Corrective Action Plans

Finding 1222839 (2025-002)

Material Weakness 2025

CO

Reporting Subrecipient Monitoring Allowable Costs / Cost Principles § 200.303 § 200.328 § 200.329

Finding 2025-002 Federal Agency Name: U.S. Department of Treasury Program Name: Coronavirus State and Local Fiscal Recovery Funds FFALN # 21.027 Finding Summary: Eide Bailly LLP prepared our single audit for Federal Coronavirus State and Local Fiscal Recovery Funds where the Town is a subrecipient t...

Finding 2025-002 Federal Agency Name: U.S. Department of Treasury Program Name: Coronavirus State and Local Fiscal Recovery Funds FFALN # 21.027 Finding Summary: Eide Bailly LLP prepared our single audit for Federal Coronavirus State and Local Fiscal Recovery Funds where the Town is a subrecipient to Douglas County who is the recipient of the funds. Eide Bailly LLP identified that the Town did not have documented or consistently applied internal controls to ensure compliance with the County’s subrecipient guidance requiring the submission of formal special reports for ALN 21.027. Responsible Individuals: Mark Henderson, Assistant Director of Castle Rock Water Corrective Action Plan: Staff will complete quarterly reports including project progress and estimated project infrastructure costs. The reports will be reviewed by management prior to submission to the recipient of the Federal Funds (Douglas County). Anticipated Completion Date: Ongoing during the period that the Town is a subrecipient of these funds for the project.

View Audit 406402

Finding 1222792 (2025-003)

Material Weakness 2025

Cook County, Illinios

IL

Allowable Costs / Cost Principles Cash Management Subrecipient Monitoring § 200.302 § 200.307 § 200.472

Memo: Cause and Corrective Action Plan for Finding 2025-003 This correspondence serves as Cook County Health (CCH) and Cook County Department of Public Health (CCDPH) response to Finding 2025-003. During the FY2025 Single Audit, one audit finding was identified by Washington, Pittman & McKeever, LLC...

Memo: Cause and Corrective Action Plan for Finding 2025-003 This correspondence serves as Cook County Health (CCH) and Cook County Department of Public Health (CCDPH) response to Finding 2025-003. During the FY2025 Single Audit, one audit finding was identified by Washington, Pittman & McKeever, LLC. The root cause and corrective action plan is identified below. Condition During the current audit period, the Cook County Department of Public Health (DPH) did not comply with federal regulations regarding the use and reporting of program income as it relates to funds awarded through the RWHAP Root Cause Analysis The HIV grants transitioned to CCH from an external organization in July 2025. Award amounts were granted in multiple phases, requiring four budget revisions, with the final revision approved in December 2025. The contractual period covered March 2025 through December 2025. During the transition period, CCH lacked formal operational procedures to identify, record, and track program income. Several operational and administrative challenges contributed to this issue, including: • No written internal procedures were in place to define or track program income requirements. • No formal transition teams were established to identify core grant obligations, resulting in unclear interpretation of sponsor requirements. • CCH had not yet identified the appropriate internal systems or interdepartmental collaborations necessary to retrieve and reconcile program income data. • Organizational priorities during the transition focused on maintaining existing deliverables, including vouchering, budget compliance, hiring, and onboarding of direct and administrative staff. • Staffing Shortages, CCH onboarded personnel quickly as contractual employees, direct staff transitioned onboard as CCH employees in phases upon execution of grant contracts. Corrective Action Plan CCH Director of Grants Accounting is implementing formal written processes and procedures to ensure compliance with Federal Uniform Guidance requirements related to program income. The corrective action plan includes: • Developing standardized written procedures that clearly define program income requirements and tracking responsibilities. • Establishing shared roles and responsibilities across departments to support consistent data collection, reconciliation, and reporting. • Identifying the specific data elements required to accurately record and monitor program income. • Formalizing interdepartmental collaboration processes necessary to retrieve and validate program income information. • Defining the systems and reporting tools that will be used to track and maintain program income records. • Providing staff training on program income requirements, documentation standards, and compliance expectations. These actions will strengthen internal controls and ensure timely, accurate identification and tracking of program income moving forward, official approval/implementation is expected December 2026

View Audit 406385

Finding 1222748 (2025-002)

Material Weakness 2025

Mountain Community Action Program, Inc.

VA

Allowable Costs / Cost Principles Internal Control / Segregation of Duties

1. Proposed Corrective Action: Our agency will migrate all time sheets to digital, which will be input and tracked by the employee and submitted each payroll. That timesheet will then be reviewed and approved by the Director of Operations before payroll is disbursed. Digital timesheets will be avail...

1. Proposed Corrective Action: Our agency will migrate all time sheets to digital, which will be input and tracked by the employee and submitted each payroll. That timesheet will then be reviewed and approved by the Director of Operations before payroll is disbursed. Digital timesheets will be available on demand going forward. 2. Timeline for Implementation: This process has already been completed.

View Audit 406332

Finding 1222688 (2025-001)

Material Weakness 2025

School's Out Washington

WA

Allowable Costs / Cost Principles

Contact Person(s): Matt Fadich Explanation and specific reasons for disagreement with the audit finding or that corrective action is not required (if applicable): Not applicable Corrective action planned: Task: Reviewed all nonpayroll transactions charged to federal programs and implemented coding a...

Contact Person(s): Matt Fadich Explanation and specific reasons for disagreement with the audit finding or that corrective action is not required (if applicable): Not applicable Corrective action planned: Task: Reviewed all nonpayroll transactions charged to federal programs and implemented coding and documentation corrections for 2026. Anticipated completion date: Done Task: Updated procedures addressing the documentation and allowability standards for nonpayroll expenditures directly charged to federal grant programs. Anticipated completion date: Done Task: Train staff with purchasing and coding authority on updated procedures, including documentation requirements and the distinction between allowable program charges and costs that may not be directly charged to federal grants. Anticipated completion date: June 30, 2026 Task: Establish a quarterly review process to identify and address potentially questionable nonpayroll transactions charged to federal programs on an ongoing basis. Anticipated completion date: June 30, 2026 School’s Out Washington considers the above steps sufficient and adequate to close the gaps in the coding of transactions that may have permitted unallowable costs to post to grants for YE2025. These steps will remedy the lapse in effectiveness experienced by School’s Out Washington’s internal controls over allowable costs.

