internal controls to ensure that part-time and extension credit lecturer payroll and fringe benefits costs are based on actual time worked and are properly approved. Corrective Action Plan as Reported by the CT State Community College: CSCU is working to resolve the technical limitations that resulted in the relevant audit finding. Once resolved, reports will be generated and shared with the campuses to verify services provided. This will ensure that part-time and extension credit lecturer payroll is based on actual time worked that is properly approved and verified. Task Due Date Status Provide access to the template for the reporting requirements 1/8/2026 Completed Provide requirements for the report that would meet the needs of the audit requirement 1/12/2026 Review requirements and outline any questions / concerns with producing the requested report 1/20/2026 Regroup as a team to discuss next steps and review workplan for report implementation 1/21/2026 Completed Develop, test, and migrate report (detailed work plan to follow) 4/1/2026 Implement report for approval by each campus (Spring 2026 Semester) 5/1/2026 CT State Community College Anticipated Completion Date: May 1, 2026 CT State Community College Contact Person: Jennifer Person, Assistant Vice Chancellor of Human Resources and Labor Relations jennifer.person@ct.edu (860) 723-0258 Corrective Action Plan as Reported by the Office of Policy and Management: The Office of Policy and Management has no additional response beyond that offered by the CT State Community College. Office of Policy and Management Anticipated Completion Date: May 1, 2026 Office of Policy and Management Contact Person: Yvonne T. Addo, Chief Administrative Officer yvonne.addo@ct.gov (860) 418-6360

Recommendation: The Department of Public Health should strengthen internal controls over cash management to ensure that federal drawdowns align with the immediate cash needs to administer the program. Corrective Action Plan as Reported by the Department of Public Health: Management Assurance and Fiscal have worked together to identify gaps and inefficiencies in the drawdown tool. Management Assurance will periodically evaluate the drawdown tool’s usefulness and effectiveness as a cash management internal control. Fiscal will continue to monitor grant draws through the use of the improved drawdown tool. Anticipated Completion Date: Ongoing Department of Public Health Contact Person: Chuma Amechi, Fiscal Administrative Manager chukwuma.amechi@ct.gov (860) 509-7233 Ryan Wenzel, Supervising Accounts Examiner ryan.wenzel@ct.gov (860) 509-7822

Recommendation: The Department of Social Services should strengthen internal controls to ensure that only eligible recipients receive Money Follows the Person Rebalancing Demonstration services in accordance with federal laws, award terms and conditions, and the Money Follows the Person Operational Protocol. Corrective Action Plan as Reported by the Department of Social Services: The Department agrees in part with this finding. Condition #1: DSS agrees that participation end dates were not updated timely due to cross-system manual entry limitations. Reconciliation procedures and supervisory oversight will be strengthened. Condition #2: DSS agrees that participation suspensions were not consistently reflected across systems due to timing delays. Monitoring and real-time reconciliation controls will be enhanced. Condition #3: DSS agrees approved costs exceeded institutional thresholds in limited cases. Variances were clinically justified, reviewed, and authorized. DSS will strengthen documentation and internal protocols to ensure clearer policy alignment. Condition #4: DSS agrees that the documentation was incomplete in one instance. Internal review standards will be reinforced to ensure comparative cost analyses are consistently documented. Please note, the Department will not be returning the questioned costs associated with this finding. According to federal regulations, recoveries based on eligibility errors can only be pursued when identified by programs operating under Centers for Medicare and Medicaid Services’ (CMS) Payment Error Rate Measurement program, per section 1903(u) of the Social Security Act and regulations at Title 42 CFR Part 431, Subpart Q. Anticipated Completion Date: December 31, 2026 Department of Social Services Contact Person: Christine Weston, Program Division Director (860) 424-5012