View Audit 406271

Finding 1222678 (2025-001)

Material Weakness 2025

North Kitsap School District No. 400

WA

Allowable Costs / Cost Principles Subrecipient Monitoring

Finding ref number: 2025-001 Finding caption: The District did not have adequate internal controls and did not comply with time-and-effort requirements. Name, address, and telephone of District’s contact person: Renata Sorna, Assistant Director of Business, Finance and Operations North Kitsap School...

Finding ref number: 2025-001 Finding caption: The District did not have adequate internal controls and did not comply with time-and-effort requirements. Name, address, and telephone of District’s contact person: Renata Sorna, Assistant Director of Business, Finance and Operations North Kitsap School District 18360 Caldart Ave NW Poulsbo, WA 98370 Tel: (360) 396-3011 Corrective action the auditee plans to take in response to the finding: We have reinstated the semi-annual and annual certification process requiring signatures from both employees and their direct supervisors to verify the work completed after that fact. In addition, we are developing a procedure for policy 6106: Allowable Costs for Federal Programs. Anticipated date to complete the corrective action: Reinstating the semi-annual certifications has already been completed for the 2025-2026 school year. We anticipate finalizing the procedure by the end of school year 2025-2026.

View Audit 406254

Finding 1222667 (2025-005)

Material Weakness 2025

UNITED COMMUNITY MINISTRIES, INC.

VA

Allowable Costs / Cost Principles § 200.403 § 200.404

2025-005 Auditor’s Recommendation: UCM should develop and implement comprehensive written policies and procedures addressing allowability and documentation standards. Controls should ensure only actual costs are charged. Staff responsible for grant accounting should receive Uniform Guidance training...

2025-005 Auditor’s Recommendation: UCM should develop and implement comprehensive written policies and procedures addressing allowability and documentation standards. Controls should ensure only actual costs are charged. Staff responsible for grant accounting should receive Uniform Guidance training. Corrective Action: UCM will develop and implement comprehensive written policies and procedures addressing cost eligibility, documentation standards, and the requirement that only actual costs are charged to Federal awards. The procedures will be designed to ensure costs charged to Federal awards are permitted under the award terms, properly supported, accurately recorded, and consistent with Uniform Guidance requirements. UCM will update its grant accounting procedures to require supporting documentation for all costs charged to Federal awards, including invoices, receipts, payroll records, allocation schedules, contracts, purchase approvals, proof of payment, and other relevant source documents. Estimated, unsupported, or budgeted amounts will not be charged to Federal awards unless specifically permitted by the award terms and adjusted to actual costs within the required reporting period. UCM will also implement a documented review process to confirm that Federal award expenditures are based on actual costs incurred. The review will include verification that the expense was incurred during the grant period, relates to the approved program, is supported by adequate documentation, is charged to the correct funding source, and agrees to the general ledger and supporting records. Evidence of review and approval will be retained with the grant files. Staff responsible for grant accounting, Federal award reporting, payroll allocation, accounts payable, and program budget oversight will receive Uniform Guidance training. Training will include cost eligibility, documentation standards, actual cost requirements, cost allocation, and grant expenditure review procedures. Responsible for Corrective Action: Shruti Jha, Senior Director of Finance Liya Tseye & Carmen Romero, Accountants Gina Macanlalay, Director of Family Achievement Program Laura D’Ambrogi, Grants Manager Anticipated Completion Date: December 31, 2026

View Audit 406238

Finding 1222666 (2025-004)

Material Weakness 2025

UNITED COMMUNITY MINISTRIES, INC.

VA

Allowable Costs / Cost Principles Internal Control / Segregation of Duties Subrecipient Monitoring § 200.303

2025-004 Auditor’s Recommendation: UCM should formalize and document internal control procedures over Federal award expenditures, including documented review and approval processes to ensure compliance with Uniform Guidance. Corrective Action: UCM will formalize and document internal control procedu...

2025-004 Auditor’s Recommendation: UCM should formalize and document internal control procedures over Federal award expenditures, including documented review and approval processes to ensure compliance with Uniform Guidance. Corrective Action: UCM will formalize and document internal control procedures over Federal award expenditures to ensure costs charged to Federal awards are allowable, allocable, reasonable, properly approved, and adequately supported in accordance with Uniform Guidance. Written procedures will be developed for expenditure review and approval, including documentation of business purpose, budget availability, cost eligibility under the award terms, proper account coding, funding source, supporting documentation, and evidence of approval. UCM will also strengthen controls over direct assistance to client expenditures by requiring documentation of client eligibility, assistance type, amount approved, funding source, program approval, finance review, and evidence of payment. Direct assistance expenditures will be reviewed to ensure they are allowable under the Federal award, consistent with program requirements, properly coded, and adequately supported before payment or reimbursement is processed. UCM will also implement a Federal award expenditure checklist or similar review tool to document review before expenditures are paid, posted, or reported. The checklist will include review of allowability, allocability, reasonableness, budget availability, funding source, supporting documentation, approval, and compliance with applicable Federal award requirements. For direct assistance to clients, the checklist will also confirm client eligibility, approved assistance type, required case documentation, and evidence of payment. Staff responsible for Federal award expenditures, direct client assistance, grant accounting, accounts payable, and program budget management will receive training on the updated procedures and Uniform Guidance requirements. Supporting documentation and evidence of review and approval will be retained with the expenditure records. Responsible for Corrective Action: Shruti Jha, Senior Director of Finance Gina Macanlalay, Director of Family Achievement Program Laura D’Ambrogi, Grants Manager Anticipated Completion Date: December 31, 2026

View Audit 406238

Finding 1222665 (2025-003)

Material Weakness 2025

UNITED COMMUNITY MINISTRIES, INC.

VA

Allowable Costs / Cost Principles § 200.403 § 200.430

2025-003 Auditor’s Recommendation: UCM should develop and implement comprehensive written policies and procedures addressing time and effort, employee benefits, payroll allocations, and documentation standards. Staff responsible for grant accounting should receive Uniform Guidance training. Correcti...

2025-003 Auditor’s Recommendation: UCM should develop and implement comprehensive written policies and procedures addressing time and effort, employee benefits, payroll allocations, and documentation standards. Staff responsible for grant accounting should receive Uniform Guidance training. Corrective Action: UCM is implementing Insperity, a new Human Resource and Payroll software system, to improve the accuracy and documentation of time allocation, payroll processing, and benefit allocation across programs and funding sources, including the Family Achievement Program federal award. UCM will configure Insperity and related procedures to support time allocation by program, grant, or cost objective, supervisor approval, payroll allocation reporting, and retention of supporting documentation. In addition, UCM will develop and implement written policies and procedures addressing time and effort reporting, employee benefit allocations, payroll allocation methodology, review and approval requirements, and documentation retention standards. These procedures will require that employee benefits charged to the federal award are based on actual benefit costs incurred, rather than budgeted or estimated amounts, unless otherwise permitted by the award terms and adjusted to actual costs within the required reporting period. UCM will establish a review process to ensure payroll and benefit costs charged to the federal award are accurate, allowable, based on actual costs incurred, properly supported, and consistent with Uniform Guidance requirements. Staff responsible for grant accounting, payroll processing, and federal award compliance will receive Uniform Guidance training. Responsible for Corrective Action: Shruti Jha, Senior Director of Finance Deborah Ewell, Director of Human Resources Laura D’Ambrogi, Grants Manager Anticipated Completion Date: September 30, 2026

View Audit 406238

Finding 1222634 (2025-004)

Material Weakness 2025

Center for Cultural & Technical Interchange Between East & West, INC

HI

Allowable Costs / Cost Principles § 200.430

View of Responsible Officials: Management agrees with the finding and recommendation. Corrective Action Plan: Problem The financial audit conducted by N&K identified that there were two (2) incorrect deduction amounts that were entered into the HRIS system, resulting in an overcharge to the employee...

View of Responsible Officials: Management agrees with the finding and recommendation. Corrective Action Plan: Problem The financial audit conducted by N&K identified that there were two (2) incorrect deduction amounts that were entered into the HRIS system, resulting in an overcharge to the employee. Upon investigation, it was determined that the HR Administrator updated the wrong benefits deduction entry, which caused an incorrect overcharge for the employee’s life insurance deduction and an incorrect undercharge to their long-term disability insurance deduction. The incorrect charges occurred over a span of 15 months to a total overage of $913.59, for which the employee was not reimbursed. Root Cause The error occurred during the organization’s benefits carrier switch from Prudential Financial to The Standard. Their existing process—where the Administrator inputs changes and the Assistant performs a post-entry review—failed to detect the error, resulting in a finding within the auditor’s report. The issue appears to stem from a combination of process and control weaknesses: • Manual data entry error by the Administrator • Ineffective secondary manual review, likely due to: o Lack of a standardized checklist or validation criteria o Insufficient sampling or inconsistent spot-check methodology • Lack a system-based validation controls within the HRIS system (e.g., thresholds, alerts) • Limited accountability clarity for final verification • Lack of periodic audits in case errors are missed Immediate actions to address the current issue and mitigate employee impact • Calculate and process reimbursement for the overcharged employee (completed) • Communicate transparently with the affected employee regarding: o Nature of the error o Correction made o Reimbursement payment • Conduct a targeted audit of recent deduction changes to identify any similar errors (completed) Corrective Action Plan (Preventive Controls) To prevent future occurrences from happening, unit will implement the following changes to its administrative procedures: 1. Standardized Data Entry Protocol The unit will utilize its HR Action Form as a standard processing mechanism for benefit deduction changes made within the HRIS, including:• Source documentation verification (e.g., enrollment forms, carrier files) • Confirmation of deduction amount and effective date This will require both the processor and the reviewer to initial and certify that the change was accurately completed, thus strengthening its review process. 2. Enhancing review procedure for multiple changes done at the same time The unit will replace its previous “spot check” review process with a structured verification process that mirrors its semi-monthly timesheet report for payroll. This new report will include: • The processor documenting all deductions or changes made • The processor including supporting documentation • The auditor completing a 100% review to confirm work accuracy and cross-verification against source documents • The Director providing a final spot-check and sign-off It is important to acknowledge that these enhanced controls may introduce some operational trade-offs. In the short term, the shift to 100% review and additional dual-verification tasks will likely increase processing time and workload redundancy for both the Administrator and Assistant. There is also a risk of workflow bottlenecks, particularly during high-volume periods such as open enrollment or payroll cutoffs. Closing The implementation of new corrective and preventive measures will establish a more disciplined and reliable control environment around the East-West Center’s benefits administration. By formalizing data entry protocols, strengthening independent review, and introducing layered validation controls, the unit can significantly reduce the likelihood of this occurrence (or other-related HRIS data entry errors) while improving overall data integrity and employee trust. The proposed changes will enhance audit readiness and operational transparency for the Human Resources team.Contact Person: Human Resources Director Anticipated Completion Date: Procedures have been implemented as of report issuance date 32

View Audit 406213

Finding 1222521 (2025-003)

Material Weakness 2025

Commonwealth of Puerto Rico Department of Natural and Environmental Resources

PR

Allowable Costs / Cost Principles § 200.403 § 200.404 § 200.405

VIEWS OF RESPONSIBLE OFFICIALS As a result of a Specific Conditions letter issued by the United States Department of Education (USDE), in March 2021 the Puerto Rico Department of Education (PRDE) signed a contract with a Third-Party Fiduciary Agent (“TPFA”) to oversee the administration of federal f...