Recommendation: The Department of Transportation should strengthen internal controls over consultant payments for extra work. Corrective Action Plan as Reported by the Department of Transportation: The CTDOT Transit Design Unit has immediately put in-place a corrective action plan, which will be completed by January 30, 2026. As part of this action plan, when signing off on invoices in the future, the Project Manager will ensure the date of the invoice refers to the correct payment mechanism or extra work letter in accordance with our established policies. This will strengthen internal controls and reviews over payments for all fee letters to ensure it follows established policies and only pay for properly authorized extra work. In addition to internal actions, the consultant project team will be counseled for submitting an invoice that does not follow CTDOT policies. Anticipated Completion Date: January 30, 2026 Department of Transportation Contact Person: Jonathan Kang, Transportation Supervising Engineer Jonathan.Kang@ct.gov, (860) 594-2754

Reference Number: 2025-025 Prior Year Finding: 2024-024 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division: Division of Substance Abuse and Mental Health Federal Program: Opioid-STR Assistance Listing Number: 93.788 Award Number and Year: H79TI085764 (9/30/2022 – 9/29/2024) 6H79TI085764 (9/30/2023 – 9/29/2025) 5H79TI083305 (9/30/2024 – 9/29/2027) Compliance Requirement: Allowable Costs/Cost Principles – Time and Effort Reporting Type of Finding: Material Weakness in Internal Control Over Compliance Recommendation: The Division should enhance procedures, implement proper controls, and perform additional training over time and effort reporting. The Division should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Documentation should be readily available for audit. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The Division evaluated the developed process and implemented controls for completion of the process within 60 days with added monitoring roles for accuracy and timeliness. The Division will be performing training for assigned staff, monitoring completion and will continue to improve the process for efficiency and compliance. Name(s) of the contact person(s) responsible for corrective action: Brook Meadow, Fiscal Administrator II, Office of the Secretary Administration Planned completion date for corrective action plan: June 30, 2026

Reference Number: 2025-021 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Health and Social Services State Division: Division of Medicaid and Medical Assistance Federal Program: Children’s Health Insurance Program Assistance Listing Number: 93.767 Award Number and Period: SAI000005399 (10/1/2023 – 9/30/2024) Compliance Requirement: Period of Performance Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Recommendation: The Division should review and enhance its procedures and internal controls to ensure that it maintains documentation that expenditures charged to the program are incurred within an award’s allowable period of performance. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: To prevent recurrence, we are implementing the following actions: 1. Enhanced Monitoring Controls o Establish a centralized tracking system for all awards, including start and end dates. 2. Staff Training and Accountability o Conduct mandatory training for program and finance staff on compliance with period of performance requirements. o Assign clear responsibility for monitoring award timelines to designated personnel. 3. Pre-Closeout Review Process o Introduce a formal pre-closeout review 60 days before the award end date to identify and resolve outstanding obligations. o Require certification from both program and finance leads confirming that all expenditures fall within the allowable period. 4. Post-Expenditure Review o Perform monthly reconciliation of expenditures against the period of performance. o Immediately flag and correct any discrepancies identified. Name(s) of the contact person(s) responsible for corrective action: Joel Riley – Program Integrity Chief Anthony Yeager – Fiscal Manager Planned completion date for corrective action plan: July 31, 2026

Reference Number: 2025-020 Prior Year Finding: 2024-019 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division: Division of Social Services Federal Program: CCDF Cluster Assistance Listing Number: 93.575. 93.596 Award Number and Year: SAI5406 (10/1/2022 – 9/30/2025) SAI5788 (10/1/2023 – 9/30/2026) SAI6656 (10/1/2024 – 9/30/2028) SAI6306 (10/1/2024 – 9/30/2027) Compliance Requirement: Allowable Costs/Cost Principles – Time and Effort Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance Recommendation: The Division should enhance procedures, implement proper controls, and perform additional training over time and effort reporting. The Division should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Documentation should be readily available for audit. Explanation of disagreement with audit finding: There is no disagreement with the audit findings. Action taken in response to finding: The following action will be taken to improve the current process. • The Fiscal unit is implementing procedures to serve as the central repository for all Time and Effort records, replacing the current practice of storing these forms at the program manager level. • Implement internal controls for Time and Effort Reporting. • Confirm that T&E information submitted is accurate and reconciled. • Provide training for Time & Effort certification. Name(s) of the contact person(s) responsible for corrective action: Joanne Sunga – Fiscal Administrator Tracey Rogers-Mitchell – OSEC Chief of Administration Secil Onat – DSS Chief of Administration Planned completion date for corrective action plan: June 30, 2026.