VIEWS OF RESPONSIBLE OFFICIALS As a result of a Specific Conditions letter issued by the United States Department of Education (USDE), in March 2021 the Puerto Rico Department of Education (PRDE) signed a contract with a Third-Party Fiduciary Agent (“TPFA”) to oversee the administration of federal funds. As this was the first time the PRDE was required by the USDE to contract a TPFA, the PRDE received support and guidance from the USDE. The USDE reviewed and approved the key procurement terms of the RFP, including the stipulated fixed fee provision for payment of TPFA services and expenses. The following is the PRDE's response to Finding Reference Number 2025-003. Statement of Condition 1 — Reasonableness of the Average Hourly Rate The PRDE does not agree with the implication, in Statement of Condition 1, that the average hourly rate is unreasonable. As the contract stipulates a fixed monthly fee, the reasonableness of the hourly rate should be calculated over an extended performance period, as the hours worked during a particular month fluctuate depending upon the level of work required to be performed. In the sample of invoices examined for the twelve-month period beginning June 2024 and ending May 2025, the total invoice amounts over the twelve-month period, less related expenses and the 1.5% contribution fee to the Government of Puerto Rico, divided by the total hours worked, results in an average hourly rate of $407.83, which is slightly above the noted “reasonable” rate which was addressed over 5 years ago in the RFP. Adjusting for a cumulative inflation rate of 24.48% since 2020, the RFP range of rates would have been between $81 and $438, so the average hourly rate of $407.83 is within that range. However, it should be noted that the rates in the RFP were expected to be local billing rates and not rates of a global consulting firm providing TPFA services from a team of experienced international senior professionals. The range of rates noted in the invoice template, i.e., $195–$695, and highlighted in each TPFA monthly invoice, approximates rates of the US General Services Administration (GSA). The PRDE does not agree with the recommendation that contract terms with the vendor should be revised before the contract expires. As this was the first time the PRDE was required to contract the services of a TPFA, the PRDE received guidance from the USDE, which reviewed and approved the key procurement terms of the RFP, including the stipulated fixed fee provision for the payment of TPFA services and expenses. The fixed fees were a result of extensive negotiations between the PRDE and the selected vendor and, although the hours and expenses are disclosed in each monthly invoice, this is provided for informational purposes only and, as stated in each invoice, “is not to be used to calculate the Total Amount Due,” which in each month is the applicable fixed fee. In addition, the PRDE does not agree with the recommendation that the TPFA submit supporting evidence for the reimbursement of expenses because (i) the TPFA contract is a fixed fee that is inclusive of all professional service fees and expenses, (ii) the TPFA provides an explanation of major expenses incurred within each monthly invoice, and (iii) the monthly fixed fee invoice is not requesting any specific reimbursement for expenses incurred. Statement of Condition 2 — Allocability Between Federal and Non-Federal Funds The PRDE does not agree with the finding that there is no basis for the allocation of costs between Federal and non-Federal funds. The funding of TPFA invoices from various federal funds was a result of (i) reasonable discussions between the PRDE and the USDE, (ii) the USDE's authorization for the availability of federal funds to pay TPFA invoices, and (iii) the actual availability of both federal and state funds at the PRDE from which to pay TPFA invoices. Furthermore, the TPFA services are applicable to all federal funds under the TPFA's administration, and its work is not directly tied to any specific grant. The funding for TPFA services is divided between federal and state funds as agreed to between the PRDE and the USDE, and payment for those services is determined based upon the availability of both federal and state funds. TPFA services are conducted for the benefit of the entire PRDE organization and, as such, are overhead costs not directly tied to any specific program or purpose. In addition, funds used to pay TPFA invoices are sourced from grant administration accounts that are specifically designated for the payment of overhead costs. Auditor Comment on Management Response for Finding No. 2025-003 The 2 CFR 200.1 establishes that: “Indirect [facilities & administrative (F&A)] costs mean those costs incurred for a common or joint purpose benefitting more than one cost objective, and not readily assignable to the cost objectives specifically benefitted, without effort disproportionate to the results achieved. To facilitate equitable distribution of indirect expenses to the cost objectives served, it may be necessary to establish a number of pools of indirect (F&A) costs. Indirect (F&A) cost pools must be distributed to benefitted cost objectives on bases that will produce an equitable result in consideration of relative benefits derived.” This information was not provided for our evaluation. Also, we made reference to the Program Determination Email for ALNs. 84.938 and 84.425 dated September 18, 2024 (Audit Control Number 02-21-39634), received from Ms. Catherine Miers of the Office of Elementary and Secondary Education of the US Department of Education (USDE), in which they required that the PRDE provide documentation for the following corrective actions: “revised the contract terms to include a reconciliation of total hours and rates to adjust the payments made to the vendor before the contract expiration; requested that adequate supporting evidence from the vendors be presented for any expenses to be reimbursed by the PRDE; and develop an adequate review of the vendors invoice to properly identify the actual hours of services that benefited the Federal programs so a correct allocation of the costs incurred can be made within Federal programs and state funds”. IMPLEMENTATION DATE None RESPONSIBLE PERSON Jullymar Octtaviani Vega Sub-Secretary of Administration Edgar Delgado Serrano Interim Director of Federal Affairs Office

View Audit 406169

Finding 1222518 (2025-002)

Material Weakness 2025

Commonwealth of Puerto Rico Department of Natural and Environmental Resources

PR

Equipment & Real Property Management Internal Control / Segregation of Duties Procurement, Suspension & Debarment § 200.302 § 200.403

VIEWS OF RESPONSIBLE OFFICIALS The Puerto Rico Department of Education (PRDE) accepts the finding identified by the auditors regarding the incorrect coding of five (5) reimbursement payments for equipment purchases in account E6170 (Donations and Contributions to Private Entities), rather than in th...

VIEWS OF RESPONSIBLE OFFICIALS The Puerto Rico Department of Education (PRDE) accepts the finding identified by the auditors regarding the incorrect coding of five (5) reimbursement payments for equipment purchases in account E6170 (Donations and Contributions to Private Entities), rather than in the appropriate E5000-series accounts, and the omission of said assets from the institutional property register. The PRDE has initiated the necessary corrective actions to address this deficiency. Specifically, all assets included within the affected reimbursement transactions have been identified, and a detailed inventory is being prepared in which each asset is classified according to the capitalization criteria established in the Restart Program Fiscal Process Guide (unit cost equal to or greater than $500.00 and useful life greater than two (2) years). This inventory distinguishes between capitalizable equipment (E5000 series) and non-capitalizable equipment (E4414), in accordance with applicable regulatory requirements. Once finalized, the inventory file will be submitted to the PRDE’s Office of Property for review and mass upload into the institutional property register, ensuring that all assets acquired with Restart Program funds are properly recorded under PRDE ownership, in compliance with Section 102(h)(3) of the 2018 Hurricane Relief Act and the requirements of 2 CFR §200.302(b)(3)(4). IMPLEMENTATION DATE Fiscal Year 2026-2027 RESPONSIBLE PERSON Edgar Delgado Serrano Interim Director of Federal Affairs Office

View Audit 406169

Finding 1222517 (2025-001)

Material Weakness 2025

Commonwealth of Puerto Rico Department of Natural and Environmental Resources

PR

Matching / Level of Effort / Earmarking Subrecipient Monitoring Allowable Costs / Cost Principles § 200.302 § 200.403

VIEWS OF RESPONSIBLE OFFICIALS The Puerto Rico Department of Education (PRDE) acknowledges the audit findings presented by the auditors regarding the Activities Allowed or Unallowed / Allowable Costs/Cost Principles compliance requirement under the IDEA Special Education Cluster (Assistance Listing ...

VIEWS OF RESPONSIBLE OFFICIALS The Puerto Rico Department of Education (PRDE) acknowledges the audit findings presented by the auditors regarding the Activities Allowed or Unallowed / Allowable Costs/Cost Principles compliance requirement under the IDEA Special Education Cluster (Assistance Listing Nos. 84.027 and 84.173). The PRDE recognizes that certain deficiencies identified by the auditors relate to inconsistencies in supporting documentation, documentation retained in departmental systems, and the need to strengthen administrative controls over the documentation supporting disbursements for private educational and therapy services. The Department further acknowledges opportunities to improve the consistency of information maintained in supporting schedules, contract documentation, proposals, and other records used during the invoice review and payment process. The PRDE respectfully clarifies that, in several instances identified during the audit, the questioned conditions were attributable to documentation inconsistencies, system-generated reporting errors, or documentation that supports the transactions but was not maintained or presented in a standardized manner during the audit process. Specifically, the Department notes that adjustment reports recorded in the financial system agreed with the disbursement vouchers despite errors identified in certain Excel master schedules; that invoice validations performed by the Centers are based on the corresponding "Carta de Aprobación de Consulta de Ubicación," which establishes the approved services and applicable rates for each student; and that federal regulations authorize IDEA Part B (ALN 84.027) funds to be used for eligible children ages 3 through 21, including expenses otherwise allowable under the Preschool Grant (ALN 84.173), as permitted under 34 CFR §300.202(a). With respect to students identified as over 21 years of age, the PRDE conducted an individual review of the affected student records and determined that the population includes students who exited the program at age 21 as well as students for whom documentation exists supporting the continuation of services through individualized educational determinations, transition planning activities, or compensatory educational services. The Department recognizes, however, that documentation supporting these determinations was not maintained in a standardized manner that facilitated timely retrieval during the audit. The PRDE further acknowledges that improvements are needed to ensure that procurement documentation, contract amendments, proposals, invoice support, Excel master schedules, and student-level supporting documentation are complete, accurate, consistent, and readily available for audit and monitoring purposes. Accordingly, the Department accepts the auditors' recommendations and is committed to implementing corrective actions designed to strengthen internal controls, standardize documentation practices, improve supervisory review procedures, and enhance coordination among the responsible program and administrative units IMPLEMENTATION DATE Fiscal Year 2026-2027 RESPONSIBLE PERSON Enid Diaz Nieves Executive Director III Alayra Figueroa Gonzalez Associate Secretary for Special Education

View Audit 406169

Finding 1222515 (2025-003)

Material Weakness 2025

WINGS ACROSS ALABAMA

AL

Allowable Costs / Cost Principles Internal Control / Segregation of Duties

Recommendation: We recommend the Organization review its cash policies and procedures to develop a system of requiring management approval of all expenditures of federal funds and documenting this approval. Action Taken: Management will establish a process for properly approving all expenses and mai...

Recommendation: We recommend the Organization review its cash policies and procedures to develop a system of requiring management approval of all expenditures of federal funds and documenting this approval. Action Taken: Management will establish a process for properly approving all expenses and maintaining documentation of approvals before the end of the next fiscal year.

View Audit 406165

Finding 1222514 (2025-002)

Material Weakness 2025

WINGS ACROSS ALABAMA

AL

Allowable Costs / Cost Principles

Recommendation: We recommend the Organization review its cash policies and procedures to develop a system of maintaining support for all expenditures of federal funds. Action Taken: Management will establish a process for retaining expense documentation before the end of the next fiscal year.