Reference Number: 2025-018 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division: Division of Social Services Federal Program: CCDF Cluster Assistance Listing Number: 93.575. 93.596 Award Number and Year: SAI5406 (10/1/2022 – 9/30/2025) SAI5788 (10/1/2023 – 9/30/2026) SAI6656 (10/1/2024 – 9/30/2028) SAI6306 (10/1/2024 – 9/30/2027) Compliance Requirement: Eligibility Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Recommendation: The Division should reevaluate its current process, implement proper controls, and perform additional training to ensure that participants receiving benefits under the program meet eligibility requirements. The Division should maintain documentation of participant eligibility and this documentation should be readily available for audit. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The Division of Social Services (DSS) is currently conducting pilot sites to implement front-end scanning prior to case processing. Bi-weekly meetings with the vendor began in August 2024, and the first on-site visit to a pilot location took place in August 2025. Following successful implementation of the scanning process, a statewide rollout is planned for April–May 2026. The DSS Training Department has developed targeted mini training courses focusing on areas with high error rates. The Learning Innovation Team (LIT) will collect and analyze pre- and post-assessment data from child care training to measure effectiveness. Additionally, open lab sessions will be introduced to provide hands-on support, with a focus on accurately entering authorizations based on need for care and addressing other common error areas identified through Quality Control audits. Name(s) of the contact person(s) responsible for corrective action: Jacqueline Bensel – Social Service Senior Administrator Planned completion date for corrective action plan: June 30, 2026.

Reference Number: 2025-017 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division: Division of Social Services Federal Program: Temporary Assistance for Needy Families Assistance Listing Number: 93.558 Award Number and Year: 2501DETANF (10/1/2024 – 9/30/2025) 2401DETANF (10/1/2023 – 9/30/2024) 2301DETANF (10/1/2022 – 9/30/2023) Compliance Requirement: Allowable Costs/Cost Principles – Time and Effort Reporting Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Recommendation: The Division should enhance procedures, implement proper controls, and perform additional training over time and effort reporting. The Division should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Documentation should be readily available for audit. Explanation of disagreement with audit finding: There is no disagreement with the audit findings. Action taken in response to finding: The following action will be taken to improve the current process. • The Fiscal unit is implementing procedures to serve as the central repository for all Time and Effort records, replacing the current practice of storing these forms at the program manager level. • Implement internal controls for Time and Effort Reporting. • Confirm that T&E information submitted is accurate and reconciled. • Provide training for Time & Effort certification. Name(s) of the contact person(s) responsible for corrective action: Joanne Sunga – Fiscal Administrator Tracey Rogers-Mitchell – OSEC Chief of Administration Secil Onat – DSS Chief of Administration Planned completion date for corrective action plan: June 30, 2026

Reference Number: 2025-016 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division: Division of Public Health Federal Program: Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), COVID-19 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Assistance Listing Number: 93.323 Award Number and Year: NU50CK000497 (8/1/2019 – 7/31/2027) NU51CK000334 (8/1/2024 – 7/31/2029) Compliance Requirement: Allowable Costs/Cost Principles – Time and Effort Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Recommendation: The Division should reevaluate its current process, implement proper controls, and perform additional training over time and effort reporting. The Division should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Documentation should be readily available for audit. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: • ELC Financial Lead will work with DPH Support Services to track all recoded time against grant. • As recodes are identified, time certifications for affected staff will need to be revised and filed appropriately. Name(s) of the contact person(s) responsible for corrective action: Teresa Reed, Wes Holleger, Deborah Fisher Planned completion date for corrective action plan: April 1, 2026.