View Audit 406165

Finding 1222459 (2025-002)

Material Weakness 2025

Housing Authority of the City of Bastrop. Texas

TX

Allowable Costs / Cost Principles Cash Management HUD Housing Programs

Corrective Action Plan - Interfund receivables and payables. Contact person - Executive Director, Rhonda Baxter., Executive Director, at the Bastrop Housing Authority, 502 Farm Street, Bastrop TX 78602, telephone number (512) 312-3398. Corrective action planned - Interfund receivables and payables w...

Corrective Action Plan - Interfund receivables and payables. Contact person - Executive Director, Rhonda Baxter., Executive Director, at the Bastrop Housing Authority, 502 Farm Street, Bastrop TX 78602, telephone number (512) 312-3398. Corrective action planned - Interfund receivables and payables will be liquidated each month. Anticipated completion date - Within the next year.

View Audit 406154

Finding 1222458 (2025-001)

Material Weakness 2025

Housing Authority of the City of Bastrop. Texas

TX

Allowable Costs / Cost Principles HUD Housing Programs Material Weakness

Corrective Action Plan - Individual charge tickets not attached to credit card statements. Contact person - Executive Director, Rhonda Baxter., Executive Director, at the Bastrop Housing Authority, 502 Farm Street, Bastrop TX 78602, telephone number (512) 312-3398. Corrective action planned - Indivi...

Corrective Action Plan - Individual charge tickets not attached to credit card statements. Contact person - Executive Director, Rhonda Baxter., Executive Director, at the Bastrop Housing Authority, 502 Farm Street, Bastrop TX 78602, telephone number (512) 312-3398. Corrective action planned - Individual charge tickets will be attached to credit card statements each month. Anticipated completion date - Within the next fiscal year.

View Audit 406154

Finding 1222377 (2025-008)

Material Weakness 2025

City of Amarillo, Texas

TX

Special Tests & Provisions Subrecipient Monitoring Allowable Costs / Cost Principles § 200.303

Finding 2025-008: Special Tests and Provisions – Revenue Diversion Airport Improvement Program View of responsible officials: The City agrees with the finding. Corrective action plan: The City will draft and maintain a formal written policy or documented procedure to ensure airport-generated revenue...

Finding 2025-008: Special Tests and Provisions – Revenue Diversion Airport Improvement Program View of responsible officials: The City agrees with the finding. Corrective action plan: The City will draft and maintain a formal written policy or documented procedure to ensure airport-generated revenues are used only for allowable airport-related purposes in accordance with federal revenue-use restrictions. Implementation dates: July 31, 2026 Responsible person: Lola Ogunremi, Chief Financial Officer

View Audit 406137

Finding 1222347 (2025-005)

Material Weakness 2025

Center for Independence of Individuals with Disabilities

CA

Allowable Costs / Cost Principles Subrecipient Monitoring § 200.303 § 200.309 § 200.403 § 200.405

Provide funder-led training sessions for management and staff, maintain current budget tracking incorporated federal program compliance into relevant staff performance evaluations, implement a dual-storage documentation methodology combining a shared drive and a document management system (DMS) and ...

Provide funder-led training sessions for management and staff, maintain current budget tracking incorporated federal program compliance into relevant staff performance evaluations, implement a dual-storage documentation methodology combining a shared drive and a document management system (DMS) and update the Finance Manual.

View Audit 406136

Finding 1222345 (2025-004)

Material Weakness 2025

Center for Independence of Individuals with Disabilities

CA

Allowable Costs / Cost Principles Subrecipient Monitoring Cash Management § 200.303 § 200.305 § 200.309 § 200.328 § 200.329

Provide all management staff with annual training on federal grant requirements, perform periodic internal reviews and a final year-end reconciliation, maintainall grant-related records on a shared organizational drive accessible to all responsible staff, provide formal onboarding and off boarding p...

Provide all management staff with annual training on federal grant requirements, perform periodic internal reviews and a final year-end reconciliation, maintainall grant-related records on a shared organizational drive accessible to all responsible staff, provide formal onboarding and off boarding procedures for federal grant management, and update the Finance Manual .

View Audit 406136

Finding 1222227 (2025-001)

Material Weakness 2025

Sewerage and Water Board of New Orleans

LA

Allowable Costs / Cost Principles Cash Management Eligibility § 200.403

Corrective Action Plan: Management acknowledges the finding relative to formal documentation for eligible project costs and will enhance review procedures for monthly WIFIA loans draws to have written contemporaneous evidence from the lender in addition to preliminary approval received for project t...

Corrective Action Plan: Management acknowledges the finding relative to formal documentation for eligible project costs and will enhance review procedures for monthly WIFIA loans draws to have written contemporaneous evidence from the lender in addition to preliminary approval received for project transfers or changes (i.e. renaming of subprojects listed in the loan closing documents within the same scope approved in the loan). The project changes materialized due to a change in expected timing of Sewer Utility work included in joint projects with the City’s Department of Public Works. As a result, standalone projects were executed to complete the required work by the October 2025 deadline mandated in the Sewer Consent Decree. The changes were discussed with the lender upon notification from the Department of Public Works and included in WIFIA quarterly reporting while the formal project approvals are in process. The Utility’s Project Delivery Unit Director is responsible for ensuring that this corrective action is accomplished with an estimated timeline for completion by September 30, 2026. The WIFIA project scope is defined as: I. Water Line Replacement via the Joint Infrastructure (JIRR) Program; II. Sewer Line Replacement via the Joint Infrastructure Recovery Roads (JIRR) Program; III. Sewer System Evaluation and Rehabilitation Program (SSERP); and IV. Sewer Force Main Replacement and Improvement. The eligible activities include, restoration and replacement of damaged gravity sanitary sewer mains, manhole rehabilitation and repair, CIPP lining and point repairs, Water line replacement and repair, Roadway restoration and ADA curb ramp improvements associated with the utility work.