Reference Number: 2025-009 Prior Year Finding: 2024-011 Federal Agency: U.S. Department of Labor State Department Name: Department of Labor State Division Name: Division of Unemployment Insurance Federal Program: Unemployment Insurance, COVID-19 – Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: 24A55UI000067 (10/1/2023 – 12/31/2026) 25A55UI000116 (10/1/2024 – 12/31/2027) Compliance Requirement: Allowable Cost/Cost Principles Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Recommendation: The Division should reevaluate its procedures and controls regarding general disbursements to ensure that supporting documentation is readily available upon audit request. Explanation of disagreement with audit finding: We acknowledge that audit ready evidence was not produced in a timely fashion but respectfully disagree that the Division did not maintain this evidence. The lack of timely production can be attributed to lack of awareness of the proper repository where such audit evidence was maintained and/or could be easily retrieved, as opposed to no maintenance at all. We also maintain that the division was able to substantiate all expenses queried. Action taken in response to finding: The business will continue to refine its process for maintaining audit ready evidence to improve response time in future engagements. Name(s) of the contact person(s) responsible for corrective action: Michael Soper, Fiscal Management Planned completion date for corrective action plan: March 31, 2027

Reference Number: 2025-008 Prior Year Finding: 2024-010 Federal Agency: U.S. Department of Labor State Department Name: Department of Labor State Division Name: Division of Unemployment Insurance Federal Program: Unemployment Insurance, COVID-19 – Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI372152255A10 (10/1/2021 – 12/31/2024) UI393142355A10 (10/1/2022 – 12/31/2025) 24A55UI000067 (10/1/2023 – 12/31/2026) 25A55UI000116 (1/1/2024 – 12/31/2027) Compliance Requirement: Allowable Cost/Cost Principles – Time and Effort Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Recommendation: The Division should reevaluate its current process, implement proper controls, and perform additional training for time and effort reporting. The Division should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Documentation should be readily available for audit. Explanation of disagreement with audit finding: We agree that the division was unable to provide documentation supporting the timesheet approval as asserted. However, we respectfully disagree that the lack of timesheet approval translates into charging the program with unallowed costs. It’s important that the auditors understand that the division’s responsibility to ensure that payroll charges to the program are appropriate begins with ensuring that each employee tasked with performing program functions are hired into the correct division internal program unit (“IPU”). And then further within that IPU, instruct employees to use a specific activity code that is assigned to various federal programs. In the samples reviewed, employees properly used the correct activity code to record time for the work performed. Action taken in response to finding: The business will continue to refine its process for demonstrating the appropriateness of allowed payroll costs to the program and present a substantial action plan in late FY2027. Name(s) of the contact person(s) responsible for corrective action: Marie Cameron, Director of DUI Planned completion date for corrective action plan: March 31, 2027

Reference Number: 2025-003 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division: Division of Public Health Federal Program: WIC Special Supplemental Nutrition Program for Women, Infants, and Children Assistance Listing Number: 10.557 Award Number and Year: 241DE701W1003 (10/1/2023 – 9/30/2024) 251DE701W1003 (10/1/2024 – 9/30/2025) Compliance Requirement: Allowable Costs/Cost Principles – Time and Effort Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance Recommendation: The Division should enhance procedures, implement proper controls, and perform additional training over time and effort reporting. The Division should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Documentation should be readily available for audit. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: On March 12, 2026, an email to all WIC supervisors was issued notifying the dates that all T&E reports are due to the Administration Office. The policy was reiterated during the March 17,2026 Supervisors meeting held via Zoom. Name(s) of the contact person(s) responsible for corrective action: Joanne White – Public Health Program Administrator Planned completion date for corrective action plan: March 31, 2026

Management will review all contracts to ensure the appropriate indirect costs rates are being used in calculations. A review process is in place in which a staff or grant accountant will prepare the indirect cost calculation, and the Accounting Manager or Director will review and approve. The accounting team will also use formula driven excel calculations to try and avoid any manual input errors.