View Audit 406093

Finding 1222221 (2025-005)

Material Weakness 2025

Housing Authority of the City of Conway

AR

Allowable Costs / Cost Principles HUD Housing Programs Cash Management § 200.403

2025-005 Allowability – Interprogram Activity Public Housing Operating Fund ALN 14.850 Significant Deficiency in Internal Control Other matter required to be reported in accordance with Uniform Guidance Condition: The Authority maintains a material interprogram receivable balance in the asset manage...

2025-005 Allowability – Interprogram Activity Public Housing Operating Fund ALN 14.850 Significant Deficiency in Internal Control Other matter required to be reported in accordance with Uniform Guidance Condition: The Authority maintains a material interprogram receivable balance in the asset management program (“AMP”), which is due from other programs of the Authority. This interprogram receivable increased by $373,091 from the September 30, 2024 balance of $433,981, for a total receivable balance of $807,072 as of September 30, 2025. Auditor Recommendations: We recommend that the Authority immediately discontinue using Public Housing Operating Fund resources to fund costs or cash shortfalls of other programs or component units. The Authority should prepare a detailed reconciliation of all interprogram receivable and payable balances by program and implement a repayment plan to restore the Public Housing Operating Fund. We further recommend that the Authority implement written cash management and interprogram accounting procedures to prevent future unauthorized advances. These procedures should include monthly reconciliation of all interprogram balances, supervisory review, and approval of interprogram activity. Management Response: Management acknowledges and accepts responsibility for the deficiencies in internal control over allowability and eligibility and are committed to implementing corrective actions that address missing documentation and lack of verifiable procurement procedures to ensure compliance. Reconcile intercompany balances • CHA is currently working with its fee accountant to complete this process Cease Additional Borrowing • Effective immediately, CHA will discontinue the practice of increasing interprogram borrowings from AMP 1 except where expressly authorized by HUD regulations. Implementing a Repayment Plan • CHA will implement a repayment plan to prioritize repayment from unrestricted or otherwise eligible funding sources in compliance with HUD requirements. Monthly Interprogram Reconciliation • Finance staff and fee accountant will reconcile all interprogram receivable and payable balances monthly. • Any new interprogram activity will be reviewed by the Executive Director and Fee Accountant to ensure allowability before recording. Strengthen Budget Monitoring • Management will perform monthly budget-to-actual reviews for every program to identify operating deficits before they require interprogram borrowing. • Programs experiencing budget shortfalls will implement corrective spending measures or identify alternative eligible funding sources. Improve Cash Flow Management • With the assistance of the fee accountant, CHA will prepare monthly cash flow projections for each program to monitor liquidity and prevent the use of restricted Public Housing Operating Funds for other programs. Implement Internal Control Procedures • Written procedures governing interprogram transactions will be incorporated into the Authority's financial policies. • All interprogram transactions will require documentation supporting the purpose, funding source, and regulatory allowability. Oversight by Fee Accountant • The Authority's Fee Accountant will review interprogram balances during monthly financial statement preparation and report unusual activity or growing receivable balances to management. Board Oversight • The Board of Commissioners will receive monthly financial reports that include interprogram receivable and payable balances to provide ongoing oversight of repayment progress and compliance. Monitoring • The Executive Director and Finance Department will monitor compliance with this corrective action plan monthly and adjust operating budgets as necessary to eliminate future interprogram borrowing. Name of Responsible Person(s): Jackie Otto, Executive Director, Sherdana Wade, Director of Operations, Michelle Guidry, Finance Director Projected Completion Date: Some of the corrective activities are underway. We anticipate full compliance ahead of the June 30, 2027 audited submission.

View Audit 406074

Finding 1222216 (2025-002)

Material Weakness 2025

Housing Authority of the City of Conway

AR

HUD Housing Programs Allowable Costs / Cost Principles Significant Deficiency

2025-002 Payroll Significant Deficiency in Internal Control (Repeated from prior year, Finding No. 2024-002) Condition: During our audit of payroll expenditures, the Authority was unable to provide adequate supporting documentation and as a result we were unable to verify that employees were paid at...

2025-002 Payroll Significant Deficiency in Internal Control (Repeated from prior year, Finding No. 2024-002) Condition: During our audit of payroll expenditures, the Authority was unable to provide adequate supporting documentation and as a result we were unable to verify that employees were paid at the properly approved rates for the periods tested and that internal controls were operating effectively. Auditor’s Recommendations: The Authority should implement internal controls over payroll and human resources to ensure complete and accurate personnel files are maintained on an ongoing basis for all employees. The Authority should review all current employee payroll files to ensure their files are up to date and include documentation supporting their approved pay rates and all subsequent compensation changes. Management Response: Management acknowledges the findings and the significant deficiency in internal control. We accept responsibility for the deficiencies in internal control over payroll reporting and are committed to implementing corrective actions as follows to ensure a robust control environment that ensures payroll transactions are verified against authorized documentation. Action(s) Taken: • Comprehensive File Reviews: • Immediately initiated a full review of all current employee payroll files to confirm completeness. • Acknowledge that some documentation predating the implementation of Paycom may remain incomplete; however, CHA is making every effort to ensure files are as complete as possible. • Documentation Verification: • Began verifying that each employee file contains proper documentation, including: • initial pay rates, • compensation changes, and • job descriptions and offer letters, where applicable. • Implemented a checks-and-balances review process to ensure that: • time is entered accurately, • timesheets are reviewed and signed by both the employee and the employee's supervisor, and • Authority leadership conducts a pre-payroll audit prior to processing. • Internal Controls: • The Authority utilizes a third-party provider, Paycom, for payroll administration and recordkeeping. • Timesheets are submitted, reviewed, and approved electronically within the system. • Pre-payroll audits are performed by the Executive Director prior to final payroll approval. • All payroll records are securely stored, easily searchable, and fully traceable through the electronic system. • Final payroll approval by the Executive Director through an approval memo to the HR Director before payments are allowed to be made. • Ongoing Compliance: • The HR Director will conduct semi-annual internal audits of a sample of employee files to verify and document ongoing compliance. • Staff responsible for inputting and reviewing payroll will receive ongoing compliance training. • A standardized file documentation checklist will be used to support consistent and complete recordkeeping. Name of Responsible Person(s): Jackie Otto, Executive Director, Sherdana Wade, Director of Operations, and Natalie Hawks, HR Director Projected Completion Date: Some of the corrective activities are underway. We anticipate full compliance ahead of the June 30, 2027 audited submission.