ENROLLMENT REPORTING PROCEDURES SHOULD BE STRENGTHENED. STUDENT FINANCIAL AID CLUSTER PROGRAM ALN# 84.268,84.007,84.033, 84.063, and 84.038 (Questioned Costs - None) Views of Responsible Officials and Planned Corrective Actions The university will strengthen coordination between the Registrar, Financial Aid, and the Business Office to ensure that SAP status is evaluated and communicated before financial aid is disbursed. Procedures will be implemented to ensure timely receipt of grade reporting and academic alerts from faculty and Academic Affairs. Financial Aid staff will review SAP eligibility after each academic evaluation period and maintain documentation of SAP determinations. Students who do not meet SAP requirements will be appropriately flagged to ensure financial aid eligibility is addressed prior to disbursement, strengthening compliance with federal financial aid regulations. Date to be implemented: On-going and completed by June 1, 2026. Persons responsible: Vice President of Business & Finance and Office of Financial Aid.

We acknowledge the critical importance of establishing and maintaining an effective system of internal control over compliance, including allowable costs under federal awards per Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) that a non-federal entity may charge only allowable costs that are adequately documented and are necessary and reasonable for performance of the federal award under the principles of 2 CFR Part 200, Subpart E. As such, we are committed to taking immediate corrective actions to address the deficiencies to ensure accurate billing rates for equipment charges are used and that charges for internally generated fees, such as burn mix, are documented prior to charging the fees to the program. We have outlined below the specific steps we have already undertaken and will undertake: 1.Development of Standardized Equipment Rate Schedule The District has developed and will maintain a standardized schedule of approved equipment billing rates used for federal and state grant programs. This schedule will be based on published or internally approved rates and will be reviewed annually to ensure accuracy. 2.Verification of Billing Rates Prior to Grant Charges Prior to charging equipment usage to any federal award, finance staff will verify that the billing rate applied matches the approved rate schedule. This verification will be documented and retained with the supporting grant expenditure documentation. 3.Documentation of Internally Generated Rates For internally generated fees, including burn mix or similar materials, the District will develop and maintain formal documentation supporting the calculation of the rate. This documentation will include the components used to determine the rate (such as material cost, labor, and overhead where applicable) and will be retained in the grant support files. 4.Pre-Approval of Internally Generated Charges Internally generated billing rates will be reviewed and approved by management prior to being charged to any federal grant program. The approved rate documentation will be maintained as part of the grant compliance records. 5.Enhanced Grant Expenditure Review Process The District will implement a secondary review process for grant-related expenditures. Finance staff or management will review charges to federal awards to ensure the expenditures are supported, reasonable, allowable under Uniform Guidance, and calculated using the correct approved billing rates. 6.Training on Uniform Guidance Requirements Finance staff and personnel responsible for preparing or submitting grant-related charges will receive refresher training on federal grant compliance requirements under 2 CFR Part 200, specifically related to allowable costs, documentation requirements, and internal controls over grant expenditures. 7.Ongoing Monitoring of Grant Compliance As part of the year-end grant reporting process, management will periodically review equipment charges and internally generated fees charged to federal awards to ensure the established procedures are consistently followed and that adequate supporting documentation is maintained. Responsible Parties and Accountability to be designated: 1.Jackie Dunklee, CFO, and Isaac Pawning, Division Chief: Responsible for overseeing the development and update of a standardized schedule of approved equipment billing rates and ensuring compliance with state, local, and federal regulations. 2.Thelesa Montoya-Neves, Accounting Manager: Responsible for ongoing monitoring and review of equipment charges to federal awards. 3.Erick Rodriguez, Compliance Officer: Responsible for ensuring that federal grant expenditures are supported, reasonable, allowable under Uniform Guidance, and calculated using the correct approved billing rates. By implementing these corrective actions, we are committed to addressing the significant deficiency of internal controls over compliance to ensure accurate billing rates for equipment charges are used and that charges for internally generated fees, such as burn mix, are documented prior to charging the fees to the program. Anticipated Completion Date: June 2026

The Senior Accounting and Finance Director and the Director of Operations have scheduled a weekly meeting to address training needs for front-line staff and to develop methods for monitoring data collection and ensuring accountability for data entry. Although procedures and training manuals were developed, staff turnover resulted in the processes and procedures not being consistently followed.

Management has acknowledged the finding and has implemented enhanced procedures through frequent reconciliations and stricter review policies to ensure documented costs agree to the underlying invoice support. Name of the contact person responsible for corrective action: Garrett Richardson, VP of Finance; Haley Kotun, Director of Finance Anticipated completion date: January 2026

2025-001 - Miscalculation of Reconnect Scholarship Awards. Auditor Description of Condition and Effect. For 3 out of 12 students tested, the incorrect amounts of Michigan Reconnect scholarships were calculated and awarded to students. As a result, the College had a total of 16 students whereby the Michigan Reconnect scholarships awarded during the fiscal year were miscalculated, resulting in $16,101 in under-awarded scholarships and $288 in over-awarded scholarships to students. The College corrected under-awarded scholarships by adjusting student accounts to reflect accurate award amounts and issued refunds to students as applicable on March 18, 2026. The college corrected over-awarded scholarships by adjusting the student accounts and updating the Michigan Student Scholarships Grants ("MiSSG") reporting system to refund MiLEAP on August 6, 2025. Auditor Recommendation. We recommend that the College implement a formal review process for Michigan Reconnect scholarship award calculations, ensuring that each calculation receives a second, independent review to verify its accuracy. Corrective Action. The College recalculated the awards for the students impacted, adjusted their student accounts, notified the students of these corrections and returned $288 in over-awarded scholarships to MiLEAP by updating the MiSSG reporting system. Additionally, the College plans to conduct additional training of stafff on the Michigan Reconnect Expansion program, including the last-dollar calculation methodology, and will implement a review of the calculations by a second individual of all disbursements. Responsible person. Maryann DeCaire, Director of Financial Aid. Anticipated Completion Date. March 31, 2026.

Condition: Expenditures for the Child and Adult Care Food Program were incorrectly reported as expenditures to other nutrition programs. Recommendation: The auditors recommend that the School properly identify and report nutrition program expenditures by program. Contact Name: Anastacia Europa Ruiz, Chief Operating Officer Corrective Action Planned: The School Management will identify nutrition program expenditures by each separately funded program and report such expenditures by each separately funded program. Anticipated Completion Date: June 30, 2026

Condition: For FAL 10.185, all 40 vendor disbursements tested lacked evidence of supervisory approval, as the payment request forms were not signed by the designated approver prior to payment. For FAL 10.558, 27 of thirty-two vendor disbursements tested lacked documented supervisory approval prior to payment. Finally for FAL 84.010A, two of the ten vendor disbursements tested lacked documented supervisory approval prior to payment. In each noted instance, payments were processed without evidence that the School performed and documented a review in accordance with established internal control procedures. Recommendation: The auditors recommend that the School enforce existing policies requiring documented supervisory approval prior to processing payments and implement monitoring procedures to ensure approval documentation is completed and retained. In addition, the School should strengthen pre-payment review procedures to ensure expenditures are evaluated for allowability, necessity, reasonableness, and proper allocation in accordance with 2 CFR Part 200 and applicable program requirements. Training should be provided to personnel responsible for processing and approving federal program expenditures to reinforce compliance responsibilities. Contact Name: Anastacia Europa Ruiz, Chief Operating Officer Corrective Action Planned: The School Management will require documented supervisory approval, including signature and date, on all payment request forms prior to processing vendor disbursements charged to federal programs. Accounts payable staff will not release payments without evidence of required authorization. Written disbursement procedures will be reviewed and the applicable staff will be retrained within 90 days. The School will perform monthly oversight of disbursement activity and quarterly sample reviews to ensure ongoing compliance. Anticipated Completion Date: June 30, 2026