View Audit 406074

Finding 1222208 (2025-003)

Material Weakness 2025

Cheney Care Community

WA

Allowable Costs / Cost Principles Matching / Level of Effort / Earmarking Subrecipient Monitoring § 200.302 § 200.303

Finding 2025-003: Section 232 Loan – Mortgage Insurance Nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities Loan, ALN 14.129 Anticipated Completion Date: November 20, 2025 Recommendation: It was recommended the related parties reimburse Cheney Care Commun...

Finding 2025-003: Section 232 Loan – Mortgage Insurance Nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities Loan, ALN 14.129 Anticipated Completion Date: November 20, 2025 Recommendation: It was recommended the related parties reimburse Cheney Care Community for the expenditures paid on their behalf. In addition, it was recommended management review the disbursements made during the periods of turnover to confirm there were no other unallowable payments made. It was also recommended management of Cheney Care Community review their internal controls over the cash disbursement process with the necessary individuals involved in the process to ensure the controls are consistently performed going forward. Action Taken: The related parties reimbursed Cheney Care Community for the expenditures paid on their behalf. Since the new accounts payable clerk started in the Summer of 2025, they have been reviewing all of the supporting documentation for disbursements made during the period of turnover, and accumulating any additional corrections that need to be made. They will continue this process for all disbursements from the period of turnover. The Executive Director/Administrator and Accountant will review the process and procedures in place with the new accounts payable clerk, and implement controls to ensure the appropriate facility and general ledger account coding are made going forward. In addition, they will review the review and monitoring controls in place and revise as needed to ensure the proper checks are in place to catch errors.

View Audit 406067

Finding 1222196 (2025-004)

Material Weakness 2025

Sessions Village 202 171-Ee015

WA

Allowable Costs / Cost Principles Subrecipient Monitoring Reporting § 200.302 § 200.303

Finding 2025-004: Section 202 Supportive Housing for the Elderly, Capital Advance and Project Rental Assistance Contract, ALN 14.157 Anticipated Completion Date: June 11, 2026 Recommendation: It was recommended the related parties reimburse Sessions Village 202 for the expenditures paid on their beh...

Finding 2025-004: Section 202 Supportive Housing for the Elderly, Capital Advance and Project Rental Assistance Contract, ALN 14.157 Anticipated Completion Date: June 11, 2026 Recommendation: It was recommended the related parties reimburse Sessions Village 202 for the expenditures paid on their behalf. In addition, it was recommended management review the disbursements made during the periods of turnover to confirm there were no other unallowable payments made. It was also recommended management of Sessions Village 202 review their internal controls over the cash disbursement process with the necessary individuals involved in the process to ensure the controls are consistently performed going forward. Action Taken: The related parties reimbursed Sessions Village 202 for the expenditures paid on their behalf. Since the new accounts payable clerk started in the Summer of 2025, they have been reviewing all of the supporting documentation for disbursements made during the period of turnover, and accumulating any additional corrections that need to be made. They will continue this process for all disbursements from the period of turnover. The Executive Director/Administrator and Accountant at the management agent will review the process and procedures in place with the new accounts payable clerk, and implement controls to ensure the appropriate facility and general ledger account coding are made going forward. In addition, they will review the review and monitoring controls in place and revise as needed to ensure the proper checks are in place to catch errors.

View Audit 406042

Finding 1222185 (2025-001)

Material Weakness 2025

Dartmouth-Hitchcock Health and Subsidiaries

NH

Subrecipient Monitoring Allowable Costs / Cost Principles Reporting § 200.430

2025-001 Timeliness of Effort Certification Cluster: Research and Development (also applies to other major programs referenced below) Sponsoring Agency: All research and development cluster sponsoring agencies and Department of Health and Human Services (for the other major program referenced below)...

2025-001 Timeliness of Effort Certification Cluster: Research and Development (also applies to other major programs referenced below) Sponsoring Agency: All research and development cluster sponsoring agencies and Department of Health and Human Services (for the other major program referenced below) Award Names: All research and development cluster awards and Doorway for Substance Use-Related Supports and Services Award Numbers: All research and development cluster awards, Cheshire Medical Center 05-95-920510-7040000 Assistance Listing Title: All research and development cluster assistance listing titles and Opioid STR Assistance Listing Number: All research and development cluster assistance listing numbers and 93.788 Award Year: 2024-2025 Pass-through entity: All research and development cluster pass-through entities and New Hampshire Department of Health and Human Services This is a repeat finding of 2024-002 and in the prior year corrective action plan we had anticipated correcting this matter by March 31, 2025. Due to additional training needing to be administered to providers, we had to revise our date of completion to September 30, 2026. Management agrees with the finding related to the timeliness of effort certification. Management has continued to provide training and education to both operational and clinical leadership regarding timely effort certification. Dartmouth-Hitchcock currently has two effort certification systems: one used for research and one used to track other metrics. This has caused confusion among those required to certify effort for federal awards as they often believe that they had already certified their effort for research purposes . Management will provide additional education sessions and provide further clarification to the research community on the importance of timely effort certification and the differences in each effort reporting system. Individual Responsible: John Muhlen, System Vice President of Corporate Finance Anticipated Completion Date: September 30, 2026

View Audit 406039

Corrective Action Plans

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