Recommendation We recommend implementing a Program Improvement Plan between the Title IV-E team and Fostering Connections to ensure that adoption cases potentially eligible for extended subsidies are processed promptly upon consideration, with the necessary agreements executed in a timely manner, i.e., before the children in question turn 18. Management Response Corrective Action The Office of Performance and Accountability Director will work with the Adoption and Kinship Unit Supervisor to establish a biannual review of payments to adoptive parents to verify if cases need to be closed. Due Date of Completion: June 30, 2026 Responsible Person(s) Office of Performance and Accountability Director

Recommendation We recommend a Program Improvement Plan with documentation retention and file checklist, training, implementation, and monitoring process. There should be accountability for non compliance with these requirements. Management Response Corrective Action Missing Documentation The CYFD Adoption Subsidy unit will continue to organize its filing system. The Eligibility Manager and Office of Performance and Accountability Director will work with the Adoption and Kinship Unit Supervisor to review and ensure appropriate checklists, training, and processes are in place. In addition, the Eligibility Manager, OPA Director, and Adoption and Kinship Unit will conduct an additional case review to ensure required documentation is present and establish a biannual cadence of self-assessment checks to ensure no missing documentation. Criminal Records Mitigation The agency continues to ensure that workers, supervisors, and managers follow proper procedures for mitigating criminal records checks. The agency addresses this by creating a supervisor checklist to ensure licensure documentation is complete and accurate. The supervisor will conduct an initial placement review; the checklist will include verification by the supervisor of the completed level of care documentation. Supervisors and Managers will address work performance with employees through corrective actions or employment evaluation. Due Date of Completion: June 30, 2026 Responsible Person(s) Office of Performance and Accountability Director

Recommendation The Department should strengthen controls over the retention and documentation of foster care records to ensure compliance with all applicable regulations. This includes ensuring all required documentation are properly collected, stored, and accessible for audits. Regular internal audits of foster care case files should be implemented to confirm compliance with internal controls and regulations. A system to track and follow up on outstanding documents will ensure timely collection of all required records. We also recommend that the files are stored electronically in one location, with appropriate access given to individuals. The Department should also review licensing processes for providers with disqualifying criminal histories and take corrective actions when necessary. Additionally, staff training on proper documentation and adherence to internal controls should be enhanced. Management Response Issue Missing and incomplete supporting documentation for Children placed in Children placed in Congregate Care Settings. Root Cause Lack of clear instruction or process. Direction and agreement on how to work with HCA and MCO to obtain needed documentation when a child is placed in a congregate setting. Corrective Action Create a supervisor checklist to ensure licensure documentation is complete and accurate. Supervisor will perform review at initial placement; checklist will include supervisor verification of complete and accurate placements agreements. Supervisors and Managers will address work performance with employees through corrective actions or employment evaluation. Work with CYFD Behavioral Health and NM Health Care Authority (HCA) to ensure CYFD has proper documentation for Medicaid licensed and approved congregate care facilities, to include certification of staff CRCs, licensure, and placement agreements. Issue a directive to CYFD licensing and placement staff that outlines the process for determining level of care, payment, placement agreements, and how this is documented for children in custody placed in all congregate care settings. The CYFD Office of Performance and Accountability in partnership with CYFD Protective Services Licensing and Support will incorporate annual Regional Placement Reviews into its annual case review schedule Issue Missing and incomplete placement agreements for children placed with foster families. Root Cause Lack of clear instruction or process. Need for more robust supervisory oversight. Corrective Action Create a supervisor checklist to ensure placement agreement documentation is complete and accurate. Supervisor will perform review at initial placement; checklist will include supervisor verification of complete and accurate placements agreements. Supervisors and Managers will address work performance with employees through corrective actions or employment evaluation. Provide FACTS Entry and Documentation Refresher training for all Licensing and Support Staff. The CYFD Office of Performance and Accountability in partnership with CYFD Protective Services Licensing and Support will incorporate annual Regional Placement Reviews into its annual case review schedule. Issue No documentation of Level of Care in hard file or entered into FACTS per agency procedures Root Cause Lack of clear instruction or process. Need for more robust supervisory oversight. Corrective Action Create a supervisor checklist to ensure level of care documentation is complete and accurate. Supervisor will perform review at initial placement; checklist will include supervisor verification of completed level of care documentation. Supervisors and Managers will address work performance with employees through corrective actions or employment evaluation. Provide FACTS Entry and Documentation Refresher training for all Placement and Licensing Staff. The CYFD Office of Performance and Accountability in partnership with CYFD Protective Services Licensing and Support will incorporate annual Regional Placement Reviews into its annual case review schedule. Issue Missing criminal records checks and no mitigation measures found. Root Cause Lack of clear instruction or process. Need for more robust supervisory oversight. Corrective Action Create a supervisor checklist to ensure criminal record check (CRC) documentation is complete and accurate. Supervisor will perform review at initial placement; checklist will include supervisor verification of completed CRC documentation. Supervisors and Managers will address work performance with employees through corrective actions or employment evaluation. Provide "cheat sheet" that outlines level of documentation needed to verify CRC’s have been completed for family foster homes, TFC homes, and congregate care settings. Provide guidance on when and how to mitigate criminal record checks histories, and how this is documented. Provide FACTS Entry and documentation refresher training for all Placement and Licensing Staff. The CYFD Office of Performance and Accountability in partnership with CYFD Protective Services Licensing and Support will incorporate annual Regional Placement Reviews into its annual case review schedule. Issue Missing Abuse and Neglect Checks Corrective Action Create a supervisor checklist to ensure abuse and neglect check documentation is complete and accurate. Supervisor will perform review at initial placement; checklist will include supervisor verification of completed Abuse and Neglect Check documentation. Supervisors and Managers will address work performance with employees through corrective actions or employment evaluation. Provide guidance on conducting abuse and neglect checks and documents that show checks are completed before a child is placed and in accordance with agency policy and procedure. Provide FACTS Entry and documentation refresher training for all Placement and Licensing Staff. The CYFD Office of Performance and Accountability in partnership with CYFD Protective Services Licensing and Support will incorporate annual Regional Placement Reviews into its annual case review schedule. Issue Missing Foster Care Licensure Corrective Action: Create a supervisor checklist to ensure licensure documentation is complete and accurate. Supervisor will perform review at initial placement; checklist will include supervisor verification of completed licensure documentation. The CYFD Office of Performance and Accountability New Mexico Children, Youth, and Families Department Reporting 30 in partnership with CYFD Protective Services Licensing and Support will incorporate annual Regional Placement Reviews into its annual case review schedule. Issue Missing Abuse and Neglect Petition and Ex-Parte Custody Orders Root Cause Need for more robust supervisory oversight in the Title IVE determination process. Corrective Action The Title IVE/Medicaid Manager will work with CYFD Children's Court Attorneys to ensure that Abuse and Neglect Petitions and Ex-parte Custody Orders are present when conducting initial and ongoing Title IVE determination. The CYFD Office of Performance and Accountability in partnership with CYFD Protective Services Licensing and Support will incorporate annual Regional Placement Reviews into its annual case review schedule. Due Date of Completion: June 30, 2026 Responsible Person(s) Protective Services Division Director, Behavioral Health Division Director, Director of Performance and Accountability, Policy Director